The Essential NGO Guide to

Managing Your USAID Award

About the Capable Partners Program
The Capable Partners Program (CAP) works across technical sectors to strengthen the
organizational and technical capacities of non-governmental organizations (NGOs), community-
based organizations (CBOs), faith-based organizations (FBOs), intermediary support organizations
(ISOs), and NGO networks.

CAP provides technical assistance, training, and grants management to USAID Missions and
operating units to support:

• Strengthening operational and technical capacity of local NGOs, networks, and ISOs;
• Building and supporting linkages among local organizations (NGOs, cooperatives, networks,
governments, and businesses);
• Increasing capacity of NGOs, networks, and ISOs to engage in advocacy for key policies
or programs; and
• Disseminating tested innovations, best practices, and lessons learned.

The Essential NGO Guide to Managing Your USAID Award is one aspect of CAP’s technical
assistance (TA) to help NGOs effectively manage U.S. Government funds. Through this Guide as
well as trainings, skills-building activities, and www.NGOConnect.Net, a resource and information
exchange for international development practitioners, CAP works to enhance NGO performance
and build community ownership.

Acknowledgments
The Guide is the fruit of the efforts and experience of dozens of U.S. Agency for International
Development (USAID) and FHI 360 staff members who have spent their careers helping NGOs
implement effective and compliant USAID-funded programs. The authors are especially indebted
to the following individuals who reviewed the manuscript and provided extensive comments that
greatly enriched this publication: Elizabeth Baldwin, Elizabeth Berard, Blanch Brown, Hayley
Bryant, Robert Combs, Helen Dalton, Carl Dempsey, Benjamin Duodu, Marty Galindo-Schmith,
David Hughes, Peter Irungu, Phoebe Kilele, Takady Konate, Michael Kott, Molly Loomis, Teresa
Mancini, Anna Mecagni, Amita Mehrotra, Thabi Mngadi, Susan Mugwe, Alice Munthali, Sammy
Munyoro, Caroline Odhiambo, Matthew Pietz, Chad Rathner, Lee Rosner, Uchechi Roxo, Ken
Sklaw, Robby Vanrykel, Kirsten Weeks, Scholastica Williams, Kelly Wolfe, Pamela Wyville-Staples,
and Jason Zeno. Finally, special thanks go to Christopher O’Connell, whose research and initial
drafts provided the foundation on which to build.

Funding for the The Essential NGO Guide to Managing Your USAID Award was provided to
CAP by USAID. The Guide’s contents do not necessarily reflect the views of USAID or the
U.S. Government.

The electronic version of the Guide, posted on www.NGOConnect.Net, will be updated

periodically to reflect changes in policy and practice that affect USAID awardees.

Cover Photo Credits: © D. Hinrichsen, Photoshare; © Shehab Uddin, DRIK; © Church Alliance for
Orphans; © Chrissie Lam; © Anvar Ilyasov, World Bank; © Saleh Abdoulaye Abdel-Kerim, FHI 360.

© 2010. All rights reserved by FHI 360, MSI, and USAID. The Guide may be photocopied or
adapted, in whole or in part, provided the material is distributed free of charge and that credit is
given to the Capable Partners Program and USAID.

Capable Partners Program, FHI 360 Executive Editor: Barney Singer

1825 Connecticut Ave, NW Managing Editor: Cate Cowan
Washington, DC 20009-5721 Editorial Associate: Bethany Mahler
[email protected] Editorial Assistant: Colin Bonner
Designer: Jill Vitick



 Table of Contents
Figures v
From the Editors vi
Abbreviations and Acronyms vii
Chapter 1—Introduction 1
1.1 Why This Guide? 2
1.2 Who Is the Guide For? 2
1.3 How Is the Guide Organized? 2
1.4 How to Use This Guide 2
1.5 Ties to Organizational Development 3

Chapter 2—Your Award 5

2.1 Overview 6
2.2 Getting Started 7
2.3 Pre-Award Phase 11
2.4 Negotiation Phase 14
2.5 Other Pre-Award-Related Activities 15
2.6 Understanding Your Cooperative Agreement 19
2.7 Summary and References 23

Chapter 3—Program Start-Up 25

3.1 Overview 26
3.2 Getting Started 28
3.3 Management Policies and Systems 32
3.4 Planning 37
3.5 Communication 48
3.6 Summary and References 58

Chapter 4—Running an Effective and Compliant Program 61

4.1 Overview 62
4.2 Getting Started 64
4.3 Administrative Management 66
4.4 Technical Program Management 91
4.5 Summary 95

Chapter 5—Reporting: Requirements and Benefits 97

5.1 Overview 98
5.2 Getting Started 99
5.3 Your Reporting Requirements 100
5.4 Summary and References 113

Chapter 6—Award Close Out 115

6.1 Overview 116
6.2 Getting Started 116
6.3 Close-Out Policies and Procedures 120
6.4 Post-Award Use of USAID-Funded Goods and Commodities 124
6.5 Summary 126

Chapter 7—Assessing and Building

Your Organization’s Capacity 133
7.1 Overview 134
7.2 Getting Started 134
7.3 Conducting Your Organizational Assessment 137
7.4 Guide to Systems and Structures Needed to Succeed 143
7.5 Summary and References 145

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 Chapter 8—Sustainability 147
8.1 Overview 148
8.2 Getting Started 148
8.3 Strategic Planning 151
8.4 Strategic Planning Online Resources 155
8.5 Summary 155

Chapter 9—Seeking Future Funding 157

9.1 Overview 158
9.2 Getting Started 159
9.3 Researching Funding Opportunities 160
9.4 Applying for USG Funds 164
9.5 Designing Programs 167
9.6 Budgeting 168
9.7 Eligibility Rules to Receive USG Funds 173
9.8 Partnerships 174
9.9 Summary and References 176

Index 179
Annex I 183
Glossary of Terms and Acronyms 183

Annex II 191
Common USAID Standard Provisions 191

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 Figures
Figure 1—Sample Obligation Timeline 9
Figure 2—Award Phase Timeline and Task List 10
Figure 3—Key Start-Up Tasks 29
Figure 4—Counterpart Contacts on the NGO and USAID Teams 30
Figure 5—Appropriate Uses of Start-Up Funds 31
Figure 6—Workplan Implementation 39
Figure 7—Sample Workplan Logic Matrix for a Women’s Micro-Enterprise
Program at 3, 6, 9, and 12 Months 39
Figure 8—Sample Activity Description: Community Home-Based Care 42
Figure 9—Sample Summary Budget 43
Figure 10—Sample Detailed Budget 43
Figure 11—Communication Audit Template 50-51
Figure 12—Analysis of a Brand Hierarchy 52
Figure 13—Sample Brand Identity 54
Figure 14—Sample Implementation of Branding and Marking 56
Figure 15—Key Elements of an Implementation Model 65
Figure 16—Top Portion of the SF-270 67
Figure 17—Calculation Area of the SF-270 68
Figure 18—Requesting Reimbursement Using the SF-270 69
Figure 19—Top Half of the SF-1034 70
Figure 20—NGO X Award Amount Breakdown 72
Figure 21—Phases of Procurement 75
Figure 22—Examples of Unallowable Costs 78
Figure 23—Excluded Party List Web Site Advanced Search 82
Figure 24—Excluded Party List Web Site Results Page 83
Figure 25—Sample Botswana Per Diem Rates 87
Figure 26—Reports, Frequency, and Submission Dates 100
Figure 27—Reporting Questions 100
Figure 28—Measuring a Program’s Financial Health 101
Figure 29—Financial Forms and Uses 101
Figure 30—Federal Financial Report Submission Dates 101
Figure 31—Top Portion of the SF-425 102
Figure 32—Middle Portion of the SF-425 102
Figure 33—Bottom Portion of the SF-425 103
Figure 34—Sample Performance Report Outline 106
Figure 35—Key Steps in the Audit Process 108
Figure 36—Period Covered in Foreign Tax Reporting 111
Figure 37—Example of Foreign Tax Reporting 111
Figure 38—Sample Foreign Tax Tracking Log 112
Figure 39—Sample Data on Remaining Award Funds 121
Figure 40—Close-Out Timeline and Checklist 127-129
Figure 41—Key Close-Out Activities through an Organizational Development Lens 130
Figure 42—Components of a Capacity-Building Action Plan 135
Figure 43—Organizational Capacity Assessment Checklist 138
Figure 44—Online Organizational and Capacity-Building Resources 139
Figure 45—Sample List of Organizational Activities 142
Figure 46—Sample List of Activities and Needed Materials 142
Figure 47—Action Plan Example 144
Figure 48—Goals and Objectives Examples 152
Figure 49—Example of the Types of Information to Include in a SWOT Analysis Matrix 153
Figure 50—Selected Online Resources on Strategic Planning 155
Figure 51—Overview of Sources of Fundraising 162-163
Figure 52—Sample Funding Source Analysis 164
Figure 53—Key Parts of an M&E Implementation Plan 167
Figure 54—Summary of Cost-Share Valuation and Documentation 173

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 From the Editors
The Essential NGO Guide to Managing Your USAID Award is designed to assist NGOs to more
effectively administer resources from the U.S. Agency for International Development (USAID).

The Guide aims to help USAID awardees (also referred to as grantees and/or recipients)
clarify specific requirements, regulations, and compliance issues mandated by their agreements.
In preparing this Guide, we sought to minimize the use of unnecessarily complicated legalistic
terminology and jargon and introduce simple definitions of commonly used terms.

USAID requirements can serve as a basis for establishing good business practices essential to
implementing effective programs and responsible management of funds irrespective of whether
your organization is a USAID recipient. Obviously, the success of your NGO will also depend
on the capacity to respond to the needs of beneficiaries, develop close ties with community
leaders, liaise with government officials at the local, regional, and national levels, build partnership
networks comprised of businesses, donors, government agencies, and other NGOs, and engage
in the never-ending quest for creative and innovative solutions to meet development challenges.

Strengthening your capacity may seem a daunting task for an NGO. Any such efforts must be
directed toward improved performance and service delivery as their end result. This Guide is
designed to serve as an essential tool, not only for administering individual USAID awards but,
in the larger context, for strengthening the capacity of NGOs to better respond to the needs of
beneficiaries who depend on the organization’s services.

If you have comments, please write to the editors at [email protected].

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Abbreviations and Acronyms
ADS Automated Directives System
AO Agreement Officer
AOTR Agreement Officer’s Technical Representative
APR Annual Performance Report
APS Annual Program Statement
AUSAID Australian Agency for International Development
CA Cooperative Agreement
CAP Capable Partners Program
CBO Community-Based Organization
CCM Country Coordinating Mechanism
CFR U.S. Code of Federal Regulations
CIDA Canadian International Development Agency
CMP Cash Management and Payment Division
COTR Contracting Officer’s Technical Representative
CTO Cognizant Technical Officer
DEC Development Experience Clearinghouse
DFID Department for International Development
EIN Employer Identification Number
EU European Union
FAC Federal Audit Clearinghouse
FAR U.S. Federal Acquisition Regulations
FBO Faith-Based Organization
FM Office of Financial Management
FMO Financial Management Officer
FRBNY Federal Reserve Bank of New York
GAAP Generally Accepted Accounting Principles
GMO Grants Management Officer
HR Human Resources
HQ Headquarters
IFRS International Financial Reporting Standards
LOE Level of Effort
M&E Monitoring and Evaluation
M&IE Meals and Incidental Expenses
MOU Memorandum of Understanding
NGO Non-Governmental Organization
NICRA Negotiated Indirect Cost Rate Agreement
OAA Office of Acquisition and Assistance
OD Organizational Development
OMB U.S. Office of Management and Budget
OVC Orphans and Vulnerable Children
PVO Private Voluntary Organization
QPR Quarterly Performance Report
RFA Request for Applications
RFP Request for Proposals
RFQ Request for Quotations
SAPR Semi-Annual Performance Report
SF Standard Form
SO Strategic Objective
SOW Scope of Work
SWOT Strengths, Weaknesses, Opportunities, and Threats
TA Technical Assistance
TBD To Be Determined
UNAIDS United Nations Programme on HIV/AIDS
UNICEF United Nations Children’s Fund
USAID U. S. Agency for International Development
USC United States Code
USG United States Government
VAT Value-Added Tax
WB World Bank

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1 Introduction
PHOTO CREDIT: ©RICHARD LORD, FHI 360.
 1

Introduction
Introduction
1.1 Why This Guide?

1.2 Who Is the Guide For?

1.3 How Is the Guide Organized?

1.4 How to Use This Guide

1.5 Ties to Organizational Development

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 1
Introduction

1.1 Why This Guide? 1.3 How Is the

The Essential NGO Guide to Managing Your Guide Organized?
USAID Award is designed as both a capacity-
Part One of the Guide leads you through four
building tool and desktop reference. In
phases of managing your award: chapter 2
preparing this Guide, the authors consulted the
covers the Award Phase; chapter 3 discusses
U.S. Code of Federal Regulations (CFR) as well
the Start-Up Phase; chapters 4–5 address the
as a range of documents issued by the U.S.
Implementation Phase and chapter 6 guides
Agency for International Development (USAID).
you through the Close-Out Phase.
Above all, this Guide is intended to serve
Part Two covers topics essential to getting your
as an engaging and informative resource
project off to a good start and maintaining the
to strengthen your NGO’s capacity-building
ability to deliver results, including NGO capacity
efforts as well as to be a handy resource for
building (chapter 7), developing a strategic plan
understanding and complying with USAID
(chapter 8), and tips for seeking future funding
rules and regulations.
(chapter 9).

Please note Each chapter provides links to useful tools to

This Guide focuses specifically on USAID
help you implement your work and references
regulations, not those of other U.S. Government to documents and Web sites to obtain more
agencies. It is intended only to help USAID detailed information on a particular subject.
awardees. The regulations themselves
and your agreement with USAID are the
definitive sources.

1.4 How to Use This Guide

1.2 Who Is the Guide For? The Guide is designed to be read like a book
The Guide is not just for the leaders of USAID or consulted as a desktop reference. The table
partner organizations; it is for all staff members of contents at the beginning and the index at
who play a role in managing or implementing the end can help you quickly find the specific
a USAID award. Many topics addressed information you need. Many of the sections
by this Guide apply to both prime partners provide detailed, step-by-step instructions for
receiving funds directly from USAID as well as meeting certain USAID requirements.
organizations receiving subawards from them.
Online Tips
The Guide presents rules, regulations, and
Online readers will be able to skip from one
processes organizations need to address in
page in the Guide to another whenever a word
every phase of project management—from
or phrase is in green and underlined. These are
award, start-up, and implementation through
active links, meaning that, when clicked, a new
monitoring, evaluation, reporting, and close out.
page will appear that contains more information
on that particular subject. A highlighted box at
Non-governmental organizations (NGOs)
the start of each chapter provides active links
seeking resources for their programs may also
to let you “skip ahead” to a specific topic
find the recommendations in this Guide useful to
rather than scrolling through the document
becoming stronger organizations and, therefore,
page by page.
more competitive in their efforts to pursue
USAID funding and opportunities from a diverse
To avoid duplicating information that is
range of donors. Whether an organization is
provided in depth elsewhere, when you click
focused on health, education, civil society,
on a word or phrase underlined in green you
microenterprise, agriculture, women’s
will go to a Web site that we believe is safe and
empowerment, or other technical areas, the
useful. You can tell where you are by looking at
same USAID regulations as well as the same
the Web site “address” at the top of your Web
capacity-building tools generally apply.
browser “window.”

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 1

Introduction
1.5 Ties to Organizational external relations, financial management,
governance, human resources, monitoring
Development and evaluation, and program management.
While the Guide is organized according to the
The Capable Partners Program’s approach life cycle stages of an award, the chart below
to NGO institutional strengthening reflects offers a handy way to reference its resources
seven capacity-building domains: compliance, by capacity-building domain.

The Guide as Seen through an Organizational Development Lens

Compliance Human Resources

f Cooperative Agreement Basics (Ch. 2) f Key Personnel (Ch. 2)
f Procurement Policy Standards (Ch. 3) f Human Resources Policies (Ch. 3)
f Reporting (Ch. 5)
Monitoring and Evaluation (M&E)
f Close Out (Ch. 6)
f Starting your M&E System (Ch. 3)
Governance f Baseline Surveys (Ch. 3)
f Assessing Strengths and Weaknesses (Ch. 7) f M&E Progress (Ch. 4)
f Governance and Management (Ch. 7) f Demonstrating Impact/
Telling Your Story (Ch. 3)
f Strategic Planning (Ch. 8)
Program/Project Management
External Relations
f Workplanning (Ch. 3)
f Marking and Branding (Ch. 3)
f Technical Program Management (Ch. 4)
f Communication Planning (Ch. 3)
f Learning and Sharing (Ch. 4)
Financial Management
f Financial Systems: Minimum
Requirements (Ch. 3)
f Financial Management (Ch. 4)

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2 Your Award
PHOTO CREDIT: ©Shehab Uddin, DRIK.
 2

Your Award
Your Award
2.1 Overview

2.2 Getting Started

2.2.1 Preparing for the Award Phase
2.2.2 Award Phase Timeline and Task List

2.3 Pre-Award Phase

2.3.1 Pre-Award Survey
2.3.2 Pre-Award Assurances

2.4 Negotiation Phase

2.4.1 Negotiating Changes to Your Program
2.4.2 Addressing Pre-Award Survey Findings

2.5 Other Pre-Award-Related Activities

2.5.1 Designating Key Personnel and Requesting Changes
2.5.2 Recovering Indirect Costs
2.5.3 Subagreements and Subrecipients
2.5.4 Subrecipient Requirements

2.6 Understanding Your Cooperative Agreement

2.6.1 Cooperative Agreement Basics
2.6.2 USAID Cooperative Agreement

2.7 Summary and References

CAP chpt2.indd 5 10/27/10 11:35 AM

 2
2.1 Overview • AO—Agreement Officer, the USAID official
with the authority to enter into, administer,
This chapter covers the key steps in finalizing terminate, and/or close out assistance
your award. You should review it in conjunction agreements and make determinations and
with chapter 3, which covers the start-up phase findings on behalf of USAID.
Your Award

of your program. • AOTR—Agreement Officer’s Technical

Representative (formerly referred to as
Upon receiving notice that your organization is the Cognizant Technical Officer. Under
a finalist for an award from the U.S. Agency for a contract, this position is referred to
International Development (USAID), you must as the Contracting Officer’s Technical
finalize the award details and prepare to start Representative), the USAID official
your program. There are numerous concepts responsible for monitoring a grantee’s
to grasp. Many may be unfamiliar, especially if progress toward achieving the agreement’s
you are new to working with USAID. purpose and for serving as technical liaison
between the grantee and the Agreement
Objectives Officer (AO). The AO will name and delegate
authority for specific responsibilities to the
• Understand important award-related concepts
AOTR named in a Cooperative Agreement.
and the basics of your agreement.
• Award Amount (or Award)—The total
• Learn the key tasks necessary to finalize
amount that is anticipated to be spent over
your award.
the life of the project.
• Learn what you need to have in place before
• Cash-Basis Accounting System—A method
starting your program.
of bookkeeping that records financial events
based on cash flow and cash position.
Skip Ahead Income is recorded when cash is received,
and expense is recognized when cash is
f Award Phase: Tasks
paid out. In cash-basis accounting, revenues
f Pre-Award Survey and expenses are also called cash receipts
f Pre-Award Assurances and cash payments. Cash-basis accounting
does not recognize promises to pay or
f Pre-Award Survey Findings
expectations to receive money or service in
f Designating Key Personnel the future, such as payables, receivables, or
f Indirect Costs pre-paid or accrued expenses. This system
is simpler for individuals and organizations
f Subagreements and Subrecipients
that do not have significant numbers of these
f Cooperative Agreement Basics transactions, or when the time lag between
initiation of the transaction and the cash
flow is very short.
Key Terms and Acronyms • Cost Objective—The cost limit of an activity
within budget limits. A project cannot exceed
• Accrual Accounting System—An
the cost objective that has been set for it.
accounting method that records financial
events based on economic activity rather • Cost Share—The portion of project or
than financial activity. Under accrual program costs the USG does not cover.
accounting, revenue is recorded when it is This may be in the form of cash or
earned and realized, regardless of when in-kind contributions.
actual payment is received. • Direct Costs—Goods and services specifically
• ADS—The Automated Directives System purchased for the exclusive benefit of one
(ADS, http://www.usaid.gov/policy/ads/) project that are charged to that project.
encompasses the totality of USAID’s • EIN—Employer Identification Number
regulatory body. Additionally, it includes (also known as a U.S. Federal identification
suggested but not mandatory procedures number that identifies a business or nonprofit
and links to examples of best practices. entity); USAID uses it to facilitate payment for
• Allocable Cost—A cost incurred specifically an award.
to support or advance an award. • Finding—The answer to an audit objective
• Allowable Cost—An incurred cost that is supported by sufficient, competent,
determined to be an acceptable charge. and relevant evidence.

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 2
• Generally Accepted Accounting Principles • Obligated Amount or Obligation—
(GAAP)—A standard framework of guidelines The amount USAID has committed to
for accounting and financial reporting. It the program. There is no guarantee that
includes the standards, conventions, and USAID will reimburse the recipient for any
rules accountants follow in recording and spending above the obligated amount.

Your Award
summarizing transactions and in preparing
• Program Income—Funds earned by the
financial statements. Many countries
program for the benefit of the program itself.
use the International Financial Reporting
For example, program income comes from
Standards (IFRS, http://en.wikipedia.org/ charging fees for services or from the sale
wiki/International_Financial_Reporting_ of commodities. It is also earned by selling
Standards), established and maintained by equipment purchased with program funds
the International Accounting Standards Board that is no longer needed. Note: Program
(http://en.wikipedia.org/wiki/International_ income is different from income-generating
Accounting_Standards_Board), which also activities in which the program’s beneficiaries
provides a framework of accounting standards keep any income earned.
and financial reporting.
• Substantial Involvement—The right
• Indirect Costs—Costs that are required to that the USG retains to provide input into
carry out a project but are not attributable an assistance project funded through a
to a specific project, such as electricity or Cooperative Agreement. This right usually
administrative support staff. includes the ability to approve workplans,
budgets, Key Personnel, monitoring and
• In-Kind Contribution—Noncash
evaluation plans, and subrecipients. The
resources contributed to a project, which
Cooperative Agreement specifies the areas
may include volunteer services, equipment, or
of substantial involvement.
property. They may also count as any
cost-share obligation. • Unallowable Costs—Costs that cannot
be reimbursed either because of regulations
• Key Personnel—Refers to project positions or because they are not reasonable
and to the individuals who fill the particular or appropriate.
slots. Typically, positions identified in a
Cooperative Agreement as Key Personnel
are those leadership slots considered
essential to successful implementation of
the overall project. 2.2 Getting Started
• Mandatory Standard Provisions—The set
of rules and regulations that must be followed
by recipients of USAID funds. (For more
information, go to http://www.usaid.gov/policy/
ads/300/303mab.pdf.)
• MOU—Memorandum of Understanding, a
document that may be used as a confirmation The award phase begins when USAID notifies
of agreed-upon terms when an oral agreement you that your organization has been selected
has not been captured in a formal contract. as a finalist to receive an award. Generally, the
It may also set forth the basic principles and notification comes to the individual designated
guidelines under which parties will work on your application from a person in USAID’s
together to accomplish their goals. This should acquisitions office. This begins a series of
not be used if a transfer of funds is involved. events that may include a pre-award survey
(2.3.1), negotiations (2.4), and finalizing your
• NICRA—Negotiated Indirect Cost Rate
award. Some tasks initiated during this phase
Agreement, a rate negotiated individually
between an organization and USAID to must be completed before the award is signed.
cover indirect cost. (For more information Other tasks may continue into the start-up
on indirect costs and NICRA, see USAID’s phase, such as addressing pre-award survey
Best Practices Guide for Indirect Costing at findings/conditions (2.4.2), but all award-phase
http://www.usaid.gov/business/regulations/ tasks typically must be completed before
BestPractices.pdf.) implementation can begin.

The Essential NGO Guide to Managing Your USAID Award 7

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 2
Keep in mind that this notification from It is important to approach the pre-award
USAID regarding your application for funding phase carefully and fully address each of the
is preliminary in nature and not a guarantee tasks (2.2.2) required to finalize your award.
that you will receive funding. Rather, it means This phase can be quick or can involve long
that the review of all the application materials delays. Your organization stands a reasonable
chance of receiving an award if you make it
Your Award

is complete and your application was selected

as a finalist. USAID may then further assess this far, but beware of allowing expectations to
whether your organization has the capacity run too high. Note that you may also choose to
(i.e., systems, procedures, internal controls, withdraw from the negotiations at any time.
and policies) to achieve the objectives of the Though nothing is yet signed, your partnership
program you proposed in your application with USAID begins at this stage. You will want
and to satisfactorily meet USAID compliance to work diligently to provide the information
requirements. This assessment is called the needed so that USAID can make a final
pre-award survey (2.3.1). decision in your favor. At the same time, you
must ensure your organization is not promising
Further, USAID may be interested in funding something it cannot deliver. If USAID asks
your organization only if you commit to making you to take on additional work or modify your
certain changes to your proposal. This is an program, it is your responsibility to evaluate that
opportunity to negotiate the specific terms of request and determine whether you are capable
your agreement with USAID. of fulfilling it. If you feel the request requires
more funding or affects targets, be sure to
If your organization has completed a discuss this with your USAID counterparts.
pre-award survey and you have reached An organization that meets its commitments
agreement regarding the program, budget, gains credibility and improves its prospects
and targets, USAID will make a final award for obtaining additional funding in the future.
decision based on funding availability and its
priorities. If your program addresses a USAID
priority and funding is available, USAID will offer
you the award. USAID can decide not to fund 2.2.1 Preparing for
your program at any point during this process,
however. Reasons for rejecting an award at this
the Award Phase
stage may include one or more of the following: 1. Be Aware of the Differences between
Award and Obligation.
• Results of the pre-award survey lead USAID
to conclude that your organization does not An award has two significant numbers:
have systems, procedures, internal controls, the award amount and the obligated amount.
or policies in place to properly manage The award amount is the estimated total
USAID resources or to achieve the objectives amount that is intended to be spent over the
of the proposed program. life of the project. The obligated amount is
the amount of money USAID has committed
• Your organization and USAID cannot reach
to the project which may be the full amount of
agreement on specific aspects of the award,
the award or a portion of the award amount.
such as budget, geographic area to be
In other words, it is the amount available to
served, program design, or targets.
your organization to spend on the project
• Other proposal(s) were deemed to be at any particular time. USAID will provide
a higher priority or better value to USAID. (obligate) additional funds as needed and
• Available USAID funding was reduced as funds become available to it, assuming
or reallocated. your program is progressing satisfactorily.
It is important to note that USAID may not
• Your organization’s name appears on obligate the total award amount.
the Excluded Parties list maintained by the
Department of Treasury’s Office of Foreign
Assets Control, the U.S. Department of
Treasury’s Designated Nationals List,
or the UN Consolidated List.

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 2
Figure 1—Sample Obligation Timeline Personnel, monitoring and evaluation (M&E)
The following is an example of a schedule of when an plans, and any subrecipients, c) Agency and
organization might receive obligations over a three- Recipient Collaboration or Joint Participation,
year period based on a US$1 million award. and d) Agency authority to immediately halt
Date Amount a construction activity. The intention is to

Your Award
allow USAID the ability to ensure that award
Initial Obligation 1-Dec-06 US$100,000
activities remain consistent with its overall
Obligation after 1-Jun-07 US$400,000 strategic objectives while, at the same
Workplan Approval time, providing your organization sufficient
Year 2 Obligation 1-Jun-08 US$300,000 flexibility to implement and innovate within
Year 3 Obligation 1-Jun-09 US$200,000 the boundaries of those strategic objectives.
During the early stages of the award phase,
Total Award Amount US$1,000,000
you must be must be clear regarding
the amount of flexibility provided by the
Throughout the period of performance, it
Cooperative Agreement and what specific
is important to track actual expenditures
items require USAID review and approval.
against your obligated amount to make
(For more information on substantial
sure you do not exceed that amount. It is
involvement, visit http://www.usaid.gov/
recommended that you notify USAID when
policy/ads/300/303.pdf.)
you have spent approximately 75% of
your obligated amount so that USAID can
3. Address Pre-Award Survey Conditions.
obligate additional funds. Any spending
your organization does above the obligated During the pre-award phase, if the USG
amount is at your own risk! USAID will not uncovers any deficiencies, these have to be
reimburse amounts spent in excess of the corrected in accordance with the terms of
obligated amount under any circumstances. the award. Some findings may be simple to
correct, such as the need to introduce time
Another reason why it is important to sheets for staff. Others may be much more
track funds is because USAID obligates complex and time-consuming, such as the
funds using a “forward funding system.” need to install a better financial management
This is defined as the availability of funds to system. Consult with your AOTR if you have
support future expenditures for a specified questions about what is expected.
period. USAID typically will not forward fund
obligations for more than 12 months beyond 4. Carefully Review the Cooperative Agreement.
the end of the fiscal year in which the There is always a push to have a signed
obligation takes place. Therefore, spending agreement—both from people in your
an annual obligation in less than 12 months organization who want to have the
means your organization would need to agreement finalized and sometimes from
stop program activities or spend above USAID personnel. USAID may request
the obligated amount at its own risk. changes to certain aspects of your program,
(For more information, visit http://www.usaid. which may affect targets, budget, or other
gov/policy/ads/600/602.pdf.) key aspects. Think through these changes
and document them. These should be
2. Take Note of Substantial Involvement. incorporated into the program description of
USAID has various methods through which your Cooperative Agreement before signing.
it funds organizations to carry out their
strategic objectives. One mechanism is 5. Do Not Start Implementing Yet!
a Cooperative Agreement, which gives A signed award does not mean “Go!”
USAID the right to be substantially involved Several key planning tasks and approvals
in overseeing implementation of certain may still need to take place, and costs
aspects of your program. The purpose of incurred before the start date will not be
the Substantial Involvement clause in CAs reimbursed. Chapter 3 covers the start-up
is to assist you to achieve the objectives phase in detail. Review that chapter, and
of the agreement. ADS 303.3.11 describes be sure to manage the expectations of your
substantial involvement as limited to: a) partners and potential beneficiaries during
Approval of the Recipient’s Implementation the award and start-up phases.
Plan, b) Approval of Specified Key

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2.2.2 Award Phase Timeline and Task List
Figure 2—Award Phase Timeline and Task List
Event/Task Description Timeline Reference
Your Award

◊ USAID informs The USAID acquisitions office will contact you Will begin Section 2.3
you that your about your application for funding and inform you sometime after the
organization has that your organization is selected as a finalist. final application
been selected However, USAID has made no funding commitment deadline
as a finalist via at this time.
a notification
of consideration
for funding
Pre-award survey An auditor or other USAID-approved official will Immediately, Section 2.3.1
review your organization’s systems, policies, and must complete
capabilities to determine whether you meet the prior to award
minimum standards to successfully administer
USAID funding.
Pre-award assurances Pre-award assurances are various promises your Must complete Section 2.3.2
organization must make to be eligible for USAID prior to award
funding. These are forms that are usually included
in your application process. USAID will make sure
these are completed prior to award.
Negotiate program USAID may request geographic, technical, target, Must complete Section 2.4
details budget, or other changes to your proposal to better prior to award
align it with USAID priorities and strategic objectives.
You are expected to review these proposed changes
and make sure your organization can still complete
the project within the budget, targets, and time frame.
Begin addressing If your pre-award survey resulted in any findings, Immediately or Section 2.4.2
pre-award conditions USAID will ask you to address these. within time frame
specified by USAID
Designate Key Key personnel are individuals specifically listed in Individuals critical Section 2.5.1
Personnel your agreement. Key Personnel require AO approval. to the start-up
phase should be
designated by the
time the award is
signed if possible
Final USG review and USAID will take one last look at its budget, priorities, Timeline will Chapter 2
award decision and the other finalists for the award and then make depend on
final decisions. USAID workload
and priorities
◊ Sign and Successful organizations are notified, and a final Following the Section 2.6
announce award version of the agreement is sent for signature. Read steps above
it carefully and make sure you understand and are
in full agreement with all terms and conditions
before signing.
Start-up phase begins Upon receipt of the finalized agreement, you are Upon signature of Chapter 3
expected to begin the planning tasks for the start-up the final agreement
of your award. These tasks are outlined in chapter 3. document
Establish agreements Agreements with partners should be established Must begin prior to Section 2.5.3
with partners using the appropriate mechanism, such as a contract, implementation of
an MOU, etc. a joint activity

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2.3 Pre-Award Phase The survey team wil review the applicant’s
systems against standards (http://www.usaid.
When your organization is notified that it is gov/policy/ads/300/303.pdf) contained in the
a finalist for an award, it must still complete ADS and submit its findings to the AO for review
several tasks before USAID makes a final and consideration. The AO makes the final

Your Award
decision on whether to fund the program. Being determination of the applicant’s suitability for
selected as a finalist is a very good sign, but receipt of an award.
as mentioned above, it does not mean your
organization has actually won an award. Pre-Award Survey of
Before the specifics of an award are discussed,
Accounting System Adequacy
USAID will likely conduct a pre-award survey The Pre-Award Survey for Nonprofit
and ask you to sign pre-award assurances, Organizations form is used as the basis for
steps USAID takes to make sure your assessing financial management capacity.
organization is capable of managing the This form contains a list of criteria for
resources for the program you have designed determining whether your accounting system
in your application, and it helps to ensure meets the minimum standards to be eligible
USAID that your organization is willing and able for USG funding.
to comply with USAID regulations.
These standards include appropriate accounting
software and written financial management
policies and accounting procedures. The
2.3.1 Pre-Award Survey pre-awarded survey will involve assessing the
extent to which these are in place within your
A pre-award survey assesses your organization and being actively implemented.
organization’s policies, systems, procedures, Refer to Standard Form 1408, “Pre-award
and capabilities to manage USAID resources. Survey of Prospective Contractor Accounting
Although such a survey may cover a variety of System” (often referred to as SF-1408) online
issues, including your organization’s structure, at http://www.acquisition.gov/far/current/html/
management, and governance, the focus FormsStandard41.html.
is typically on internal financial procedures,
policies, and controls. The reason for this Following are the 15 questions on the form.
emphasis is simple: regardless of the strengths In evaluating each item, the surveyor will answer
your organization may have, USAID will not “Yes” or “No.” If your system only partially
execute an award with an organization that meets the criteria for a particular question, the
cannot demonstrate the capacity to administer answer will most likely be “No,” and the surveyor
funds in full compliance with USAID rules may further indicate in a report the need for
and regulations. accounting personnel, procurement, internal
controls, or other policies and procedures
If the Agreement Officer (AO) determines essential for demonstrating the existence of
that a pre-award survey is called for, the AO good financial/administrative practices.
will assemble a team with appropriate expertise
to conduct it. A team might consist of: 1. Is the accounting system in accordance
with generally accepted accounting
• an Assistance Objective Team (AOT) member; principles applicable in the circumstances?
• the AO or designate; Generally Accepted Accounting Principles
(GAAP) are a framework of guidelines for
• the Financial Officer (Bureau for
accounting and financial reporting. They
Management, Office of the Chief Financial
include the standards, conventions, and
Officer [M/CFO], or Mission or Regional
rules accountants follow in recording and
Controller’s Office) or designate; and
summarizing transactions and in preparing
• one or more representatives of the Bureau financial statements. The surveyor will
for Management, Office of Acquisition and determine whether your overall system
Assistance, Contract Audit and Support “passes” or “fails” when compared to
Division, Contract Audit Management Branch these accepted practices.
(OAA/CAM), or the cognizant Regional
Inspector General for Audit, if appropriate.

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2. Does the accounting system provide for: • 2f—A labor distribution system that charges
direct and indirect labor to the appropriate
• 2a—Proper segregation of direct costs from
cost objectives.
indirect costs.
Similar to 2e, above, but in addition to
Your accounting system and procedures
recording the time, your system must be
must identify and record direct and indirect
Your Award

able to charge these costs to different

costs separately. When a cost is directly
projects. This also includes indirect costs.
attributable to a specific project, it is
For example, if you have a secretary who
considered a “direct cost.” If you have
provides administrative support to staff
multiple projects and have costs that are
working on multiple projects, but his or her
not specifically attributable to a single
time is not easily attributable to one project,
project, these are considered “indirect
this individual’s time may be part of your
costs.” Your accounting system must have
indirect costs.
the ability to categorize costs in this way,
and your organization must clearly define
which costs are considered direct and • 2g—Interim (at least monthly)
indirect. (For tips on how to allocate determination of costs charged to a
shared project or indirect costs, see contract through routine posting of books
section 4.3.1.6.) of account.
The surveyor will assess your policies,
• 2b—Identification and accumulation of procedures, and historical records to
direct costs by contract. determine whether you are reconciling
your books of accounts on at least a
For those direct costs that are attributable
monthly basis.
to a specific program, your system should
be able to report on what those costs are
and the total expenditures to date. • 2h—Exclusion from costs charged to
government contracts of amounts which are
not allowable in OMB A-122, Attachment B,
• 2c—A logical and consistent method for
or other contract provisions.
allocation of indirect costs to intermediate
and final cost objectives. (A contract is a The surveyor will examine your
final cost objective.) procurement policies to determine how
unallowable costs —those items USAID will
not cover—are defined and identified. The
• 2d—Accumulation of costs under general reporting system must exclude these costs
ledger control. from being charged to USAID; policies
Your system should be able to report on should be developed to prevent those items
all costs incurred across your organization. from being purchased in the first place.
These include non-project costs and (For more on allowable costs, see
indirect costs as well as direct costs. section 4.3.2.2.)

• 2e—A timekeeping system that identifies • 2i—Identification of costs by contract line

employees’ labor by intermediate or final item and by units (as if each unit or line
cost objectives. item were a separate contract) if required
by the proposed contract/grant.
Your system must include a timekeeping
component that connects an employee’s Your accounting system should be able to
hours to a specific project or activity under link the original budget (the budget in your
a project. This is not just an attribute of Cooperative Agreement) with individual
your accounting system. Your organization transactions. For example, if your budget
must have a process for employees to includes the purchase of 300 units at US$2
complete time sheets and note which each, the accounting system needs to be
hours are attributed to different activities or able to show the actual cost and quantity
projects. Even if your accounting system purchased as part of the process of
can do this, the surveyor may not give you recording the transaction.
a passing grade unless your organization
has a written policy and is actively using
this process to track employee time.

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3. Does the accounting system provide Pre-Award Survey Results
financial information:
The surveyor will provide USAID with a report
• 3a—Required by OMB A-110, Standards of of the pre-award survey results, based on
Financial Management Systems. which USAID will write a letter to the applicant
regarding any deficiencies or weaknesses.

Your Award
This question seeks to determine whether
your system will yield reports in compliance The applicant will then have an opportunity to
with the terms of your agreement— respond and clarify any issues. USAID will take
especially in terms of reporting on costs the audit into account as one aspect of its final
and managing the process for disbursing funding decision. A more detailed explanation
funds properly. (For more on the reporting of how you may want to respond to the pre-
requirements of your award, see chapter 5.) award survey results is included in the section
on addressing pre-award survey findings/
• 3b—Required to support requests for conditions (2.4.2).
reimbursement payments.
• 3c—Required to support requests for
advance payments.
When you request advances or 2.3.2 Pre-Award Assurances
reimbursements for your program, you
Pre-award certifications, assurances, and other
must report the status of your spending of
statements are promises your organization
funds received to date and the projected
makes prior to receiving a USAID award.
funding needs for the upcoming period
(one to three months or more, depending
on the amount of advanced funds USAID Find It Online
authorizes). This criterion evaluates
whether your systems are able to report SF-424B Assurance of Compliance
http://apply07.grants.gov/apply/forms/sample/
accurately on recent spending and
SF424B-V1.1.pdf
forecast upcoming costs.

4. Is the accounting system designed, and are These statements are usually included as part
the records maintained, in such a manner of a form, Standard Form-424B, that is signed
that adequate, reliable data are developed by your executive director or responsible senior
for use in pricing follow-on acquisitions? officer at your organization and states that
Your system should be more than a your organization:
system for tracking your current accounts. • will comply with the necessary USAID
The history of cost data your system stores regulations and requirements;
can be an excellent resource for you to
• has the capacity to successfully complete the
estimate costs for taking on additional work.
program; and
For example, if your project provides health
services in a certain district, and USAID • is willing to comply with USAID requirements
is interested in having your organization to monitor your program.
expand its work into an additional district,
you may extract historical data from your In many cases, you must submit this form when
system that can help provide reliable cost you apply for the award. If it was not completed
estimates for that additional work. with your application, USAID may ask that it be
signed during the award phase.
5. Is the accounting system currently in
full operation? If not, describe in Section I Specifically, these assurances include
Narrative which portions are (1) in operation, statements that your organization:
(2) set up, but not yet in operation, (3)
anticipated, or (4) nonexistent. • has the funds or resources necessary to meet
any cost-share or matching commitment you
If you are in the process of upgrading your agreed to meet;
system when the survey occurs, this is the
opportunity for the surveyor to note the • authorizes USAID to access and examine all
progress you are making and the estimated records, books, papers, or documents related
timeline for completing the upgrade. to the award;

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• has or will establish a proper relevant perspective. These experts may
accounting system; provide suggestions and recommendations
to improve your proposed program. During
• has or will establish safeguards to prohibit
the negotiation phase, USAID may ask you
employees from using their positions for
to change certain aspects of your program
purposes that constitute or present the
Your Award

based on these reviews.

appearance of personal or organizational
conflict of interest or personal gain;
Examples of changes USAID might
• will comply with U.S. laws relating to request include:
nondiscrimination on the basis of sex,
• Modify performance targets.
race, religion, color, or national origin,
among others; • Add, reduce, or change targeted
geographic areas.
• will comply with USAID audit requirements; and
• Reconsider subrecipient selection (reasons
• will open a separate bank account for the
for this could include past performance record
project (no comingling of funds).
with the proposed subrecipient on other
USAID-funded grants).
USAID requires that certain standard
• Change proposed key personnel
provisions be included in subagreements
(for example, if a proposed individual does
but does not require assurance forms from
not have the necessary qualifications).
your subrecipients. However, good business
practice dictates that these assurances should • Remove budget items that are unallowable
flow down to subagreements despite the under USAID regulations or reduce others
fact forms may not be required by USAID. deemed excessive.
• Change targeted beneficiary group(s).
• Select a specific program design or training/
education curriculum (for example, if there is
2.4 Negotiation Phase one the host government prefers).
• Add, remove, or otherwise modify
Prior to finalizing the award, your organization specific activities.
will have the chance to negotiate with USAID
the terms and conditions of the award • Redesign activities and/or strategies in a
agreement, including how your organization manner more closely reflecting approved
will receive funding and what administrative or accepted in-country practices.
issues your organization must address to be • Reduce your budget or specific budget line
eligible to receive the award. items to lower costs.
• Add strategies that take into account specific
This section discusses these issues and
cross-cutting considerations such as gender,
gives you some sense of what to expect. Each
environment, etc.
negotiation is different, so be prepared to be
flexible. Also, keep in mind that successfully
coming to an agreement with USAID does not During this negotiation phase, you must
necessarily mean you will receive funding. carefully review changes you have been asked
As mentioned, USAID reserves the right of to make and consider the following:
final selection based on USAID priorities
and availability of resources. • Does the proposed change affect targets?
• Does it affect the budget?
• Does it affect operations?

2.4.1 Negotiating Changes • Does it affect the implementation time frame?

to Your Program • Will it require different subrecipients?

• Will it require personnel changes?
The application submitted by your organization
will be thoroughly reviewed and evaluated by • Is your organization able to implement the
USAID technical experts. USAID may also requested changes?
invite host-country officials and other outside For example, let us assume you propose to
experts to participate in the review process in implement your program in a specific village
order to ensure consistency with host-country where you are already carrying out similar
development priorities and a wider and more activities, but on a smaller scale. In the

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feedback on your proposal, USAID states that important consideration during the negotiation
it already has an existing partner in the area phase. If USAID lists a particular finding that
you proposed, but has identified a gap in will require your organization to incur additional
another district and asks that you implement expenses, you may ask that the award be
your program there instead. adjusted to cover part or all of the cost. For

Your Award
example, if USAID requires a major upgrade
Before agreeing to any changes and signing to your accounting system, you may be able to
an award, your organization should research include part of that expense as an indirect cost
the new area to determine whether it has similar and have the award cover a share of that cost.
demographics. A larger population, for example,
or other factors might provide the opportunity Keep in mind that until you and USAID
to reach higher targets, whereas a smaller actually sign the award, there is always
population may mean it will be a struggle to a chance the award may not happen.
reach the originally proposed targets. Also, your Therefore, if you take on major expenses
organization may need to find a subrecipient prior to signing the award, such as
in the new area. Depending on the location, overhauling your accounting system
when compared to the one originally proposed, or hiring consultants to implement new
you may need to increase or decrease systems, you do so at your own risk.
transportation or other costs of operation.
Once the award is finalized and signed, your
In some cases, there may be a number of organization must address the findings as
unknowns that make it difficult to respond in the quickly as possible. Not properly addressing
time frame USAID requested. If this is the case, pre-award survey findings in the allotted time
talk to your USAID contact. She or he may can result in termination of your award.
have data that can help, or, if you must meet
a deadline to finalize the award that does not At that time, USAID may 1) conduct a follow-
provide sufficient time to gather the necessary up, project-specific review or 2) ask that you
information, your USAID contact may be willing include a review of your corrections in your
to allow you to address your concerns through next annual report. To do this, you must furnish
a modification to the program description after the pre-award survey report and details of
the award is made. your corrections to the auditor before she or
he conducts the regular annual audit. Your
USAID’s goal is simple—to reach agreement auditor can then include a statement in the final
on a program that both meets USAID’s priorities audit report explaining whether the pre-award
and is something that can realistically be findings were resolved. (For more information
achieved given the budget and time frame on conducting an annual audit, see chapter 5.)
of the award. Your role is to incorporate
the requested changes into your program
description, ensuring they are appropriate
and achievable.
2.5 Other Pre-Award-
Related Activities
2.4.2 Addressing Pre-Award Under a Cooperative Agreement, USAID has
clearly defined responsibilities for review and
Survey Findings approval of certain aspects of your program.
Referred to as “substantial involvement,”
Your organization typically will receive the results these may include:
of the pre-award survey in a letter that details
any “findings” or “deficiencies” with its systems. • approval of Implementation Plan;
Your agreement states under the “Special • approval of Specified Key Personnel;
Award Conditions” section that you must
• approval of the Monitoring and Evaluation
address these deficiencies within a certain
(M&E) Plan;
time after the agreement start date to continue
to receive funding, and sometime the findings • agency and Recipient Collaboration or
are specified in the agreement. It is possible, Joint Participation; and
however, for the AO or AOTR to grant you • agency authority to immediately halt a
additional time to address these deficiencies. construction activity.
As mentioned earlier, some findings may
be simple to address, but more expensive
and time-consuming to complete. This is an Each of these areas is discussed in detail
in this chapter.

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selection. Your AOTR may want to meet the
2.5.1 Designating candidate and may even want to participate in
Key Personnel and final interviews. Submit a request for approval
in writing to your AO and copy your AOTR; be
Requesting Changes sure to include the CV of the individual you wish
to hire as well as an explanation of why he or
Your Award

In a solicitation, USAID may designate

she is suited for the position. You may choose
certain positions on the project team as “Key
to use Standard Form-1420 to summarize the
Personnel.” These positions, identified as
information, but it is not required.
leadership roles, are considered essential
to successful implementation of the overall
project. It is important to note that the term Key
Personnel often is used to refer both to project Find It Online
positions as well as the individuals who fill the Form 1420-17—Contractor employee
particular slots. Biographical Data Sheet
http://www.usaid.gov/forms/AID142017.doc
(opens as a WORD document with macros)
In Your Agreement
The Key Personnel clause typically is found
under the Substantial Involvement section Your AOTR will review your selection and
of Schedule A. The clause contains both the forward it to the AO with a recommendation
terms of the requirement and the list of Key to approve or deny the change. If your AOTR
Personnel named in your agreement.
has concerns, he or she may want to discuss
them with you before seeking final approval
from the AO. Your AOTR is not questioning why
Typically, an organization will identify and you recommend one person and not another,
propose individuals to fill these Key Personnel but rather ensuring the new candidate meets
positions in its application for funding. If no one the established qualifications criteria for the
is identified at the time of application, you may particular Key Personnel position. Your AOTR
designate this unfilled slot as “to be determined” may also want to make sure that the hiring
(TBD). In this case, you can continue to recruit process was fair and in line with in-country
for the position. Once you identify the individual, standards and practices.
you must request approval. If an individual
named in your proposal is no longer available Finally, the AOTR must submit a request to
when the award phase begins, an alternative the AO to modify your agreement to formally
candidate will need to be recruited and document the change in Key Personnel. This
submitted to the AO for approval. Similarly, any formal modification may come at a later date.
proposed changes to Key Personnel named in
your Cooperative Agreement must be approved
by the AO.

Note: The AO approves all Key Personnel

2.5.2 Recovering
changes, unless authority has been Indirect Costs
delesignated to the AOTR in writing.
An organization with more than one project
When a change in Key Personnel occurs incurs three categories of expenses:
(for example, when an individual identified as • Direct project costs—Costs that can be
Key Personnel in the Cooperative Agreement clearly attributed to a specific project, such
resigns, is terminated, or is otherwise as a dedicated staff person, office space used
unavailable), notify your AOTR immediately. by project staff, or specific equipment and
In the case of termination, be sure you have supplies used only by a single project.
followed your organization’s human resources
• Indirect or shared project costs—Costs
(HR) procedures.
that are required to carry out a project, but are
difficult to attribute to a specific project, such
The next step is to conduct a fair and open
as utilities or administrative support
competition to recruit a replacement. Be sure
staff shared with other projects.
to follow your HR policies and document the
process thoroughly. When you have selected • Non-project costs—Legitimate organizational
a candidate, you may extend a conditional expenses, but costs not related to any specific
job offer that states the AO must approve the project or costs that are not “allowable.”

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Many project costs easily fall into the direct Establishing a NICRA
cost category, while non-project costs are
Another way some organizations address
usually self-evident. Allocating indirect
indirect costs is by establishing a Negotiated
project costs, however, requires a method for
Indirect Cost Rate Agreement (NICRA) with
apportioning them fairly.
USAID. A NICRA lays out a formula that

Your Award
establishes how your organization can recover
One approach to allocating indirect or shared
the shared or indirect project costs it accrues
project costs is to use a percentage based on
in carrying out its USAID-funded agreements.
the number of employees on one project versus
the total number of employees. Another way to
USAID will allow organizations to establish a
do this is by allocating dedicated office space.
NICRA based on a number of considerations,
To do this, first figure out what parts of your
including the nature and purpose of the award
office are dedicated to a specific project, such
and the justification for the need to establish
as space for dedicated project staff, and what
a NICRA. If USAID is willing to support your
parts are shared, such as meeting rooms or the
request for a NICRA, you must have the
reception area. Of the areas that are dedicated
supporting data available on which to establish
to specific projects, calculate the area allocated
a NICRA formula. Your accounting system must
to each project. You can even divide the office
also be capable of separating and identifying
space of an individual who splits time based
indirect and direct project costs.
on the percentage she or he allocates to each
project. Calculate the area dedicated to each
In some cases, USAID will allow an
project as well as the percentage of overall
organization to set up a provisional NICRA that
area dedicated to each project.
will be revisited after a year to establish a final
rate. Once a final rate is established, it can be
For example, let’s say an office of 1,000
used as your indirect cost rate for other USAID
square meters houses two projects; eight
awards. In other words, you would not need to
hundred sq. meters of office space are
establish a new NICRA for each award. NICRAs
dedicated to the individual projects, while the
are then reviewed and adjusted annually.
rest is shared. Of the dedicated space, 600 sq.
meters are for one project, while 200 are for the
Your AO can advise you on whether or how
other project. This means 75% of the overall
to pursue establishing a NICRA. USAID-funded
space is charged to the first project (750 square
non-U.S.-based organizations may need to
meters), and 25% for the second (250 square
consult individual missions to establish a
meters). These percentages may also be used
NICRA. If an organization does not establish
as the basis for allocating costs for other
a NICRA during the negotiation phase, it can
shared expenses.
request one at a later date.
There is no single correct method for
Note: A NICRA can simplify how you
allocating shared costs, but how your
are reimbursed for your overhead costs in
organization calculates these costs should be
certain USAID-funded projects. However,
clearly documented. This helps to ensure that
if your organization has projects funded by
project resources are used wisely and that
other donors, or if your NICRA only covers
costs are distributed in a reasonable manner.
headquarters’ expenses, or if you want to verify
Of course, as projects and funding streams
that your NICRA is accurately covering your
change, these formulas need to be adjusted
shared expenses, you will still need to allocate
accordingly. Chapter 4 addresses this point
your shared costs. Thus, regardless of whether
in more detail.
you have a NICRA, it is a good management
practice to establish a policy for allocating
Set—and Keep Up to Date—Policies
shared project expenses.
for Calculating Shared or Indirect Costs
With these guidelines in mind, establish
policies that define the following:
• what specific costs and resources are
considered “shared”;
• how your organization will divide shared costs
among different projects; and
• under what circumstances these policies
will be revised.

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 2
2.5.3 Subagreements
Remember
and Subrecipients For vendors, whether supplying a good or
service, a purchase order or agreement is
During the award phase, you will want to begin
necessary, and vendors must be selected
Your Award

the process of establishing and/or formalizing though a competitive process according to

your relationships with subrecipients. Similar the process and procedures established
to Key Personnel, USAID approval is required by your organization and detailed in your
prior to entering into subagreements with procurement manual.
subrecipients. If your subrecipients are named
in your approved proposal and budget, then you
can proceed with executing subagreements.
If they are not named, then you will need to
specifically request approval from the AO for 2.5.4 Subrecipient
each subrecipient. Requirements
A subrecipient is any organization to which There are special requirements with which
you provide financial assistance in the form of you must comply when part of your USAID
money or property under your USAID-funded award goes to a subrecipient.
award. A subgrantee would be a subrecipient,
as would an organization you bring on to help USAID has a contractual relationship with
you implement your project. the prime recipient. Under the agreement, the
prime must abide by various requirements and
However, the following examples would not be provisions that are specified or referenced in
considered subrecipients and would not require the agreement.
USAID approval:
• a company from which you buy office Items Required in Agreements with
supplies; Subrecipients on USAID-Funded Projects
• payments for school fees for orphans and
USAID publishes two important
vulnerable children; or documents that are helpful in putting
• a beneficiary organization/community together subagreements:
NGO to which you will be providing f Mandatory Standard Provisions for
capacity-building support. U.S. NGOs (http://www.usaid.gov/policy/
ads/300/303maa.pdf)
While only subrecipients need USAID f Mandatory Standard Provisions for non-
approval, terrorism searches must be U.S. NGOs (http://www.usaid.gov/policy/
conducted on both potential subrecipients ads/300/303mab.pdf)
and potential vendors. To document that you 1. Choose the relevant document based
have checked that none is ineligible, you on whether your subrecipient is U.S.-
must check several different sources: based or non-U.S. based. Whether
your organization is U.S.-based does
1) U.S. Department of Treasury List of not matter; it is possible that your subs
Specially Designated Nationals and Blocked have a different set of requirements
Persons—http://www.ustreas.gov/offices/ from yours.
enforcement/ofac/sdn/;
2. Include all of the “mandatory” provisions
2) United Nations Al-Qaida and Taliban in the first section of the document.
Consolidated List—http://www.un.org/sc/ 3. Include all those sections listed under
committees/1267/consolist.shtml; “Required as Applicable” that are
3) Excluded Parties List—http://www.epls.gov; relevant to your sub. Each provision
explains when the provision is applicable.
and
4) any supplemental information concerning
prohibited individuals or entities that USAID The subrecipient has a similar relationship
may provide to the grantee. with a prime as the prime has with USAID.
As USAID does not have a direct relationship
with the sub, the prime is responsible for

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 2
ensuring that all mandatory provisions and - Marking and Branding—Ensure
important clauses in the award flow down to that subs understand marking and
the sub. The easiest way to do this is through a branding requirements.
subagreement that specifies and/or references • Cost Share—Any cost share a subrecipient
the requirements and practices by which the contributes may be aggregated and applied

Your Award
subrecipient must abide. toward your cost-share contribution, if any.
Therefore, you should work with your subs
The following are major areas a prime partner to record items such as volunteer hours
must address when selecting and managing and other in-kind contributions.
a subrecipient.

Reporting
Subrecipient Selection Process
• Timelines—Develop a calendar for
• Selection Process—A prime will need to use submission of all required reports. Give
an established selection process and properly your subs deadlines that allow you to receive
document all selection decisions. Suggested reports early enough so you can review and
practices for selecting subrecipients include consolidate your own reports for submission
issuing a Request for Applications (RFA) or to USAID.
soliciting bids directly from organizations that
have the skills you are looking for. • Audits—Determine whether subs will need
to have an outside audit. The expenditure
• Pre-Award Assessment—Prior to making threshold for which audits are required for
a final selection, evaluate a prospective foreign NGOs is spending US$300,000 or
subrecipient’s financial and management more in a given year. The threshold for U.S.-
systems and its ability to implement activities based NGOs is spending US$500,000. This
and deliver desired results. If possible, visit threshold amount includes total funding from
the finalists to further verify their suitability. the USG—not just the funding subs receive
• USAID Approval—USAID must approve from your organization under your award.
a subrecipient before it can receive funding.
If you named a sub in your original proposal
and budget, then it typically is approved in Post-Award
your agreement; AO approval is required • Close Out—Subs must close out financially,
if the subrecipient is not included in the complete all required deliverables, and
Cooperative Agreement. clarify disposition plans for any equipment
• Agreement—When making a subaward, or inventory purchased with USAID funds.
a Standard Grant Agreement, Fixed- Therefore, you will want to end subrecipient
Obligation Grant Agreement, or subcontract activities early.
is appropriate when a legally binding • Records—Ensure that subs are aware of
mechanism is needed. An MOU or other the documentation they must maintain and
less formal agreement is not an appropriate for how long (typically three years after
means of engaging a subrecipient because it submission of the final report).
is not legally binding. Prior to entering into a
contractual relationship, ensure that all parties
understand the legal obligations involved.
2.6 Understanding Your
Planning and Implementation Cooperative Agreement
• Requirements and Regulations—Check The award phase ends when an agreement
your award to see what provisions also is formally executed (signed) by both USAID
apply to subs, and review with them the and your organization. This document contains
requirements and USAID regulations related the expectations and regulations that govern
to the type of subagreement you use with your award.
them. Examples:
This section of the Guide focuses on
- Procurement—Ensure that subs are
Cooperative Agreements, the kind of agreement
aware of cost principles for allowable costs
USAID typically uses. Some Missions routinely
and that there are mechanisms for properly
require a post-award conference to go over
documenting procurement actions.

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 2
your Cooperative Agreement with you. If that is 9. what obligations you have to USAID after
not the case, you may request one. the program is completed;
10. specific protections and rights your
Take the time to review your agreement as organization retains;
soon as you receive it and keep a copy on
11. procedures for various interactions between
Your Award

hand, so you can refer to the terms regularly.

In fact, everyone on your project management your organization and USAID; and
team should read it thoroughly. 12. consequences and contingencies if your
organization fails to meet its obligations, or
if your organization wishes to withdraw from
the agreement, or if USAID terminates
2.6.1 Cooperative the program.
Agreement Basics
Each Cooperative Agreement will be
When you enter into a Cooperative Agreement slightly different. The following sections of
with USAID, your organization becomes legally the Cooperative Agreement are intended
obligated to follow its rules and regulations. for general reference. However, note that
Some of these are clearly spelled out, whereas what is specifically stated in your Cooperative
others may be incorporated by reference. Agreement is the organization’s legal
You must comply with both kinds and may be obligation to USAID.
penalized if you do not—even if noncompliance
was unintentional.

At the same time, the Cooperative Agreement 2.6.2 USAID

protects you, too. For example, some clauses
prohibit USAID from putting unreasonable Cooperative Agreement
reporting burdens on your organization;
others state that your organization cannot be The USAID Cooperative Agreement has
compelled to implement programs against four primary sections:
its will. Thus, knowing your rights under your 1. Award Letter
Cooperative Agreement is as important as
2. Attachment A—Schedule
knowing your obligations.
3. Attachment B—Program Description
What is in a Cooperative Agreement? 4. Attachment C—Standard Provisions
Your agreement delineates the relationship
between your organization and USAID and While Cooperative Agreements vary with each
outlines the following: award, the following outline describes the
1. how much funding USAID plans to provide general contents of each of the above sections.
to your organization; Important differences between agreements with
U.S.- and non-U.S.-based organizations are
2. what you are expected to accomplish with
contained in the Standard Provisions section.
the funding, and how you plan to do it;
These differences are discussed here briefly,
3. the time frame in which USAID plans to and Common USAID Standard Provisions are
provide support to your program; included in Annex 2.
4. who in your organization is primarily
responsible for the program’s success;
Find It Online
5. who at USAID is responsible for assisting
f USAID ADS Chapter 303—Grants and
and overseeing your program;
Cooperative Agreements to NGOs
6. what you must do to request and (http://www.usaid.gov/policy/ads/300/303.pdf)
receive funds; f Standard Mandatory Provisions for non-
7. what role USAID may play in executing U.S. NGOs (http://www.usaid.gov/policy/
your program; ads/300/303mab.pdf)
f Standard Mandatory Provisions for U.S.
8. what obligations you have to USAID during
NGOs (http://www.usaid.gov/policy/ads
the life of the program; /300/303maa.pdf)

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 2
Award Letter • A.1: The Purpose of Cooperative
Agreement—This explicitly ties funding
The award letter contains the following
to the program described in your Program
information about your award:
Description (Attachment B).
• Cooperative Agreement Number—This
number should be referenced in key • A.2: Period of Cooperative Agreement—

Your Award
documents, correspondence, and reports. Contains two sets of dates: the start and end
dates for the entire award and the date of the
• Award Amount—This figure represents the
initial obligation of funds.
total amount USAID estimates it will provide
for the life of your Cooperative Agreement. • A.3: Amount of Cooperative Agreement
and Payment—Presents the total award
• Obligated Amount—This is the amount
amount, the obligation amount, and how
of funding made readily available for an
payments are to be made. This section
awardee. The initial obligated amount is
also contains an important caveat to your
stated in this letter. The award letter often
program’s continued funding:
contains a statement such as, “USAID will not
be liable for reimbursing the Recipient for any Incremental funds up to the total
costs in excess of the obligated amount.” The amount of the agreement may be obligated
letter will then list the obligated amount under by USAID subject to the availability of
“Amount Obligated to This Action.” Each funds, satisfactory progress of the pro-
future obligation increase will be documented gram and continued relevance of the
in a modification from your AO specifying the program objectives.
new total obligated amount. You will receive • A.4: Cooperative Agreement Budget—
copies of these modifications, which can help A summary of the total project budget,
you track your current obligated amount. including the cost-share amount, if any.
Modifications to a Cooperative Agreement
reflecting an increase in the obligated • A.5: Reporting and Evaluation—A list of
amount do not require counter-signature by the various reporting requirements for which
your organization. USAID is only authorized you are responsible during the life of the
to reimburse your organization up to the Cooperative Agreement.
obligated amount and is not responsible for - Financial—quarterly financial status
any expenses you incur over that amount. reports (SF-425)
• Agreement Dates—The effective date, or - Program reporting—quarterly
start date, of the Cooperative Agreement performance reports and annual workplans
is the date the letter is transmitted, unless
- Final report—the final report to be
stated otherwise. The end date is usually
submitted at the end of the project
stated in the body of the letter.
• A.6: Indirect Cost Rate (if applicable)—
• Cost Share—The letter also lists “Cost-
Details on the Negotiated Indirect Cost
Sharing Amount (Non-Federal).” This amount
Rate (or NICRA) for your agreement,
is the cost-share contribution the recipient
including how it is to be calculated and
organization has agreed to provide for this
whether it is a provisional or final rate (this
program, if any. Whether the cost share is an
clause may not be included if no NICRA
in-kind or cash contribution, or other funding,
has been established).
your organization will be held responsible
for meeting its cost-share obligation. • A.7: Title to Property—Property purchased
Therefore, cost-share accumulations must under your agreement, such as vehicles,
be tracked accurately throughout the period computer equipment, etc., that may remain
of performance. with your organization or elsewhere.
• Agreement Officer—The AO, the legal • A.8: Authorized Geographic Code—
representative of the USG, signs the letter USAID’s procurement regulations differ
to make the award. based on the specific geographic area
where the project will be implemented.
• Payment Office—The payment office is your
The geographic code in the Cooperative
key contact for financial status reporting.
Agreement defines which set of procurement
rules will apply to this project, that is, source
Attachment A—Schedule requirements (the purchase point of items
Attachment A is the Schedule. Each element is to be procured) and origin requirements
explained below with links provided to additional (the country of manufacture of the items
details elsewhere in this document. to be procured).

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 2
• A.9: Cost Share—This is the amount your collaboration or joint participation of USAID
organization has committed to contribute and the grantee on the program. There
from non-USG sources. If your organization should be sufficient reason for Agency
has committed to a cost-share contribution involvement, and the involvement should
toward implementation of your project, you be specifically tailored to support identified
Your Award

are required to report accumulated cost-share elements in the program description. When
contributions in the quarterly financial these conditions are met, the AO may
status reports. include appropriate levels of substantial
involvement such as the following:
1. Collaborative involvement in the selection of
Find It Online advisory committee members, if the program
f 22 CFR 228—Rules on Source, Origin and establishes such a committee to deal with
Nationality for Commodities and Services programmatic or technical issues and not
Financed by USAID routine administrative matters.
(http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?
c=ecfr;sid=f410ee9353f69d2edc3205ce8572
2. Approval of and concurrence on subawards.
be2b;rgn=div5;view=text;node=22%3A1.0.2. Grantees must get the AO’s prior approval
22.27;idno=22;cc=ecfr) for the subaward, transfer, or contracting
out of any work under their award. If all
f ADS Chapter 310—Source, Origin
subrecipients were identified at the outset,
and Nationality
(http://www.usaid.gov/policy/ads/300/310.pdf) and they are listed in the agreement,
additional approvals are needed only if these
subrecipients are changed or new ones
added. While this involvement is generally
• A.10: Substantial Involvement—USAID limited to approving work by a third party,
has a clearly defined role in reviewing and USAID reserves any further approval rights
approving certain aspects of your program, for subawards or contracts and must clearly
which may include the following: spell out such Agency involvement in
- Approval of Your Implementation Plan— the substantial involvement provision of
The implementation or workplan describes the agreement.
how your organization will implement 3. Approval of the recipient’s monitoring and
its program to reach the objectives evaluation plans. The AO (unless otherwise
contained in the Cooperative Agreement. delegated to the AOTR) must approve any
Upon submission, USAID will review the change to your proposed targets or other
workplan and provide you with feedback. aspects of your M&E plan. For example, if
You cannot begin implementing your the in-country team suggests you work in a
program until you receive official approval different geographic area, and, as a result,
of your workplan. Typically, workplans you understand that your targets will change,
are required annually for awards covering be sure to get written approval before
multiple years; the submission dates will moving forward.
be stated in your agreement.
4. Authorization of specified kinds of direction
- Approval of Specified Key Personnel— or redirection because of interrelationships
Several positions on your project may be with other projects. All such activities must
listed in this section as Key Personnel be included in the program description,
(2.5.1), along with the names of the negotiated in the budget, and made part
individuals who currently hold each of the award.
position. USAID may designate as Key
Note: Some Missions may also include the
Personnel only those positions that are
following substantial involvement provision
essential to the successful implementation
when appropriate:
of an award. USAID‘s policy limits this to a
reasonable number of positions, generally Agency Authority to Immediately Halt a
no more than five positions or 5% of Construction Activity—The AO may immediately
recipient employees working under the halt a construction activity if identified
award, whichever is greater. specifications are not met. In such cases, the
AO must also attach the identified specifications
- Approval of Grantee Collaboration
to the award when it is being executed. Any
or Joint Participation—If your project
material changes to the specifications must
would benefit from USAID’s technical
be treated as an amendment to the award.
knowledge, the AO may authorize the

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 2
• A.11: Program Income—This is the approach, and have the AO approve them
gross income earned by your organization in writing before you act on these changes.
that is directly generated by a supported
activity or earned as a result of the award. Attachment C—Standard Provisions
Program income includes fees for trainings Standard provisions are a variety of laws,

Your Award
or other services, funds earned from selling regulations, and requirements that apply to
equipment purchased with USAID funds, entities receiving USAID funding. Though they
interest earned on micro-loans, etc. are “standard,” the actual provisions you find in
Funds raised by selling equipment even your Cooperative Agreement vary based on
after the agreement has ended are still two things:
subject to these regulations. Please
refer to the language on equipment in • U.S.- versus non-U.S.-based recipients
chapter 4 (Procurement) of this Guide to have different standard provisions, with
review regulations related to the sale of some overlap.
items purchased with USAID funds. Income- • Some standard provisions must be
generating activities are not program income included in all Cooperative Agreements
if the income generated goes directly to the (“mandatory standard provisions”); others
beneficiaries, not the project. are only involved if they pertain to your
• A.12: Special Provisions—These include: specific program (“required as applicable
standard provisions”).
- A.12.1: Disability—USAID requires that
your organization take steps to ensure
that people with disabilities are not
discriminated against.
- A.12.2: Terrorism Financing—
2.7 Summary and References
Your organization must comply with During the award phase, you will begin to
U.S. laws against providing resources build a relationship with USAID and finalize the
to organizations associated with critical agreement details that will govern the
terrorism. This provision also applies rest of your award.
to subagreements made under
your agreement. This chapter introduced important award-related
concepts and the basics of your agreement,
- A.12.3: Special Award Condition—If the
described the key tasks necessary to finalize
pre-award survey resulted in any findings or
your award, and outlined what you need to have
deficiencies, your agreement will state how
in place before getting started with your program.
long you have to resolve those issues. If you
do not resolve these issues satisfactorily, it
The following chapter proceeds with the
could jeopardize your agreement.
start-up phase of your program, to begin as
soon as USAID and your organization sign
Attachment B—Program Description the Cooperative Agreement.
The Program Description is the heart
and soul of the Cooperative Agreement. References
Its contents might include some or all of • USAID ADS Chapter 303—Grants
the following information: the purpose of and Cooperative Agreements to NGOs
the award, expected project results and (http://www.usaid.gov/policy/ads/300/303.pdf)
outcomes, target populations, geographic
focus, strategic emphasis, specific activities, • USAID Standard Mandatory Provisions for
and monitoring and evaluation approach. The non-U.S. NGOs (http://www.usaid.gov/policy/
Program Description is based on the technical ads/300/303mab.pdf)
application submitted during the funding • USAID Standard Mandatory Provisions for
competition. If any concerns were raised U.S. NGOs (http://www.usaid.gov/policy/
during the technical review, and you were ads/300/303maa.pdf)
asked to address them during negotiations,
these issues will be included in your revised
Program Description. You should clearly
document any significant changes arising from
the results of the technical review, including
changes to targets, budgets, or technical

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CAPResourceGuide_book.indb 24 10/22/10 12:49 PM
3 Program Start-Up
PHOTO CREDIT: ©Shehab Uddin, DRIK
 Program Start-Up 3

3.1 Overview

3.2 Getting Started

Program Start-Up
3.2.1 Five Tips for Managing a Successful Start-Up
3.2.2 Start-up Timeline and Checklist
3.2.3 Your Team and the USAID Team
3.2.4 Requesting Funds during Program Start-Up

3.3 Management Policies and Systems

3.3.1 Financial System Minimum Requirements
3.3.2 Procurement Policy Standards
3.3.3 Human Resources Policies

3.4 Planning
3.4.1 The Workplan
3.4.1.1 Workplan Sections
3.4.1.2 Activity Descriptions
3.4.1.3 Workplan Budget
3.4.1.4 What Makes a Good Workplan
3.4.1.5 Workplan Review and Approval
3.4.2 Starting Your Monitoring and Evaluation (M&E) System
3.4.2.1 Setting Up an M&E System
3.4.2.2 Linking Program Targets with Impact Indicators

3.5 Communication
3.5.1 Developing a Communication Plan
3.5.2 Branding
3.5.2.1 How Do I Develop a Level 2 Brand for My Program?
3.5.2.2 What Are the Elements of My Program’s Brand?
3.5.3 Marking and Donor Requirements
3.5.3.1 Creating a Marking Plan
3.5.3.2 Marking Program Deliverables
3.5.3.3 Subrecipient Requirements
3.5.3.4 Special Requirements
3.5.4 Demonstrating Impact
3.5.4.1 Telling Your Story
3.5.5 Communication and Ethics

3.6 Summary and References

25

CAP chpt3.indd 25 10/27/10 11:37 AM

 3.1 Overview Objectives
• Understand what you need to accomplish
The start-up period is one of the most critical
during the start-up phase.
phases of your program. While some managers
feel compelled to begin implementing as soon • Learn the minimum requirements for key
3 as possible, the more attention you give to management systems.
establishing a solid foundation (by establishing • Walk through the initial workplanning process.
management policies and systems and
developing specific implementation plans), the
smoother your program implementation will be. Key Terms and Acronyms
Program Start-Up

• Accrual Accounting System—An

Skip Ahead accounting method that records financial
f Start-Up Timeline and Checklist events based on economic activity rather than
financial activity. Under accrual accounting,
f Financial Systems
revenue is recorded when it is earned and
f Procurement Process realized, regardless of when actual payment
f HR Policies is received.
f M&E Start-Up • AO—Agreement Officer, the USAID official
f Workplanning with the authority to enter into, administer,
terminate, and/or close out assistance
f Communication Plan
agreements and make determinations
f Demonstrating Impact and findings on behalf of USAID.
• AOTR—Agreement Officer’s Technical
Representative (formerly referred to as the
This chapter introduces the major tasks that Cognizant Technical Officer. Under a contract,
you need to accomplish between finalizing this position is referred to as the Contracting
your award and starting implementation of your Officer’s Technical Representative), the
program. The first part, “Getting Started” (3.2), USAID official responsible for monitoring
offers tips for ensuring a successful start-up a grantee’s progress toward achieving the
and includes a timeline and checklist (3.2.2). agreement’s purpose and for serving as
This section also introduces the USAID team technical liaison between the grantee and
(3.2.3) to help you understand their roles and the Agreement Officer (AO). The AO will
responsibilities. Finally, this section looks at the name and delegate authority for specific
practical matters of requesting and spending responsibilities to the AOTR named in a
money (3.2.4) during the start-up phase. Cooperative Agreement.
• Brand—A visual representation of a product or
“Management Policies and Systems” (3.3)
service, such as a logo or graphic that is easily
discusses requirements for financial (3.3.1),
recognizable. It is a project’s “signature.”
procurement (3.3.2), and human resources
(3.3.3) systems and policies. • Branding—The process of developing an
identity for a product or service using images
The section on “Planning” (3.4) covers developing and words to evoke positive emotional
a workplan (3.4.1) and setting up your monitoring responses in beneficiaries, which are
and evaluation (M&E) system, and the final influenced by their interactions with the
section includes information on developing a implementation of the brand (promotion,
branding and marking plan (3.5.3.1). customer service, other customers, etc.).

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 • Cash-Basis Accounting System—A method • M&E—Monitoring and Evaluation, the
of bookkeeping that records financial events process of collecting and analyzing data
based on cash flows and cash position. and information for the purpose of identifying
Income is recorded when cash is received, and measuring a project’s impact.
and expense is recognized when cash is • Marketing—The processes and activities
paid out. In cash-basis accounting, revenues that contribute to an organization’s public 3
and expenses are also called cash receipts image that, when developed effectively—and
and cash payments. Cash-basis accounting reinforced by the good work of staff—help
does not recognize promises to pay or earn the trust and confidence of
expectations to receive money or service in beneficiaries, local leaders, and donors.
the future, such as payables, receivables, or
pre-paid or accrued expenses. This system • Marking—Applying graphic identities or

Program Start-Up
is simpler for individuals and organizations logos to program materials or project signage
that do not have significant numbers of these to visibly acknowledge contributors; identifies
transactions, or when the time lag between organizations supporting the work.
initiation of the transaction and the cash flow • Matching Funds—A percentage or fixed
is very short. amount of non-USG resources that USAID
• Communication—The process of requires recipients to provide for a project
transmitting ideas and information about the to be eligible to receive funds.
nature of an organization and the issues with • Micro-Purchase Threshold—The
which it deals; an ongoing, core activity that amount an organization sets under which a
is key to sustaining an organization. procurement process may be simplified. For
• Cost Share—The portion of project or example, if your micro-purchase threshold
program costs the USG does not cover. is $1,000, you may be required to secure a
This may be in the form of cash or minimum of three bids on items above that
in-kind contributions. amount, but not on items equal to or below
that amount.
• FM (or FMO)—USAID’s Financial
Management Office. • NICRA—Negotiated Indirect Cost Rate
Agreement, a rate negotiated individually
• HR Policies—A set of rules, values, between an organization and USAID to
or guiding principles that define how an cover indirect cost. (For more information
organization addresses human resources- on indirect costs and NICRA, see USAID’s
related matters. Human resources policies
Best Practices Guide for Indirect Costing at
should reflect sound practice, be written
http://www.usaid.gov/business/regulations/
down, be communicated across the
BestPractices.pdf.)
organization, and be reviewed and modified
periodically to reflect changing circumstances. • SF-1420—Standard Form-1420, Contractor
Employee Biographical Data Sheet, used
• In-Kind Contribution—Noncash
during the hiring process to gather relevant
resources contributed to a project, which
information, including salary history.
may include volunteer services, equipment,
or property. They may also count as any • Standard Budget Categories—Standard
cost-share obligation. categories the USG suggests all awardees
use, including Personnel, Fringe Benefits,
• Key Personnel—Refers to project positions
Consultants, Travel/Transportation, Equip-
and to the individuals who fill the particular
ment, Supplies, Contractual Services
slots. Typically, positions identified in a
(subcontractors), Program Costs (sometimes
Cooperative Agreement as Key Personnel
replaced with “construction costs”), Other
are those leadership slots considered
Expenses, and Indirect Costs.
essential to successful implementation of
the overall project. • Workplan—A document that lays out a
program’s planned activities, associated
resources, and targets.

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 3.2 Getting Started 4. Begin Building Strong Relationships with
your USAID Counterparts (both technical
and contracting staff)—You will meet
new counterparts in the United States
and/or Missions all working toward the
3 same goal of getting your program ready
for implementation. Establishing good
relationships with all of these people will help
build trust and confidence and make the
3.2.1 Five Tips for Managing whole process easier for everyone.
a Successful Start-Up 5. Build Implementer-Friendly Processes and
Program Start-Up

Systems—Start-up involves establishing

1. Communicate Progress to All Stakeholders— core management processes, including M&E
The news of your award is likely to and financial management systems. It may
energize everyone, including project staff, be tempting to impose automated, highly
subrecipients, beneficiaries, USAID, and technical systems. However, before doing
the government officials and community so, consider the impact: How much training
members in your project implementation will be necessary? Are costs involved?
area. However, excitement can quickly turn Will costs be excessive? Is there adequate
into frustration if nothing seems to happen infrastructure to support high-tech solutions?
for weeks or even months. Be sure to keep Do staff have the time and capacity to learn
everyone informed and involved during the and maintain these systems? Does using
start-up phase to maintain momentum these systems prohibit subrecipients from
and enthusiasm. participating in the M&E process? Be sure to
2. Involve Staff, Subrecipients, and test new systems in the field to ensure they
Communities in the Planning Process— are practical, affordable, and sustainable.
The easiest way to sustain enthusiasm is to
involve staff, subrecipients, and community
members in the workplanning process. Resist
the temptation to write a workplan based
solely on your understanding of the situation
3.2.2 Start-Up Timeline
because you think that involving a broader and Checklist
group might be too time-consuming and
would delay implementation. The extra time The start-up phase of a project begins when
invested in the beginning can foster broad the award is executed and continues until
ownership of the process and the project. your workplan is approved and you receive
funding designated for implementation. There
3. Learn What USAID Requires—In effect, may be some overlap between this phase
compliance begins before the start date and some activities in the award phase, such
of your award. Why? Because notification as addressing pre-award conditions. Some
of an award signals the start of a series of activities begun in the start-up phase may
events that may include a pre-award survey, continue through the initial implementation
negotiations, and finalizing your award. phase. Figure 3 provides a list of the key tasks
Learning what USAID requires and when to be completed during start-up.
will help you get off on the right foot.

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 Figure 3—Key Start-Up Tasks
Event/Task Description Timeline Reference
Award finalized Begin the start-up phase with delivery of the signed Chapter 2
award to the partner.
Outstanding Attend to any aspects of the award phase that are Continues from Chapter 2
pre-award tasks still pending (such as pre-award conditions). award phase
3
Request funding to Request funds from your funding agency to cover As needed Section
cover start-up the costs for staff and systems development that 3.2.4
are necessary to complete your start-up objectives.
Note: This funding may not be used to
start implementation.

Program Start-Up
Workplan Develop a detailed workplan for the first year of Start after Section
the project based on your Cooperative Agreement. project planning 3.4.1
USAID may provide a template. Do a workplan-
budget comparison to ensure that planned activities
are consistent with amounts budgeted.
Financial systems Make sure your financial manager understands Must complete Section
the financial reporting requirements of the award certain aspects 3.3.1
and has everything necessary to meet the minimum before receiving
requirements. Open a new bank account exclusively funds
dedicated to the project and acquire accounting
software applications, if needed.
Procurement policies Establish an effective procurement process to Must complete prior Section
and procedures ensure that all procurements made under your to making purchases 3.3.2,
award meet USAID requirements and reflect chapter 4
good business practices.
HR policies Develop any required HR policies in compliance Systems for tracking Section
with local labor laws and communicate them to your hours required 3.3.3
staff. Human resource policies, at a minimum, should immediately; other
include the following sections: equal opportunity and policies may be less
non-discrimination, drug-free workplace, disability, time-sensitive
anti-human trafficking, HIV workplace policy.
M&E system Develop indicator definitions, data-gathering Coordinate with Section
processes, and tools. Communicate the importance development of 3.4.2
of data quality to staff and train them to gather and workplan
record data properly.
Baseline assessment Conduct or review results from a program-specific Coordinate with Section
baseline assessment and look for any major baseline development of 3.4.2.1
data that may already be available. M&E system

Workplan review Be responsive as USAID reviews your workplan. Timing varies Section
Adjust your program, if necessary, and notify your 3.4.1.5
AOTR immediately if any of the changes affect your
budget or targets.

Marking/ Develop a marking/communication plan and review Complete prior to Section

communications plan your USAID marking and branding plan. implementation 3.5.3.1

Workplan approved Receive notification when your AOTR approves your Section
workplan. (If you are operating on a reimbursement 3.4.1.5
basis rather than an advance basis, you may begin
implementing at this time.)
Funding for 1. If not already obligated, request funds to As long as one Chapter 4
implementation cover initial implementation costs. Be aware month to obligate
that USAID’s process for obligating funds may additional funds,
sometimes take several weeks, so be sure to plus as long as
plan accordingly. two weeks to
disburse funds
2. Receive funding from USAID. Organizations
operating on an advance-funding basis may
begin implementing once the first installment
of implementation funds is received.

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 of your agreement. The title of the key USAID
3.2.3 Your Team and individual with whom you will interact in this
the USAID Team office is the Agreement Officer (AO). The AO
is responsible for approval of formal actions
During start-up, it is important to manage the (unless delegated) and award modifications.
expectations of the entire project team as well
3 as beneficiary stakeholders by engaging them
The AO counterpart in your organization will
likely be the Executive Director or someone
in planning and keeping them informed of in a similar leadership role with the authority
the project’s status. This will get things done to enter into legal agreements on behalf of
more quickly and will help staff cultivate trust, the organization.
expertise and leadership skills, which will be
critical for solving problems and achieving At USAID, the finance office is the Cash
Program Start-Up

goals going forward. Management and Payment Division (CMP),

but is often simply referred to as “FM,” short
During implementation, team members will for Office of Financial Management.
be working with host-government officials at
the local and national levels as well as the In most cases, the technical office will be
in-country USAID Mission and/or Washington, your primary, day-to-day point of contact.
DC-based personnel (and, in some cases, The technical office deals with all of the
both). During the life of your award, you will programmatic aspects of your award. USAID
deal with three primary USAID offices: the agreements identify the Agreement Officer’s
agreement office, financial office, and Technical Representative (AOTR) as the
technical office. primary point of contact in the technical office
(named in your Cooperative Agreement or
The USAID agreement office is where you subsequently by the AO). A letter of designation
applied for funding and negotiated and received from the AO will articulate the responsibilities
your award. The agreement office manages of the AOTR.
issues related to compliance with the terms

Figure 4—Counterpart Contacts on the NGO and USAID Teams

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 the funding available to implement your
3.2.4 Requesting Funds award and could hinder your ability to meet
during Program Start-Up your targets. Also, any funds remaining from
your start-up obligation will be available to
Start-up costs should be identified and spend during implementation.
accounted for in the budget submitted with your 3
proposal. Once approved, you are free to move Before USAID approves your workplan, it may
forward spending those funds for program start- ask you to make changes. Thus, it is important
up. Request funds by completing the Standard to wait for written approval before you begin to
Form-270 (SF-270) (http://www.whitehouse. deliver services. Note that numerous activities
gov/omb/grants/sf270.pdf). While advances are contribute to your ability to deliver services that
generally provided on a quarterly basis, you do not necessarily count as implementation—

Program Start-Up
may be restricted to requesting funds for one for example, training subrecipients on your
month at a time. (For more on completing the M&E system, recruiting personnel, and planning
SF-270 form and requesting and disbursing for purchases. Be creative and use this time
USAID funds, see chapter 4.) wisely to prepare your organization and any
partners and subs for action once the workplan
You must budget and spend your start-up funds is approved.
carefully in case there are delays in getting your
workplan approved. It is not unreasonable to Note: The limitation on implementation
expect the start-up phase to last three months during the workplan review process applies
or more. only during approval of your initial workplan.
Subsequent USAID workplan reviews will not
The funding you receive during the start-up effect implementation of ongoing activities, but
phase is part of your total award amount. You approval will be required to expand activities.
may use it to cover budgeted start-up costs
only. If you spend more than you budgeted Figure 5 lists examples of how you may and
during this phase, it must be subtracted from may not spend start-up funds.

Figure 5—Appropriate Uses of Start-Up Funds

YES—May Fund during Start-Up NO—May NOT Fund during Start-Up

• Addressing pre-award survey findings

• Salaries, or a portion of salaries, for personnel • Salaries of personnel who work

contributing to start-up tasks, such as workplanning, only on implementation (for example,
setting up financial systems, or building the service delivery)
M&E system
• Advertising for project-specific positions,
recruiting, and even making a job offer contingent
on workplan approval
• Deposits for rent and utilities; be sure to
accurately record as advances or accruals in
your accounting system and not as expenses
until they are actually incurred

• Training staff and subrecipients named in your • Training unapproved subrecipients or

Cooperative Agreement conducting trainings at the community level

• Purchasing items necessary to complete • Purchasing items for implementation,

your start-up tasks, such as office equipment such as test kits, or printing implementation-
and supplies specific materials

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 3.3 Management Policies
Pre-Award Survey of Your
and Systems Financial System
If USAID conducted a pre-award survey
Several management systems are required
(see chapter 2), the auditor checked whether
3 to implement your program successfully and
your system met the minimum requirements.
to ensure compliance with the regulations If your system fell short, you will have received
governing your award. a report on the deficiencies.

This section outlines important factors and

minimum requirements for each of these You must set up your financial systems
systems, including: and policies to comply with the financial
Program Start-Up

requirements of your award. These

• Financial System requirements include ensuring that costs are
Minimum Requirements (3.3.1) properly categorized, tracked, and charged and
• Procurement Policy Standards (3.3.2) that financial information is reported accurately.

• Human Resources Policies (3.3.3) The following section outlines some of

• Monitoring and Evaluation (3.4.2) the minimum requirements for financial
management related to your award. This
• Baseline Assessments (3.4.2.1) does not replace having a good accountant or
financial manager on staff and does not cover
all general NGO financial management needs.

3.3.1 Financial System Regulation Specifics

Minimum Requirements Good financial management requires:
• accounting software;
The U.S. Code of Federal Regulations (CFR)
contains a set of minimum requirements that • written financial policies that are well
your financial system must meet in order for understood by your staff; and
your organization to receive USAID funds. • trained professional staff.
The requirements are designed to ensure that
USAID funds are administered appropriately
and used for their intended purpose, and that The minimum requirements below refer to
you document the use of the funds so that an both software features and financial policies,
auditor can review them (when appropriate). and you must incorporate all of these into
your staff training.

Financial System Minimum USAID requires that your financial system must:
Requirements Key Points
• Relate financial data to performance data to
Applies to: All recipients of USG funds subject develop unit cost data whenever practical.
to annual audits
• Maintain records that identify the source
Required for: Financial reports, funding
and application of funds for USAID-sponsored
requests, and audits
activities. These records must contain
Verified by: Annual Audit information pertaining to all USG awards,
Governed by: Code of Federal Regulations authorizations, obligations, unobligated
“Financial Systems Minimum Requirements” balances, assets, outlays, income,
(http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c= and interest.
ecfr&sid=b3c3841e5bbf2cb2e94dc6312c427ef • Demonstrate effective control over and
2&rgn=div8&view=text&node=22:1.0.2.22.25.3 accountability for all funds, property, and
.54.2&idno=22) other assets. Your system must adequately
safeguard all assets and ensure that they
are used solely for authorized purposes.
How does this help my program?
• Compare outlays with budget amounts
The importance of sound financial management (for each award, when applicable).
cannot be stressed enough. If evidence of
• Have written procedures for determining the
financial mismanagement is found at your
reasonableness, allocability, and allowability
organization, it will tarnish your organization’s
of costs in accordance with the provisions
reputation and make it challenging for you to get
of the applicable USAID cost principles
funding in the future.

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 and the terms and conditions of the award - Accrual versus Cash-Basis Reporting—
(see section 3.3.2 on Procurement Policy USAID allows either cash-basis or accrual
Standards below). accounting systems. If your organization
• Maintain accounting records, including maintains its records on a cash basis,
cost accounting records, supported by you do not need to establish an accrual
source documentation. accounting system. Please note that cash 3
accounting is not GAAP-compliant and
• Keep your USAID funds in a separate, is not recognized by the International
dedicated, interest-bearing account Financial Reporting Standards. An accrual
separate from other all other funds, even accounting system is highly recommended.
separate from other USAID funds. The only
exceptions are if your organization (or one

Program Start-Up
of your subrecipients) receives less than
US$120,000 per year or if the interest- Accrual Accounting System
bearing account requires a minimum balance An accounting method that records financial
that is too high to make it practical to use. events based on economic activity rather than
financial activity. For example, under accrual
- You must remit interest earned on the accounting, revenue is recorded when it is
account in excess of US$250 per year earned and realized, regardless of when
to USAID. (You may keep up to US$250 actual payment is received.
to cover administrative costs.) If you are
a subrecipient, you will remit the excess Cash-Basis Accounting System
interest to the prime recipient who A method of bookkeeping that records financial
in turn will submit the interest to USAID. events based on cash flows and cash position.
- Payment shall be deposited in US dollars This system recognizes revenue when cash
is received and expense when cash is paid.
($) to the USAID Account at the Federal
In cash-basis accounting, revenues and
Reserve Board New York (FRBNY) via
expenses are also called cash receipts and
wire transfer. cash payments. Cash-basis accounting does
- The following information is required on not recognize promises to pay or expectations
each wire transfer to ensure proper receipt, to receive money or service in the future,
acceptance, and crediting of funds by such as payables, receivables, and pre-paid
or accrued expenses. This is simpler for
the FRBNY:
individuals and organizations that do not have
significant numbers of these transactions, or
A Federal Reserve Bank New York (FRBNY) when the time lag between initiation of the
33 Liberty Street transaction and the cash flow is very short.
New York, New York 10045
TREAS/NYC FUNDS TRANSFER DIVISION
ABA # 0210-3000-4
(Also known as RI Receiver Financial Institution) In addition, USAID may require fidelity bond
coverage if your organization lacks sufficient
B USAID ALC = 72000001 coverage to protect USAID’s interest. (A fidelity
(Represents the USAID Account)
bond is a form of protection that covers an
C Type / Subtype Code— organization for losses that it incurs as a result
10 U.S. Fedwire Participant Commercial Bank of fraudulent acts. It usually insures a business
15 Foreign Central Bank with FRB Account for losses caused by the dishonest acts of its
employees.) If such a bond is required, be
D USD Amount
sure to obtain it from a company that meets
E Sender FI Financial Institution (Foreign Central USAID standards.
Bank or U.S. Fedwire Participant)

F Instructed Amount (USD or Foreign Currency)

Exchange Rate (if applicable)
Procurement Policy Standards
G Beneficiary Information (Intermediary Institution) Key Points
H Originator/FI: Identifier, Name, Address Applies to: All USG-funded partners
and subrecipients
I Originator to Beneficiary Information (purpose)
Required for: Annual Audit
Verified by: Annual Audit
• Accurately produce data necessary to Governed by: A combination of U.S. law,
complete the financial reporting requirements, USAID regulations, and the terms of your award
including the SF-425. (For details on financial
reporting requirements, see chapter 5.)

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 - Disciplinary Actions—The standards
3.3.2 Procurement of conduct must outline the disciplinary
Policy Standards actions to be applied to employees for
violating these rules.
USAID has procurement regulations that
• Free and Open Competition—Encourage
3 dictate what you can buy, from where, how
free and open competition to the maximum
you must purchase and ship items, what taxes
extent possible.
are applicable, and what documentation is
required. The specific regulations are discussed - Unfair Competitive Advantage—Vendors
in chapter 4, but this section discusses the who help you develop statements of work
procurement policies needed to govern your should be barred from bidding on that work.
purchasing process. - Clear Evaluation Criteria—Solicitations
Program Start-Up

should clarify the criteria your organization

How does this help my program? will use to evaluate bids.
Because you are a steward of USAID funds, • General Procurement Procedures—In your
one of your goals is to make sure your procurement policy:
organization uses this money appropriately
and effectively to deliver needed services to - Avoid purchasing unnecessary items.
beneficiaries. The procurement regulations are - Consider both lease and purchase
meant to ensure that funds are not mismanaged alternatives, where appropriate.
or used to purchase dangerous or low-quality
- Include in your solicitations such elements as:
goods that could cause more harm than good.
Establishing an appropriate procurement • description of technical requirements;
process helps protect your organization and • criteria to be used in evaluating bids;
your beneficiaries, promotes transparency and
accountability, and helps ensure that funds are • minimum acceptable performance
used efficiently to deliver needed services. standards;
• specific features of required items;
Regulation Basics • preference for products and services that
• Standards of Conduct—Develop written use the metric system of measurement;
standards of conduct for the employees and
and officers in your organization who are • preference for energy-efficient items and
involved in selecting goods, services, and products that conserve natural resources.
consultants and overseeing procurement.
The code of conduct is for all staff because • U.S. Small, Minority-, and Women-Owned
staff are involved in procurement in one way Businesses—When working in the United
or another, including: States, U.S.-based recipients should
give preferential treatment to U.S. small
- Conflict of Interest—Employees should businesses, including HUBZone
not be involved in selecting or overseeing (http://www.sba.gov/hubzone/aboutus/
procurement if there is a real or perceived index.html), veteran-owned, service-
conflict of interest. This includes situations disabled veteran-owned, and minority- and
where the employee, any member of women-owned firms. To achieve this, your
the employee’s immediate family, or the policies should:
employee’s partner has a financial or
other interest in the firm selected for an - Consider whether a firm intends to
award. This includes any organization subcontract with small, minority-, or
that employs or is about to employ the women-owned businesses in your
employee, employee’s family member, evaluation process.
or the employee’s partner. - Encourage contracting with consortiums
- Gratuities—Employees must not of small, minority- or women-owned
request or accept gratuities, gifts, favors, businesses when a contract is too large
or anything of monetary value from for any single firm to handle individually.
subagreement contractors or subawardees. - Use the services of various USG
However, you may set standards for agencies and organizations, such as
situations in which the financial interest is the Small Business Administration and
not substantial or the gift is an unsolicited the Department of Commerce’s Minority
item of nominal value. Business Development Agency, in your
solicitation process.

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 • Procurement Instruments—Specify when • USAID Pre-Award Review—If your
to use various procurement instruments, such organization does not have a procurement
as fixed-price contracts, cost-reimbursable policy in place that meets the minimum
contracts, purchase orders, and incentive standards listed above (for example, if your
contracts. Your policies should prohibit the organization had pre-award survey findings
use of “cost-plus-a-percentage-of-cost” or to this effect), USAID may impose increased 3
“percentage-of-construction-cost” methods monitoring of your award procurements by,
of contracting. for example, requiring a review of various
documents (for example, solicitation, cost
estimates, etc.) for any procurements of
Micro-Purchase Threshold US$10,000 or more.

Program Start-Up
The amount your organization sets, under
which your procurement process may be It is important for you to adhere strictly to your
simplified. For example, if your micro-purchase organization’s procurement policy (that meets
threshold is US$1,000, you may have to have USAID requirements). Not adhering to your
a minimum of three bids on items above that organization’s own procurement policy is a
amount, but not on items equal to or below common audit finding. For example, if your
that amount. There is no USG requirement organization requires a minimum of three bids
regarding what that amount should be.
for any purchase over $1,000, it is essential
to get the three or more quotes in writing or
to document a valid reason why three quotes
could not be obtained.
• Contractor Evaluation—Clearly state
that you will only enter into contracts with
vendors that you believe can successfully
complete the work required. Your policies
should consider contractor integrity, record
3.3.3 Human
of past performance, financial and technical Resources Policies
resources, or accessibility to other necessary
There are a number of USAID regulations
resources. Your policies should also include
that touch on human resources (HR)-related
a process for ensuring that suppliers are
issues. (See Standards of Conduct regarding
not listed on the Excluded Parties List
conflict of interest, gratuities, and disciplinary
(www.epls.gov), the UN Consolidated List
actions in section 3.3.2 on Procurement
(http://www.un.org/sc/committees/1267/
Policy Standards.)
consolist.shtml), and the U.S Department of
Treasury’s Designated Nationals list (http://
How Do HR Policies Help My Program?
www.ustreas.gov/offices/enforcement/ofac/
sdn/). (For more information on ineligible People are your organization’s most valuable
suppliers, see 4.3.2.4). asset. Establishing a set of HR policies does
not restrict your staff and volunteers—rather,
• Documentation Procedure—Record price
it helps guide and protect them, so they may
or cost analysis in connection with every
contribute to the best of their abilities.
procurement action. The cost analysis should
include the allowability test (see 4.3.2.1).
Some HR policies are required by local law,
• Records for Large Purchases—At a U.S. law, or your funding agency, while others
minimum, keep records with the following are practical or necessary for managing an
information on all procurements that exceed effective organization. Regardless of the
your micro-purchase threshold: source, establishing clear, well-developed HR
- the basis for selection; policies will not only enhance communication
between managers and employees, clarify
- justification for lack of competition when expectations, and ensure that all staff are
competitive bids were not obtained; treated equitably, but they can also protect your
- documentation on terrorism search; and organization against grievances and lawsuits if
they arise.
- basis for award cost or price.
• Contract Administration System—You It is a good idea to review your HR policies
should also have a process for evaluating with regard to meeting USAID requirements.
contractor performance that documents This process will allow you to identify and
whether the contractor met the terms, resolve any gaps or conflicts. Your organization
conditions, and specifications of the contract. should compile an employee handbook to share
with your staff.

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 Policy Essentials • Faith-Based Organization Hiring
Protections—Under U.S. Equal Employment
• Local Labor Laws and Regulations—
Opportunity laws, a faith-based organization
Organizations must comply with local labor
(FBO) implementing a USAID program
laws where they employ staff. For example,
has the right to hire people who share the
there may be regulations preventing hiring
3 discrimination or requiring certain benefits. It
organization’s faith to carry out its activities.
If you choose to do this, make sure your HR
is also important for both organizations and
policies are clear on this point.
employees to be clear from the beginning
about the process for discipline/termination,
the rights of the employee and employer, and • Drug-Free Workplace Policy—Your
grounds for discipline/termination. Cooperative Agreement requires you, and
Program Start-Up

any of your organization’s subgrantees, to

• Standards of Conduct—Standards of issue a drug-free workplace statement. This
conduct are established to address the policy statement must be signed by every
behaviors and professional conduct that staff member in your organization. A good
affect the employee’s ability to perform his or way to address the signature requirement for
her job and represent the organization. Those this policy is to include it in two documents:
related to procurement (3.3.2) are described first, in the HR manual and, second,
above, but you may want to broaden them to as a separate one-page policy document
include reporting to work on time, performing that is signed by each employee and placed
assigned duties, and supporting a safe and in personnel files.
healthy work environment and common
workplace standards, such as prohibiting According to USG Mandatory Standard
sexual harassment or discrimination. Provisions, the Drug-Free Workplace Policy
statement must include:
• Time Sheet Tracking—Time sheets - a declaration that the unlawful manufacture,
are required for your annual audit for all distribution, dispensation, possession, or
personnel who are paid with USAID funds, use of a controlled substance is prohibited;
including contractors and part-time staff. In - specific actions your organization will
addition, it is helpful to have volunteers fill out take against employees who violate that
simplified time sheets, so you can track their prohibition; and
hours and count their contribution toward your
cost-share contribution (if you have one). - conditions of employment under any award
that state that an employee must:
• abide by the terms of the statement, and
• Due Diligence in Hiring Decisions—You are
required to have a summary of a candidate’s • notify you in writing if he or she is
academic and work history (a curriculum vitae convicted of violating of a criminal drug
or CV) for every employee hired under your statute occurring in the workplace no
award to verify his or her employment and later than five calendar days after
salary history. The Cooperative Agreement the conviction.
does not require use of the SF-1420—The In addition, your organization is required to
“Contractor Employee Biographical Data establish an ongoing drug-free awareness
Sheet” (form AID-1420-17, http://www.usaid. program to inform employees about:
gov/forms/AID1420-17.doc), the standard
- the dangers of drug abuse in
form used to document the salary history of
the workplace;
employees and contractors. However, the
“1420” bio data form is often used during - your drug-free workplace policy;
the hiring process because it is an easy way - any available drug counseling,
to capture the relevant information. Note rehabilitation, and employee assistance
that, although this form may not be required, programs; and
USAID often asks for it to help justify salaries.
- the penalties you may enforce for drug-
abuse violations in the workplace.

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 This policy statement and program must be in Creating an Employee Handbook
place no later than 30 days after the effective
Once you have developed and reviewed your
date of your award.
organization’s HR policies, print and assemble
them in an employee handbook to share with
You are required to notify USAID immediately if
your staff. Ensure that staff sign a statement
an employee is convicted of a drug violation in
that they have received and reviewed it, and
3
the workplace. You must send such notification
understand their obligation to adhere to your
in writing within 10 calendar days after the
organizational policy. Also, include a personnel
conviction and identify the employee’s position
policy review in your orientation process.
title and the number of each award on which
the employee worked.

Program Start-Up
Within 30 days of an employee’s conviction,
you must either: 3.4 Planning
- take appropriate personnel action against The most important deliverable and
the employee, up to and including implementation tool you are required to
termination (as appropriate with your develop during the start-up phase is your
organization’s HR policies and applicable workplan. A good workplan synthesizes all
labor laws), or of the technical, organizational, and financial
planning for your program. It takes the program
- require the employee to participate
description approved in the Cooperative
satisfactorily in a drug-abuse assistance
Agreement and translates it into a specific
or rehabilitation program approved by
one-year implementation plan that USAID
a national, state, or local health, law
must approve before you can start working.
enforcement, or other appropriate agency.
This section begins by discussing workplanning,
In the event that local laws prevent you from which covers what you want to achieve, and
following the mandates of the USG drug-free how and by when you intend to achieve it.
workplace policy in full, notify your AO or AOTR Monitoring and evaluation is then introduced
and seek his or her guidance. as an essential consideration. The chapter
concludes with a discussion of another
• HIV/AIDS Policy—An HIV/AIDS policy important deliverable required by USAID—the
defines an organization’s stance on the branding and marking plan (3.5.2).
employment of persons living with HIV or
AIDS and the expected treatment of persons
living with HIV or AIDS in the workplace.
Although an HIV/AIDS policy is not required, 3.4.1 The Workplan
it is considered best practice for any
organization, particularly those working within Your workplan is a detailed narrative outlining
the field of HIV/AIDS. An HIV/AIDS policy exactly how you plan to implement the first year
formalizes the organization’s commitment to of your program. Although your award may have
addressing HIV/AIDS and supporting staff a period of performance of several years, you
living with HIV or AIDS, including benefits for generally create and submit workplans annually
care or treatment, adjustments in working to allow for year-to-year program adjustments.
assignments where possible, and job security. Workplans are based on the program
The development of a comprehensive HIV/ description in your Cooperative Agreement.
AIDS policy can enable the organization to While the Program Description expresses what
keep and benefit from talented staff. you plan to accomplish over the entire life of
the award, your workplan provides the details
and specifics.
Ensure that your organization is in
compliance with national and local labor The workplan is a key component of both
laws regarding the employment of persons your annual responsibility to USAID and your
living with HIV/AIDS. In some cases, your own internal project-management process.
organizational policy may exceed what The workplan is a tool for you to communicate
is legally required, particularly in countries to USAID how you will execute your program.
with no laws regarding the employment of In addition, the workplan is an excellent tool for
persons living with HIV. you to use internally to better plan and manage
your activities.

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 3.4.1.1 Workplan Sections II. Implementation Plan
The implementation plan, the heart of your
Sometimes USAID may require you to use a workplan, contains detailed descriptions of each
specific format, but often you will be on your activity. You can take different approaches to
own to develop your workplan. Below are five organizing this section, based on the number
3 major sections that workplans may include: of countries and the structure of activities in
I. Executive Summary your program.
II. Implementation Plan
a. Workplan Logic Matrix Some partners start with headquarters-level
III. Monitoring and Evaluation Plan activities—for example, development of training
IV. Budget materials. Programs are then broken down
Program Start-Up

V. Management and Staffing into strategic objectives (SO), broad, long-

term goals that link directly to the Program
In addition, workplans often include Description in your Cooperative Agreement.
appendices with supporting material and Your activity descriptions then fall under your
other information about your program. strategic objectives as shown in Figure 6.
Generally, your activities should align closely
with your targets. Be sure to explain all targets
I. Executive Summary that you have committed to achieve.
The executive summary, typically no more If you plan to report on a target, there must
than two pages in length, provides a general be an activity description explaining how it
description of your project and how it is to will be achieved (see section 3.4.1.2 on
be implemented. It includes the total budget Activity Descriptions).
required for the year broken down by major
a. Workplan Logic Matrix
activities and a summary table of targets
you plan to reach during the year. If you are Your implementation plan may include a
implementing a project in multiple countries, Workplan Logic Matrix; this matrix links
include a general overview and then a country- activities, timelines, and targets. Generally,
by-country overview. If you are in the middle the Workplan Logic Matrix will be similar to
of executing a multiple-year program, you the chart in Figure 7, laid out in the same
may want to include a short summary of order as your workplan (Strategic Objectives
project progress to date as it relates to the and Activities). For each activity, 3-month,
current workplan. For example, you may 6- month, 9-month, and 12-month outputs
explain how a slow start-up in the first year are listed. The 12-month outputs will be
affected original plans and that your second- cumulative. The Workplan Logic Matrix
year workplan includes adjustments to stay also shows your targets, subrecipients, and
on target. However, refrain from getting into geographic location for each activity.
a detailed discussion of progress; save that
for your quarterly performance reports. Also,
resist getting overly detailed about how you are
adjusting each activity; include that detail in the
activity descriptions in the implementation plan.

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 Figure 6—Workplan Implementation

Program Start-Up
Figure 7—Sample Workplan Logic Matrix for a Women’s Micro-Enterprise Program at 3, 6, 9, and 12 Months

Activity Outputs Outputs Outputs Outputs Target Indicators Sub- Location

3 Month 6 Month 9 Month 12 Month recipients

Kenya

Strategic Objective 1: Empower women through income-generating associations.

Activity 1: Establish 3 Add 3 Add 3 Add 3 Engage # of women Nairobi Nairobi

Formation associations associations associations associations 120 women engaged Youth
of Women’s of 10 (total 6) of (total 9) of (total 12) of through Alliance
Associations women 10 women 10 women 10 women community
each each each each outreach
to form 12
income-
generating
associations

Activity Train 10 Train +10 Train +10 Train +10 Train 40 # of women Global Nairobi
2: Best female female female female women in trained Grassroots
Business community community community community effective
Practices leaders leaders leaders leaders business
Leaders (total 40) practices
and
vocational
skills

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 III. Monitoring and your reasons for rebudgeting, and how you
will make up shortfalls in areas where you shift
Evaluation Plan money out.
Monitoring and evaluation plans contain the
following elements (see section 3.4.2):
V. Management and Staffing
3 • indicators broken down by locality/
The management and staffing section includes
geographical area and activity;
an organization chart that shows the reporting
• additional USAID in-country indicators broken structure and identifies personnel. In addition,
down by locality and activity; a narrative may explain staffing strategies,
• additional indicators you plan to use to such as volunteer recruitment and retention
monitor your programs, broken down by plans, training, and in-country or subrecipient
Program Start-Up

geographical area and activity; management strategies.

• detailed narrative that describes your M&E For multiple-year agreements, workplans after
process; and the first year may focus on any recent or future
• precise definitions for measuring targets. changes to the project’s staffing structure and
their impact on plans for the upcoming year.
Keep in mind that your focus should always
The narrative should include information on: be on the impact on implementation for the
upcoming year.
• how data are gathered;
• how they are entered into your M&E system;
Appendices
• frequency with which data are gathered
The inclusion of appendices to your workplan
and entered;
varies widely from partner to partner and
• what controls or measures are in place to program to program. Examples of documents
ensure accuracy and data quality; you may wish to attach in an appendix include:
• how you will use the data for program • documents in other formats that are difficult
improvements; and to integrate into the main document (for
• overview of the training you give to staff example, a workplan budget created using
involved in gathering data. Microsoft Office Excel);
• graphical documents, such as
Finally, you should include precise definitions organizational charts;
for all indicators. For example, when you count • supplementary information that provides
someone as “trained,” is there a test or are additional details on your program, such as
there a certain number of classes the individual curricula summaries or training agendas; and
must attend? Are there government standards
and certifications to which you must adhere? • further information on subrecipients,
including MOUs.

IV. Budget While appendices can be helpful, be wary of

The budget section includes a budget putting too much in an appendix. If you find your
narrative and refers to an attached budget. workplan doubling in length after including the
The budget spreadsheet and the budget appendices, consider whether they are really
narrative should break down the budget into helpful to your AOTR.
standard USAID budget categories.
An alternative is to attach a summary list of
The narrative should have a one- or two- materials that your program uses with a table
paragraph overview on overall spending. Is the of contents or short synopsis of each item.
program on track from a spending perspective? This list may include data-gathering forms,
If not, why? Do you plan to shift, slow down, or training manuals, information pamphlets,
speed up spending? handouts, etc. Include details about the
language in which something is written,
In addition, if you foresee the need for the number of pages, who developed the
rebudgeting, determine whether these changes document, and when it was last revised.
will meet the 10% significant rebudgeting Your AOTR then may request a copy of a
threshold requiring USAID approval. Explain full document later if needed.

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 • major costs associated with doing this work;
3.4.1.2 Activity Descriptions and
Activity descriptions are a central part of your • outputs and outcomes you expect and how
workplan, so it is a good practice to start writing you plan to measure these.
your activity descriptions first, and then build the
rest of the workplan around them. 3
The primary purpose of activity descriptions
is to lay out the technical details and timelines,
The first step is to break down your planned which you should cover in depth. Other areas
work into “activities” and “objectives.” (staffing, budget, and M&E) do not need to be
as comprehensive, since the reader will refer to
Activities and Objectives those sections in your workplan. However, it is

Program Start-Up
Workplans group activities under objectives. very helpful to discuss how a particular activity
An objective is a high-level goal that your relates to those sections.
activities work together to achieve. It ties back
to the program description in your Cooperative Within each activity description, refer to
Agreement. The activities that work toward that partners, materials, or curricula that you plan
goal will fall under that objective. to work with or use. Put details about your
subrecipients or the curricula you propose to
An activity is a series of tasks with one or two use in an annex to avoid straying too far from
primary outputs. The output(s) should tie directly discussing implementation.
to your targets. If you have a number of different
targets for an activity, try breaking them down. Activity Description Outline
Are the tasks under an activity closely related, and Example
and do they all build toward the same goal? If
not, consider reorganizing your activities. The following is an activity description outline:
• activity name
If an activity does not fit easily under one
• type of program/program activity area
objective, try to determine what the primary
outcome is. For example, perhaps an event • geographic scope of activity;
you are sponsoring promotes mediation, • technical description of project; and
raises awareness about indigenous forms of
dispute resolution, encourages active listening, • current status of the activity (is it a new or
and provides information on interpersonal continuing activity?).
reconciliation, but the primary goal is mediation. - If it is a new activity, what steps do you
If you have other strategic objectives for local need to take to get started? How long will
forms of dispute resolution, active listening, and start-up take?
interpersonal reconciliation, you can always
- If it is continuing, are there any changes/
mention how this activity links to those other
expansions this year?
strategic objectives in your activity description.
• Include any other specific steps that
Writing Activity Descriptions are necessary to reach this year’s targets,
such as the need to identify locations, hire
A good activity description will be able to or recruit volunteers, develop materials,
convey the following: complete major procurements (vehicles), etc.,
• what you plan to do; as well as estimated timelines for completion.
• how you plan to do it; • Major costs associated with the activity.
• how long it will take; • Who will do the work—staff, volunteers,
or subrecipients.
• who will be doing it;
• Targets estimated for the activity.
• who you will be doing it to and/or with;
• Indicators you will monitor to measure impact
• where the activity will be undertaken
and quality.
(multiple locations or single location);
• Linkages with other programs and any
• how the activity links to other activities, either
additional effects the program may have.
within this project or other partner projects
(including referral networks);

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 Figure 8—Sample Activity Description: Community Home-Based Care

Community Home-Based Care

The Community Home-Based Care activity is a home-based palliative care program set up and
3 maintained by volunteers from the local community. This activity is aimed at 20 rural communities in the
Southern Nations, Nationalities, and People’s Region (SNNPR) in Ethiopia.
This program uses the “Home-Based Care in Ethiopia” training materials developed by XYZ NGO
and approved for use by the Ethiopian Government. The materials have been translated into the local
language most widely spoken in SNNPR.
This activity will start up as soon as the workplan is approved. Our Training Manager, Almez Hailu,
a registered nurse with five years of HBC experience, completed training in the curriculum in August.
Program Start-Up

She will travel to SNNPR within one month to set up and conduct the first training of trainers. We
have partnered with the SNNPR Regional Health Bureau to provide 10 trainers who are familiar with
local language and Amharic. The training consists of a two-week course and two weeks of “hands-on”
supervised home interventions. After the trainers have completed their training, they will be dispatched
to the 20 villages in 5 groups of 2. They will spend approximately one month in each village. Over the
course of the year, they will go to each village once.
Once in the villages, they will work with the local communities to identify individuals needing care and
will establish home-based care committees, starting with the families of people living with HIV/AIDS
(PLWHA). They will work with the committees to train volunteers and identify additional needs, such as
nutrition, treatment, and testing. Since the trainers are from the regional health office, they will draw on
local resources for referrals.
Once the 10 individuals are trained, we expect each of them to reach out and train at least 10 additional
volunteers in each village, bringing the total trained to 210. Based on the current prevalence data, we
estimate there are, on average, 25 PLWHA in each village. Our goal is to provide at least weekly visits
to each of those PLWHA after we have identified them and trained the volunteers. That would mean we
would reach an estimated 500 individuals with home-based palliative care.
The community care committees will learn basic recordkeeping and will receive simple forms to complete
during each visit. Our M&E Field Staff will travel once a month to each village to gather the data and to take
oral reports from the committees on the status of their programs. These staff members will also be able
to resupply home-based care kits and answer any questions the volunteers may have. The Field Staff will
stay in each village for one week and will visit multiple homes during their visits to ensure quality control.
We will also be working with the Regional Health Bureau office to monitor effects through referrals to
other treatment, testing, and orphans and vulnerable children programs.

The budget spreadsheets—both the summary

3.4.1.3 Workplan Budget and detail—should be in Microsoft Office Excel®
format, and it is best to put them in one file with
Your workplan budget should include
separate worksheet tabs. Ideally, the summary
six elements:
tab will total automatically from the detail.
• summary budget spreadsheet;
• detailed budget spreadsheet; Summary Budget Spreadsheet
• budget narrative; The summary budget will show the totals for
• identification of international travel; each of the USAID standard budget categories.
The spreadsheet should also show the cost
• identification of items that will require share or matching funds where appropriate. The
waivers or approvals; and standard budget categories are incorporated
• cost-share/matching details. into the sample summary budget spreadsheet
in Figure 9.

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 Figure 9—Sample Summary Budget

Summary Budget Cost Share Total Project

for My NGO (if applicable) Costs

Year 1 Year 2 Year 3 Total 3 Years 3 Years

A. Personnel 45,000 47,250 49,612 141,862 50,000 191,862

3
B. Fringe
Benefits 9,000 9,450 9,922 28,372 5,000 33,372

C. Consultants 10,000 10,500 11,025 31,525 31,325

D. Travel,

Program Start-Up
Transportation 22,000 23,100 24,255 69,355 69,355

E. Equipment 40,000 0 0 40,000 6,535 46,798

F. Supplies 4,990 882 926 6,798 6,798

G. Contractual
Services
(subcontracts) 135,000 141,750 148,837 425,587 425,587

H. Program
Costs 75,000 78,750 82,688 236,438 143,634 380,072

I. Other
Expenses
(e.g., audit) 25,000 26,250 27,563 78,813 78,813

J. Indirect Costs 0 0 0 0 0

TOTAL 365,990 337,932 354,828 1,058,750 205,169 1,263,919

Figure 10—Sample Detailed Budget

Year 1 Detailed Budget (Jan 1, 2010 to Dec 31, 2010)

A. Personnel Position Rate per Month Number of Year 1 Total

Months LOE*

1. Darlene Director Project Director $1,000 12 $12,000

2. Frank Finance Finance Manager $900 12 $10,800

3. Paul Program Program Officer $800 12 $9,600

4. Patience Program Assistant Program Assistant $650 12 $7,800

5. Robby Receptionist Receptionist $400 6 $2,400

6. David Driver Driver $400 6 $2,400

SUBTOTAL $45,000
* LOE - Level of Effort

Detailed Budget Spreadsheet which are linked directly back to the summary
spreadsheet. This will help significantly if you
The detailed budget breaks down the costs
need to rebudget.
further, and each line item should include a unit
cost as well.
Figure 10 is a sample of one section—A.
Personnel—of the detailed budget spreadsheet
Ideally, totals in the detailed budget spreadsheet
for My NGO.
will be calculated based on specific formulas,

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 Budget Narrative • Indirect Costs—Costs that are required to
A budget narrative should reference both the carry out a project, but are difficult to attribute
summary and detailed budget spreadsheets. to a specific project, such as utilities, rent,
It should start by going through each of the or administrative support staff. If a NICRA
standard budget categories and giving a short is established, include the rate and how it is
3 description of the primary costs that will be calculated. Also, state whether the NICRA
incurred. Certain budget categories require is the provisional or final rate. (For more
further explanation, as follows: information on indirect costs, see section
4.3.1.6. For more on establishing a NICRA,
• Personnel—Identify Key Personnel and
see section 2.5.2.)
the percentage of their time dedicated to
the project.
Program Start-Up

The narrative should also discuss the status of

• Fringe Benefits—It is important to
the program’s overall spending. Is the program on
identify separately the fringe benefits that
track from a spending perspective? If not, what
your staff are entitled so that USAID can
do you plan to shift, slow down, or speed up.
understand how your HR policy relates to
the budget. (Remember also that if it is your
Identification of Items that Will
organization’s policy to pay a severance
Require Waivers or Approvals
to your staff at the end of the contract, this
Include a list of restricted commodities such as
should also be reflected in your budget and
vehicles, pharmaceuticals, and other items that
budget notes.) Remember to keep track of
require waivers and/or approvals.
accruals in your accounting system if it is
cash-based.
Cost Share/Matching
• Contracts—This may include the name of Provide a brief narrative describing your
your subrecipients that you intend to use organization’s contributions to the project that
on the project. Include all projected costs of apply to your cost-share or matching obligation,
your subrecipients under this line item (and if any.
then their detailed budget and budget notes
as appendices) as opposed to including their
budgeted line items (such as salaries, fringe Cost Share versus Matching Funds
benefits, travel, etc.) with your organization’s The term “matching funds” is used when
own line items. For consultants, remember to program recipients are required to provide a
include the rate justification (such as the daily certain amount of non-USG funds to a project
rate based on their established and verified in order to be eligible to receive USG funds.
Cost share refers to all other cases where non-
salary history or SF-1420 form) and the unit
USG contributions are committed to a program.
justification (such as the number of days, etc.).
Carefully consider the amount of cost share
• Travel—Identify international travel and or matching funds your organization will be
provide justification for it. able to contribute. Once cost share or matching
• Equipment—Identify equipment that will funds are proposed and approved, either is
legally binding, and your organization will be
require waivers or approvals, including
held to contributing that amount.
vehicles, and provide a justification. Also,
identify procedures you will follow in Clarifying which currency will be used for
procurement (getting multiple bids, local expenditures is also important. When
for example). proposing a cost-share amount, pay close
attention to whether it is in U.S. dollars or
• Other Direct Costs—Identify other expenses local currency.
directly attributable to the project that are
not included in the line items presented
above. These will vary from organization to
organization and may include costs such as
rent, utilities, supplies, expendable equipment, 3.4.1.4 What Makes a
etc. Unit costs for these types of items may be Good Workplan
based on the organization’s prior experience
implementing projects of a similar scope The following are the three characteristics of a
and size. good workplan:
• Subawards—Identify partners and 1. The workplan describes activities thoroughly
include a short description of the activities and completely, so that someone who is
you will implement with them or have unfamiliar with the project will be able to
them implement. understand it.

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 2. The different sections of the workplan
are connected. For example, if the activity 3.4.2 Starting Your
description says that 50 people will be Monitoring and Evaluation
reached, then the M&E section will describe
how it will determine whether 50 people (M&E) System
have been reached, the budget section will
Experience shows that it is good practice 3
account for the cost of reaching 50 people,
to consider M&E from the start. While many
and the staffing section will show how the
people have heard of evaluations that take
organization will hire and train someone to
place at the end of the project, you must
reach those 50 people.
conduct one at the beginning of the project to
3. The proposed activities, time frame, and serve as a starting point or baseline against

Program Start-Up
budget are realistic and achievable. which to measure change. This means
collecting data before the intervention starts.

Although often mentioned in the same breath,

3.4.1.5 Workplan Review monitoring and evaluation are, in fact, two distinct
activities, related but not identical. What they
and Approval have in common is that they seek to learn from
what you are doing and how you are doing it.
Once you complete your draft workplan,
submit it in accordance with the instructions Monitoring involves tracking your project’s
in your Cooperative Agreement. Typically, progress, which means systematically gathering
this means submitting it electronically to your and analyzing information about what you are
AOTR. Your AOTR will then coordinate a doing, whom you are reaching, and whether
technical review with various USAID experts. activities are being implemented according
You may be asked to make changes to your to plan. It provides the basis for evaluation.
program, ranging from minor fixes to major Evaluation is the comparison of actual project
program reorganization. Again, major changes impact against agreed-on plans. It looks at what
are generally requested only if your proposed you set out to do, what you have accomplished,
activities are inconsistent with USAID guidance and how you accomplished it.
or host-country plans. If these changes affect
your targets or budget, be sure to alert your Your M&E system gathers information on
AOTR. Major changes that require rebudgeting dozens of data points throughout your program
or changes in scope or targets may require a so you can track progress and analyze the
modification to your agreement. effectiveness of each activity.

Generally, the review process for the first year

will take longer and involve more revisions than M&E System Setup Key Points
will subsequent reviews. Applies to: All recipients
Required for: Performance Reporting
Once you have made all requested changes,
your AOTR will do a final review and issue a Verified by: Data Quality Assessments
formal workplan approval. At this point, if you Governed by: Your Cooperative Agreement
are planning to operate on a reimbursement and USAID regulations
basis, you can begin implementing. If you are
operating on an advance-funding basis, then
your AOTR will arrange for you to receive an How Does This Help
additional obligation on which you can begin to
draw. The obligation may take as long as one My Program?
month, with an additional two weeks for funds Setting up an M&E system is more than just
to get to your bank account. Be sure to plan building a spreadsheet or database. You must
accordingly and manage the expectations also understand your overall objectives and
of project stakeholders. figure out how to track activities and progress
to make sure you are achieving goals.
There is one important consideration to note: By carefully designing an M&E system that is
if your organization still has outstanding pre- user-friendly and responsive to the challenges
award conditions that you have not met by the of operating in the field, you will have a powerful
time you are ready to implement, USAID may tool at your disposal to track the progress and
not clear your organization to receive funding. impact of your program as well as data to
(For more information about pre-award guide its refinement.
conditions, see chapter 2.)

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 In addition, you will want to select some
3.4.2.1 Setting Up of your own indicators, which you will use
an M&E System to measure the impact of your program
activities. You should align these program-
The following section outlines several specific indicators with your objectives, and
3 important considerations to keep in mind as they should help measure your success at
you set up your M&E system. Numerous free meeting them.
M&E resources are available on the Internet,
a number of which are listed in the reference
section, for further reading. In addition, a special Baseline Assessments
section on baseline assessments (see the box
A baseline assessment gives a snapshot of the
on Baseline Assessments) can help you start
Program Start-Up

community or targeted beneficiary group prior

gathering baseline data.
to the start of a project. It may include data on
communities, households, and/or individuals,
1. Plan Your M&E Timeline. depending on the specific goals of the project.
What key deliverables does your M&E These data may be used prior to
system contribute to, and when are they due? implementation to refine the project design.
For example: The assessment is repeated during the project
to track progress and help make adjustments,
• When are M&E-related reports due (see and at the end of the project to measure the
chapter 5 on reporting requirements)? overall impact of the project. The baseline
- host-government reporting requirements; assessment is a critical component of your
M&E system.
- USAID performance reporting
Data from in-country sources may contribute
requirements; and
to your baseline. In addition, other NGOs/
- final report. CSOs operating in the same country where you
are working may have data they are willing
• How else will you be using the data for
to share.
internal program management?
However, these are a supplement to your
- to feed into annual budgeting and survey of the communities where you intend
work planning; to work. This aspect of the assessment should
- mid-term evaluation; focus specifically on collecting data relevant to
your project.
- final evaluation;
You can contract baseline assessments to an
- other regular program monitoring; and independent evaluator, especially if your M&E
staff is not in place from the start. Be sure
- as a tool for decisionmaking. to save all documentation of your baseline
assessment, including all tools and forms,
Long-term programmatic goals and objectives for evaluators to use later to conduct mid-term
should be based on performance and feedback and final evaluations.
from the field, including feedback from intended
beneficiaries. Over and above USAID reporting
requirements (in line with strategic plans), M&E 3. Choose Appropriate Data Collection Methods.
plans should include indicators to track progress
A strong M&E plan will provide a sense of
toward long-term sustainability. Map these items
the number of beneficiaries receiving project
on a timeline to that ensure your system is
support as well as what changes this support
prepared to deliver the data you need on time.
brings about in their lives. Different data-
collection methods gather information that
2. Use Your Program’s Objectives to answers both of these questions, and it is
Define Indicators. important to make careful decisions about the
A program may have required indicators types of data collection methods to use to tell
that will define a portion of the data you the story of your project results.
collect. The host government may also
require programs to report against country- Data collection methods should match the
specific indicators. indicators developed for the program, be
appropriate to the context, and be easy to use.

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 Consider systems that allow for community- field staff may face and provide guidance to
level participation and ensure that all analysis help them. One particularly helpful item is
is shared with the implementers in the field, a list of clear definitions of your indicators
so everyone can learn from the data. and guidance on exactly what and how to
count. Then, train and provide mentorship of
4. Design a Paper Process First. subrecipients that are gathering information 3
to feed into your M&E system.
When staff visit beneficiaries, what data
will they need to capture? How will they
8. Test Your System.
collect these data? How will they record the
data? How will you consolidate and analyze A practice run of your system, from beginning
the data for reporting? to end, can spot data-capturing issues and

Program Start-Up
technical problems, so they can be addressed
Design your process step by step with paper- before actual implementation.
based forms first. Later, you may choose to
automate or computerize certain components. 9. “Push Down” Analysis Opportunities and
Incorporate Feedback.
5. Take an Implementation-Friendly Approach. Too often, M&E systems feed data up the
What challenges does your program reporting chain, from communities to program
face in the field? Is travel to sites in rural offices where analysis and learning takes
areas expensive and time-consuming? Is place, but they do not push it back down
there electricity or solar-energy-powered to the community level. Communities and
equipment? Do you have good Internet implementing subrecipients benefit greatly
access? What sort of literacy rates can from receiving feedback and from learning
you expect from volunteers or field staff, how to use the data to perform their own
including computer literacy? program analysis. These systems do not
need to include complicated data tools. A
If you take into account the realities faced by small community group can use something
your partners in the field, you can use simple as simple as a flip chart with activities
techniques to make your system more field- and beneficiaries to see which clients are
friendly. For example, use pictures and icons receiving what services each month.
rather than words if there is limited literacy;
have paper forms that match computer forms
to help data entry; and set up a paper-based,
backup system in case a computer is 3.4.2.2 Linking Program
unavailable for a time.
Targets with Impact Indicators
6. Streamline and Automate Processes
Another important consideration is determining
Where Appropriate.
how you will demonstrate impact—showing
Once you have an overview of your system, significant, sustainable changes in a target
you will want to streamline and automate population or community after an intervention
processes where appropriate. For some is completed. Impact differs from measuring
projects, USAID may have an automated outputs, for example, counting the number of
system or Web interface you must use to people trained, the number reached with certain
capture and/or submit data; others have interventions, etc.
spreadsheet templates. Ensure that your
system is compatible and you can input data Impact (http://www.outcomemapping.ca/
directly into these systems if such an option resource/resource.php?id=189) also differs
is available. from looking at outcomes, which are the
short- to medium-term observable behavioral,
7. Design Training and/or Reference Materials institutional, and societal effects of the
for Data Collection. intervention’s outputs. Impact indicators are
about real change over time. They attempt
Once your system is designed, create to measure whether your work is having
training and reference materials for the an effect on the quality of life of your
staff. Understand the particular challenges program’s beneficiaries.

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 Before launching your intervention, establish an effective communication strategy can mean
the baseline by gathering data on each of your strengthening support among local leaders and
indicators. By providing a before-and-after beneficiaries, developing partnerships, and
picture for each indicator, you can receiving additional donor funding.
demonstrate impact.
3 While the different activities involved in
Impact indicators relate to your objectives. communication cut across many phases of
For example, if you are running an HIV/AIDS your award and continue throughout your
voluntary counseling and testing (VCT) program, it is best to begin planning them during
program, why are you trying to get people start-up. The earlier you prepare and start
tested for the disease? The answer outlines implementing your communication plan, the
the objectives you want your VCT program more people you are likely to reach and
Program Start-Up

to achieve: the more people your program will benefit.

• Those who are HIV-positive will seek treatment.
Often when we think of “communication,”
• Those who are HIV-positive will take steps to we think of advertising products for sale or
prevent the spread of HIV. sending out a press release, but it is much
• Those who are HIV-negative will begin or more than that. Anytime you are trying to
continue to use prevention measures to transmit messages to a group of people
protect themselves and remain negative. outside the organization, it can be considered
communication. This includes:
• By helping people to know their status
and how to remain healthy and productive, • informing potential beneficiaries about the
the program will help fight stigma services you offer;
and discrimination. • appealing to potential volunteers to contribute
time to your program;
You can use these objectives to track • sharing your success stories with the NGO
impact indicators—for example, follow up with community and potential partners; and
individuals who discovered they are HIV-positive
and received counseling to learn how many: • informing the public about your work,
including crediting your donors.
• sought treatment,
• used condoms, The following section discusses several key
• retained their jobs, or concepts, including communication planning
(3.5.1), branding (3.5.2), marking requirements
• reported suffering discrimination. (3.5.3), demonstrating impact (3.5.4), and
communication ethics (3.5.5). Each of these
Linking impact indicators to the program topics is a component of your communication
targets helps you to monitor the amount of strategy and can contribute to your
work your program is doing and the quality organization’s ability to sustain its activities.
of your interventions. It can also help you
improve your interventions and, thus, the How does this help my program?
lives of beneficiaries.
Communication includes a variety of channels,
methods, and strategies, ranging from putting
up signs and applying logos to hosting events
3.5 Communication and building a Web site. Together, these add
Communication is a key component of up to your organization’s public image which,
any program. Not only does it help build when developed effectively (and reinforced by
relationships with donors, beneficiaries, and the good work of your staff), will help you earn
other stakeholders, but it also alerts people to the trust and confidence of beneficiaries, local
the great work you do and is critical to meeting leaders, and donors.
the needs of your donors. Over the long term,

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 It is important to separate the work you can
3.5.1 Developing a do from what you must do. Set goals that
Communication Plan focus on what must be done and make sure
these goals are achievable.
To communicate effectively, it helps to plan
what you want from your communication, and 3. Conduct a communication audit. 3
what you need to do to get it. Such a plan
Take stock of what you are doing and
provides direction on how to shape your image,
saying now to your various audiences,
create demand for your services and build
including beneficiaries, donors, other NGOs,
relationships with key target audiences.
and potential volunteers. To get started,
collect any news stories as well as samples
Developing a written communication plan takes

Program Start-Up
of all existing materials such as letterhead,
effort. However, once in place, a written plan
fliers, brochures, and so on. Also, take a look
will make everything easier, help set priorities,
at what is being communicated in the external
relieve you of last-minute stress, and bring
environment about your sector/issue and by
order and focus to activities that can otherwise
any competition.
be hit or miss.
As with any planning process, it also means
The process of developing a communication
answering some basic questions:
plan is similar to that used to develop a
workplan or a strategic plan (chapter 8). Like • Why do we want to communicate with groups
them, a communication plan includes: outside of our organization (goals)?
1. strategic objectives; • What do we hope to achieve (outcomes)?
2. activities or tactics to achieve • To whom do we want to communicate it
these objectives; (audience)?
3. how these objectives and activities are • What do we want to communicate (message)?
supported; and - the services we offer;
4. expected outcomes (“targets”) against - why they need these services (that is, how
which you can measure the success of they will benefit from them); and
each activity.
- who is making this work possible
(that is, giving credit to the donor and
A communication plan may also include policies or host government).
particular to communication, including ethical
guidelines (3.5.5), discussed later in this chapter. • Who will communicate the message
(messengers)?
Five Steps to Improved • How do we want to communicate it (channels)?
Communication - What language(s) do they speak?
1. Create a Communication Planning Team. - Where and how can you communicate with
them—in other words, what is the best way
To get buy-in and improve the chances
to “get in front of them” with our message?
that the plan will not gather dust, involve
the people who will be responsible for - What cultural considerations should we be
implementing the plan. If the organization aware of?
has a communication manager, he or she
should lead the process. If not, choose A sample of a more comprehensive set of
someone on staff with the relevant expertise questions follows in Figure 11.
to guide a team through the process.

2. Define a scope of work and allot time to

the process.
Be clear about the roles each participant will
play. Allow for three to five days—in one go or
spread over time—the first time you do it.

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 Figure 11—Communication Audit Template

GOAL(S) Why do we want to communicate with groups outside of our organization (goals)?
What do we hope to achieve (outcomes)?
What are our priorities?

3 AUDIENCE(S) Who are our target audiences—be specific? (Choose from a list.)
‰ Beneficiaries
‰ Donors
‰ Opinion leaders
‰ Media
‰ General public
Program Start-Up

‰ Legislators/other Government entities________________

‰ Other stakeholders (describe_______________________)

What is the profile of each?

• What language(s) do they speak? ___________________
• What cultural considerations should we be aware of?

IMPLEMENTATION Tactics
Which of the following methods (tactics) have we used to promote the organization and its
core messages in the past 12 months? Do we have examples?

‰ Brochures ‰ Newsletter
‰ Fliers ‰ Events
‰ Posters ‰ Local newspaper advertising
‰ Billboards ‰ Local radio advertising
‰ Press releases ‰ Business cards
‰ Web site ‰ E-mail
‰ Presentations ‰ Other__________________

What are the best methods (tactics) to reach our target audience(s)—in other words, what
is the best way to “get in front of them” with our message? (Match audiences with effective
tactics above.)
‰ Beneficiaries
‰ Donors
‰ Opinion leaders
‰ Media
‰ General public
‰ Legislators/other Government entities
‰ Stakeholders (describe_____________________)

What do we want to communicate to each audience (message)?

• the services we offer;
• why they need these services (that is, how they will benefit from them); and
• who is making this work possible (that is, giving credit to the donor and or
host government).

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 Figure 11—Communication Audit Template (continued)

IMPLEMENTATION Who will communicate the message (messengers)?

(continued) How do we want to communicate it (methods/tactics)?
What resources do we have available now for implementation?
How are those resources being allocated? 3
What resources do we lack? Time, materials, money?
What works?
What does not work?
Are there skills/abilities we believe would help us do our job better?
• If yes, what are they?

Program Start-Up
• How can we get them?

Review
Who must review and sign off on any external communication product/material?

MONITORING & How do we monitor success (for example, survey and clip newspapers)?
EVALUATION What have been our most effective communication tactics?
How do we measure the impact of our efforts?
What are the biggest obstacles in effectively reaching the target audience(s) with
our messages?
Name one thing that the organization could do to improve
communication immediately.

GENERAL What is the biggest communication challenge the organization faced in the last 12 months?
What do we think are the greatest challenges for the organization over the next year?

4. Develop communication action plan

and timeline. 3.5.2 Branding
The answers to the audit questions become Branding is the process of using images and
the basis of your action plan. Try to design words, such as logos and slogans, to identify
“SMART” communication activities—Specific, a product or service. The goal of branding is to
Measurable, Achievable, Realistic, and establish a recognizable identity, which helps
Time-Bound (chapter 8). Do not forget to you gain the trust of your beneficiaries and
include as part of your communications plan helps them associate certain ideas and values
budget considerations and sufficient staff to with your brand. Developing a brand identity
implement the intended activities. for your organization and your programs is
the foundation of NGO marketing.
5. Implement the plan.
Traditionally, we think of brands and
Based on what you’ve learned, you are ready branding as something exclusive to the realm
to develop materials and disseminate your of commercial producers. But, increasingly,
message(s). Be sure to monitor and evaluate NGOs are realizing that adapting branding
your efforts. Revisit your plan every few techniques to their programs can have
months and adjust your approach as needed. enormous benefits, such as:

If getting started is overwhelming, take on a • Making a Brand Promise—Logos and

few simple tasks first. The momentum from a slogans can help tell beneficiaries what
small amount of progress can help energize they can expect from your program’s
the organization to take on bigger challenges. services, such as quality, confidentiality,
and compassionate care.

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 • Establishing a Brand Identity—Through
consistent branding, beneficiaries who 3.5.2.1 How Do I
become familiar with and develop trust in one Develop a Level 2 Brand
aspect of your program can easily identify your
other service outlets and will seek out your for My Program?
3 services in the future. You can take this a step
The first step is to ask yourself the
further by branding a network of services.
following questions:
• Building Brand Value—As recognition of
your brand grows and you gain the trust of a. Who are the primary beneficiaries of our
local leaders, donors, and beneficiaries, program? What language, cultural, and
you increase the value of your brand. A other concerns might they have in relation
Program Start-Up

valued brand leads to improved program to seeking our services?

sustainability and helps meet the donor’s
b. What is the primary objective of
own branding objectives. For example, if you
our program?
hand over a project with a strong brand value
to a local implementer, it can build on your c. How do we want beneficiaries to feel
outreach to beneficiaries and donors, giving about our program? What values and
them a head start on renewing funding. ideas do we want them to associate
with our services?
You can apply branding principles to your
organization’s name (Level 1) as well as to
individual programs (Level 2), much like a A. Who are your beneficiaries?
manufacturer does with separate brands When listing your beneficiary groups,
for different product lines and, as Figure 12 note any special cultural, language, or
illustrates, the Nature Conservancy has for its literacy considerations. Larger programs
program components. Since most organizations implementing in multiple areas should list
have already developed brands for their all of the different subgroups they may be
organizational identity, the following section targeting, such as women, children, high-risk
focuses primarily on program-level groups, groups in different areas, or groups
(Level 2) branding. with different religious, education, traditions,
or socioeconomic backgrounds.
Figure 12—Analysis of a Brand Hierarchy

Level Brand Name Brand Promise Tag Line

1 Parent or Master Brand: The Nature The leader in protecting Protecting Nature.
Organization Name Conservancy ecologically important lands Preserving Life™
and waters for nature and
people around the world.

2 Child or Sub-brand: Nature Rocks™ Partner initiative that gives Let’s Go Explore™
Program/Project/Service busy parents and caregivers
the tools, instructions, and tips
(http://www.naturerocks.org/
getting-started.aspx) for
quick, easy, inexpensive
(or free) activities, so they
can enjoy quality family
time in nature.

3 Consumer Brand: 2009 Summer Nature A specific tool to help parents Fun for the whole family
Stands-alone Planning Guide and caregivers.
components

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 Note any special concerns your beneficiaries • Avoid excessively long names. Your program
might have about seeking your services, such name should be something people can
as maintaining confidentiality or avoiding remember easily.
stigma and discrimination. For example, a • Do an Internet search of your proposed name
potential beneficiary might not want to to see whether another program already uses
walk openly into an office that has a sign it. If you do find a program with the same 3
that reads, “HIV/AIDS Services for name, consider changing yours.
High-Risk Individuals.”
• Do not include “foundation” in your name
B. What are your program objectives? unless you plan to distribute funds to other
organizations. The term “foundation” implies
Next, summarize your program’s mission in the availability of funds, so donors may not

Program Start-Up
one sentence by trying to capture its primary believe you need funds.
objective. For example:
• Avoid potentially offensive or alienating
The ____ project seeks to improve the names (cultural, religious, and social
lives of people in the XYZ region by providing considerations depending on the locality
them with the necessary knowledge and skills where you intend to work).
to improve access to clean water.
Program Logo
C.How do you want your beneficiaries to view Creating a logo for your program is often the
your program? most intimidating aspect of branding, especially
for those who are not artists or do not consider
Look at your program from the point of
themselves particularly creative.
view of your beneficiaries. How do you want
them to feel about your program? Examples
Your logo may derive from your program name
may be “safe, trustworthy, confidential,
or popular local images that you may be able to
helpful, culturally responsive, makes me
adapt. Is there a particular local flower, tree, or
feel better,” etc.
animal that symbolizes what you are trying
to represent?

Have fun. If you cannot come up with anything,

3.5.2.2 What Are consider a simple logo using the name of your
the Elements of program in a nice font. If a logo idea comes to
you later, you can always add it.
My Program’s Brand?
Your answers to the questions above form the Taglines, Additional Images, Etc.
foundation of building your brand. The next step You may want to express more than just a
is to consider the key elements of your brand’s program name and logo, especially for new
image, and synthesize the program objective programs that people may not know much
and the feelings you want your beneficiaries to about. Consider putting an additional phrase,
have about your program, all the while keeping slogan, or images alongside your logo.
in mind the language, culture, and other
important considerations of your beneficiaries. For example, a program offering health,
education, and psychosocial support services
may want to put a tagline (short phrase next to
Program Name its program name such as, “Healthy, Smart,
Naming your program is the first step in and Happy Children.”
developing your brand. It can be a simple
name or an acronym. It may be in English Also consider the branding requirements of
or the native language where you are your donor, which often wants to have its logo
implementing. Some program naming tips: displayed alongside your program name.

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 Be careful not to add too many words and
images. Your brand should be as clear and 3.5.3.1 Creating a
concise as possible. Marking Plan
The best way to ensure that you are meeting
Next Steps USAID’s requirements is to create a marking
3 plan specifying what will be marked, and
Test your brand, especially if you are using a
language and culture different from your native when, where, and how you will mark program
tongue. Share your logo and program name deliverables, sites, and events.
with native speakers and ask for their feedback.
You never know what cultural symbols may USAID requires that you submit a branding
be taboo or what language nuances may strategy and marking plan to your AO that
Program Start-Up

lead to misinterpretation. Once you develop describes how you will implement the marking
the basic branding for your program, you will requirements in your program. The AO must
want to integrate your brand into your public review and approve your plan before executing
communication and apply the logo to your your award.
program deliverables.
A good marking plan describes the following:
• What you will mark—all sites, documents,
events and commodities you procure
3.5.3 Marking and or produce as a part of the Cooperative
Donor Requirements Agreement (for example, banners at
events, stickers on equipment, etc.).
While developing your brand, do not forget • How you will mark—the type of
to take into consideration the branding marking (feature USAID and grantee
requirements and objectives of your donors logo on banner; insert jpeg of logos on
and partner organizations. Applying logos notebook cover template).
to program deliverables, called “marking,”
• When you will mark—in the event that you
identifies your program and acknowledges
might not mark an item permanently right
who funds, supports, and implements it.
away (for example, a project site that is being
Proper marking strengthens relationships
constructed), describe any temporary marking
between implementing partners and credits
and plans for final marking.
donors for making the program possible.
• Where you will mark—describe the size
Not only is marking a good idea, but and placement of the USAID logo and any
USAID agreements include specific accompanying logos.
marking requirements.

Figure 13—Sample Brand Identity

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 Include any anticipated exceptions in your
3.5.3.2 Marking Program marking plan. If an unforeseen circumstance
Deliverables arises, you must request a waiver from your AO.

You should mark program deliverables to

identify and give credit to both USAID and 3
implementers. However, you will not mark 3.5.3.3 Subrecipient
all deliverables the same way. High-profile
deliverables, such as a clinic, may be marked Requirements
with the logos of all implementing partners and
Marking requirements also apply to
donors. Conversely, you may only need to mark
subrecipients. It is a good practice (and in
smaller commodities procured for the program,

Program Start-Up
many cases it is required) to include language
such as computers or office equipment, with
in your subawards requiring that the donor’s
the USAID identity.
logo (and perhaps your logo as well) be
included on program deliverables.
Your marking plan should specify the approach
for different deliverables and, at a minimum,
should cover all donor requirements. The
following are examples of program deliverables
that should be marked with USAID’s logo: 3.5.3.4 Special Requirements
The AO may require a pre-production review
• project sites;
of USAID-funded public communications and
• electronic and printed documents, such program materials for compliance with the
as informational and promotional materials, approved marking plan. Contact your AOTR
audiovisual presentations, public service before printing to ask whether USAID would
announcements, Web sites, etc.; like to review the final product.
• events, such as training courses, workshops,
press conferences; and Any public communication funded by USAID,
where the content has not been approved by
• commodities, including equipment, supplies, USAID, must contain the following disclaimer:
and other materials.
This study/report/audio/visual/other
information/media product [specify] is made
Marking Exceptions possible by the generous support of the
There are some situations when applying American people through the United States
logos does not make sense. You may not want Agency for International Development
to apply logos when their use would: (USAID). The contents are the responsibility
of [insert your organization’s name] and do
• impair the functionality of an item; not necessarily reflect the views of USAID
• incur substantial costs or be impractical; or the United States Government.
• offend local cultural and social norms or be
You also must give your AOTR copies of
considered inappropriate;
all program and communication materials
• cause increased security risk for volunteers, produced under the award.
staff or beneficiaries; or
• result in increased stigma and discrimination
for the recipients.

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 Figure 14—Sample Implementation of Branding your baseline assessment and your most recent
and Marking project data to show what percentage of girls
attended school prior to your intervention versus
what percentage attends now.

3
B C
A Impact also goes beyond just measuring the
number of people reached. There are numerous
ways to highlight the results of your program.
For example, beyond looking at the percentage
of girls attending school, you can explore the
impact schooling has had on the girls‘ lives as
a whole. Are the girls healthier? Do they make
Program Start-Up

better decisions in social situations? Has access

to education increased their self-esteem? By
developing posters, brochures, or a Web site,
and using select photos, statistics, and stories
from the community, you can communicate your
impact and show how your program positively
affects community members. Ultimately, a
marketing strategy that focuses on beneficiaries
helps drive your communication activities.

D E F
3.5.4.1 Telling Your Story
Web page for www.ngoconnect.net Telling your story should be an important part
Banner of your organization’s communication and
A. Tagline for product—“Sharing marketing plan. Why? Because stories and
Resources and Knowledge Among the photographs are a powerful way to educate
Global NGO Community” donors, prospective partners, and the public
about your programs and demonstrate their
B. Product name and logo (Level 3)— positive impact on your community. In the
NGOConnect.Net process, telling your story lets you give credit
C. Program brand and logo (Level 2)— to donors and reach a wider audience of
Capable Partners Program potential supporters. Consider developing
and disseminating at least one or two success
Footer: stories about each program you implement.
D. Donor disclaimer
E. Prime and sub logos/brands (Level 1) There are many different types of success stories.
—FHI 360, MSI The most common highlight the impact of a
program by communicating how it has made a
F. Donor brand/logo—USAID. difference in people’s lives. However, success
stories may also highlight a specific event or
discuss an innovative tool or approach a program
has implemented. Success stories may expand
3.5.4 Demonstrating Impact on information provided in your performance
reports, repackaged for a wider audience.
While developing your marketing and
communications strategies, be sure you retain The key to a good success story is the ability
the focus of your organization—to have a to turn data that provide evidence of your
positive impact on the lives of beneficiaries in program’s results into an engaging personal
the communities you serve. This is your story, story that everyday readers will care about
and this is the story that donors want to support. and understand. For example, Kenya’s Wema
Centre illustrates its approach to rescuing street
Demonstrating impact is very powerful when children through the story of the transformation
done objectively by using statistics from your of a teenage boy (http://www.ngoconnect.net/
project’s M&E system. For example, rather than wema). The story puts a human face on the
saying, “Our programs enable more girls to attend statistical evidence of the program’s impact.
school,” you should use the data comparing

56 www.ngoconnect.net
 individuals in your story. Tell them exactly
Find it online how you intend to use the story and request
their written permission by having them sign
For inspiration, sample the ways other NGOs
a release form authorizing you to use their
have shared their success stories at these
Web sites: names and photos. This makes sure they
know how you intend to use the story, such 3
f NGOConnect.Net as posting it on the Internet, or sharing it with
http://www.ngoconnect.net/success
media, donors, or others (See 3.5.5).
f One Shared World
http://onesharedworld.org/success/index.html
• Talk about the before, after, and future:
A great way to demonstrate impact is to
f PEPFAR Stories of Hope explain the problem your program hoped to
http://www.pepfar.gov/press/c19597.htm

Program Start-Up
address by giving a glimpse of what life was
f USAID Telling Our Story like before your program came along. Your
http://www.usaid.gov/stories/about.html story then shows how you addressed that
challenge, by describing what happened after
your program was in place. You may also
want to talk about the future—plans
to expand or sustain your program.
Finding a Good Story • Do not forget the data: Though these
A success story summarizes the work you stories often focus on an individual or group
do by telling a specific story of how that effort of people for the “human face” of the work,
has improved the lives of the beneficiaries do not leave out the bigger picture that your
you serve. Stories often surface throughout data show. Consider using a graph or a
implementation, and it is a good practice to jot chart to make your data more engaging
them down as they arise and keep a file you for the reader.
can come back to later to write them up.
• Give credit: Be sure to give credit to those
who have supported your program. Identify
Some ideas for developing a good story include:
key staff, partners, and donors. This can be
done in the narrative or by putting the logos
• Ask your staff and subrecipients to suggest
of donors and other organizations involved
beneficiaries of your program whom you
on a printed or electronic presentation of
might include in a success story.
the story.
• Document an innovative approach your
• Provide contact information: Success stories
program uses that allowed you to reach
are often short—one or two pages (200 to
new people or address a need that was
500 words) at the most. Therefore, there is
previously unmet.
probably a lot of information you do not have
• Discuss an event that allowed you to reach space to include in your story. Providing
out to new people. contact information allows others who are
• Build on pieces of good news about your interested in your story to follow up with you
program that are passed around your office for more details.
and that energized staff.
• Elaborate on a story you often tell colleagues Coordinating with Donors
or donors that grabs their attention.
As you begin to develop your success story,
contact USAID. Your AOTR may want to help
Writing the Story you promote the story by posting it on USAID’s
While there is no precise formula for writing a Web site or including it in presentations or
success story, the following are some common publications. Some donors want to review the
strategies and tools you may want to consider document before it is distributed, and they
to make your story interesting: may have other requirements for publicly
documenting the programs they fund. This
• Use quotations and photos: using the words process gives donors a chance to be involved
and pictures of the people in your story can in the story. After all, just as you are proud of
make it much more personal and engaging to your program’s success, they, too, are happy
the reader. Note, however, that while people to be supporting your good work.
are usually very happy to tell their stories,
it is important to respect the privacy of the

The Essential NGO Guide to Managing Your USAID Award 57

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 Promoting Your Story To guide your approach to photographing
people, consult the USAID-funded INFO
Once the story is written, share it with a
project for a list of ethical issues and sample
number of different audiences to communicate
templates for requesting permission
your successes as widely as possible. Start by
(http://www.photo share.org/phototips/
sharing the story with your donors, then share
3 it with your partners, your beneficiaries, and
developethics.php). Consider incorporating
these and other ethical practices when
the general public.
developing standards of conduct for staff.
These considerations are not intended to
Consider the following strategies for sharing
prevent people from taking photos, but rather
your story:
to help increase respect for individuals’ right
• Post the story on a Web site—yours, your to privacy.
Program Start-Up

partner’s, and donor’s.

• Create a news release and share the story
with local media.
3.6 Summary and References
• Print copies and post it at program
implementation sites (if appropriate). Though everyone wants to begin implementing,
• Provide copies to local government officials you should not rush the start-up phase of your
and your AOTR. project. This is a critical time to prepare your
staff and partners through planning and
• Submit your story to NGO conferences setting up the systems necessary to run an
and forums, where you might be asked to effective program.
share more details about your program
with other implementers. This chapter has reviewed the tasks you
• Share the story with your partners and staff. need to accomplish during the start-up phase,
This is a great way of soliciting more stories and has discussed the minimum USAID
from your team. requirements for key management systems,
such as your accounting and M&E systems.
This chapter has also outlined the program-
planning process, including the development
of your initial workplan.
3.5.5 Communication
and Ethics USAID wants to make sure the programs it
supports have the systems, policies, personnel,
Most of the time, people are happy to let you and plans in place prior to implementation that
photograph or audiotape or videotape them and will lead to high-quality, effective services for
are eager to tell their story so you can share the beneficiaries. Taking your time with these
it with others. However, there are significant start-up activities will only improve your ability
ethical considerations, and it is important for to deliver the best possible program to
you to respect the rights and privacy of all your community.
subjects you wish to photograph or audiotape
or videotape, especially patients in clinical The foundation you build during the start-up
settings, children, and those incapable of phase will help you as you enter the next
making their own decisions. phase of your program: implementation. The
next chapter discusses the keys to running
an effective and compliant program.

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 References • M&E Fundamentals
Human Resources This mini-course covers the basics of
program monitoring and evaluation in the
• Key Tools and Resources for a Human
context of population, health, and nutrition
Resource Management (HRM) System
programs. It also defines common terms
http://www.ngoconnect.net/c/document_
and discusses why M&E is essential for 3
library/get_file?p_l_id=17776&folderId=
program management.
38677&name=DLFE-5176.pdf
http://www.cpc.unc.edu/measure/training/
mentor/me_fundamentals
Marketing and Communication • M&E News
• Resource: Photoshare

Program Start-Up
This news services focuses on developments
http://www.photoshare.org in monitoring and evaluation methods.
• Development Photography Ethics http://mande.co.uk/
http://www.photoshare.org/phototips/ • MEASURE Evaluation’s M&E Capacity-
developethics.php Building Guides
• Strategic Communications Audits http://www.cpc.unc.edu/measure/tools/
monitoring-evaluation-systems/capacity-
This brief helps nonprofit organizations building-guides
to better understand and assess their
communication capacities. • Performance Monitoring and Evaluation
http://www.mediaevaluationproject.org/ USAID online course
WorkingPaper1.pdf The course includes modules ranging
from the M&E framework to conducting
Monitoring & Evaluation evaluations, developing scopes of work,
assuring data quality, and review and
• The Evaluation Wiki dissemination of evaluation results.
Founded in 2006 by the nonprofit http://communities.usaidallnet.gov/fa/
organization Evaluation Resource Institute node/1901
(ERI), the mission of Evaluation Wiki is
to make freely available a compendium
of up-to-date information and resources
to everyone involved or interested in the
science and practice of evaluation.
http://www.evaluationwiki.org/index.
php/Main_Page

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CAPResourceGuide_book.indb 60 10/22/10 12:49 PM
4 Running an Effective and
Compliant Program
PHOTO CREDIT: ©SALEH ABDOULAYE ABDEL-KERIM, FHI 360.
 Running an Effective and
Compliant Program
4.1 Overview

4.2 Getting Started

4.2.1 Five Tips for Ensuring Compliance 4
4.2.2 Your Implementation Model

4.3 Administrative Management

4.3.1 Financial Management

Running an Effective and Compliant Program

4.3.1.1 Requesting and Disbursing USAID Funds
4.3.1.2 How to Fill Out the SF-270
4.3.1.3 How to Fill Out the SF-1034
4.3.1.4 Monitoring Pipeline and Burn Rates
4.3.1.5 Rebudgeting
4.3.1.6 Allocating Shared Project Costs
4.3.2 Procurement
4.3.2.1 Allowability Test
4.3.2.2 Allowable Costs
4.3.2.3 Source/Origin Restrictions
4.3.2.4 Ineligible Suppliers/Excluded Parties List
4.3.2.5 Non-Expendable Equipment
4.3.3 Travel
4.3.3.1 Travel Requirements
4.3.3.2 Developing a Written Travel Policy
4.3.4 Use of USAID-Funded Property
4.3.5 Requesting Modifications to Your Agreement

4.4 Technical Program Management

4.4.1 Monitoring and Evaluating Progress
4.4.2 Learning and Sharing

4.5 Summary

61

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 4.1 Overview
Skip Ahead
Running an effective USAID-funded f Financial Management
program requires:
f Procurement
• meeting or exceeding your targets;
f Travel
• providing quality services that have a f Use of USAID-Funded Property
quantifiable, measurable, positive impact;
f Requesting Modifications to Your Agreement
• providing quality service to USAID;
f Monitoring and Evaluating Progress
• being part of the wider response to a
f Learning and Sharing
problem in the country, through service
4 delivery, referrals and sharing experiences,
networking and collaborating with others on
the ground, and establishing wrap-around • Examine the basics of managing your
services when appropriate; award funding and documentation, including
• creating innovative programs that adapt to modifications to your agreement and changes
changing needs; to your budget.
Running an Effective and Compliant Program

• establishing sustainable responses • Understand requirements and best practices

that build the capacity of communities related to technical program management.
and local implementers;
• spending funds wisely; Key Terms and Acronyms
• maintaining appropriate programmatic and • Allocable Cost—A cost incurred specifically
financial documentation; to support or advance an award.
• reporting in a timely manner; • Allowable Cost—An incurred cost
• complying with regulations in your determined to be an acceptable charge.
Cooperative Agreement; and • Authorized Class of Service—Unless
• building a credible and functional organization travel falls under certain exceptions, air
and strong staff and project team. travel purchased with USG funds requires
the customary standard commercial airfare
(economy class or equivalent).
In this chapter, we break down these • Burn Rate—The rate at which you spend
management tasks into two broad categories: your award funds on a periodic basis,
administrative management (4.3) and technical typically monthly.
program management (4.4).
• Cooperative Agreement—One of two
Administrative management includes methods the USG uses to provide assistance.
requesting, disbursing, and managing funds The USG uses this method when it wishes to
(4.3.1.1); complying with procurement (4.3.2) as retain substantial involvement in a project.
well as other award regulations; and complying • Cost Share—The portion of project or
with your agreement terms (4.3.5). program costs not covered by the USG.
This may be in the form of cash or
Technical program management includes in-kind contributions.
monitoring and evaluating (4.4.1) and learning
• Direct Costs—Goods and services
and sharing (4.4.2) within your organization and
specifically purchased for the exclusive
among partners.
benefit of one project that are charged to
that project.
This chapter refers to the terms of your
Cooperative Agreement several times. For • Excluded Parties List—A database of
detailed information on standard provisions in individuals and organizations that are not
USAID Cooperative Agreements, please refer eligible to receive funding from USAID or any
to Annex II of this Guide. USG agency. Recipients are responsible for
using this online database to check vendors,
Objectives consultants, and applicants prior to making
any purchases or hiring decisions
• Learn the administrative management (http://www.epls.gov). Other online sources
requirements of USAID-funded agreements, for verifying eligibility include the UN
especially regarding finance, procurement, Consolidated List (http://www.un.org/sc/
property management, and travel. committees/1267/consolist.shtml) and the

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 U.S. Department of Treasury’s Designated • Origin—Where an item was originally grown
Nationals List (http://www.ustreas.gov/offices/ or manufactured.
enforcement/ofac/sdn/). • Per Diem—The maximum amount of
• Fiscal Year—Sometimes called a financial money that the USG allows an individual to
year or budget year, a period used for cal- be reimbursed for per day to cover lodging
culating annual (“yearly”) financial statements and meals and incidental expenses when
in businesses and other organizations. It may traveling on behalf of a project.
or may not correspond to the calendar year, • Pipeline—The amount of funds obligated
which is January 1 through December 31. but not yet spent, which is calculated by
The USG fiscal year covers a 12-month adding up all of the funds spent to date
period that begins October 1 and ends the and subtracting that amount from the total
following September 30. obligation to date. 4
• Fly America Act—A regulation that applies to • Program Income—Funds earned by the
all USG-funded travel and requires the use of program for the benefit of the program itself.
U.S. flag air carriers, with a few exceptions. Program income comes from charging fees
• FMO—USAID’s Financial Management Office. for services or from the sale of commodities.
It is also earned by selling equipment
• Incidental Expenses—Expenses incurred

Running an Effective and Compliant Program

purchased with program funds that is no
during travel, such as gratuities and tips for
longer needed. Note: Program income is
services, laundry, toiletries, etc.
different from income-generating activities
• Indicator—A specific data point an organ- in which the program’s beneficiaries keep
ization tracks to monitor program progress. any income earned.
• Indirect Costs—Costs that are required to • Prohibited Items—Goods or services
carry out a project but are not attributable that cannot be purchased with USG funds
to a specific project, such as electricity or under any circumstances.
administrative support staff.
• Reasonable Cost—A cost that is generally
• In-Kind Contribution—Noncash recognized as ordinary and necessary and
resources contributed to a project, which that a prudent person would incur in the
may include volunteer services, equipment, conduct of normal business.
or property. They may also count as any
• Restricted Items (or Restricted
cost-share obligation.
Commodities)—Goods or services that may
• International Travel—Any travel between not be purchased without specific written
two countries. permission in advance.
• Key Personnel—Refers to project positions • SF-270—Standard Form-270, Request for
and to the individuals who fill the particular Advance, used to request funds for a grant
slots. Typically, positions identified in a or Cooperative Agreement.
Cooperative Agreement as Key Personnel
• SF-425—Standard Form-425, Federal
are those leadership slots considered
Financial Report, used to prepare financial
essential to the successful implementation
reports for a grant or Cooperative Agreement.
of the overall project.
• SF-1034—Standard Form-1034, Public
• M&IE—Meals and Incidental Expenses, costs
Voucher for Purchases and Services Other
incurred during travel, such as breakfast,
Than Personal, used to request funds
lunch, dinner, gratuities and tips for services,
and liquidate advances for a grant or
laundry, toiletries, etc.
Cooperative Agreement.
• NICRA—Negotiated Indirect Cost Rate
• Shared Costs—Goods and services
Agreement, a rate negotiated individually
benefiting multiple projects and for which
between an organization and USAID to
a vendor cannot invoice each project
cover indirect cost. (For more information
separately; therefore, the costs are charged
on indirect costs and NICRA, see USAID’s
to each benefiting project based on a
Best Practices Guide for Indirect Costing at
pre-determined formula.
http://www.usaid.gov/business/regulations/
BestPractices.pdf.) • Significant Rebudgeting—Moving funds
between budget categories above a certain
• Obligated Amount or Obligation—
threshold set by USAID.
The amount USAID has committed to the
program. There is no guarantee that USAID • Source—Where one procures an item or a
will reimburse the recipient for any spending service, regardless of its origin (where it was
above the obligated amount.

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 originally grown or manufactured). This is model, form its own partnerships, and adopt
generally the physical location of the vendor. strategies that fit the culture and context,
a Cooperative Agreement allows you the
• Standard Budget Categories—Standard
autonomy to carry out effective projects and
categories the USG suggests all awardees
deliver quality services to your beneficiaries.
use, including Personnel, Fringe Benefits,
Consultants, Travel/Transportation, Equip-
Accountability is essential to the health of
ment, Supplies, Contractual Services
your organization and to implementing an
(subcontractors), Program Costs (sometimes
effective program. That means everyone should
replaced with “construction costs”), Other
act in accordance with the organization’s
Expenses, and Indirect Costs.
values to accomplish its mission and avoid
• Substantial Involvement—The right that taking shortcuts that could compromise the
4 the USG retains to provide input into an organization’s goals.
assistance project funded through
a Cooperative Agreement. This right In addition, managing an effective USAID-
usually includes the ability to approve work- funded program comes down to balancing
plans, budgets, Key Personnel, monitoring program implementation that creatively
and evaluation plans, and subrecipients. responds to local challenges, meets the needs
The Cooperative Agreement specifies the of your beneficiaries and community, and
Running an Effective and Compliant Program

areas of substantial involvement. simultaneously complies with and fulfills donor

• Total Estimated Cost—The total projected and host-government expectations, while
cost of a project included in an organization’s establishing links with other implementers,
Cooperative Agreement. constituents, and stakeholders.

This chapter discusses how to find that

balance and successfully operate your
program under a Cooperative Agreement.
4.2 Getting Started By knowing and understanding what your
organization can and cannot do with your
award, you can maximize your program’s
effectiveness and positively influence the
lives of your beneficiaries.

One of the unique aspects of USAID’s

approach to working with partners has been to 4.2.1 Five Tips for
allow organizations the freedom to design and
manage their programs and subrecipients while
Ensuring Compliance
maintaining a cohesive, coordinated response 1. Know your agreement and get help if needed.
to an issue. This is why USAID commonly uses
a Cooperative Agreement to award funding, Your agreement is full of details. Read it
as opposed to a contract (where USAID and make sure you understand it. Make sure
specifically directs a project) or a grant (where your Board of Directors and management
USAID takes a more hands-off approach). team members are familiar with the specific
sections relevant to them.
Cooperative Agreements allow USAID to
retain substantial involvement (http://www.usaid. If you need help understanding or
gov/policy/ads/300/303.pdf) in your project. meeting the demands of your agreement,
This means USAID has the right to approve seek help. Your Agreement Officer’s
implementation plans (workplans), budgets, Technical Representative (AOTR) or
Key Personnel, M&E plans, and subrecipients. Agreement Officer (AO) can help answer
By retaining this right, USAID seeks to ensure questions. If necessary, you can request
that your program is tied to USAID and host- technical assistance or hire a consultant to
government strategic objectives. At the same help set up management processes and
time, Cooperative Agreements allow your systems that meet your award requirements.
organization to innovate. By enabling your (For explanations of some common
organization to design its own implementation agreement terms, see Annex II.)

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 2. Keep your agreement documentation
up to date. 4.2.2 Your
Over the life of your award, changes may Implementation Model
occur that affect the terms of your original
agreement, including changes in funding, Figure 15—Key Elements of an Implementation Model
targets, geographic coverage, and Key
Personnel. Be sure to get the appropriate
prior approvals, document changes in writing,
and keep all documentation readily available.
Even if you have a good relationship with
your AOTR, there will probably be changes
in personnel over the life of your award (both
4
within your organization and on the USAID
side), making it vital that you keep well-
organized documentation on all decisions
and changes affecting your award. Save
all written communications with the AO and
AOTR in carefully organized files, by date

Running an Effective and Compliant Program

and/or topic, so that there is an institutional
record of agreements and decisions to which
staff can refer over the life of the award.
It is a good idea to keep backup copies
of documentation offsite.

3. Understand which boundaries are flexible. The model you use to implement your program
should combine both administrative and tech-
To promote innovation and give you the nical program management to achieve the
authority to respond to changes in your expected outcomes. Keeping your organization’s
implementation area(s), you have a certain implementation model running efficiently is the
amount of flexibility to manage your award. essence of a program manager’s day-to-day job.
However, there are limits to this flexibility,
including limits on programmatic, budget, Although every organization’s model is different,
personnel, and partnership changes. your model should include three key elements
Sometimes you will have to get permission (pictured in Figure 15):
from your AOTR or AO prior to implementing
changes, and sometimes there will be • what you are doing directly or through
boundaries you simply cannot cross. This subrecipients (specific activities in certain
chapter will help you learn those boundaries, geographic areas);
so you can adapt while remaining in • what it takes to make it happen (resources
compliance with your award provisions. and other inputs); and
• expected outcomes (results and targets).
4. Compliance is for subrecipients, too.
In addition to being responsible for keeping
These three elements are directly linked to your
your own organization in compliance, prime
workplan activities, resources, and outcomes.
partners are responsible for making sure
Changes to your budget, for example, may
subrecipients are in compliance. Work with
affect your ability to achieve outcomes or
your subrecipients to ensure they understand
require you to modify your activities.
what is required of them, and use this as an
opportunity to build their capacity as well.
Over the life of your program, you and
your team should be constantly improving
5. Do not lose sight of the beneficiaries.
your model. As you learn from both formal
In trying to comply with all of your award’s evaluations and day-to-day experiences, you
requirements, don’t lose sight of the ultimate will adjust your activities and perhaps discover
purpose of your award: helping beneficiaries. better and less expensive ways to reach more
people with your services.

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 4.3 Administrative In This Section
Management f Requesting and Disbursing USG Funds

Administrative management functions enable f How to Fill Out the SF-270

a program to run smoothly and comply with the f How to Fill Out the SF-1034
terms and conditions of your agreement. These f Monitoring Pipeline and Burn Rates
include several routine functions, such as:
f Rebudgeting
• Financial Management (4.3.1)
f Allocating Shared Project Costs
• Budget Adjustments (4.3.1.5)
• Procurement (4.3.2)
4 you should complete the form and submit it no
• Travel (4.3.3) earlier than a week before the month in which
• Property Management (4.3.4) you need the funds. Usually, you can expect to
receive the funds within one to two weeks of
• Agreement Modifications (4.3.5) submitting the form.

When you have demonstrated over time

Running an Effective and Compliant Program

that you are spending the funds you request

4.3.1 Financial Management efficiently and that you are neither spending
too quickly nor too slowly, you may be able
to request funds quarterly. Your AOTR and
FMO will determine this by reviewing the data
4.3.1.1 Requesting and from your quarterly SF-425 Federal Financial
Reports and your SF-270 or SF-1034 requests
Disbursing USAID Funds to calculate your pipeline and burn rates.
USAID disburses funds to grantees by
advancing funds or reimbursing grantees Estimating Advances
for expenses already paid. Many grantees When estimating your request, do not
are permitted to request funding advances merely divide your annual budget by 12
and may request reimbursements as well, months; instead, calculate specifically what
if they use their own funds to cover you think you will spend in the upcoming
project-related expenses. month based on your approved workplan and
detailed implementation schedule. You may
Initially, you may be limited to requesting divide some elements of your budget evenly
funding advances one month at a time. Each among months (for example, salaries), but
request must be for the amount you estimate some expenditures, such as purchases of
you will spend in the upcoming 30-day period. non-expendable equipment, may occur all in
You are not allowed to request or hold on to one month (for example, at the beginning of
any extra “contingency funds.” However, if a a project). Consider the funds that you have
particular planned procurement is delayed, currently and confirm the remaining amounts
you can carry those funds until the following that subrecipients may have before you make
month. If an activity is cancelled, you can any requests.
spend the funds on another activity in your
approved workplan. If you are implementing with subrecipients (for
the purposes of advances, we are referring to
You request funds by filling out the form subgrantees), work together to manage funding
specified in your Cooperative Agreement, either requests and spending so no one runs out of
the Standard Form (SF)-270—Request for money. To do this, ask subrecipients to provide
Advance or Reimbursement or the Standard monthly or (when approved) quarterly funding
Form (SF)-1034—Public Voucher for Purchases estimates based on their approved workplans
and Services Other than Personal, and and detailed implementation schedules. You
submitting it to USAID’s FMO. If you have also may wish to institute a process with
multiple awards from USAID, you must fill out subrecipients for advances and reimbursements
a separate form for each award. In general, similar to the one you follow for USAID.

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 request; the middle section, where you can
4.3.1.2 How to Fill Out calculate your advance or reimbursement; and
the SF-270 the bottom section, used only for requesting
advances. The second page contains
The process of filling out the SF-270 to instructions and a place for you to sign.
request advances or reimbursements from
USAID is outlined in the following pages. Top Portion
These tips are not meant to substitute for the While most of the top portion is relatively
USAID instructions found online or for guidance straightforward, here a few tips that will help
provided by your FMO. Instead, they aim to you fill out the key boxes (refer to Figure 16).
address some questions first-time users may
have when filling out this form. After completing the top portion, you must
determine whether you need to fill out the full 4
Begin by downloading a PDF version of the calculation area in the middle of the form or
SF-270 at http://www.whitehouse.gov/omb/ the simplified calculation area for advances
grants/sf270.pdf. at the bottom.

To take advantage of some of the form’s Fill out the full calculation area for an advance

Running an Effective and Compliant Program

features, including auto-calculations, be sure and reimbursement or if you have any program
you have the latest version of Adobe Reader®, income (see Figure 17).
which you can download for free at http://www.
adobe.com/products/acrobat/readstep2.html. If you are not requesting a reimbursement
and do not have program income, skip down
The form consists of two pages. The first to the Advances Only portion of the form,
contains three primary sections—the top portion described below.
for information about your grant and your

Figure 16—Top Portion of the SF-270

1a
ADVANCE
CASH 2
FINAL PARTIAL
L 1b ACCRUAL

• Box 1(a)—The type of payment requested • Box 1(b)—For all requests other than the
will be an advance or a reimbursement. final request at the end of your grant, always
Generally, you will be requesting an select partial payment.
advance for your monthly installments. • Box 2—The basis of the request depends on
Reimbursements are requested only when the type of accounting system you are using.
you spend your own funds on items within
your approved workplan budget and are • Box 8—The “PERIOD COVERED BY THIS
asking to recoup those funds. REQUEST” should be one calendar month (for
example, FROM January 1, 2010, TO January
31, 2010), unless the FMO directs otherwise.

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 Calculation Area Program Income—Program income is
The primary calculation area (rows labeled a - j, money the program earns for itself. It comes
shown in Figure 17) includes three columns from charging fees for services or the sale of
across the top (a–c) and a total column. Fill out commodities. Program income is also earned
your funding request across these columns only by selling no-longer-needed equipment
if you have separated out headquarters (HQ), purchased with program funds.
subrecipient, or country costs in your approved Note: Program Income is different from income-
annual budget in this way. Doing this helps generating activities, in which the program’s
your AOTR track your requests and spending beneficiaries keep any income earned.
against your budget, though this is generally not
something the FMO requires. If your budget is
4 organized into more than three categories,
ask your AOTR what categorization would be
most helpful.

Figure 17—Calculation Area of the SF-270

a b c
Running an Effective and Compliant Program

a
b
c
d
e
f
g
h
i

j
a. Total program outlays to date (row a): cost share you may be able to commit to
All expenditures for your program, including during the advance period, it is fine to put
cost share, as of the beginning of the request US$0 in your SF-270, as long as you properly
period. In other words, if your request is for account for the actual cost share generated
January 1–31, 2009, give the total outlays as in your next SF-425.)
of December 31, 2008. g. Federal share of amount on line e: This
b. Less: Cumulative program income is the total amount you have requested from
(row b): If your program has earned any USAID toward this project to date, including
program income, enter it here. funds requested for the advance period. The
c. Net program outlays (line a minus line b). FMO checks this number to ensure that it
matches the amount from the last SF-270.
d. Estimated cash outlays for advance period: It can be checked by adding lines h and i.
How much you will need for the advance
period (in our example, January 1—31, 2009) h. Federal payments previously requested:
all funding needed (including cost share), Sum of all of the money you have requested
regardless of any carryover cash on hand. to date from USAID.

e. Total (sum of lines c & d): This is all the i. Federal share now requested (line g
money your organization has spent to date, minus line h): The result will be the total
plus what you expect to spend through the amount of USAID funds you need for the
end of this advance period. upcoming month (request period), less any
unspent USAID funds you have on hand.
f. Non-Federal share of amount on line e:
All past cost-share contributions, plus all cost- j. Advances required by month: Use the final
share contributions you plan to make during row only when you request funds quarterly,
the advance period. (If you are not sure what but receive the funds in monthly installments.

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 Advances Only Reimbursements
To fill out the alternate computation for When filling out the SF-270 for a
advances only, calculate how much funding you reimbursement of purchases within your
will need for the next month and subtract the approved workplan budget, there are a
amount of any unspent USAID funds you have few things you will do differently.
remaining from your previous advance to come
up with the amount you are requesting for
the period. During the previous period, if you
spent more than your previous advance, the
unspent funds remaining block may show a
negative amount.
4
Figure 18—Requesting Reimbursement Using the SF-270

Running an Effective and Compliant Program

8 8

• Box 8—Period covered by this request: • Row D—Estimated cash outlays for advance
this should cover the period in which the period: this should be US$0, since you are
funds you are requesting reimbursement not requesting an advance. If you need both
were expended. an advance and a reimbursement, fill out
separate forms.

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 Submitting the SF-270 To apply for an advance, you will fill out
three SF-1034s requesting three separate
Once you complete the first page, have the
advance payments for the upcoming quarter
Project Director or other designated certifying
(one SF-1034 for each month—three-month
authority within your organization sign and date
rolling advance). All 3 should be submitted 10
the second page. Then scan and e-mail the
business days before the beginning of every
form to your FMO at [email protected], copying
quarter. This is designed for your organization
your AOTR. Always make a copy for your file,
to maintain a uniform cash flow. To begin
and then mail the original to your FMO. If you
the request, mark the top the SF-1034 with
have not heard from your FMO within 10 days,
“Request for Advance.”
follow up.
Within 15 days of the end of every month,
4 you will submit another SF-1034 for liquidation
of the advance, marked at the top with
4.3.1.3 How to Fill Out “Liquidation of Advances.” This reports the
the SF-1034 amount of funding (if any) that your organization
spent from the advance you received for that
If your organization uses the SF-1034 to month. As no new advances can be made until
the recipient submits this liquidation form, it is
Running an Effective and Compliant Program

request funds and liquidate advances from

USAID, follow the steps outlined below. As with imperative that this form be submitted on
the guidelines for filling out the SF-270, these a timely basis every month.
tips are not meant to substitute for the USG
instructions found online or guidance from your The SF-1034 is a single page, of which
FMO, but seek to address the questions of first- you should only fill out the top portion (see
time users of the SF-1034. Figure 19). The rest of the form, along with the
spaces you leave blank, will be filled out by
your funding agency.

Figure 19—Top Half of the SF-1034

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 • Voucher No.—Start with “1” and number
consecutively, so that the number changes Keep an Eye on Your Obligation Ceiling!
every time you fill out the form. Note: Insert
The time it takes to process your SF-270 or
the word “FINAL” if this is the last voucher. SF-1034 is usually only one to two weeks, as
• U.S. Department, Bureau, or long as you have sufficient funds obligated
Establishment and Location—Insert the toward your award. If you request funds above
names and addresses of the relevant finance your obligation ceiling, it can take as long
as one month to modify your agreement to
office. Details can found in your Agreement.
obligate additional funds before the FMO can
• Date Voucher Prepared—Always remember process your SF-270 or SF-1034.
to include the date you prepared the form. It is in your best interest to monitor your
obligation amount closely. As soon as you
• Contract Number and Date—Insert the
have expended 75% of your obligation, be 4
contract number and date as shown on
sure to notify your AO and ask that additional
your Agreement.
funds be obligated.
• Requisition Number and Date, Schedule
No., Paid By, Date Invoice Received,
Discount Terms, Payee’s Account
Number, Shipped from/to Weight,

Running an Effective and Compliant Program

Government B/L—Leave all of these blank.
• Payee’s Name and Address—Include your 4.3.1.4 Monitoring Pipeline
organization’s name and mailing address as
it is written in your Cooperative Agreement. and Burn Rates
• Number and Date of Order—Leave blank. One of the responsibilities of your organization’s
financial manager is to monitor how much
• Date of Delivery or Service—Insert the you are spending under your award and to
month, day, and year, for the beginning make sure there is enough money obligated
and ending dates of the incurrence of costs to cover your upcoming expenses. Two
claimed for reimbursement. important calculations your organization must
• Articles or Services—Enter a summary track related to this are your pipeline and burn
description of the activities that are expected rate. Your AOTR also monitors these figures.
to take place (for the advance) or already did Regular communication with your AOTR will
take place (for the liquidation). Note: Your prevent the need to slow down operations while
funding agency may ask for a more detailed you wait for additional funds to be obligated.
description of the activities.
Your pipeline is the amount of funds obligated
• Amount—Enter the amount you are
but not yet spent, that is, the amount of money
requesting (for the advance) or the amount
that is still available to you. You can calculate
you spent from the advance you received
your pipeline by adding up all the funds you
that month (for the liquidation).
have spent and subtracting that amount from
• Payee must NOT use the space below— the total obligation.
Do not type or write below this line.
Calculation:
Pipeline = Obligation – Total Amount Spent
Submitting the SF-1034
Check your Cooperative Agreement for detailed The burn rate calculates the rate at which you
instructions on how to submit your SF-1034. are spending the funds you have received.
In general, an organization must submit an The basic calculation for your burn rate is the
original and three copies of the SF-1034 to the amount you have spent divided by the number
payment office indicated in your Agreement. of months you have been spending.

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 Calculation: Burn Rate = Total Amount Spent Using your pipeline and burn rate, you can
/ Number of Months of Operation to Date also calculate approximately how many months
you have left before you will need an additional
Your AOTR typically will use your SF-425 obligation. Divide your pipeline by your burn
quarterly financial reports to figure out your burn rate. This will give you the number of months
rate, but you may want to use your own financial left before the obligation runs out, assuming
systems to generate a report that helps you your rate of spending stays the same. In the
keep track of your actual monthly expenses. above example, NGO X estimates it will spend
the remaining obligation in four and a half
In calculating your burn rate, you may also months. Note, however, that the actual burn rate
separate out special one-time expenses, such likely will vary each month depending on the
as vehicles. This will give you a better sense programmatic activities undertaken.
4 of how much your project will be spending in
upcoming months. Keeping these figures in mind, you will want to
monitor your spending to make sure you are not
Example (see Figure 20): spending too quickly or too slowly. For example,
if you have a three-year award, you will want
• NGO X was awarded a Cooperative
to pace your funding so you can achieve your
Agreement for a total of US$1,000. We
Running an Effective and Compliant Program

goals in that time frame.

received an initial obligation of US$10. When
the workplan was approved, we received an
additional obligation of US$300, bringing our
total obligation to US$310. 4.3.1.5 Rebudgeting
• NGO X has been operating now for four Your approved budget is divided among nine
months and has spent a total of US$145. standard budget categories. USAID gives
• Subtracting our total obligation (US$310) you the flexibility to make adjustments to your
from our total expenditures (US$145) gives budget within those categories (for example,
us a pipeline of US$165. if you budgeted for a photocopier but decided
to use the funds to buy a computer printer
• Dividing the amount spent (US$145) by the instead). However, you may only move a limited
number of months we have been spending amount of funds between direct cost categories
(four) gives us a monthly burn rate of US$36.25. before you must seek approval from USAID.
Adjusting your budget above this threshold is
Figure 20—NGO X Award Amount Breakdown
referred to as significant rebudgeting.

USAID Rebudgeting Rules

Each USAID award is different; while some
define significant rebudgeting as cumulative
changes between budget categories that
exceed 10% of the total budget over the
lifetime of the award, others specify a much
lower threshold. To find out the rebudgeting
rules that apply to your award, check your
Cooperative Agreement.

If, for example, a US$2 million award has

a significant rebudgeting threshold of 10%,
the grantee can rebudget up to a total of
US$200,000 between categories over the
lifetime of the award without seeking approval.
Above that amount, you will have to seek
approval for all budget changes.

These changes are cumulative. In this scenario,

if you rebudget US$50,000 in the first year, then
US$150,000 in the second year, any additional
changes between budget categories in the
third year—no matter how small—have to be

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 pre-approved. The AO has the option to restrict • Non-project costs—Legitimate
rebudgeting if the changes are not necessary organizational costs that are not related
or reasonable. to any specific project or costs that are not
“allowable” under USG-funded projects,
Seeking Approval such as fundraising and entertainment.

If you are planning budget changes that

exceed your award’s significant rebudgeting Most of your expenses will fall into the direct
threshold, or that will significantly alter the project cost category, while non-project costs are
activities being undertaken, write a memo to usually self-evident. Shared expenses, however,
your AOTR and AO requesting the approval may be the biggest challenge to address.
and include the following:
Sharing Resources versus 4
• Explain why rebudgeting is necessary Shared or Indirect Costs
(for example, explain unforeseen costs
or circumstances). There is an important difference between
a resource that may be shared by more than
• Outline all previous rebudgeting under one project and something that is a shared
this award. or indirect cost.

Running an Effective and Compliant Program

• Detail where the money is coming from
(that is, what costs you will not be expending A resource that more than one project may
to free up funds). share typically falls into the direct cost category.
For example, let’s think of a professional staff
• Detail how the rebudgeted funds will be used.
member as a resource who may devote time
• Explain any effects you anticipate as a to more than one project. Since the individual’s
result of the rebudgeting, such as changes time is tracked on a time sheet, you will know
in targets. exactly how many hours were spent working
• If applicable, discuss other sources of funds on Project A versus Project B. Therefore, you
you will be using to make up any deficits. can allocate the exact number of hours to each
project as direct costs.

Once you have reached that threshold, your Another example: If your organization has a
AO must approve all rebudgeting, regardless of vehicle, more than one project may use it for
the amount. Therefore, if you need to request trips. However, every trip should be noted in
approval to rebudget further, try to estimate all the vehicle usage log book, so the expenses
the changes needed to complete your project for each trip can be allocated as direct costs
and request the approvals all at once. to each project.

A shared or indirect cost, on the other hand,

is one that is has been incurred for common
4.3.1.6 Allocating Shared or joint project need. Examples of common
Project Costs shared office costs are utilities, Internet service
charges, and expendable office supplies like
An organization with more than one project paper and paper clips. Unlike the examples
incurs three categories of expenses: above, it is not obvious how much should be
charged directly to any one project.
• Direct project costs—Costs clearly
attributed to a specific project, such as a Some organizations have gone through a
staff person who works exclusively on that process with USAID to establish a NICRA and
project, office space used by project staff, use that to address these kinds of costs. But
or specific equipment and supplies used most organizations do not have a NICRA (or
only by a single project. only have a NICRA for headquarters expenses),
so they need a method for figuring out how
• Shared project costs—Costs required to to allocate these kinds of costs.
carry out a project but difficult to attribute
to a specific project, such as electricity or
administrative support staff.

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 Sample Formula for Calculating
Shared Expenses Common Shared Office Expenses
f Office rent and utilities;
Costs that cannot be attributed to one project
or another as a direct cost will need to be f telephone service charges (exception:
addressed by establishing a formula. One long-distance calls may be itemized and paid
approach is to use a percentage based on the by the project that incurred the expense;
number of employees on one project versus the f expendable and routine office supplies
total number of employees or the allocation of (pens, paper clips, etc.); and
dedicated office space. f office support staff (office assistants,
accountants, receptionists, etc.) whose time
To do this, first figure out what parts of your is spent in support of all projects.
4 office are dedicated to a specific project, such
as space for staff working exclusively on the
specific project, and what parts are shared, USAID is willing to pay its “fair share” of
such as meeting rooms or the reception area. the organizational costs associated with
Of the areas that are dedicated to specific implementing its project. By establishing
projects, calculate the square meters allocated a shared expense policy, your organization
to each project. You can even divide the office ensures that it is consistent in allocating costs
Running an Effective and Compliant Program

space of an individual who splits time based between/among different projects and/or donors
on the percentage he or she allocates to each every month in a way that does not discriminate
project. Add up the area dedicated to each between sources of funding. Improper allocation
project and calculate the percentage dedicated of share costs is often a common audit finding,
to each project. so it is important to do it accurately.

For example, let’s say a 1,000-square-meter Multiple Offices

office houses two projects 800 square meters of
office space is dedicated to the projects, while If your organization has offices in several
the rest is shared. Of the dedicated space, different locations, you may want to set some
600 square meters is for one project, while 200 general guidelines and have each office set its
is for the other project. This means 75% of the own specific policy based on the projects and
overall space is charged to the first project expenses at that location. The policies should
(750 square meters), and 25% to the second be in writing because during your annual audit,
(250 square meters). These percentages may the auditors will review and compare your
be used as the basis for allocating costs for policy with your practice. Some projects that
other shared expenses. share offices establish a formal Memorandum
of Understanding (MOU) that includes detailed
There is no single correct method for allocating agreements on additional topics, such as
shared costs, but it should be clear how your shared assets, payroll, and human resources
organization handles these costs. This helps issues. This is common when the separate
to ensure that you are using your project funds “project teams” come from different
wisely and that you are distributing costs fairly. operational units or are from completely
And do not forget, as projects and funding different organizations.
streams change, you should adjust your policy
for allocating shared costs accordingly.
Q: Do we need a NICRA?

Set (and Keep Up to Date) A: While an organization needs a method

a Shared Expense Policy for figuring out how to allocate indirect or
shared costs, it need not be a NICRA. Some
With these guidelines in mind, set a policy organizations go through the process to
that defines the following: establish a NICRA, but most will find that
• what specific costs and resources are process time-consuming and that another
method is more efficient.
considered “shared”;
• how your organization will divide shared
costs among different projects; and
• when the policy will be revised.

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 4.3.2 Procurement Procurement
USAID procurement regulations ensure that The process of acquiring goods, supplies,
recipients use USG money to advance the and services including:
purpose of the award, spend it wisely, and f goods, spare parts, and supplies for
do not use it to purchase items or services in program activities;
conflict with the public’s interest. Therefore,
f equipment, office furniture, and supplies for
you are required to carefully review your project offices; and
organization’s procurement policies and ensure
consistency with USAID requirements. f consulting services by individuals
and/or organizations.

4
Figure 21—Phases of Procurement

Running an Effective and Compliant Program

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 Figure 21 is a simplified procurement process Throughout the entire procurement process,
map, which is broken down into three phases: several checks and balances are required to
make sure the purchase is allowable. If you do
• Pre-procurement—Before you begin to
not have a procurement policy, it is critical that
procure an item, you must have an approved
your organization adopt one that incorporates
budget, and it must be included in standard
these processes to ensure that all goods and
budget categories, unless it requires specific
services it procures will be allowable under
approval. If it is not, you may need to
the award.
rebudget. If your rebudgeting amounts to
significant changes (4.3.1.5), you will need
to request approval. If the specific item is in Important Procurement Links
the budget, you must first check that the item ADS Chapter 260—Geographic Codes
4 passes the allowability test (4.3.2.1) before http://www.usaid.gov/policy/ads/200/260.pdf
you begin the procurement.
ADS Chapter 310—Source,
Origin and Nationality
• Procurement Phase—This is the process
http://www.usaid.gov/policy/ads/300/310.pdf
just before purchasing when you have the
funding and begin planning for the specific USAID Acquisition Regulation (AIDAR)
purchase by soliciting bids, acquiring pricing http://www.usaid.gov/policy/ads/300/aidar.pdf
Running an Effective and Compliant Program

information, and reviewing different vendors. Buy America Act

Your own internal procurement policies http://www.acquisition.gov/far/html/subpart
guide much of this process. %2025 1.html

• Purchasing Process—Once you have 2 CFR 226

selected a vendor and settled on a price, http://ecfr.gpoaccess.gov/cgi/t/text/text-
idx?c=ecfr&tpl=/ecfrbrowse/Title22/22cfr226_
you must do a final review, and then you
main_02.tpl
can make the purchase. After the purchase
is complete, you need to ensure that your 2 CFR 230 (A-122)
documentation is in place and that you have http://ecfr.gpoaccess.gov/cgi/t/text/text-
entered the relevant information into your idx?c=ecfr&tpl=/ecfrbrowse/Title02/2cfr230_
main_02.tpl
inventory tracking system, if applicable.
Excluded Parties List
There are even more detailed steps http://www.epls.gov
within each of these major steps, however.
For example, most organizations have a UN Consolidated List
http://www.un.org/sc/committees/1267/
special process for soliciting and evaluating
consolist.shtml
bids on large items costing US$3,000 or
more—a USAID-suggested cost threshold for U.S. Department of Treasury’s Designated
obtaining three quotes. Your organization may Nationals List http://www.ustreas.gov/offices/
want to set up a more restrictive threshold, for enforcement/ofac/sdn
example, $500, to assure fairness, best value,
and accountability.

If an item costs more than US$5,000 per unit,

be sure it is approved as non-expendable
Requirements for Subrecipients
equipment in your approved budget. Items over Almost all procurement rules apply to both
$5,000 with a useful life of more than one year prime and subrecipients on an award. USAID
are regarded as “Equipment” according to the requires that subagreements, between
USG (2 CFR 230) and require prior approval the prime partner and subrecipients with
from USAID. If the item is not included in your procurements of goods or services over
approved budget, you will need written AO your organization’s designated amount,
authorization before procuring it. Note that even include certain procurement-related standard
though non-expendable equipment over $5,000 provisions, including the standard provision,
appeared in an approved budget (for example, entitled “USAID Eligibility Rules for Goods and
a computer server), purchasing that item may Services,” which outlines policies on restricted
still require specific USAID authorization. When goods, ineligible goods and suppliers, and
in doubt, it is a good idea to check with your AO. source/origin requirements.

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 Review your procurement-related clauses
closely and make sure that your staff and sub- In Your Agreement
recipients understand the process and regula- USAID Cooperative Agreements contain
tions. Remember to monitor implementation. procurement-related requirements under the
Standard Provisions. In particular, review the
standard provisions, entitled “Ineligible Goods
Procurement Good Practice
and Services” and “Restricted Commodities.”
f Establish and follow written procurement
policies and procedures.
f Conduct annual procurement planning that
includes office and program equipment, The allowability test poses four questions
supplies, and services. that are key to determining whether you can
f Link procurement planning to budget and
purchase an item. These questions apply to 4
workplanning processes. all costs associated with the award, including
direct and indirect costs.
f Provide for open competition to the
extent possible.
1. Is the cost reasonable?
f Obtain quotations, review quotations Is the cost comparable to what other
against established criteria, use evaluation organizations are paying for the same item or

Running an Effective and Compliant Program

committees, and justify vendor selection. service? Have you followed your organization’s
f Document the procurement process. procurement policies with regard to getting bids
f Keep an inventory of all equipment and reaching a fair price?
purchased and update it regularly, noting
condition and location of items. 2. Can you allocate the cost to this
specific award?
Is the cost required to advance the work
under the award?
Overview of 3. Is the cost consistent?
Procurement Regulations Have you been consistent in assigning costs
USAID’s many stipulations about how USG across all the work your organization does,
funds may and may not be spent are presented regardless of the source of funding? For
in 2 CFR 226 and include limitations on: example, do you pay the same consultants
the same rates for similar activities under
• particular goods and services; your USAID-funded awards as you do in
• where the item was manufactured projects funded by other donors?
or procured;
4. Does the cost conform to the rules and
• from whom you can purchase goods and regulations of the program?
services; and Is the cost in compliance with limitations
• how you ship them to your project site. and exclusions contained in the terms and
conditions of your award? Have the individuals
This section covers restricted and prohibited responsible for the expenditure acted ethically
items (4.3.2.2), source and origin restrictions in carrying out the procurement?
(4.3.2.3), and vendor restrictions (4.3.2.4).
For major purchases, document your review
of these questions during the procurement. Put
the questions on a form, along with a place to
4.3.2.1 Allowability Test fill in the item, budgeted amount, date, and who
in your organization filled out the form. Record
The most important concept in procurement the answers, making any necessary notes, and
under USAID-funded awards is to understand then file the forms for future reference in case
what costs are and are not allowable. Even of an audit.
though your budget has been approved, it does
not mean that all of the line items in that budget
are allowable. Before procuring any goods or
services under the award, it is important to make
sure each item passes the allowability test.

The Essential NGO Guide to Managing Your USAID Award 77

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 your program to make sure the cost is
4.3.2.2 Allowable Costs reasonable and relevant to your program.
Allowable costs are things you are allowed
to purchase or spend money on under your Restricted Commodities
agreement. What is allowed and what is not Restricted commodities are items you may
allowed may be defined by U.S. law, the purchase with USAID funds, but for which you
policies of the agency funding your award, the need prior written approval from the AO. The
regulations governing the program under which most common restricted commodities include:
you are being funded, and certain additional
restrictions that may be included in your award. • agricultural commodities;
• motor vehicles;
4 Depending on circumstance, a cost may be
• pharmaceuticals;
determined allowable or unallowable based
on whether the cost is necessary to meet • pesticides;
activity goals, is reasonable, and is allocable. • used equipment;
In addition, allowable costs are governed by
• USAID-owned excess property; and
specific categories, including U.S. laws and
USAID regulations. One way for recipients to • fertilizer.
Running an Effective and Compliant Program

keep track of these restrictions is to develop lists

of unallowable items, similar to the document in A waiver may be granted if all three of the
Figure 22 only includes unallowables. You can following conditions are met (Note: Even if you
customize this list with specifics from USAID and meet all three criteria, approval is not automatic;
your Cooperative Agreement. You will notice that you still need to request approval from the AO):
some items are restricted, meaning they are only • Item is of U.S. source/origin.
allowable with specific written permission (for
example, vehicles), while other items are prohibited • You have identified the item and incorporated
and you cannot purchase them under any it into the program description or
circumstance (for example, abortion equipment). amendments to the award.
• You have incorporated the costs related to the
This list is only the first step in determining item into the approved budget of the award.
whether a cost is allowable, however. If an
item you plan on purchasing is not on the
unallowable list, you must still determine If the AO approves, he or she will provide
whether the specific purchase passes the written authorization. If you procure the item
allowability test (4.3.2.1) by examining the prior to receiving written authorization, you risk
specific circumstances of the purchase and paying for it yourself.

Figure 22—Examples of Unallowable Costs

Category Regulating Document Examples of Limitations Applies To

U.S. Law OMB Circular A-122 PROHIBITED: Abortion, military, surveillance, All USAID
weather modification, and gambling equipment agreements

USAID USAID ADS RESTRICTED: Pharmaceuticals, vehicles, and All USAID

Regulations agricultural commodities agreements

Agreement Your Cooperative RESTRICTED: Items not included in your budget Varies by
Restrictions Agreement agreement

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 • surveillance equipment—such as
Procurement Documentation: microphones, transmitters, and recording
3 Statement of work (SOW) or specifications devices (this does not include general-use
audiovisual equipment, as long as there
3 Approved/signed purchase request is a clear purpose and need for such
(as applicable)
equipment in your program);
3 Market research of sources; Request for • commodities and services for support of
Quotations (RFQ) or Request for Proposals
(RFP), including Internet postings/ police or other law enforcement activities;
newspaper adverts • abortion equipment and services;
3 Quotations or proposals received • luxury goods and gambling equipment,
(minimum of three) including alcoholic beverages, jewelry, 4
3 Verification of search of Excluded Parties or expensive textiles; and
List, U.S. Department of Treasury’s
Designated Nationals List and UN
• weather modification equipment.
Consolidated List.
3 Analysis of quotations/bids (should show Other Types of Restrictions
quantitative/qualitative analysis of cost
Other restrictions and prohibitions that are

Running an Effective and Compliant Program

reasonableness of quotations or proposals
and advantage(s) of winning vendor) applicable to most USG funding are in “Cost
Principles for Non-Profit Organizations”
3 Memo to the file (in conjunction with (2 CFR 230, sometimes referred to as A-122),
analysis should explain in written form
background, competitive process, and which details rules for 56 specific goods and
justification for vendor selection) services, and when they may and may not be
paid for with USG funds. Review this list and
3 Approval and/or waiver from USAID become familiar with the rules that may be
(if applicable)
relevant to your program.
3 Authorized signature by organization
(as applicable) The best way to keep track of all restricted
3 Signed purchase order (PO) or contract and prohibited items is to create a table and fill
3 Confirmation of receipt of item it out based on the agreements and guidance
documents applicable to your program. If you
3 Signed property management letter receive funding through multiple grants, you
(if recipient other than organization)
may find different limitations on different funding
3 Copy of vendor’s invoice (stamped paid) streams. Be sure to note to which agreement
3 Relevant documentation—correspondence, each restriction applies.
memos, faxes, e-mails, records of
conversations—collected throughout the Use of Private Funds
procurement process
When you use private funds to procure
3 Condition and location of items goods and services as part of a cost-share
requirement, some restrictions are no longer
applicable. When your organization commits
Prohibited Items to cost share as part of the application budget,
The following may not purchased with USAID it must be appropriate for the program. You
funds under any circumstances: cannot count private funds used to purchase
prohibited items toward your cost-share
• military equipment—goods or equipment commitment. For example, alcoholic beverages
to meet the cooperating country’s purchased with private funds cannot be
military requirements; counted as cost share.

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 However, in some circumstances, you can
use cost share creatively to use your funds
more efficiently. For example, you may
purchase a used vehicle with private funds
and shift your USAID funds into other program
costs. If this results in significant rebudgeting,
you may need to get prior approval.

Consequences of Misuse of
USAID Funds
USAID reserves the right to require you
4 to refund any amount that is not spent in
accordance with the terms and conditions of
the award (that is, costs not allowable under
the regulations). Be sure to keep records for
at least three years after you submit your
final report, in case of an audit.
Running an Effective and Compliant Program

USAID grantees are assigned a “geographic

4.3.2.3 Source/ code” that designates specific countries from
which they are authorized to purchase goods
Origin Restrictions and services. There are four geographic codes
typically used: 000, 899, 935, and 941. Your
Two additional procurement restrictions deal agreement will state which code is applicable
with where an item is purchased—referred to as to your project.
its source, and where it was originally grown or
manufactured—known as its origin.
Geographic Code 000
General Source/Origin Geographic code 000 authorizes grantees
to purchase goods and services only from
Restrictions the United States, including any U.S. state(s),
Different source and origin restrictions apply the District of Columbia and areas of U.S.-
to different USAID agreements. associated sovereignty (commonwealths,
territories, and possessions).
Organizations working within the United States
are subject to the Buy American Act, which Geographic Code 899
gives priority to U.S.-manufactured goods and
services. This may apply to procurements made Geographic code 899 authorizes grantees to
by a headquarters office located in the U.S. that purchase goods and service from any country,
is purchasing goods to be used domestically. except the cooperating country itself and the
following foreign-policy-restricted countries
Different regulations govern purchases made as of May 2010:
overseas. USAID grantees should refer to the • Cuba • Libya
USAID Acquisition Regulation (AIDAR). • Iraq • North Korea
• Iran • Syria
• Laos

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 Geographic Code 935 If any component of the item you are
purchasing was produced in one of the
Geographic code 935 authorizes grantees to
restricted countries, the item is ineligible for
purchase goods and services from any country,
USAID funding. Periodically, changes are made
except the foreign-policy-restricted countries
to the countries listed under these codes; for
listed above as of May 2010.
the most up-to-date information on foreign-
policy-restricted countries, see section 22 CFR
Geographic Code 941 228.03 at http://ecfr.gpoaccess.gov/cgi/t/text/
Geographic code 941 authorizes grantees to text-idx?c=ecfr&rgn=div6&view=text&node=22:
purchase goods and services from any country, 1.0.2.22.27.1&idno=22.
except foreign-policy-restricted countries, the
Regulations that apply to your organization
cooperating country itself, and as of May 2010,
are included in Schedule (Attachment A) of 4
the following:
your Cooperative Agreement.
Albania Lithuania
Andorra Luxembourg Rules and Waivers for Specific
Angola Macedonia Restricted Commodities
Armenia Malta

Running an Effective and Compliant Program

Under geographic code 935, you may purchase
Austria Moldova almost all of the goods and services in your
Australia Monaco budget from almost any country in the world,
with the following three exceptions, which must
Azerbaijan Mongolia
be of U.S. origin:
Bahamas Montenegro
• agriculture commodities
Bahrain Netherlands
• motor vehicles
Belgium New Zealand
Bosnia and Norway • pharmaceuticals
Herzegovina
People’s Republic
Bulgaria of China As stated, this restriction only applies to the
Belarus Poland origin, meaning you can purchase these goods
from any eligible source. In other words, you
Canada Portugal
could purchase a U.S.-manufactured vehicle
Croatia Qatar from a local dealer.
Cyprus Romania
Czech Republic Russia It is possible to request a waiver from your
AO to purchase these commodities that have
Denmark San Marino been manufactured or grown outside of the
Estonia Saudi Arabia United States; however, you will need to justify
Finland Serbia the reason for selecting a non-U.S. product.
France Singapore
For example, one reason your AO might
Gabon Slovak Republic consider granting a waiver is if a U.S.-
Georgia Slovenia manufactured product is not available on the
Germany South Africa local market, while an equivalent non-U.S.
product is. In this case, perhaps the additional
Greece Spain
shipping costs would dramatically increase the
Hong Kong Sweden cost to purchase U.S.-manufactured products.
Hungary Switzerland Gather and document the estimated costs
Iceland Taiwan before contacting your AO.

Ireland Tajikistan In some circumstances, your AO may still

Italy Turkmenistan require you to purchase U.S.-manufactured
Japan Ukraine items despite any additional costs. This may
be the case with certain pharmaceuticals,
Kazakhstan United Arab Emirates
especially when there could be a concern about
Kuwait United Kingdom the quality or safety of specific pharmaceuticals
Kyrgyzstan Uzbekistan manufactured outside of the United States.
Latvia Vatican City
Liechtenstein

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 Subawards, Other Geographic To comply with this obligation, you should check
the following three sources and document your
Codes, and Local Procurement results before purchasing from a vendor:
Implementation of the source/origin and local
1. Excluded Parties List, a searchable database of
procurement regulations may be different for
individuals, firms, and organizations that are not
subawards under your current award when, for
eligible to receive USG funds. Using this system
example, the prime recipient is U.S.-based and
to check vendors is part of your responsibility
the subrecipient is based in a different country.
under the Terrorism Financing clause in
the Special Provisions section (listed under
Also, in future awards, you may find different
Attachment A—Schedule) of your Cooperative
rules pertaining to source and origin, and you
Agreement—www.epls.gov;
may be assigned a different geographic code.
4 For a complete explanation of USAID source/ 2. U.S. Department of Treasury List of Specially
origin rules, including other geographic codes, Designated Nationals and Blocked Persons—
local procurement rules, and restrictions http://www.ustreas.gov/offices/enforcement/
applicable to subawards, review the ADS ofac/sdn/; and
Chapter 310—Source, Origin and Nationality 3. United Nations Al-Qaida and Taliban
(http://www.usaid.gov/policy/ads/300/310.pdf). Consolidated List—http://www.un.org/sc/
Running an Effective and Compliant Program

committees/1267/consolist.shtml.

While the search function on each site is

4.3.2.4 Ineligible Suppliers/ slightly different, it is easy to check whether
Excluded Parties List your prospective consultant, staff, vendor, or
subcontrator is ineligible. For example, to begin
In addition to rules on what items you can buy a search on www.epls.gov, click on “Advanced
and from where you can buy them, USAID Search” in the upper left section of the homepage.
regulates from whom you can buy them. This is After reading the information in the “Important
to ensure that recipients of USAID funding do EPLS Advanced Search Information” page and
not provide material support or resources to any checking the box at the bottom, you will be able to
persons or organizations that commit, threaten search by firm, entity or vessel or individual under
to commit, or support terrorism. the Name Search Type drop down menu.

Figure 23—Excluded Party List Web Site Advanced Search

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 If you get an exact match, you must find a marks around part of the name, such as “So
new vendor. If you choose to continue with the and So,” the database returns no results. If
procurement, the costs will be unallowable and you receive results that you are unsure of, call
you will not be reimbursed by the USG. 1-866-472-3757 or e-mail [email protected]
for additional help.
If you receive a partial match, and it is clearly
not the supplier you are considering, you may If you receive no matches, then print the page
want to search again using quotation marks and keep it in your files in order to document
around the name to get an exact match. For your search. This page shows the date and
example, when searching for So and So time of your search and the term you searched
Supplier, the database returns a match of John under, as shown in Figure 24.
Tse-So Ning in Louisiana. By putting quotation
4
Figure 24—Excluded Party List Web Site Results Page

Running an Effective and Compliant Program

equipment section of your budget and apply
4.3.2.5 Non-Expendable the equipment rules for the procurement and
Equipment use of these items. This will involve gathering
multiple bids as part of the procurement process
Equipment is defined as tangible items and including these items in your inventory
with a useful life of at least one year and management system.
an individual unit cost of an amount
determined by your organization’s policies It is good practice to manage the procurement
and procedures. The USG lists a unit cost of of items you think of as “equipment” but cost
$5,000 to categorize items as equipment. less than US$5,000 (such as computers or
Your organization may set a lower value motorbikes) in the same way as you manage
but cannot exceed $5,000. So if you categorize items costing US$5,000 or more, for
equipment (which has special procurement example, gathering multiple bids on these
rules procedures) as items over $1,000, items and including them in your inventory
you would list all items separately under the management system.

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 in-country USAID Mission will respond, within
4.3.3 Travel five days, only if travel is denied. If the recipient
does not receive a response within five working
Travel in country or across borders—whether
days, the recipient will be considered to have
for a conference, field visit, workshop, or other
met these standards for notification and
purpose—is often necessary to implement
may travel.
your USG-funded award. Your Cooperative
Agreement contains travel-related rules,
Where security is a concern in a specific
which you are required to follow when
country, it is a good idea to notify the U.S.
traveling internationally for your project and,
Embassy of the traveler’s presence when he
therefore, should be checked before making
or she has entered the country. This may be
any arrangements.
especially important for long-term postings.
4
The Fly America Act
4.3.3.1 Travel Requirements The Fly America Act states that you must fly on
U.S. flag air carriers or U.S. airline code share
Prior Approval for on foreign flag air carriers, as long as they
International Travel travel to your destination, except as follows:
Running an Effective and Compliant Program

You must get prior approval in writing from • If no U.S. flag air carrier provides service on
the AO (unless delegated to the AOTR) before a particular leg of the route, you may use a
every trip. Any specific international travel in foreign air carrier service, but only to or from
your Cooperative Agreement’s approved budget the nearest interchange point to connect with
is considered to be approved; otherwise, U.S. flag air carrier service.
you must submit a written request. When
requesting approval for international travel, Fly America Note:
provide the following information:
Foreign air carrier service may not be used/
• dates of travel and return; justified solely on the basis of cost savings.
• destination country or countries; and
• purpose and objectives of trip.
• If the service on a foreign air carrier would
be three hours or less, and using the U.S.
Written approval, which can be a simple
flag air carrier would at least double your
e-mail from your AO, should be saved for future
travel time, you may fly a foreign carrier.
reference and included in your documentation.
Alternately, your AO may allow you to submit a • If a U.S. flag air carrier offers nonstop or
list of trips to be taken in the annual workplan direct service (no aircraft change) from your
and approve them all at once. Note that origin to your destination, you must use the
business class travel always must be approved U.S. flag air carrier service unless such use
individually by USAID. would extend your travel time, including delay
at origin, by 24 hours or more.
Travel Notification • If a U.S. flag air carrier does not offer nonstop
or direct service (no aircraft change) between
Neither the USAID Mission nor the U.S.
your origin and your destination, you must
Embassy requires country clearance for
use a U.S. flag air carrier on every portion of
employees or subawardees of USAID
the route where it provides service unless,
recipients. However, if the primary purpose
when compared to using a foreign air
of the trip is to work with in-country USAID
carrier, such use would do at least one of
personnel, or you expect significant
the following:
administrative or programmatic support from
USAID, you must notify the Mission prior to - increase the number of aircraft changes
your travel—at least two weeks in advance. you must make outside of the United
States by two or more;
This notice must include your award number, - extend your travel time by at least six hours
the AOTR’s name, the traveler’s name, the date or more; or
of arrival, and the purpose of the trip. You may
send the notice by e-mail, but be sure to save - require a connecting time of four hours or
a copy of the notification in your records. The more at an overseas interchange point.

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 Economy Seating any transportation costs for that service.
The certification must include:
Required for All Travel
• traveler’s name;
For official travel, both domestic and
international, you must use economy (coach) • travel dates;
class (unless paid for personally or through • origin and the destination of the travel;
frequent flyer benefits).
• detailed itinerary of your travel, name of the
Exceptions that allow you to fly business class air carrier, and flight number for each leg of
include circumstances when: the trip; and

• Regularly scheduled flights between origin/ • statement explaining why you met one of
the exceptions outlined above or a copy of
destination points (including connecting
your agency’s written approval deeming that
4
points) provide only first-class and business-
class accommodations. foreign air carrier service was a necessity.

• No space is available in economy-class

accommodations in time to accomplish the File a Trip Report
mission, which is urgent and cannot be Following travel—domestic as well as
postponed (be sure to include documentation

Running an Effective and Compliant Program

international—it is good practice to write a short
of urgency and importance). report to capture what you have learned and
• When use of business-class accommodations enable you to share it with others easily. There
is necessary to accommodate your disability is no set format or protocol for writing a trip
or other special need as substantiated in report; however, it usually describes where you
writing by a competent medical authority. went, when you went, why you went, who was
with you, and what you did and learned.
• Security purposes or exceptional
circumstances as determined by your
As you are writing your report, imagine how it
agency make the use of business-class
will be used by the people who will read it. Here
accommodations essential to the successful
are some simple guidelines:
performance of the agency’s mission.
• Begin with a short paragraph stating the
• Economy-class accommodations on
purpose of the trip (why).
an authorized/approved foreign air carrier
do not provide adequate sanitation or • Summarize your activities while on the trip.
health standards. Be concise and factual. Remember, the
reader is usually not interested in a detailed,
minute-by-minute account of what happened.
While these exceptions exist, they in no way
Instead, write a clear and concise outline of
promote the use of business-class travel, which
your trip (where, when, who, and how).
should be used only when such exceptional
circumstances are met. • Point out important information you
feel should be highlighted or stressed
(what you learned).
Travel Procurement
• If appropriate, end by stating any
Documentation recommendations and any follow-up that
As when procuring any other item or service should occur.
using USG funds, you must follow USG
procurement regulations and carefully
document the process you used to purchase
airline tickets. This means providing proof that
4.3.3.2 Developing a
the procurement of tickets was a competitive Written Travel Policy
process and verifying that you traveled to
the specified destination by submitting airline In addition to complying with USAID policies,
boarding passes or ticket stubs. if your NGO has its own written travel policy,
you should review it when making any travel
In addition, if your travel qualifies as an arrangements. If your NGO does not have a
exception to the Fly America Act and you do written travel policy, it is good practice to put
not fly a U.S. flag air carrier, you must provide one in place. Such policies will allow employees
a certification and any other documents USAID traveling on official business domestically as
requires. Without these, your funding agency well as internationally to be reimbursed for
will not reimburse your organization for transport, lodging, M&IE, and other allowances.

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 • Reimbursement
Travel Policy Checklist* - The types of costs that will be reimbursed
An organization’s Travel Policy must, at (for example, transportation costs, visas,
a minimum: lodging, currency conversion, telephone
f Establish procedures for how travel costs calls, Internet, etc.).
will be determined (for example, per diem, - Whether expenses will be reimbursed on
actuals, etc.). the basis of actual receipts or per diem or a
f Establish internal travel approval requirements. combination of the two. If a per diem basis
f Cover both domestic and foreign travel by all is selected, then a per diem policy needs
employees, whether or not it is financed by to be clearly defined for both domestic and
the USG. international travel.
4
f Specify which class of air carriage is - How employees will account for their travel
allowable in particular circumstances. expenses upon returning from their trip.
f Conform to the requirements of the Many NGOs create an expense report
Fly America Act. template using Microsoft Excel®, which
employees fill out after every trip.
f Provide for any travel notification or
approvals required of a USAID award.
Running an Effective and Compliant Program

• Exchanging Money
f Define allowable costs under the policy
in accordance with the applicable cost
- What rate to use for changing foreign
principles established by the U.S. Office currency to local currency. For example,
of Management and Budget (OMB). some NGOs use the in-country exchange
rate using official exchange documents as
* http://www.usaid.gov/policy/ads/300/30359s1.pdf
supporting documentation, while others
use the exchange rate of a trusted online
A well-thought-out travel policy defines source, such as www.oanda.com.
procedures for authorizing official travel, helps
control business travel costs, and provides
Note: Once travel rules have been adopted,
clear guidelines about the types and amounts your organization’s policy must be uniformly
of expenses that may be reimbursed. A applied to both USG-funded and other
written travel policy also helps ensure that all activities, unless the specific contractual
employees are treated fairly and equitably. agreement under which the travel is
being conducted calls for different
A travel policy should address: procedures/requirements.

• Approval
- The process for an employee to request What if my organization does not have a written
your organization’s approval to travel, travel policy?
including the appropriate form to be
If you do not have a written policy regarding
completed by the traveler, the amount of
travel costs, the standard for determining the
time in advance that the form should be
reasonableness of reimbursement for overseas
submitted, and to whom the form should
allowances is the regulations published by the
be submitted.
U.S. Department of State. Rates are published
• Advances monthly by country (and cities within a country)
- How advances of funds to be used for and are available at http://aoprals.state.gov/
travel will be calculated. For example, some web920/per_diem.asp. If you do not have
policies state that advances cannot be a travel policy, the following overview of
issued for more than a specific percentage USG practices can provide a framework for
of the total estimated travel costs. developing one.

- When outstanding advances will be Does a traveler need approval/authorization?

reconciled. It is good practice to allow for
only one outstanding advance at a time Your travel policy should require that travelers
and to establish a deadline (for example, complete and submit a travel request form
within two weeks to one month) by which specifying reasons for the travel, dates,
employees must reconcile their advance estimated cost, etc., to the supervisor.
upon returning from their trip.

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 May a traveler request a travel advance? per diem rates for Francistown, Botswana,
accessed from http://aoprals.state.gov/
A traveler may wish to request funds in advance
web920/per_diem.asp.
of a trip to cover the per diem (or actual
expenses, depending on organization policy)
and any other business-related expenses. If the city you are going to is not listed under the
The amount of the advance and the format for Post Name, use the “Other” rate (see column 2
the request are based on the organization’s of Figure 25) published for that country.
policy. Note: auditors commonly find that travel
advances are not issued according to the Travel costs may be charged on an actual cost
organization’s policy. basis, on a per diem basis, or on a combination
of the two (for example, using the actual cost
Advances should be accounted for shortly after for lodging and a per diem basis for meals and 4
completing the related trip. Failure to reconcile incidental expenses), provided the method is
travel advances may result in the travel applied to an entire trip and not only to selected
advance being deducted from the pay of the days of a trip.
traveler. (While this is good business practice,
it is important that this be according to the Meals & Incidental Expense
organization’s policy.)
Allowance

Running an Effective and Compliant Program

Generally, travelers are entitled to the M&IE
Good Practice
allowance the day travel begins. On the day of
Allow only one travel advance at a time; do departure and on the last day of travel, travelers
not issue any new travel advances until the are entitled only to a percentage (based on
outstanding travel expenses/reimbursement
your organization’s policy, the USG default
request and trip report have been submitted.
policy is 75%) of the applicable M&IE rate of the
authorized travel location. Employees on local
day trips are only eligible to receive an M&IE
What is per diem? allowance if the time away exceeds 12 hours.
A per diem allowance is a daily maximum What if meals (for example, lunch) are
amount for which a traveler may be reimbursed provided free of charge (for example, by
for each day away from his or her regular another organization) during the trip?
workplace on official business. The per diem The M&IE allowances will be adjusted if
allowance is usually composed of two parts: meals are provided free of charge during one’s
travel for business purposes. The Web site for
1. Lodging: a ceiling or maximum rate that may
be reimbursed for lodging. Lodging is almost
always reimbursed based on actual cost Documenting M&IE
incurred up to the maximum allowable USG
To get reimbursed for lodging and other travel-
rate. Remember: original receipts must be related costs of US$25 or more, the traveler
submitted when requesting reimbursement must save and submit all original receipts and
for all lodging costs. invoices to document the expenses. For meals
2.M&IE: a fixed daily rate for meals (breakfast, and personal expenses that fall under M&IE,
receipts are not required by the
lunch, dinner, and related tips and taxes) and
incidental expenses (for example, gratuities USG, but your organization’s per diem policy
and tips, laundry, toiletries). Figure 25 is an may require them.
example of the U.S. Department of State

Figure 25—Sample Botswana Per Diem Rates

Country Post Season Season Max. M&IE Max. Per Footnote Effective
Name Name Begin End Lodging Rate Diem Rate Date
Rate

Botswana Francistown 01/01 12/31 US$172 US$54 US$226 N/A 12/01/2009

Botswana Other 01/01 12/31 US$103 US$44 US$147 N/A 12/01/2009

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 calculating reductions to the M&IE for the unusual circumstances. Original receipts must
U.S. State Department per diem rates is be submitted when requesting reimbursement
http://www.state.gov/www/perdiems/breakdown. for all lodging costs.
html. If you develop your own organizational
per diem policy, it should include how the M&IE What if a traveler stays in the home of a friend
will be reduced should breakfast, lunch, and/or or a relative?
dinner be provided free of charge. The amount A traveler who stays in the home of a friend or
generally will not be adjusted if complimentary relative while on official travel may not claim
meals are provided by common carriers (such lodging expenses for reimbursement. Hence,
as airlines or trains) or hotels (such as when where lodging is not required, the applicable
the hotel price includes bed and breakfast). M&IE rate to be used is the rate for the location.
4 What happens if working meals were had during How does a traveler calculate expenses
the trip? incurred in a foreign currency?
Working meals should be reimbursed when In the case of international travel, a significant
accompanied by a written explanation of portion of the expenses will be in foreign
the following: currency. To calculate the expenses, the traveler
• purpose of meeting; must provide appropriate receipts, with the
Running an Effective and Compliant Program

currency rate(s) of exchange applicable for

• why meeting was held during a mealtime;
the period in country. To obtain the appropriate
• who was in attendance—names, titles conversion rate, either use the rate provided
(if applicable); and at the time of exchange as documented in the
• outcome of meeting. exchange receipts or go to a reliable currency
exchange Web site, such as http://www.oanda.
com/converter/classic. Be sure to document the
A traveler can only claim either a per diem or exchange rate you use by printing out the Web
the actual expense, and in this case, as the page and submitting it with your expense report.
traveler may be requesting reimbursement for
the working meal (provided there is adequate
documentation), the traveler’s M&IE allowance
would have to be adjusted accordingly, just as
when meals are provided free of charge.
4.3.4 Use of USAID-
Funded Property
What if someone travels to a number of different
countries (or posts within a country) on the same When your organization acquires equipment
trip and each has a different per diem rate? using USAID funds, there are certain limitations
on how you may use the equipment.
The maximum per diem reimbursement rate is
determined based on where lodging is obtained.
If lodging is not required, the applicable M&IE Use of Equipment Outside of
rate to be used is the rate for the location, or if
numerous locations are visited in one day, the
Award Activities
location with the highest M&IE rate should be In most cases, the title for all property
used. If a traveler visits more than one country purchased under your award is vested in
on a trip, then the rate for each country should your organization. Check your Cooperative
be used for the days in each country. Agreement to be sure, or for more information
see 22 CFR 226, http://edocket.access.gpo.
What happens if a traveler’s actual lodging gov/cfr_2007/aprqtr/22cfr226.34.htm.
cost or M&IE costs are above the maximum
allowable lodging rate? You can use the equipment in the program
for which it was acquired as long as needed,
While your organization’s policy regarding the
whether or not USAID funds continue to support
maximum amount for which a traveler may be
the program. For example, if you purchased
reimbursed may differ from USG policy, it is
a vehicle to be used as a mobile testing unit
important to note that if the total of the lodging
funded by USAID, you can still use that vehicle
exceeds the per diem rate established for
for that purpose even after the USAID award
the location, the traveler will have to pay the
has ended, as long as you continue your mobile
excess charges. The one exception to this is if
testing program, and as long as you have
you specifically request and receive approval
written approval for the continued use of
in advance for “actual subsistence” at a higher
the equipment.
rate, but this is granted only for special or

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 Additionally, throughout your program, you may set lower thresholds for tracking items
may make USAID-funded equipment available with a lesser value that is determined by
for use in other programs if such use will not your organization.
interfere with work on the program for which
you originally acquired the equipment. You Property management standards for USAID-
must treat rent or other fees charged as funded and -owned equipment must include all
program income. of the following:
• Accurately maintained equipment records
When equipment is no longer needed for the that contain:
original program, but the program continues,
you may use the equipment in connection with - description of the equipment;
other USG-sponsored activities in the following
order of priority:
- manufacturer’s serial number, 4
model number, USAID stock number,
• activities sponsored by the original funding national stock number, or other
agency (USAID), then identification number;
• activities sponsored by other USG agencies. - source of the equipment, including the
award number;

Running an Effective and Compliant Program

Under these circumstances, you do not have - owner of the title—your organization,
to inform USAID about the equipment’s use USAID, or other specified entity, such
until you have to dispose of it. When acquiring as the host government;
replacement equipment, you may use the - acquisition date or date received;
equipment to be replaced as trade-in or you
may sell it and use the proceeds to offset the - percentage of USAID funds used to
costs of replacement equipment subject to the purchase the equipment—for example, if
approval of the AO. you used 25% funding from a non-USG
source, then USAID furnished 75% of
You may not use equipment acquired with the cost;
USAID funds to provide services to non-USG - location and condition of the equipment
organizations for a fee that is less than private and the date the information was reported;
companies charge for equivalent services. In
- unit acquisition cost; and
other words, if you purchase a vehicle, you may
not let another organization borrow or rent it - ultimate disposition data, including date
for less than what it would normally cost that of disposal and sales price or the method
organization to rent a similar vehicle. used to determine current fair market value
where a recipient compensated the USAID
Even though the title to the equipment is vested for its share.
in your organization, you are also not allowed to • A physical inventory of equipment
use the property as collateral for a loan without containing results reconciled with the
approval of USAID. equipment records at least once every two
years. Any differences between quantities
When closing out an award, you need to determined by physical inspection and those
submit a final disposition plan and inventory shown in the accounting records must be
that accounts for any equipment and property investigated to determine the causes of the
acquired with USAID funds or received from discrepancy. Furthermore, the inventory must
USAID. The decision regarding the right to include information verifying the existence
the property rests with USAID. of, current use of, and continued need
for the equipment. While USAID requires
Property Management an organization to undertake a physical
Standards inventory every two years, your organization
may decide to have tighter controls over your
Your organization should have a written equipment and may undertake a physical
policy for managing property and a system inventory every six months or every year
for cataloging and tracking inventory. You are just prior to your audit (if you have one).
required to track items costing US$5,000 or
more purchased with USAID funds using this • A control system to ensure adequate
type of system. However, it is good practice to safeguards to prevent the loss, damage, or
use this system for tracking additional items as theft of the equipment. Any loss, damage, or
well, such as computer equipment and other theft must be investigated and documented
fixed assets. Note, too, that some Missions fully, and your AO promptly notified.

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 • Adequate maintenance procedures to keep • Adding Restricted Commodities—
the equipment in good condition. The addition of costs to the budget
that require prior approval, such as
• If you are authorized or required to sell
restricted commodities.
the equipment, you must use proper sales
procedures that provide for competition to • Reduction in Training Allowances—
the extent practicable and result in the The transfer of funds allotted for training
highest possible return. allowances (direct payment to trainees)
to other categories of expense.
Fixed-asset management software exists, • Adding/Changing Subrecipients—
but it can be expensive and complicated to The recipient intends to enter into a
administer. As long as you keep your subagreement with another organization
4 records organized, updated, and backed to help implement the award, and the
up, these data can be maintained partnership was not incorporated into the
in a simple spreadsheet. approved program description and budget.
There are other circumstances when USAID
4.3.5 Requesting may modify your Cooperative Agreement at
its discretion.
Modifications to
Running an Effective and Compliant Program

Your Agreement
Requesting Changes
Over the life of your award, your Cooperative
The first step in modifying your agreement is
Agreement will be modified with routine
to discuss the change with your AOTR. If the
updates, such as additional obligations
change makes sense to the AOTR, then make
(or incremental funding), and other program
a formal request in writing to your AO, copying
alterations, such as changes in Key Personnel.
your AOTR.

Changes Requiring Modification

of the Cooperative Agreement Be sure to have at least e-mail approval in
hand before acting. If you implement a change
Certain changes to your program or budget
that is not approved, you may be required to
require prior approval as well as a formal pay back or cover any costs with private funds.
modification to your agreement. Though you
may move forward with the change once you
receive written approval, it is also important
Modifications to your agreement require
to ensure that these changes are eventually
extensive paperwork for USAID staff. Therefore,
documented in the terms of your agreement
the AO may grant approval by e-mail, but wait to
through a modification (see “Requesting
execute a formal modification until a later date.
Changes”). The following list includes changes
To expedite matters for your AO, if possible,
that must be documented in a modification to
try to assemble multiple modification requests
your Cooperative Agreement:
and submit them all at one time. For example,
• Major Scope Changes—A change in if there is a major change in the scope of work
scope or project objectives that will require of your program, assemble the requests for
revising the funding allocated among a change in budget, a change in the program
project objectives. description, a change in personnel, and a
• Key Personnel Changes—Changes in Key change in targets and send them all together.
Personnel specified in the award, including a
25% reduction in time devoted to the project. If you request a modification and receive
e-mail approval, but not a formal modification
• Additional Funding—When additional to your agreement, keep track of these items
or incremental funding is added to your and occasionally remind your AOTR of the
total obligation. outstanding modifications. A good time to send
• Changes to Indirect Costs—Where indirect a reminder is right before the annual date when
costs have been authorized, any plans to your agreement is modified and additional
transfer funds budgeted for indirect costs to funds are obligated.
absorb increases in direct costs or vice versa.

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 4.4 Technical Interpreting Data and Using M&E
Program Management as a Decisionmaking Tool
As you track progress and report on
Technical program management focuses on beneficiaries your program has reached, you
ensuring that your team is delivering quality may uncover significant discrepancies between
services that meet the needs of the beneficiaries the targets set in your workplan and the actual
and fulfill the overall goals of your program. numbers you are reaching. Do not panic; this
One of the most important tools you have to is a normal part of program management,
help manage your activities is your M&E especially for programs implementing newly
system (4.4.1). designed interventions or expanding to a new
geographic area with new subrecipients.
The responses to many problems around 4
the world continuously evolve, and your Gaining a better understanding of the
organization needs to learn and share (4.4.2) underlying reasons for target shortfalls and
on an ongoing basis. Learning best practices developing a plan to adjust your program and/or
and new approaches may help you address reset its targets is an important part of bringing
challenges your program faces and improve a program to maturity. It is also important to
the quality of services you provide. It is also track progress made in implementation and

Running an Effective and Compliant Program

important for you to share your experiences so targets against the amount of funds spent, so
other organizations and individuals may benefit take steps to implement strategies to offset
from the valuable lessons you have learned. budgetary variances. Changes (shortfalls or
gains) in both targets and budgets should be
explained in relevant reports, along with an
explanation of measures that will be taken
4.4.1 Monitoring and so that implementation remains on track.
Evaluating Progress
It is simply not possible to manage the technical Significance of Discrepancies
side of your program effectively without a good between Targets and
M&E system that gathers the right data in an Actual Performance
accurate and timely manner. Having timely,
good-quality data alone is not enough, however. Discrepancies between targets and actual
The data are also an important management performance are to be expected from time
tool that must be interpreted and used to time. In such cases, the project manager
effectively in order to make evidence-based must decide whether a particular discrepancy
decisions to improve your program on is “significant” enough to warrant further
an ongoing basis. Data also will be used in investigation. Possible action depends on:
the development of your program reports. • How dramatic is the difference: 10% more or
less than expected? 50%? More than 50%?
Chapter 3 discussed setting up your M&E
• How close are you to the situation? Are you
system. During the planning process, program
managing the program directly, or through
designers often build in formal program
a subrecipient? Is the program in the same
evaluations every couple of years, conducted
country or is it remote?
by external, independent evaluators. These
evaluations will help you demonstrate that your • How central is the specific program
program is getting results, but they should not activity involving the discrepancy to your
be the only time you are using the M&E data overall program? Is it intricately linked to
to analyze program performance. several other activities, or is it a small,
stand-alone piece?
At the very least, you should analyze your
data quarterly, ideally working directly with
subrecipients, implementers, and a wide range Reviewing Targets
of staff. This is your best opportunity to take a If you determine that actual results are deviating
hard look at the data to examine your program significantly from the targets set, you will want
performance and consider making adjustments, to discover why. While there are numerous
a process that allows you to use M&E as a tool possible causes, most fall into these areas:
for decisionmaking.
• problems with faulty or mistaken intervention
design assumptions;

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 • poor program implementation; In your workplan, you probably tied the
proposed targets to your budget. Therefore,
• late start-up;
when you propose lowering your targets, address
• poor data collection tools; and/or the impact on your budget. If you cannot reach
• data-quality errors. the proposed targets in one area, try to see if
you can rebudget to increase your targets in
another program area. If you have to reduce the
Different staff members may manage each of total number of targets, the cost per beneficiary
these areas: a technical lead for intervention inevitably rises and your program looks less cost-
design, a subrecipient for implementation, and effective. If that happens, be prepared for your
an M&E specialist for data quality. The process funding agency to decide to reduce funding in
for reviewing target discrepancies should line with your reduced targets.
4 include all of these people, perhaps led by
the program director. Reviewing targets, making program
adjustments, and assessing data quality are
Adjusting Targets Upward natural and necessary parts of the program
While discrepancies generally refer to management process. Each time you refine your
shortfalls between targets and actuals, your program model, applying lessons learned, you
Running an Effective and Compliant Program

program may require adjustments if your actuals strengthen your program. As a result, the next
are significantly higher than your targets. For time you implement in a new area or work with
example, higher-than-expected results could a new subrecipient, your assumptions will be
affect budgets or other related activities. Higher better and your targets will be more accurate.
actuals also may be an indication that double-
counting is occurring. Therefore, pay close Data Quality Problems
attention to unusually high actuals and be What if your intervention design was sound
prepared to investigate and adjust if necessary. and its implementation is going smoothly, but
there are still gaps between targets and actual
performance data? The problem could be with
Adjusting Targets Downward the data themselves, such as:
In some cases, your findings will leave you • undercounting results (for example, if
little choice but to adjust your targets. Because volunteers do not record everyone reached);
you are contractually obligated to reach those
targets, you will have to work with your AOTR • double-counting results (higher-than-expected
to make these changes. In doing so, consider results can come from counting program
the following: beneficiaries multiple times);

• Will you be reducing your targets for the • poor data collection tools; and
current year or reducing your overall targets? • data entry problems (perhaps the data are
Whenever possible, propose solutions to being gathered properly, but they somehow
make up current shortfalls in future years. are not entered accurately into your system).
• Do you have a good reason for reducing
your overall targets? A shortage of time is not
sufficient. Could an extension to the period
Addressing Data Quality Issues
of performance without additional funding Address any data quality issues you discover
help you meet your original goals? If the immediately. For example, if the problem is
answer is still no, you will want to develop a undercounting, start by ensuring that everyone
well-documented, evidence-based reason to involved understands the definition of exactly
support your request to reduce your targets. what/who to count for each indicator.

Ensure that your team understands the

When adjusting your targets, try to pinpoint
indicator(s). Sometimes, funders define
the corresponding assumption(s). For
indicators clearly. However, in other cases, your
example, let’s say your Trafficking in Persons
organization is expected to set its own minimum
(TIP) program is underperforming, and
standard for when to count an individual as
you believe, in part, that there are fewer
having been “reached.” If everyone on your
TIP victims in the catchment area than you
team is not using the same definitions for who
assumed is the case. Gather the data that
meets the threshold to be counted, miscounting
show this and use them as the basis for the
the number of beneficiaries may result.
modification request.

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 Review the indicators to ensure your Developing Solutions
definitions are accurate. If you have reported
Once you have identified discrepancies, you
results to USAID that may have errors, contact
will want to look for the cause(s) and develop
your AOTR to discuss the issue and find ways
solutions to address them.
to correct past reports.
If you find multiple reasons for a discrepancy,
Intervention Design do not try to address all of them at once. Focus
Assumptions on the one or two whose resolution will have
the greatest impact; in other words, generate
When you designed your program, you the best return on your investment of time,
made a number of assumptions. You used personnel, and resources. If possible, test your
these, in turn, to develop your targets and changes on a small scale before implementing 4
select indicators. Factors taken into account them program-wide.
probably included:
• demographic data (including population size, If you must adjust your intervention, be sure
age distribution, and prevalence rates); to put processes in place to test and validate
the adjustments. Monitor progress closely and
• social and cultural factors (such as language,
document the changes you make. If you are

Running an Effective and Compliant Program

cultural appropriateness, and acceptance);
using an intervention other subrecipients or
and/or
partners use elsewhere, share your experience
• program effectiveness estimates (such as so everyone benefits from the lessons learned.
estimates of the number of people who will
change their behavior or will be open to
Looking at Program Design
accepting your services).
Target shortfalls due to intervention design
problems are often the most difficult to pinpoint
In general, the more reliable the initial data
and can be the most challenging to respond to.
used to design the program, the more accurate
Try to rule out all other problems first.
your targets should be. However, for new
programs, or programs expanding into new
areas, the underlying demographic data and Making Implementation
the social and cultural assumptions may not be Adjustments
as reliable as those for established programs.
Sometimes, adjusting your implementation
Therefore, expect discrepancies to arise
strategies can get your program back on
between targets and actual results.
track. Consider these tips:
• Test your changes on a small scale first
Implementation Challenges
before applying the change to your entire
Sometimes the source of the discrepancies program whenever possible. Give changes
is program implementation rather than design. a few months to work before trying to speed
This could include: things up to compensate for discrepancies
• slower-than-expected program start-up; in meeting targets. You can always request
additional time later, but remember that
• budget problems (such as higher-than- approval of additional time is not automatic.
expected costs or delays in securing
matching funds); • Document any adjustments, so you will not
repeat mistakes.
• human resource problems (such as
the inability to find qualified personnel
or challenges in recruiting and
retaining volunteers); 4.4.2 Learning and Sharing
• unforeseen events (such as civil unrest); Throughout the project cycle, your staff and
• environmental challenges (such as heavy collaborators have countless opportunities
rains that render fieldwork impossible due to learn and improve their ability to manage
to inaccessible roads for an extended and implement effective projects, whether it is
period of time); and/or from observation, data and research, mistakes
made, challenges overcome, new ideas
• training problems (such as ineffective trainers
learned at a conference, or formal or informal
or ineffective training materials).
evaluations. While it is not efficient

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 or practical for everyone to be present at experiencing a knowledge vacuum when
every moment, there are ways to maximize key staff leave and avoid a repetition of
the gains, contribute to staff development, avoidable mistakes.
improve project effectiveness, and enhance • Organizations that share knowledge with
project sustainability. Actively promoting subrecipients and implementing community
conscious learning and deliberately creating organizations help to create ownership of
opportunities for sharing should take place at the project and a sustainable response.
numerous levels within your program, within
your organization, and among programs and • Organizations that are willing to share
partner organizations. experiences and learn from other organizations
benefit exponentially from the experiences of
Sometimes, USAID or others in-country all of the organizations involved. This enables
4 facilitate forums in which you can participate. your organization to be on the leading edge,
Work with your AOTR to ensure that your build a reputation as a collaborative partner,
organization is included on Mission mailing lists and, possibly, help to better position your
and is aware of these forums. Whether or not organization for future awards.
USAID initiates such forums, organizations that
actively promote learning and sharing within
the organization and with others are able to Tips for Promoting
Running an Effective and Compliant Program

quickly respond to changes, improve program

Learning and Sharing
effectiveness, and promote innovation.
• Learning can be free. Even if you currently
Benefits of Learning and Sharing do not have any budget for training, you
can promote learning and sharing through
The drive to learn and share within your
informal sharing forums over tea or meals.
organization’s culture should come from the
management team. If you are not actively • Everyone has something to share. For example,
promoting learning and sharing within your the office computer expert can show everyone
organization, program, and the wider NGO how to do more with spreadsheets. The
community, then such activity probably does not accountant can demonstrate how to develop
happen. Sometimes, managers do not promote a good budget. The local volunteer can teach
learning and sharing, because they do not everyone a few phrases in the local language.
know the benefits. They may think it benefits Your staff have a lot of knowledge and would
individual employees and other organizations, love to share it. The key is to tap into that
rather than understanding how it helps their knowledge and create an open, receptive
organization. They may fear that if employees environment. However, often people have to
learn too much, they will demand higher wages be invited/asked to share what they know. It is
or leave for better opportunities, and that other up to you as a leader to create a space where
organizations may use their program designs this is possible.
to be more competitive when seeking
future funding. • Do not wait for someone else to set up
a learning forum. Take the lead with your
Your organization will benefit greatly from partners and other area NGOs to
a robust learning and sharing program that encourage staff exchange visits and other
promotes knowledge sharing within your learning opportunities.
organization, between you and your partners
and with other outside organizations. • Build in time for reflection. Take the time
Here are just a few examples: after major activities or evaluations or at
• Organizations that have a strong learning and regular intervals during implementation to
sharing program find it easier to recruit and capture, share, and consolidate lessons
retain talented personnel. Professionals know learned. These should provide the opportunity
which organizations are good to work for, for everyone to share what they have learned
including which ones will help them grow in and would like to contribute, not just top
their careers. managers. Very often, the people most
directly involved in the implementation have
• Organizations that share and document the most practical ideas for improving the
the knowledge of individual employees avoid project and process.

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 • Include everyone. Sometimes, more 4.5 Summary
learning is taking place at the upper
management levels within an organization, Running an effective and compliant program
with less taking place at the staff level. covers an array of management areas, both
However, everyone in your organization administrative and technical. A good program
can benefit from learning, and most staff manager will tie all of these together by working
are interested in learning new skills, with the project team to constantly refine the
even if they have nothing to do with their organization’s implementation model and by
current positions. You never know: your keeping everyone focused on providing quality
organization’s administrative assistant may services to beneficiaries.
be your future M&E expert.
This chapter provided details on the
• Capture the knowledge. Whenever possible, administrative management requirements of
4
capture the sharing experience in electronic USAID-funded agreements, especially with
format, so you can share it again. This may regard to finance, procurement, property
mean asking the presenter to put together management, and travel. It also discussed
a PowerPoint® presentation that is the basics of managing your award funding
posted on a shared drive, or it may mean and documentation, including modifying
helping staff document processes in simple

Running an Effective and Compliant Program

your agreement and changing your budget.
training manuals. Larger organizations may Finally, this chapter outlined requirements
wish to explore knowledge management and good practices related to technical
software options. program management.
• Evaluate your current learning and sharing.
A key aspect of managing USAID-funded
Do you have a training budget? Do other
programs this chapter did not cover is reporting.
activities you already have promote sharing?
Because of the number and complexity of
What external forums could you participate
USAID reporting requirements, this topic is
in? Ask your staff for suggestions about
covered separately in chapter 5.
what training they feel they need for or are
interested in.

• Make a plan and set goals. Learning and

sharing is something that your organization
might forget about in the future if you do
not integrate them into your organization’s
management plan. Create a simple plan
and set goals for the organization. Review
your progress at least once a year and
make learning and sharing a part of each
employee’s individual job description and
annual performance reviews. Track how
many trainings your employees have
attended and what training they have
provided to others.

• Explore opportunities online. The availability

of information online and increased access
to the Internet are opening up tremendous
opportunities for learning through
online communities of practice, even for
organizations located in the most remote
areas. Encourage your staff to search for
Web-based communities and share what
they find with others.

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CAPResourceGuide_book.indb 96 10/22/10 12:49 PM
5 Reporting: Requirements
and Benefits
PHOTO CREDIT: ©AMIT PASRICHA, FHI 360
 Reporting: Requirements
and Benefits
5.1 Overview

5.2 Getting Started

5.2.1 Five Tips for Outstanding Reporting
5.2.2 Reporting Due Dates
5.2.3 Preparing for Other Reporting Requests

5.3 Your Reporting Requirements

5
5.3.1 Federal Financial Report (SF-425)
5.3.2 Performance Reports (Quarterly)
5.3.3 Annual Audit
5.3.4 Foreign Tax (VAT) Reporting

Reporting: Requirements and Benefits

5.4 Summary and References

97

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 5.1 Overview
Skip Ahead
Reporting is the primary way you demonstrate f Reporting Due Dates
that you are meeting the expectations of your
f SF-425 Federal Financial Report
award and complying with USAID requirements.
Timely and accurate reporting contributes to f Performance Reporting
building a strong relationship with the donor f Annual Audit
and providing evidence of the impact of
f Foreign Tax Report
your program.

Often the day-to-day demands of running a

program consume significant time and energy,
and writing reports feels like a distraction Key Terms and Acronyms
from attending to program needs. However, in • Allowable Cost—An incurred cost
addition to being an important responsibility determined to be an acceptable charge.
under the Cooperative Agreement, reporting can
• Audit—An independent review and
enhance the daily operations of your programs
examination of system records and activities.
by helping you examine the financial health,
5 programmatic strength, and performance of • Burn Rate—The rate at which an
your organization and activities. It also gives organization spends its award funds on a
you the opportunity to bolster ties with your periodic basis, typically monthly.
partners. It is advisable to develop a reporting • Finding—The answer to an audit objective
culture within your program by ensuring that that is supported by sufficient, competent,
all staff have the right tools and training to and relevant evidence.
contribute appropriately. By viewing reporting
Reporting: Requirements and Benefits

as a management tool and process that can • Fiscal Year—Sometimes called a financial
improve your ability to serve your beneficiaries year or budget year, a period used for
and meet donor needs and expectations, you calculating annual (“yearly”) financial
will come to experience its benefits. statements in businesses and other
organizations. It may or may not correspond
This chapter covers general reporting tips and to the calendar year, that is, January 1
details about the specific reports you are likely through December 31. The USG fiscal year
to encounter as a USAID recipient. The first covers a 12-month period that begins October
part, “Getting Started” (5.2), gives program 1 and ends the following September 30.
managers new to USAID reporting several tips • FMO—USAID’s Financial Management Office.
to get the most out of the reporting process.
This chapter also outlines key reporting due • Foreign Tax Report—The report that all
dates (5.2.2) and tips to prepare for special USG recipients must fill out annually to report
or unanticipated reporting requests. the Value-Added Tax (VAT) that was paid to
the host government. The reports are used
The second part, “Your Reporting to ensure that U.S. foreign assistance is not
Requirements” (5.3), details four of the being taxed.
reports typically required under your • Management Decision—The evaluation
Cooperative Agreement. While each agreement of a recommendation by management and a
may vary slightly, many USAID partners must decision on an appropriate course of action.
prepare and submit these reports. Double-
• Pipeline—The amount of funds obligated but
check your agreement for specific requirements.
not yet spent, which is calculated by adding
all funds spent to date and subtracting that
Objectives amount from the total obligation to date.
• Learn best practices for assembling • QPR—Quarterly Performance Report.
effective reports.
• Understand the specific reporting require-
ments and due dates that are common to
most USAID-funded partners.
• Gain an appreciation of how reporting
enhances your ability to serve beneficiaries.

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 5.2 Getting Started 2. Develop a reporting calendar and timeline.
To ensure you have plenty of time to
assemble good reports, list all of the
requirements on a calendar and plan ahead
so you will not be rushed. Make sure all staff
and subrecipients who contribute to each
report are aware of the timeline and due date.
Program managers new to USAID reporting
may find the forms, due dates, and reporting 3. Engage subrecipients early.
requirements challenging. The requirements
are not that complex once you understand Most reports require prime partners to
what is requested. The key is to give yourself gather information from subrecipients.
plenty of time to complete each report and, When creating your reporting calendar,
as mentioned above, engage your staff in allow enough time for your subrecipients
preparing the reports on a routine basis. to give you meaningful input. This not only
leads to a better report, but it also builds
This section includes five tips for producing subrecipients’ capacity by involving them in
excellent reports as well as a list of key the self-evaluation aspects of reporting and
holding them accountable for data gathering
reporting due dates (see Figure 26). In addition, 5
the section provides some general guidelines and deadlines. Be sure to close the loop with
for maintaining your data systems to help subrecipients by sending them copies of the
you prepare for unplanned reporting that reports you submit to USAID.
USAID grantees often must do. Together, these
tips will help you lay the foundation for 4. Tell a consistent story in all of your reports.
successful reporting. There is a negative disconnect if your

Reporting: Requirements and Benefits

performance reports describe a financially
healthy program, but your Federal Financial
Reports show you are going through your
5.2.1 Five Tips for funding more quickly than expected. All of
your reports should be linked together, so
Outstanding Reporting that when your AOTR reviews your program
1. Do not be afraid to tell the truth. documentation, he or she gets an accurate
picture. Quantify all of your conclusions with
It is exciting and rewarding to report on your data, and show how your program is meeting
program’s successes, but sometimes your targets and staying on budget. This allows
reports will have some bad news, too. Do not your AOTR to conclude that your program is
try to hide the challenges you are facing. Your doing well.
Agreement Officer’s Technical Representative
(AOTR) is on your side and wants to help, 5. Do not surprise your AOTR or AO.
but he or she can only do so if you provide an
honest assessment. Program managers who Reports document various aspects of your
demonstrate they can overcome unforeseen program—they are not the primary means
challenges make positive impressions of communicating with your funding agency.
on donors. You should discuss major challenges with
budget, staff, partnerships, or implementation
strategies with your AOTR first, and
The USG fiscal year document them later in your reports.

The USG fiscal year covers a 12-month period

that begins October 1 and ends the following
September 30.
1st Quarter: October 1–December 31
2nd Quarter: January 1–March 31
3rd Quarter: April 1–June 30
4th Quarter: July 1–September 30

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 process for data entry, you may have to
5.2.2 Reporting Due Dates scramble to compile these numbers on
short notice.
Figure 26—Reports, Frequency, and Submission Dates

Report Frequency Due date to be

submitted 5.3 Your Reporting
Federal Quarterly Thirty days after Requirements
Financial the end of each
calendar quarter: This section outlines the four reports required
Report January 30, April 30, of USAID-funded programs:
July 30, October 30
• Federal Financial Report (5.3.1)
Performance Quarterly January 30, April 30,
Report July 30, October 30 • Performance Report (5.3.2)

Annual Audit Annually Thirty days after you • Annual Audit (5.3.3)
receive it from your • Foreign Tax (VAT) Report (5.3.4)
auditor. The audit
and report must be
5 submitted within nine These reports must be submitted to USAID
months after the end as outlined in your Cooperative Agreement.
of your fiscal year Reporting related to award close out is covered
Foreign Tax Annually April 16 in chapter 6 of this Guide.
Report

Final Report* Award Ninety days after the Figure 27—Reporting Questions
Reporting: Requirements and Benefits

end of the award

* The Final Report is covered in chapter 6—Award Close Out.

5.2.3 Preparing for Other

Reporting Requests
USAID grantees are sometimes asked to
respond to a number of special, unplanned or
“ad hoc” report requests. These requests can
demand a quick response and generally include
target or budget status or estimates. Your AOTR
may provide a spreadsheet template or other
guidance on how to submit the needed data.
If you are unable to meet the deadline or are
unsure about what exactly is called for, contact
your AOTR immediately for additional guidance
on how to respond.

If your M&E and financial systems are up to

date, it probably will not take you long to pull
the numbers together. Always make sure your
financial and programmatic reports “match.”
However, if you do not have a disciplined

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 5.3.1 Federal Financial Report Specifics
Your Cooperative Agreement describes financial
Report (SF-425) reporting requirements, including:
The Federal Financial Report, also referred to • when (and how often) to submit reports;
as SF-425, is a snapshot of where you stand on • what form to use; and
spending on your award and tracks how much
cost share your organization has contributed. • how (and to whom) to submit reports.
These reports are due quarterly to the FMO. Figure 29—Financial Forms and Uses

Form Use

SF-425 Key Points SF-270 (for more To request advances

information, see 4.3.1.2) and reimbursements
Due: Quarterly
Form: SF-425 (pdf) — download at SF-425 To report on financial
http://www.whitehouse.gov/omb/grants/standard_ status, cost share and
forms/ff_report.pdf program income

Instructions: download at SF-1034 (for more To request funds and

http://www.whitehouse.gov/omb/grants/standard_ information, see 4.3.1.3) liquidate advances 5
forms/ffr_instructions.pdf
Submit to: FMO When Is My Federal Financial Report Due?
(cc: AOTR and AO) Federal Financial Reports are due 30 days
after the end of a quarter, based on USAID’s
fiscal year (October 1–September 30). You are

Reporting: Requirements and Benefits

required to report every quarter through the
How Does This Help My Program? end of your award’s period of performance. At
the end of your award, you will submit a final
You can use the information in SF-425, coupled Federal Financial Report within 90 calendar
with your budget, to determine whether you are days. Figure 30 lists the due dates for each
spending too quickly or too slowly by examining quarter and what period each report covers.
pipeline and burn rates. When combined with
performance data, you can ascertain whether
How to Fill Out the SF-425
you are spending efficiently to meet your targets
by analyzing unit costs. (For more information What follows are tips to help you complete
on pipelines, burn rates, and unit costs, see the new form. These tips are not meant to
section 4.3.1.4.) substitute for the USG instructions found online
or for guidance provided by your FMO. Instead,
Figure 28—Measuring a Program’s Financial Health
they address some questions first-time users
may have when filling out this form.

Figure 30—Federal Financial Report Submission Dates

Period Due Covers

Quarter 1 Jan. 31 Oct. 1–Dec. 31

(of the previous
calendar year)

Quarter 2 Apr. 30 Jan. 1–Mar. 31

Quarter 3 July 31 Apr. 1–June 30

Quarter 4 Oct. 31 July 1–Sept. 30

Final Federal 90 days Entire life of award

Financial after the end
Report of the award

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 Use a separate SF-425 for quarterly reporting can download for free at http://www.adobe.com/
for each Cooperative Agreement. Begin by products/acrobat/readstep2.html. Start by filling
downloading a PDF version of the SF-425. out the top portion, shown in Figure 31. It asks
To take advantage of some of the features, for basic information about your organization,
including auto-calculations, be sure you have grant, and the period covered in this report.
the latest version of Adobe Reader®, which you

Figure 31—Top Portion of the SF-425

1 2

4b 5 7
5
8 9

The numbers in the following list correspond to 7. Basis of Accounting—Your accountant or

the numbered blanks on the SF-425. financial manager will know whether you are
reporting on a cash or an accrual basis.
Reporting: Requirements and Benefits

1. Federal Agency and Organizational

Element to Which Report is Submitted— 8. Project/Grant Period—The start and end
USAID or other USG funder. dates of your award.

2. Federal Grant or Other Identifying Number 9. Reporting Period End Date—The date for
Assigned by Federal Agency—Insert your each report depends on which quarter you
Cooperative Agreement identification number, are covering:
which may look something like XXX-A-00-09- • 1st Quarter: December 31
00XXX-00 and can be found on the first page
of your agreement. • 2nd Quarter: March 31
• 3rd Quarter: June 30
4b. EIN—For U.S. grantees only.
• 4th Quarter: September 30.
5. Recipient Account Number or Identifying
Number—This number is for your use only;
the USG does not require it.

Next, fill out the middle portion, which contains the main calculations as outlined in Figure 32.

Figure 32—Middle Portion of the SF-425

a
b c
d
e
f
g
h
i
j
k

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 Some numbers will be calculated automatically (f) Federal share of unliquidated
if you are using Adobe Reader®. Once you obligations—Enter the total amount of
have finished, double-check to make sure all unexpended USAID-obligated funds as of
the calculations are correct. the reporting period end date. This amount
should be calculated by subtracting the
Section 10: Transactions USG share of expenditures, 10e, from the
current obligation amount as listed in the
Federal Cash most recent modification.
(a) Cash Receipts—Enter the total amount (g) Total Federal share—Enter the amount by
of actual cash received from the USG adding line 10e plus line 10f. This will equal
(before deduction of bank fees and other the total federal funds obligated as of the
miscellaneous fees) through the end date reporting period date.
of the reporting period specified in box 9.
(h) Unobligated balance of Federal funds—
(b) Cash Disbursements—Enter the Subtract line 10g from line 10d.
cumulative amount of cash and check
payments as of the reporting period
end date. This total includes the sum of Recipient Share
cash expended for goods and services, (i) Total recipient share required—Enter
cash advances, and payments made to the total required recipient cost share as 5
subrecipients and contractors as well as listed in the Cooperative Agreement. If
the amount of indirect expenses charged this amount has been revised through a
to the award. modification, please use the amount
(c) Cash on Hand—Enter the amount of line listed in the modification.
10a minus line 10b. (j) Recipient share of expenditures—Enter

Reporting: Requirements and Benefits

the amount of cost share expended through
Federal Expenditures and the reporting period.
Unobligated Balance (k) Remaining recipient share to be
(d) Total Federal funds authorized— provided—Enter the amount by subtracting
Enter the total award amount. This refers line 10i minus line 10j.
to the “Total Estimated USAID Amount”
listed in your Cooperative Agreement. If
Program Income
this amount has been revised through a
modification, please use the amount If your agreement allows for program income,
listed in the modification. please refer to the detailed instructions on how
to fill out lines 10l through 10o at http://www.
(e) Federal share of expenditures—Enter
whitehouse.gov/omb/grants/standard_forms/
the total amount of USAID-obligated funds
ffr_instructions.pdf.
expended as of the reporting period end
date. For grantees working on a cash
Next, fill out the bottom portion, which contains
basis, this amount should equal 10b, Cash
the main calculations as outlined below. Some
Disbursements. For grantees working on
figures will be calculated automatically if you
an accrual basis, please enter the total
are using Adobe Reader®. Once you have
USAID-obligated funds disbursed plus
finished, double-check to make sure all the
funds committed.
calculations are correct.

Figure 33—Bottom Portion of the SF-425

b d
e

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 Finally, the bottom portion contains information How Does This Help My Program?
on indirect expenses and a place for the sign-
Performance reports are arguably the most
ature. All documents must be signed by the
important reports of your program. Each
authorized certifying officer.
performance report synthesizes results from
all the work you and your subrecipients are
Section 11: Indirect Expense doing and compares it to your budget and
Complete this information only if the USG and in workplan. This gives you the opportunity
accordance with your Cooperative Agreement. to evaluate your progress and tweak your
(b) Rate—Enter the indirect cost rate(s) in activities to maximize your success. A robust
effect during the reporting period. performance reporting exercise strengthens
ties with subrecipients and ensures that you
(d) Base—Enter the total amount against
are meeting beneficiary needs. Though not as
which the indirect rate is applied.
comprehensive as a formal program evaluation,
(e) Amount Charged—Enter the amount comprehensive performance reports are an
of indirect costs charged during the important management tool to ensure that all
period specified. aspects of your program are being implemented
as planned. In addition, they will serve as a
key source of information for formal, external
5 Section 13: Certification evaluations of your program.
and Submission
Once you have finished, double-check to Report Specifics
make sure all calculations are correct. Type Separate performance reports are required
in the name of the authorized certifying official for each award. In addition, if you have a
(13a), have this person sign the form (13b), multi-country award, you need to consolidate
Reporting: Requirements and Benefits

provide his or her contact information (13c/13d), your separate reports for each country into
and date the form (13e). Then scan and e-mail one report. USAID generally sets the due
the form to your FMO at [email protected], copying date at 30 days after the end of the calendar
your AOTR. Always make a copy for your file, quarter, but be sure to consult your Cooperative
and then mail the original to your FMO. Agreement for specific requirements.
If you have not heard from your FMO within
10 days, follow up to make sure your Performance reports contain a narrative and
submission was received. data as directed by your AOTR. The following
tips will help you develop the best performance
report possible.

5.3.2 Performance Reports 1. Start by involving subrecipients and staff.

(Quarterly) The process of preparing performance
reports provides opportunities to
Key Points communicate with your staff and
subrecipients about your program. To aid
Due: Typically quarterly this process, provide subrecipients with a
Form: No fixed form, but USAID may provide simplified reporting template and a deadline
a template for submitting their contributions to the
Submit to: AOTR or as directed by your report. Develop a culture of reporting and
Cooperative Agreement a system for maintaining these reports so
they can serve as the basis for your required
reports. You may want to facilitate training
sessions with staff and subrecipients to
Performance reports document how the project ensure that they fully understand the kind
is progressing and compare actual results with of information you are requesting and the
the targets in the workplan. You typically will be level of detail required. Gather your staff to
required to compile and submit these reports discuss progress over a particular period. In
every three months. addition, allow sufficient time between the
subrecipient’s deadline and the submission
date to consolidate and finalize your report.

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 2. Do not surprise your AOTR. 7. Show how your program contributes to
related efforts in your country.
When your AOTR reads your report, there
should be no surprises. Ensure that your Your report should not just look at the
AOTR is aware of major changes that affect performance of your program; it should
your budget or targets (such as changes in also show how your activity is linking with
subrecipients, geographic location, or Key and contributing to related efforts in your
Personnel) before they happen, since many country. If relevant, tell how your program
require approval. Do not wait to notify your links to other programs and works with the
AOTR via the performance report. This government and/or other local NGOs by
report should document these changes and participating in technical working groups to
update your progress since putting these build capacity and demonstrate and share
changes into place. lessons learned and successes.

3. Take the time to do an honest evaluation. 8. Keep documentation for your final
performance report.
With many day-to-day demands, it is
tempting to reduce the effort you put into the Performance reports and workplans can
report. However, the performance report is focus too much of our attention on the yearly
one of the most important reports of your segments of our programs as opposed
5
program. When evaluating your progress to the longer-term picture. However, your
over the past year, there will be successes program is an ongoing effort. Above and
and challenges. A good performance report beyond meeting targets and staying within
provides a balanced look at the program’s budget, your staff are constantly refining a
progress and setbacks. program model to address the challenges
in the communities where you work to be

Reporting: Requirements and Benefits

4. Quantify your conclusions with data. more effective, sustainable, and efficient.
As you refine your model, document your
While the bulk of your performance report
activities. This will help you write your final
may be a narrative discussion of progress
performance report, and it will provide
and setbacks, the core of your report is
guidance should you want to expand your
the data generated by your M&E system.
model in the future or try to replicate it
You should be able to demonstrate your
elsewhere. It will also allow you to avoid
successes and challenges by reviewing and
making the same mistakes you may have
analyzing your data, including both financial
made in the past.
performance and the unit cost of a service.
9. Share with subrecipients and staff.
5. Use your workplan and budget as baseline
data sources. You began the performance report process
by gathering input from subrecipients and
The “data” that are driving your report come
your staff. Close the loop at the end of
from your M&E system and your accounting
the process by sharing the final document
system (to show actual costs). However,
with them. Performance reports are public
to measure performance, you must compare
documents that can be accessed by anyone,
these actual data to your workplan and
so it is fine to share them with staff and
workplan budget. This comparison shows
subrecipients. Often, partners and staff
whether your program exceeded, met, or fell
become focused on their piece of the puzzle.
short of your expectations.
Sharing the program performance reports
with everyone is an opportunity to keep your
6. Preview your next workplan.
team engaged and focused on the bigger
Use the performance report as a baseline picture. Consider taking time to give an
for future activities. You must address overview of the report and (as with tip #7) to
challenges you faced in the past year in the present a preview of upcoming adjustments
next workplan. Preview various options your in the coming year.
organization is planning in the next year to
address these challenges.

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 10. Be prepared and flexible to respond to No matter how you format the report, it is
unexpected USAID requests. important to include the following information:
One of your unwritten opportunities is to • A comparison of actual accomplishments
assist USAID by complying with unexpected with the targets you set for that period. These
requests, such as data for a Portfolio targets should correspond to the targets laid
Review, a success story about your project, out in the Workplan Logic Matrix of
etc. While these are not deliverables or your workplan.
requirements in a contractual sense, the
• When possible, try to relate the targets
requests should be taken seriously. Timely
achieved to cost data to compute the unit
and quality submissions will reflect well on
cost for each activity. For example, if you are
your organization and support the overall
reporting that your prevention activity reached
aims of the project and USAID.
1,000 people for the period, and you spent
US$25,000 on this activity, you can report
Your AOTR may provide you with a template
that it cost approximately US$25 to reach
for your Performance Reports, but, if not, the
each person.
outline in Figure 34 may help you get started.
• If you fell short of reaching your targets,
explain why.
5 Figure 34—Sample Performance Report Outline
• If you had high unit costs or unforeseen
Sample Performance Report Outline expenses, explain why.
I Title Page
f Organization/program name
f Agreement number
5.3.3 Annual Audit
Reporting: Requirements and Benefits

f Reporting timeline
f Date of submission
An audit is an independent review and
examination of system, records, and activities.
f Agreement start and end date It is required annually for both prime recipients
II Table of Contents and subrecipients that receive a certain
threshold of funds from the USG. The purpose
III Acronyms of the audit is to evaluate your organization’s
spending of USAID funds to ensure that you
IV Executive Summary/Overview—General
are in compliance with the regulations set forth
program information
in your agreement. The audit also examines
V Summary Table of Indicators—Targets your internal controls to ensure that appropriate
and results policies and procedures are in place and being
followed. To ensure objectivity, an independent
VI Project Implementation by Strategic
Objective—Project activities summarized
auditor whom you hire and pay for with USAID
by strategic objectives funds conducts the annual audit. (For more
detailed information on audits, see Circular
VII Monitoring and Evaluation A-133, http://www.whitehouse.gov/omb/
f Overview rewrite/circulars/a133/a133.html.)
f Results of surveys, studies,
or evaluations
Audit Key Points
f Descriptions of new tools or methods
Due: Nine months after the end of your fiscal
f M&E table of indicators
year or within 30 days of receiving the report
VIII Program Management—Major management- from your auditor, whichever comes first
related activities Form: SF-SAC (http://harvester. census.gov/
fac/collect/formoptions.html) plus attachments
IX Budget—Overview of expenditures
(see Audit Package box)
X Other Issues—Sustainability and coordination Submit to: U.S.-based organizations submit
with other groups to the Federal Audit Clearinghouse; non-U.S.-
based organizations submit to USAID
XI Success Stories

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 The annual audit is rather straightforward. from the USG (either directly or as
Its purpose is to answer four questions: a subrecipient) during their fiscal year.
1. Were the financial reports you submitted • Foreign nonprofit organizations where
during the year accurate? the principal USG donor is USAID must
have an audit conducted if they expend at
2. Did you follow the rules, regulations, and least US$300,000 USG funds during their
policies governing the award? fiscal year.
• For-profit organizations where the principal
3. What is the status of any previous USG donor is USAID will be reviewed
audit findings? annually to determine whether an audit is
required (ask your AOTR and AO if an audit
4. Are there any questionable costs? is required).
If your organization does not meet any of these
How Does This Help My Program? requirements, it is exempt from annual audit
The annual audit gives you a chance to have requirements, and audit costs are not allowable
an independent expert double-check that unless the AO requests a project-specific audit.
your organization is operating successfully in However, you must still make records available
support of your programs. It is like having an for review or audit upon USAID’s request. 5
organizational health exam every year to check Remember, you also must comply with any
whether everything is running the way it is host-country audit requirements.
supposed to and to catch any problems early.
Scope of an Audit
Key Audit Terms The audit covers your organization’s fiscal year.

Reporting: Requirements and Benefits

f Allowable Cost—An incurred cost determined In addition, it may look at previous audit findings
to be an acceptable charge to the USAID. to determine whether corrective actions taken
were sufficient to address previous findings.
f Audit—An independent review and
examination of system records and activities.
An audit typically covers your entire
f Finding—The answer to an audit objective organization. However, if you have just one
that is supported by sufficient, competent, program that receives USAID funding, you
and relevant evidence.
may choose to have a single-program audit.
f Management Decision—The evaluation of Additionally, if you have a large, complex
a recommendation by management and a organization with many different operational
decision on an appropriate course of action. units, it is possible to have an audit focus on the
organizational unit that receives USAID funds.

Report Specifics What Are Primes and

The annual audit looks at the management Subs Responsible For if a
of all funding you receive from the USG, Subrecipient Is Audited?
whether you are a subrecipient or a prime
recipient. In other words, if an organization has Prime recipients must ensure that subrecipients
a Cooperative Agreement and direct funding that meet the audit threshold are audited as well.
from USAID, and it also receives funding from
the U.S. Centers for Disease Control and Subrecipients submit their audits directly to
Prevention as a subrecipient to another NGO, USAID. U.S. law only requires subs to submit
the auditor will conduct one audit that covers their audit to the prime if there are findings
both awards. Not every organization that related to the funding from that award. Some
receives funding from USAID (either directly prime recipients prefer to require their subs
or as a sub) is required to conduct an to provide copies of audits regardless of
annual audit. whether there are any findings by including this
stipulation in the contractual agreements. If you,
The following list summarizes the different as the prime, want the audit reports from your
scenarios when various types of organizations subrecipients, please remember to insert this
meet the threshold that requires an A-133 audit: stipulation in your subagreement.

• U.S.-based nonprofit organizations that

expend US$500,000 or more in total funding

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 When subs have findings, primes issue financial reports covering the fiscal year being
management decisions on the corrective audited. Prepare a schedule of expenditures
actions. Management decisions must be issued made under your USAID awards and prepare
within six months of receiving the audit. a schedule (summary) of prior audit findings
(if any).

Who May Conduct an Audit? 2. Audit—Information gathering and report

You are required to contract with an writing conducted by the auditor.
independent, non-government auditor to
perform these audits. USAID retains the 3. Organization’s Response—Replying to
right to conduct or arrange for additional any findings. Once your audit is complete,
audits, reviews, and evaluations. your organization must prepare a corrective
action plan to address each audit finding in
USAID-funded, foreign-based organizations the auditor’s report. For each item, provide
should contact their in-country or regional the following:
Mission to request a list of organizations
authorized to conduct audits of USG programs. • responsible individual;
U.S.-based nonprofit organizations must follow • corrective action planned; and
the procurement process and regulations stated
5 in their Cooperative Agreements.
• anticipated completion date.
If you do not agree with an audit finding or
If an audit is determined necessary for a USAID- believe corrective action is not required, then
funded, for-profit organization, a USG official may include an explanation and specific reasons.
conduct it, rather than a private auditor. If a USG
auditor is not available, USAID will direct the for- 4. Submission—Assembling the required
Reporting: Requirements and Benefits

profit organization to hire an independent auditor documentation and submitting it to USAID.

from a list of USG-approved local audit firms. U.S.-based nonprofit organizations must
All costs for properly conducted audits are submit their audit packages to the Federal
allowable and may be charged to the award. Audit Clearinghouse (FAC) within 30 days of
receiving the report from your auditor or nine
months after the end of your fiscal year (the
The Audit Process audit period). You are not required to submit
Figure 35 gives is an overview of the audit your audit package directly to USAID. Instead,
process, then several of the key steps you are you will submit one copy to the FAC, plus one
responsible for are outlined in more detail. for each USG agency that had audit findings
in your report. The FAC will then distribute the
The audit process comprises copies to USAID and other relevant funding
agencies as necessary.
six phases:
1. Pre-Audit—What you must prepare before Foreign and for-profit organizations may
the auditor can begin the formal audit. Identify have different submission rules set by USAID.
all USAID funds received and the programs Please contact USAID or the in-country or
under which you received them. Gather regional Mission office for guidance.

Figure 35—Key Steps in the Audit Process

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 6. Post-Audit—Follow up on and implement
Federal Audit Clearinghouse (FAC) any required corrective action. After the
USG oversight agency or prime issues a
Bureau of the Census
management decision, you will be responsible
1201 E. 10th Street
Jeffersonville, IN 47132 for implementing any necessary corrective
USA action. Be sure to maintain documentation
showing progress on each item.

After completing your corrective action plan, Even if there were no findings relevant to
compile the rest of your audit package USAID, it still may request a copy of your
(see Audit Package box). audit directly from you. Further, USAID
reserves the right to conduct its own audits,
5. Management Decision—Reviewing regardless of the outcomes of your audits.
proposed corrective actions and issuing a
decision. Within six months of receiving the Finally, you must maintain records and a
audit package, the agency or the prime (in the copy of the audit package for a minimum of
case of a finding for a subrecipient) will issue three years following submission or three
a corresponding management decision for years after you resolved a finding from that
each finding. year. USAID retains the right to conduct or 5
arrange for additional audits, reviews,
If you receive funding from multiple USG and evaluations.
agencies, the oversight agency (the USG
agency that provides the predominant amount
of funding in a given year) takes the lead on
management decisions for any audit findings 5.3.4 Foreign Tax

Reporting: Requirements and Benefits

that relate to multiple USG agencies.
(VAT) Reporting
The management decision must clearly state
whether the audit finding is sustained, the Organizations implementing some
reasons for the decision, and the expected development projects are exempt from certain
action(s) of the audited organization, such as taxes and duties imposed by the government
repaying disallowed costs, making financial of the country in which they are implementing.
adjustments, or taking other action. Exemptions cover both prime recipients
and subrecipients.
If the audited organization has not completed
corrective action, a timetable for follow-up will Bilateral agreements between the USG and
be given. The management decision should host governments outline separately for each
describe any appeal process available to country the specific exemptions and the
the auditee. process for requesting reimbursements of taxes
paid. Below are several common exemptions
as well as taxes you may be required to pay.
The Audit Package You will need to find out what exemptions
f SF-SAC Form (Data Collection Form for and requirements are relevant in each of the
Reporting on Audits (http://www.whitehouse. countries in which your organization is working.
gov/omb/grants/form_sf-sac/sfsac.pdf)
f Financial Statements
Foreign Tax (VAT) Reporting Key Points
f Schedule of Expenditures under USG Awards
Who must report: Any organization that
f Summary Schedule of Previous Audit purchased US$500 or more with USAID funds
Findings
Due: Annually on April 16
f The Auditor’s Report
Form: No standard form; see below for outline
• Opinion on the Financial Statements
Submit to: If not specified, submit to FMO
• Opinion on the Schedule of Expenditures and AOTR
• Report on Internal Controls for
Financial Statements
• Report on Internal Controls for Compliance
How Does This Report
• Schedule of Findings of Questionable Costs
Help My Program?
f Corrective Action Plan The Foreign Tax Report helps ensure that
you are using the USG funds for their intended

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 purposes. USAID uses these reports to track Country Specifics
whether foreign governments are complying
Each country negotiates its own bilateral
with the terms of their bilateral agreement.
agreement with the United States, which
includes provisions regarding the taxation
All organizations receiving USAID funding
of U.S. foreign assistance. These provisions
must submit a Foreign Tax Report by April 16
typically address what taxes are exempt and
each year. All organizations receiving USAID
how organizations implementing USAID-funded
funds must comply with the foreign tax reporting
programs can receive reimbursements for any
requirements established by the U.S. Embassy
taxes paid. Exemptions and reimbursement
in that country.
procedures can vary widely from country to
country, but it is your responsibility to check with
the Mission regarding the rules in the country
Taxes Exempt in Most Countries where you are working.
• Value-Added Tax (VAT) levied on commodities
and services purchased in-country, and Work with the in-country USAID team to answer
the following questions:
• customs duties levied on commodities
imported into the country for use in USAID- • What taxes, if any, am I exempt from paying?
5 funded projects. • What taxes, if any, am I required to pay?
• What is the process for obtaining an
Taxes Not Exempt exemption or reimbursement?
The process for obtaining an exemption or
• VAT or sales tax levied on items purchased
reimbursement varies by country. Some
outside of the host country where you are
countries provide VAT exemption letters to show
Reporting: Requirements and Benefits

implementing your USAID-funded program.

vendors at the time of the purchase. Others
For example, if an organization purchases
require you to pay the VAT and later request
commodities in South Africa for use in its
reimbursement, through either the Revenue
USAID-funded project being implemented in
Authority or the local Mission or Embassy.
Mozambique, it would not be exempt from
paying VAT in South Africa.
Who Must Report?
• Organizations with headquarters outside
the host country, including those in the United Any organization that purchased US$500 or
States or Europe, are not exempt from VAT more worth of commodities with USAID funds,
or sales taxes in their home country, whether or paid any customs duties in the country where
the items purchased are used in the HQ it was operating during the prior fiscal year, is
office or in the field. required to submit an annual report on foreign
taxes. This report is required even if you did
not pay any taxes on those items during the
Other Taxes Levied by reporting period.
Host Governments
All subrecipients under your award with
Though USAID seeks exemptions on all in-country purchases of US$500 or more must
taxes host governments levy against foreign also track taxes paid and reimbursements
assistance projects, there are several received. You must incorporate subrecipient
categories of taxes that you may be required data directly into your report.
to pay, for example:
• taxes levied on services, including lodging What Taxes Do I Report?
and rental of conference facilities;
Only include taxes paid in the Foreign Tax
• payroll taxes; and Report if the following conditions all are true:
• VAT on projects with no USG funding. • You paid the tax to the government in the
Be sure to check with the in-country Mission country where you are implementing.
and other donors for details about what taxes • The transaction was US$500 or more
your organization may be required to pay. (not including the VAT).
• The tax you are paying is one your
USAID recipients will find the “Reporting organization is exempt from paying
Foreign Tax” clause in the standard provisions (for example, if you are not exempt from
in their agreement. lodging taxes in a particular country,
then do not report that).

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 Figure 36—Period Covered in Foreign Tax Reporting

Oct 1 Sept 30 Mar 31 Apr 16

Start of USG End of USG Report Due
Fiscal Year Fiscal Year

Figure A:
Taxes Paid

Figure B:
Total Reimbursement Received

Figure C:
Reimbursement Received from Taxes Paid in Most Recent Fiscal Year (Fig. A, above.)

• The purchase is related to your USAID- • contact name with phone, fax, and e-mail;
funded project. (Report the purchase • agreement number(s);
regardless of whether the specific purchase
is made with USAID funds or is part of cost • amount of foreign taxes assessed by a
share, as long as it is a legitimate part of foreign government on purchases valued at
US$500 or more financed with USAID funds
the project.) 5
under this agreement during the prior fiscal
year. If you work in multiple countries, list
When Is the Report Due? What each country separately. However, if you
Time Frame Should It Cover? work on multiple projects within one country,
report on the total for each country. You
The report is due annually on or before April should only report foreign taxes assessed by

Reporting: Requirements and Benefits

16 and must cover the period October 1 of the the foreign government in the country where
previous fiscal year through September 30 of you are working; do not report foreign taxes
the previous year. You are required to report by a third-party foreign government. For
the following three figures: example, if your program is in Mozambique,
• Figure A. Taxes paid to the host government and you purchase something in South
during the previous fiscal year. This includes Africa using foreign assistance funds, any
VAT and customs duties. taxes imposed by South Africa would not be
included in the report; and
• Figure B. All reimbursements received during
the previous fiscal year, regardless of when • all reimbursements you have received during
the original tax was paid. the fiscal year, regardless of when the foreign
tax was assessed. In addition, provide
• Figure C. Reimbursements received from
a separate figure giving the total of any
the taxes paid through March 31 of the
reimbursements of taxes assessed during
current fiscal year you are reporting on.
the fiscal year you are reporting on that you
received through March 31. This second
Submitting the Report number should be a subset of the
first number. See Figure 37 for an example.
Submit the report to the office listed in your
Cooperative Agreement under the Reporting
of Foreign Taxes standard clause or as directed Foreign Tax Reporting Example
by the U.S. Embassy or USAID’s
Organization: MyNGO
in-country Financial Management Office.
Contact: Jane Smith
Also send a copy to your AOTR.
Phone: +255-555-5555
Fax: +255-555-5556
There is no standard form for the report; E-mail: [email protected]
however, it must contain the following: Agreement Number: XYZ-123
• name of your organization;

Figure 37—Example of Foreign Tax Reporting

Country Taxes Assessed during FY08 Total Reimbursements Reimbursements Received on

Received during FY08 FY08 Taxes through March 31

Mozambique US$0 US$500 US$0

Tanzania US$1,000 US$1,000 US$1,000

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 In this example, the organization is operating back to the original accounting entry that
in two countries: Mozambique and Tanzania. recorded the taxes being paid. This will make
The amounts in this table are summaries by it easy to identify which reimbursements have
country and are not broken down by project or and have not been received.
subrecipient. During FY08, the Mozambican • Establish a log that tracks the tax payment
Government did not assess any taxes on and reimbursement process. This should
the prime recipient (or subrecipients, if any). document each tax payment, reimbursement
However, it did reimburse the organization request, and payment received. You
US$500 for taxes assessed prior to FY08. During may also want to make sure you have
FY08, the Tanzanian Government assessed the a policy for keeping copies of receipts
organization US$1,000 in taxes, but reimbursed and reimbursement requests sent to the
the organization in full by March 31, 2009. You host government or USAID office, as
must submit a separate Foreign Tax Report for applicable (see Figure 38). You will want
each country (Tanzania and Mozambique), to customize your process so it fits in with
as directed by the funding agency. the host-government and USAID in-country
requirements regarding submitting requests
Tracking VAT and Duty and expected turnaround time for
tax reimbursements.
5 Payments and Reimbursements
Your organization must develop a process • Since your subrecipients also may
for tracking VAT and customs duties paid and have purchases of commodities or other
for requesting and receiving reimbursements expenditures covered by these provisions,
from the host government. Establishing such a work with them to submit their reports to you
process greatly simplifies your annual reporting prior to the April 16 deadline, so you will have
and helps ensure that your funds help provide sufficient time to incorporate their data into
Reporting: Requirements and Benefits

services to beneficiaries. your report. Note that their reports also must
include reimbursements through March 31,
Consider the following strategies for tracking so their deadline would need to be sometime
your VAT payments and reimbursements: between April 1 and April 15.

• Develop a list of exemptions and required

taxes, so everyone in your organization VAT Tracking Log Example
involved with procurements is aware of the
Figure 38 is an example of a log for tracking
policy. Share this with subrecipients as well.
your VAT payments, reimbursement requests,
• Create a special code in your accounting and payments received. You can create a log
system for tracking all payments of exempt like this for each country in which you operate; it
taxes. Use this code only for exempt taxes, can include all requests related to that country,
not for legitimate taxes paid. even from different projects. You also may
• Create a special code in your system want to use this log to track VAT payments for
for tracking incoming tax reimbursement transactions of less than US$500 for auditing
payments from the host government. Make purposes, though you will not include these in
sure you can tie the reimbursements received your USAID-required Foreign Tax Report.

Figure 38—Sample Foreign Tax Tracking Log

Acct. Date Vendor Description Transaction VAT* Project Date Date

Sys. Value Reimb. Reimb.
Ref. # (pre-VAT)* Requested Received

210 23-Oct-07 ABC Office $1,200 $120 NPI 31-Oct-07 15-Jan-08

Supplies furniture Ethiopia

223 15-Jan-08 DEF HBC Kits $1,000 $100 NPI 31-Jan-08

Imports Ethiopia

235 02-Feb-08 GHI Computers $2,000 $200 OVC

Computers Project

236 02-Feb-08 JKL Inc. Printer $500 $50 OVC

Project
* You may want to track your payments and reimbursements in local currency.

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 5.4 Summary and References Audits
• Guidelines for Financial Audits Contracted
The keys to successful reporting are simply by Foreign Recipients
knowing the requirements and giving yourself http://www.usaid.gov/policy/ads/500/
enough time to meet the deadlines. This 591maa.pdf
chapter provided a clear outline of what • OMB Circular A-133: Audits of States, Local
USAID expects in terms of specific reporting Governments, and Non-Profit Organizations
requirements and common due dates and http://www.whitehouse.gov/omb/circulars/
shared best practices for completing a133/a133.html
effective reports. Beyond that, this chapter
also explained how the reporting process • USAID ADS Chapter 591: Financial Audits
can be a key management tool and of USAID Contractors, Recipients, and Host
enhance your organization’s ability to Government Entities
better serve beneficiaries. http://www.usaid.gov/policy/ads/500/591.pdf
• FAR (48 CFR part 42)
Now it is up to you to get started early and http://www.access.gpo.gov/nara/cfr/
submit your reports on time. waisidx_08/48cfr42_08.html

References Foreign Tax Reporting 5

Financial Reporting • Guidance on Section 579 Implementation
• 22 CFR 226—Administration of Assistance (Taxation of U.S. Foreign Assistance)
Awards to U.S. Non-Governmental http://www.usaid.gov/policy/ads/300/
Organizations (See subsections 51 for 302mac.pdf
monitoring and reporting program

Reporting: Requirements and Benefits

performance, 52 for financial reporting,
and 71 for close-out procedures.)
http://ecfr.gpoaccess.gov/cgi/t/text/text-
idx?c=ecfr&tpl=/ecfrbrowse/Title22/22cfr226_
main_02.tpl

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CAPResourceGuide_book.indb 114 10/22/10 12:49 PM
6 Award Close Out
PHOTO CREDIT: ©Beacon of Hope.
 Award Close Out
6.1 Overview

6.2 Getting Started

6.2.1 Six Tips for Managing Award Close Out
6.2.2 Planning for Continuity
6.2.3 Award Extensions
6.2.3.1 Requesting an Extension
6.2.4 Subrecipient Close Out
6.2.5 Final Request for Funds
6.2.6 End of Award
6
6.3 Close-Out Policies and Procedures
6.3.1 Financial Close Out
6.3.1.1 Finalizing Total Expenditures
6.3.1.2 Remaining Funds

Award Close Out

6.3.1.3 Meeting Your Cost-Share Requirement
6.3.1.4 Final Federal Financial Report (SF-425)
6.3.1.5 Final Foreign Tax Reporting
6.3.1.6 Final Audit
6.3.2 Administrative Close Out
6.3.2.1 Maintaining Documentation
6.3.3 Human Resource Close Out
6.3.3.1 Team and Interpersonal Dynamics
6.3.3.2 HR Legal Requirements and Contractual Obligations
6.3.4 Final Performance Report

6.4 Post-Award Use of USAID-Funded

Goods and Commodities
6.4.1 Sale of Property and Equipment
6.4.2 Final Inventory Report
6.4.3 Other Close-Out Considerations
6.4.4 Letter to USAID

6.5 Summary

115

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 6.1 Overview
Skip Ahead
Award close out represents the end of a f Award Extensions
particular funding stream, but it is not the end of
f Finalizing Total Expenditures
your work. Rather, it is the start of a transitional
phase for your organization and your team, and f Final SF-425
there may be implications for your beneficiaries. f Maintaining Documentation
f HR Requirements
Whether or not you have additional funding
to maintain your project, the close-out phase f Final Performance Report
is an important time for documenting and f Sale of Property
evaluating what you have learned, as well as
f Final Inventory Report
shifting human, financial, and other resources
to different activities, and meeting your final f Close-Out Timeline and Checklist
responsibilities to USAID under the terms and
conditions of your Cooperative Agreement.

This chapter covers the USAID requirements

for final reporting (6.3.1), regulations concerning
the use of assets purchased with USAID funds 6.2 Getting Started
after the award period is over (6.4), and the
documentation you are required to maintain
after the award (6.3.2.1).

6 Objectives
• Learn what steps you must take to close out
an award and when you need to take them. As an award comes to an end, managers must
• Learn the requirements for final reporting. deal with several important issues:
• Understand what you may and may not do
• Management Challenges—When a projects
with property and other project-related assets
Award Close Out

ends, enthusiasm for it may begin to fade,

after the award has ended.
and staff and partner organizations may
• Understand what project documentation you be eager to move on to the next project. In
are required to maintain and for how long. some instances, staff may turn their attention
to securing new positions or morale may
slip as the end of the project approaches.
Key Terms and Acronyms However, this is a vital time when the loss of
• Close Out—The final phase of a project key staff can disrupt the process of phasing
in which activities are finalized and out or transitioning a program. Ideally, your
administrative tasks completed. organization has other projects to which
• Cost Share—The portion of project or you can reassign staff. However, this is not
program costs the USG does not cover. always the case, and the end of an award
This may be in the form of cash or may also involve the conclusion of some
in-kind contributions. staff members’ contracts. This can lead to
challenging gaps in staffing, especially in
• NICRA—Negotiated Indirect Cost Rate small organizations.
Agreement, a rate negotiated individually
between an organization and USAID to • Donor Requirements—Donors have
cover indirect cost. (For more information deadlines for completing final reporting
on indirect costs and NICRA, see USAID’s requirements and may ask for debriefs
Best Practices Guide for Indirect Costing at from the project team. There are particular
http://www.usaid.gov/business/regulations/ programmatic and financial requirements
BestPractices.pdf.) for USAID.

• No-Cost Extension (also called a Non- • Transition Challenges—If part or all of

Funded Extension)—When the recipient your activities are being shifted to a new
requests and is given additional time beyond funding stream or other implementers, your
the award end date to use unspent funds organization needs to tend to a number of
from the original award to complete activities. financial and program management tasks.

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 Addressing all of these challenges takes your organization’s private or other funds. A
time and money, and you must plan, budget, final evaluation can be extremely valuable to
and start them well before the award’s end your organization beyond the specific project.
date, because you should complete them It can help to measure the impact your work
beforehand if possible, as you cannot spend has had on the communities where you have
project funds after the award end date, and been working—critical information that can
staff may move on to other projects. Even strengthen marketing materials and support
though these tasks will not demand your future proposal efforts. It also allows you
full attention right away, it is best to begin to document lessons learned that can help
preparing for the close-out phase early—as improve the design and implementation of
much as a year before the end of the award. future interventions.

An evaluation gains credibility when

consultants who are independent of your
6.2.1 Six Tips for Managing project conduct it.

Award Close Out To ensure that you have adequate time to

complete a thorough evaluation, contract it
1. Develop a close-out plan. to start no later than six months prior to the
To successfully manage the close out of end of your award. You can share evaluation
your award, start by creating a close-out plan findings and your experiences with other
that details the different activities and when NGOs in your network and in presentations at
they will be completed as well as who will various forums and conferences, where you
oversee them. This will help your organization can meet prospective partners and donors.
keep track of important close-out deadlines
and plan better for the future. 4. Pursue extension requests early. 6
If you have unspent funds as the award
2. Work with staff early to ensure a
end-date approaches, or there are ongoing
smooth transition.
activities that will have a detrimental effect on
One of the biggest challenges at the end the community if stopped, you might consider
of an award is dealing with the impact of requesting an extension. Seek guidance

Award Close Out

staff who leave before the project ends. on whether USAID will consider giving you
If there is a lack of clarity about ongoing an extension and what type of extension
funding or other projects, staff may accept (see 6.2.3) to pursue.
other opportunities prior to the end of the
award. This presents a difficulty not only 5. Work with subrecipients on their close out(s).
for transitioning or closing out the project,
but also because you run the risk of losing It is important to work closely with
some valuable knowledge necessary for final subrecipients during close out for two
reporting when staff members leave. reasons. First, as the prime partner, you are
responsible for ensuring that subs comply
The best strategy is to work with staff early with all financial and other requirements
to see whether there are additional projects under your award, including post-award
or other funding to secure their jobs for the requirements. Therefore, it is in your interest
foreseeable future. However, if their departure to make sure your subrecipients understand
is inevitable, you should work with these and meet their requirements.
staff members to have them document their
experiences, especially as they relate to the Second, if you are handing over activities
final stages of the project, including the final to your subrecipients, the close-out period
report. Throughout this process, consult local is critical to the successful transition of
labor laws to ensure that you comply with all your program. Make sure you have enough
host-country requirements. resources available to complete this
transition, so your subs will be prepared
3. Conduct a final evaluation to measure to manage the activities on their own.
impact and learn lessons.
It is a good idea for subrecipients to close out
Your project budget should include funding 30 to 60 days before the end of your period
for a final, end-of-project evaluation; if not, of performance and not implement activities
you may want to consider funding one with during this time. This will give both you and

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 your subrecipient(s) time to complete close- There are three general types of extensions:
out requirements related to subawards. 1. Non-Funded (also known as a No-Cost)
Extension—This occurs when the recipient
6. Close out with the community. requests and receives additional time beyond
the award end date to use unspent funds from
As you close out, and the donor, your
the original award to complete activities. This
staff, and subrecipients begin to focus on
does not increase the overall award amount;
other projects, be sure to “close out” with
it simply gives you more time to continue
community leaders and beneficiaries to
your program.
maximize their ability to sustain the services
on which they have come to rely. Be sure
A non-funded extension is probably the
to thank community members and leaders
most common type of extension, since it
for supporting your project and staff, and
does not require USAID to obligate additional
make sure they know whom to contact if they
funds beyond the current obligated amount
have questions or need additional support
and helps to ensure that the original project
in the future. In fact, it is advisable to inform
goals are met.
the community of your exit strategy from
the outset to empower its members to take
2. Funded (or Cost) Extension—This occurs
ownership of the program and avoid
when you have run out of funds and time,
surprises during close out.
but you have not met your targets, or you
otherwise need additional time and money
to complete your program.
6.2.2 Planning for Continuity 3. Agreement Expansion—This occurs when
USAID asks you to expand your existing work.
6 One of the first steps in the close-out process
USAID usually provides additional funding
is to assess the need to continue your project’s
services or interventions, and, if warranted, and, sometimes, additional time to complete
to explore options for funding. At least a year the extra work.
before the end of the award, you should start
thinking about whether your organization will: A modification to your agreement may occur
when USAID has a gap in its overall program
• continue the project with funding from that it wants you to fill temporarily while a larger
Award Close Out

new sources; program is being competed. For example,

• request an extension; you are working with several community
organizations, and your Agreement Officer’s
• transfer responsibility for services or Technical Representative (AOTR) asks that
interventions to a local partner that has you expand your project to work with several
alternate funding; or additional organizations for a year while USAID
• simply close out your activities (if, because, develops and solicits a subgranting/capacity-
for example, there is no ongoing need for building program implementer.
the services).

The path you choose will depend on many

factors, which is why it is important to make 6.2.3.1 Requesting
a decision in consultation with the Mission, an Extension
partners, community leaders, beneficiaries,
and donors. To determine whether you will have funds
remaining at the end of your program, review
your pipeline and burn rates. If you believe
your program will benefit from a non-funded
6.2.3 Award Extensions extension, begin discussing this with your AOTR
very early—at least six months prior to the
Programs rarely proceed as predicted, and it end of your award. You will need to undertake
is often difficult to make up for delays simply by different activities if your award is continuing
working faster. Depending on your program’s rather than shutting down. If you wait too long to
particular circumstances and needs, you may request an extension, you risk losing staff and
want to pursue an extension to get extra time may have to restart close-out activities.
and/or funding for your program.
When discussing the possibility of an
extension with your AOTR, be sure to explain

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 why you are unable to complete your award This ends your obligations and releases you
within the original time frame. Further, be from future liability.
prepared to demonstrate how the additional
time will allow you to meet or exceed your Subrecipient close-out requirements are
original targets. If your AOTR is receptive, he or basically the same as those for prime partners,
she may tell you to prepare a formal request in though subs report to the prime and not
writing and include a budget to show how you directly to USAID. Some key requirements you
intend to spend the remaining funds during the may want to coordinate with your subs include:
extension period. The request gets submitted
• Final Performance Reports—Your
to the AO, who will make a final decision and,
subrecipients must contribute to the final
if an extension is approved, will complete a
report, including data. The final performance
modification to your agreement.
report should say whether each subrecipient
achieved its goals and targets. If a subrecipient
If your request for an extension is approved,
fell short, it needs to explain any shortfalls.
you will continue your regular financial and
performance reporting during the extension • Financial Close Out—Be sure your
period at the same intervals as before. (For subrecipients make their final expenditures
detailed reporting requirements, see chapter 5.) and complete their final financial report in
Remember to always get an extension approval time for you to meet your financial
in writing in the form of a modification to reporting deadline.
your agreement. • Inventory Report—Subrecipients are
required to complete a final inventory report
Extensions are never guaranteed, no matter (see 6.4.2).
what the circumstances. Therefore, plan careful
and begin this conversation early. • Records—Subrecipients are required to
maintain the same documentation as primes. 6
Work with your subs to make sure they know
what documentation they must maintain
6.2.4 Subrecipient Close Out and for how long. (For more on maintaining
documentation, see 6.3.2.1.)
Subrecipients must also close out at the end of

Award Close Out

an award, and the prime partner is responsible
for ensuring that they comply with all post-
award requirements. Work with your subs 6.2.5 Final Request for Funds
early so they understand their requirements,
and make sure they have the resources and As your award end date approaches, start
help necessary to comply. Set deadlines for thinking about your final request for funds.
submitting final reports to ensure that there Three months before the end of the award, you
is ample time to incorporate them into your should submit the final Standard Form-270
final reporting. (SF-270) Request for Advance or Reimbursement
or the final Standard Form-1034 (SF-1034),
Some organizations choose to close out according to the arrangements laid out by the
with their subrecipients 30–60 days before Financial Management Office (FMO). (For
the end of the award, so that financial close detailed information on how to fill out the
out, final invoices, property disposal, and final SF-270 and SF-1034, see chapter 4.) In
reporting are all completed prior to the award addition, some agreements may require a final
end date. If so, point this out when you put SF-425 within 90 days of the award end date.
your subagreements in place, so that your
subrecipients are not surprised. Confirm that If your organization is not operating on a
subs know that any costs they incur after quarterly advanced-funding basis, review the
the end date of their subawards will not be SF-270 and SF-1034 deadlines.
reimbursed. If your subrecipients did not close
out before the award end date, you should At this time, it is also best to keep a close
collect all subrecipient reports within 60 days of eye on remaining award funds and outstanding
the end of the award. costs. If your accounting system is cash-based,
rather than accrual-based, set up a special
The final step after receiving your subrecipients’ spreadsheet to track funds during the last
report is to send a close-out letter formally three months of your award.
ending your contractual relationship with subs.

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 There are several key components to
6.2.6 End of Award financial close out, including finalizing total
expenditures, preparing a final financial report,
Check your Cooperative Agreement to
and maintaining documentation. Before you
determine the exact end date of your award.
can complete these steps, however, you must
If you have received an extension, you must
finalize all billing related to the award, including
have a modification of your agreement from
all final payments to subrecipients. Once you
your AO documenting the change that states
complete this process and complete a final
the new end date.
SF-270 or SF-1034, you can finalize your
total expenditures and prepare your closing
At the end of your award, review the information
financial report.
you need for the financial and performance
reports. Most important, stop incurring costs
to be charged to the award. If you foresee the
need to incur expenses after the award ends,
seek prior approval from your AO. Otherwise, 6.3.1.1 Finalizing
you are responsible for any costs you incur after Total Expenditures
the award end date.
The first step in financial close out is to finalize
Note that you are permitted to pay outstanding total expenditures. This process helps to
obligations to vendors for costs incurred prior to determine whether any funds are remaining and
the end date. You must pay all these expenses to make sure your organization has contributed
and reimburse USAID any remaining funds the total minimum required cost share.
within 90 days of the award end date.
As you will recall from chapter 4, award funding
6 is obligated in stages and then disbursed
to your organization through advances or
6.3 Close-Out Policies reimbursements. Determine your totals for the
following categories:
and Procedures
• Total USAID-Award Amount—This is the
There are four key aspects to closing out ceiling or total estimated cost of your award
a project: financial, administrative, human (not including any cost share).
Award Close Out

resource, and programmatic, all of which • Total Obligations—The sum of all USAID
are discussed below. funds obligated to you under this award.
Within 90 days after the end of your award, • Total Disbursements—The total amount
you must submit a final report that includes you actually received from your funding
the following components: agency under this award (that is, the amount
of funds transferred to your organization’s
• Final SF-425 Federal Financial Report bank account through the SF-270 or
(6.3.1.4); SF-1034 requests). Be sure to include
all final disbursements.
• Final Foreign Tax (VAT) Report (6.3.1.5);
• Total Expenditures—The total amount you
• Final Performance Report (6.3.4); spent on the award.
• Final Inventory Report (6.4.2); and - Total Expenditures Charged to
• any other reports specified in your agreement. USAID—A total of all expenditures that
you charged to USAID under this award.
This excludes costs covered by cost share
or other donor contributions.
6.3.1 Financial Close Out • Total Cost-Share Requirement (if any)—
This is the amount included in your original
Twelve months before the end of the award, agreement budget.
your organization’s Program Manager must
• Total Cost-Share Contribution—The sum
develop a workplan and budget for the project’s
of in-kind and cash contributions contributed
final year that includes costs for all close out–
toward the award.
related activities. Not only is this a requirement,
but it also will make the close-out process
easier for you.

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 2. Remaining Obligation
6.3.1.2 Remaining Funds
A remaining obligation is any amount of
This section uses several example calculations obligated funds that have not been disbursed.
based on the sample data in Figure 39: This amount is calculated as follows:
Total Obligation – Total Disbursements =
Figure 39—Sample Data on Remaining Award Funds Remaining Obligation
Example: US$3,400,000 – US$3,200,000 =
Total Award Amount (from Your US$3,500,000
Cooperative Agreement)
US$200,000

Total Obligations US$3,400,000 It is critical that you track this amount,

especially in the final months of your award.
Total Disbursements US$3,200,000
If you need to complete any final award
Total Expenditures US$3,989,100 activities before the end of the award, you
can draw on your remaining obligation to
Total Expenditures Charged to USAID US$3,089,100
cover these costs. It also may be possible
Total Cost-Share Requirement US$1,000,000 for your organization to receive a non-funded
extension (6.2.3) to continue your program if
Total Cost-Share Contribution US$ 900,000
part of your obligation is remaining.

There are three important categories of 3. Unspent Advanced Funds

remaining funds to calculate:
The final category of remaining funds is
1. unobligated funds; money advanced to you that you have not
2. remaining obligation; and spent. This amount is calculated as follows:
3. unspent advanced funds. Total Disbursements – Total Expenditures 6
(USAID Share)* = Unspent Advanced Funds
The first two categories are funds you may Example: US$3,200,000 – US$3,089,100 =
still be eligible to receive before the end of the US$120,900
award. The third category is unspent funds
that you will have to return to USAID unless If your organization has been advanced funds
you receive a non-funded extension or other that you have not spent by the time the award

Award Close Out

modification that allows you to spend the funds. ends, then you must return those remaining
funds. When calculating this, be sure to list all
Toward the end of your award, it is important final expenditures, including all final invoices
to determine what funds, if any, remain that and expenses from contractors, suppliers,
you have not disbursed. These include both and subrecipients.
unobligated and obligated funds.

1. Unobligated Funds 6.3.1.3 Meeting Your Cost-

Unobligated funds are the difference between Share Requirement
funds that have been obligated and the total
award amount. This amount is calculated If your organization committed to contributing a
as follows: cost-share amount to the award, then you must
account for and document it. The calculation
Total USAID Award – Total Obligation =
to ensure you have met the cost-share
Unobligated Funds
requirement is:
Example: US$3,500,000 – US$3,400,000 =
US$100,000 Cost-Share Requirement – Total Cost-Share
Contribution = Cost-Share Balance
USAID has no obligation to disburse any Example: US$1,000,000 – US$900,000 =
funds it has not obligated. These funds US$100,000
are made available to you based on the
availability of funds and continued need In this example, the organization committed
for program activities. If you make any US$1 million in cost share, but only contributed
expenditures above the obligated amount, US$900,000 during the life of the award. This
you do so at your own risk. leaves a US$100,000 cost-share balance. As

* In calculating remaining funds, be sure to take out any expenditures covered by cost-share contributions. In our example, the total expenditures =
US$3,989,100, but the cost-share contribution = US$900,000. Therefore, the total USAID share of the expenditures = US$3,089,100.

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 your organization is contractually obligated Tax (VAT) Report to the office listed in your
to meet your cost-share requirement, you will Cooperative Agreement under the Reporting of
be required either to reimburse USAID for the Foreign Taxes standard clause. The VAT report
balance or have the amount deducted from should cover all taxes your organization paid
any final reimbursement requests. (For more and for which the host government reimbursed
information on cost share, see chapter 9.) you since the last tax reporting cycle through
the end of your award. If you receive
reimbursements later, you must submit these
funds to USAID. (For more information
6.3.1.4 Final Federal on Foreign Tax Reports, see chapter 5.)

Financial Report (SF-425)

Your final Federal Financial Report is due
90 days after the award end date and may be 6.3.1.6 Final Audit
subject to NICRA adjustments based on your
One fiscal year after the end of the award,
own or a USAID audit. The report includes the
conduct a final audit covering the last
final quarter of activity, all final transactions and
year of your award. You may conduct
expenditures, and the cumulative totals for your
this simultaneously with the end of your
entire award. This report is submitted using the
organization’s fiscal year and submit it as you
Standard Form (SF)-425—the same form used
would other audits in accordance with the terms
to submit your quarterly financial reports. (For
of your agreement. (For more information,
an explanation of how to complete the SF-425,
review the “Accounting, Audit and Records”
see chapter 5.)
provision in your Cooperative Agreement.)
• The report is due 90 days after the end of the
6 award. The end date of the award is indicated
in your original award, unless you have been
granted an extension (6.2.3).* 6.3.2 Administrative
• Block 6 (Report Type) will indicate that this is Close Out
a final report.
• Block 9 (Reporting Period End Date) will Administrative close out consists of completing
Award Close Out

include the dates for the entire award. nonfinancial tasks that may have financial
implications. You must:

The calculations for the “current period” will • Ensure compliance with USAID standards
include the final quarter of the award, and the on the types of documents that need to be
“cumulative totals” will equal the cumulative retained. (Remember, you must be able
totals you spent during the entire life of to provide documents should USAID
the award. request them.)
• Close bank account set up specifically
Please note that blocks 10i–k (Recipient for this program when it is no longer needed.
Share) is where USAID will look to see whether
• Terminate leases (if appropriate) on rented
you have met your cost-share contribution
office space that you do not plan to use after
requirement, if applicable. Ensure that this
the award.
section includes all of your in-kind and cash
contributions toward the program. Some • Terminate supply contracts (including office
organizations attach a memo to their final supplies, leases).
SF-425 that summarizes their cost-share • Terminate utilities (including electricity, water,
contribution, stating whether it was met and, gas, phone, Internet, fuel).
if not, why not.
• Terminate other service providers (including
mobile phones, security, insurance, storage
contracts, shipping, cleaning, banks).
6.3.1.5 Final Foreign • Obtain a receipt from each vendor indicating
Tax Reporting its acceptance of the notice of termination.
• Maintain the office work environment as long
In the 90 days following the end of the award, as allowable.
you are required to submit a final Foreign
* If you received an extension, you will continue routine quarterly reporting until the end date of the extension period as described in chapter 5.

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 • Settle any obligations related to closing so that when there is a new project, former
your office or other program facilities. For employees, even if they cannot be retained
example, if you shared the office with other now, will be keen to rejoin. If you do not handle
programs and had agreements in place personnel issues well, there is the risk of
covering shared office costs, be sure to complaints, low morale, lack of concentration,
cancel these agreements and inform the and poor performance.
remaining occupants of your intention
to vacate.

Please remember that you cannot charge 6.3.3.1 Team and

for any services provided beyond the end date Interpersonal Dynamics
of the project, so it is important to ensure that
all services you receive are closed out in time. Throughout the close-out process, hold regular
meetings where HR issues are discussed. It is
good practice to find out what worked and what
could be improved. This not only engages your
6.3.2.1 Maintaining current team but also provides lessons you may
Documentation apply going forward. Take notes and include
them in the project final report, as appropriate.
Your organization is required to retain all
Where possible, try to retain employees by
accounting records related to your award for at
reassigning them to other projects. Focus on
least three years following submission of the
those with strong skills and competencies
final expenditure report. USAID retains the right
to drive performance. If opportunities exist,
to audit your organization any time during those
three years. Maintaining documentation also
consider promoting staff to more senior 6
positions. For those who are being reassigned
helps if you need to address litigation or claims.
to other projects, be sure to establish a new
cost account for their salary and benefits
Your subrecipients must maintain the same
beginning from the date they can no longer
documentation for three years following the
be charged to the project that is ending.
end of your award. Work with them to make
If it is not possible to reassign employees,

Award Close Out

sure they understand their obligations and
managers should follow local labor laws when
retain all documentation in a safe location.
ending employment and good HR practice by
Note that some countries have their own
conducting exit interviews to learn how they
records retention requirements that are longer
may improve working conditions and retain
than USAID’s, so make sure that both you and
employees going forward. Exit interviews can
your subrecipients are aware of the provisions.
also provide employees with insights that may
help them make their next career move.

6.3.3 Human Resource For staff who are leaving the organization
on good terms, consider providing a letter of
Close Out recommendation (sometimes called reference
letters or referral letters) to assist the individual
Close out can be a stressful time when in finding a new job. This may be separate from
managers are trying to maintain a balance a certificate of service. The letter can explain
between meeting contractual obligations the circumstances of the individual’s leaving
and considering the individual needs of staff. and offer a concise assessment of his or her
Historically, the focus in close out has been on attributes, abilities, and performance. Three
fulfilling contractual obligations. However, this things to keep in mind: be honest, be sure you
may be perceived as insensitivity to staff who can stand by your words, and retain a copy of
are concerned about their future, particularly the letter for the file.
as the project ends. Communication is key
to sustaining a high level of performance. In addition:
All staff should be informed of the close-out
• Archive and secure files for each staff
process and the HR close-out plan, including
member—During close out, you need to
a clear indication of any efforts to retain staff.
protect the privacy of individuals, particularly
When you address personnel issues fairly,
documents that relate to medical, injury, or
your organization is seen as a good employer,

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 disability issues. Ensure that staff who have include final outcomes, lessons learned,
been let go do not continue to have access and conclusions.
to company files, property, or e-mail.
Be sure to submit the report to your AOTR and
• Ensure that all of the organization’s property
the Development Experience Clearinghouse
is returned—At the completion of their
(DEC) (http://dec.usaid.gov) within 90 days of
assignment, collect from departing staff keys,
the end of the award.
badges, computers, cell phones, etc.
• Confirm that staff are aware of any Many organizations choose to take the final
confidentiality agreement they have performance report one step further and create
signed regarding sharing company something long-lasting that they can share with
information, data, or documents. beneficiaries, the community, subrecipients,
and other NGOs. This allows an organization
to highlight its successes and document its
lessons learned and contribute to the ongoing
6.3.3.2 HR Legal effort to improve interventions in that focus
area. Your organization’s experiences may
Requirements and even help other communities struggling with the
Contractual Obligations same challenges. Some organizations share
this document with Web-based communities
The organization must follow the termination of practice, within their NGO network, or at
laws of the country ensuring payment of regional and international conferences, or
severance and other benefits as delineated they submit it to relevant publications.
by law.
To create this report, you will want to develop
6 Staff have a right to receive a certificate of a separate document from the one you provided
service. This can be as basic as providing to USAID, but you will still need to credit
name of employer, staff name, date of USAID, the same way you would on other
commencement of work, date of termination, project-related public communication products.
and location of work. (For more information on branding, see
chapter 3.) An end-of-project evaluation
(see 6.2.1) that objectively documents the
Award Close Out

Within the rules pertaining to the country of

employment, staff need to receive their final impact of your project and provides an
salary, payment of any outstanding expense independent analysis of your project’s success
claims, outstanding leave days not taken, will greatly enhance the quality of this report.
service/loyalty or severance payments, and
other payments mandated by your organization.
Additionally, staff need to be able to transfer
their pension contributions.
6.4 Post-Award Use of
Where staff are eligible for repatriation, all the
costs need to be incurred prior to the project
USAID-Funded Goods
completion date, with shipping costs being and Commodities
agreed before the end date (even if shipping
occurs after the end after the project). At its discretion, USAID determines the
disposition of all USAID-funded goods and
commodities. As a grantee, you should
review the regulations (22 CFR 226.34,
6.3.4 Final http://edocket.access.gpo.gov/cfr_2007/aprqtr/
pdf/22cfr226.34.pdf) regarding the sale or
Performance Report use of equipment outside of award-related
activities three months before the award end
The final performance report is somewhat date. After reviewing the regulations, prepare a
similar to the Quarterly Performance Report disposition plan—a detailed description of what
(described in chapter 5), though it covers the you propose to do with equipment or unused
entire award period. Your AOTR may give you supplies when the award ends. You must
a specific outline or template to follow. At a submit this to your AO, who will either approve
minimum, your final performance report will your proposal or provide further instructions.

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 6.4.1 Sale of Property 6.4.2 Final Inventory Report
and Equipment Within 90 calendar days after the award end
date, you must submit a final inventory that
The following regulations are specified for
lists all equipment you acquired with award
USAID grantees:
funds or received from USAID. The inventory
• USAID reserves the right to transfer the is due, along with the final report, and must be
title to USAID or a third party. The AO must completed in accordance with the terms of your
identify the equipment appropriately or agreement and the disposition plan approved
otherwise make it known to the recipient in by USAID. The final inventory must include:
writing. When USAID exercises its right to
• a list of equipment costing US$5,000 or
take the title, the equipment will be subject
more with a useful life of one year or more
to the Standard Provision, called Title to and
you purchased with USAID funds, and
Care of Property (U.S. Government Title).
(See Annex II, Common USAID • any unused supplies that cost US$5,000
Standard Provisions.) or more.
• If you are instructed to dispose of the
equipment, USAID will reimburse you for For each item listed, include:
reasonable expenses incurred in shipping • original cost;
the equipment to a new location. You
• USAID share of the cost (for example, if your
will need to follow procurement rules
organization paid for part of the purchase with
regarding competitive bidding to get the
cost share or matching, please note that);
lowest-cost service.
• current location and condition of the
• If you do not receive instructions within
120 calendar days after submitting your
equipment and/or how it is being used; and 6
disposition plan, you can sell the equipment • detailed proposal of what you did or intend to
and reimburse USAID for its share. You do with that property.
may deduct and retain US$500 from the While the previous list includes the standard
USAID share, or if the item is worth more requirements, Cooperative Agreements may
than US$5,000, you may retain 10% of the vary. For example, instead of listing equipment

Award Close Out

proceeds for selling and handling expenses. that costs US$5,000 or more, your organization
• Titles to supplies and other consumable may be required to list all equipment that costs
equipment are vested with your organization US$500 or more.
when you acquire them. If the value of the
remaining new and unused supplies exceeds
US$5,000 at completion of the program, and
the supplies are not needed for any other 6.4.3 Other Close-Out
USG-sponsored projects, then you may
retain the supplies, but you must compensate Considerations
USAID for its share of the cost. You may not
In addition to the key reports and activities that
use supplies acquired with USAID funds to
take place throughout the close-out phase, you
provide services to outside organizations
must address a number of other tasks before
for a fee that is less than private companies
close out is complete. These tasks may not
charge for equivalent services, unless the
apply to everyone, but when appropriate your
USG specifically authorizes you to do so.
organization should:
• You must, at a minimum, provide the same
• Reconcile Advances—If you have given
type of insurance coverage for real property
advances to any staff or subs, be sure to
and equipment acquired with USG funds
have them submit final expense reports
as you provided to your organization’s
and reimburse you if any funds remain.
other property.
• Close Bank Account—Close the bank
• Your AO will give you special instructions if
account you set up specifically for this program.
your agreement allows you to purchase any
real estate, including land or buildings. • Terminate Leases (if appropriate)—
Terminate leases on rented office space
that you do not plan to use after the award.

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 • Insurance Policies—Cancel no-longer- Keep this letter on file, as USAID may request
needed insurance policies. an update on your close out, and you can
resend the original letter.
• Outstanding Contracts—Close out
any outstanding contracts with vendors,
consultants, and other contractors.
• Office/Facility Close Out—Be sure to take 6.5 Summary
care of any obligations relating to closing your
office or other program facilities. For example, This chapter reviewed some of the key
if you shared the office with other programs USAID requirements and other issues for
and had agreements in place covering you to consider as you approach the final
shared office costs, be sure to cancel these phase of your award. Be sure to start close-
agreements and inform the remaining out preparations early, and work closely with
occupants of your intention to vacate. your staff and subrecipients to ensure that the
investment your organization made through this
award has the best possible long-term impact
on the communities and beneficiaries you serve.
6.4.4 Letter to USAID Figure 40 is a timeline ranging from 12 months
The final step of the entire close-out process is before your award end date to 3 years following
to send a letter to your AO confirming that you the end of your award that covers close-out
have completed key close-out actions, including tasks you must undertake. Items on this
submitting the final invoice, inventory, and all timeline are relevant to both prime recipients
other reports to appropriate parties as well as and subrecipients.
closing out all subcontracts and subagreements.
6
Award Close Out

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 Figure 40—Close-Out Timeline and Checklist

Time Activity Who Details

12 months Budget for close Program Manager Develop a workplan and budget for the project’s
before end out (required) final year that includes costs for all close out-
of award Teal indicates related activities.
required activity

At least Plan for continuity Executive Director 1. Assess the need for continuing your project’s
9 months of services or other services or interventions, and, if warranted,
before end project-funded explore options for funding. In consultation with
of award activities (optional, partners, community leaders, beneficiaries,
but highly and donors, determine whether your
recommended) organization will:
a. continue the project with funding from
new sources;
b. transfer management of the project or
responsibility for services to a local partner
who has alternate funding; or
c. close out your activities because, for
example, there is no ongoing need for
the services.
2. Create a plan that describes the steps
necessary for a smooth transition.

6 months Begin end-of- M&E Manager Conduct an evaluation of the project and
before end project evaluation or Consultant document your experiences. This will help USAID
of award (optional) and your local partners improve future activities.
6
Request a non- Program Manager Determine whether your program needs a
funded extension Finance Manager non-funded or other type of extension. Then,
(optional, as Excutive Director begin discussions with your AOTR. Review your
needed) pipeline and burn rates to determine whether
you will have funds remaining at the end of
your program. USAID officials will require an

Award Close Out

explanation of why you need the extra time and
what you plan to achieve during the proposed
extension period. A detailed budget for any
expenditures to be incurred after the original
award end date will be required for a cost or
non-funded extension.

Executive Director Discuss employment opportunities and end-of-

project transitions with staff. This should help
to retain them as long as possible and prepare
you if a person chooses to leave before the end
of the project period. Consult local labor laws to
ensure that you comply with all requirements.

Develop close-out Prime and 1. Review close-out requirements with

requirements for Subrecipient subrecipients and make sure they have the
subrecipients Program Managers resources and help they need to comply.
(as needed)
2. Set a deadline for submitting reports to
you to ensure that you have ample time to
incorporate them into your final report.

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 Figure 40—Close-Out Timeline and Checklist (continued)

Time Activity Who Details

3 months Begin subrecipient Subrecipient It is recommended that you have your subs close
before end close out Executive Director out 30–60 days before the end of the award, so
of award they can be sure that all final costs and reports
are complete before the award end date.

Begin tracking Financial Manager Keep a close eye on remaining award funds by
accruals tracking accruals during the last three months of
your award.

List administrative Program Director List all contracts, leases, insurance policies,
close-out tasks and other items that will need to be cancelled
or transferred as well as important dates and
contract provisions to be considered.

Submit inventory Program Manager Review the regulations regarding

disposition request selling or using equipment outside of
to your AO award-related activities.
Create a detailed description of what you
propose to do with the equipment or unused
supplies when the award ends. Note that USAID
has the final say over equipment disposition.
Submit this to your AO, who will either approve
your proposal or provide further instructions as
to what is to be done with the equipment. If you
6 do not hear from the USAID within 120 days of
submitting the inventory report, you may sell the
equipment and reimburse USAID for its share.
(For more information, review the “Title
To and Use of Property” provision in your
Cooperative Agreement.)
Award Close Out

End of award Review information Executive Director, 1. Stop incurring costs to be charged to the
needed for Financial Manager award (unless you have prior approval, which
financial and means the award date has been extended).
performance
reports required by 2. Begin financial close out, including
your donor demonstrating that you have met all cost-share
requirements and have finalized all award-
related expenditures.

60 days Collect Subrecipient If your subs did not close out before the end of
after end subrecipient Executive Director the award, collect their reports now to ensure
of award reports due adequate time to incorporate their contributions
to prime into your final report.
(recommended)

After receipt of Executive Director Send a letter formally ending your contractual
the subrecipient relationship with your subrecipient(s).
reports, send
close-out letter
to subs

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 Figure 40—Close-Out Timeline and Checklist (continued)

Time Activity Who Details

90 days Submit the final Financial Manager Submit the final SF-425 in accordance with
after end SF-425 Federal the terms of your agreement covering the entire
of award Financial Report award period. Be sure it demonstrates that you
(required) have met any and all cost-share requirements
and that your accounting system confirms your
cost share, in case of an audit. Unspent funds
must be returned to USAID.

Submit final Program Manager Submit final performance report, which

performance focuses on final outcomes and lessons learned
report throughout the entire award period, to your
(required) AOTR and the DEC, in accordance with the
terms of your agreement.

Submit final Program Manager Submit final inventory report, which includes a
inventory report list of equipment, any unused supplies, and a
(required) statement describing where you disposed of
the final inventory.

Submit final Financial Manager Submit the final VAT report to the office listed in
VAT (foreign tax) your Cooperative Agreement under the Reporting
report (required) of Foreign Taxes standard clause. The report
covers taxes paid and reimbursed through the
end of your award in accordance with the terms
of your agreement.
6
End of fiscal Submit final audit Auditor Conduct a final audit covering the last year of
year after (required) your award. You may conduct this in sync with
award close out the end of your organization’s fiscal year and
submit it as you would other audits in accordance
with the terms of your agreement.

3 years Maintain records Financial Manager Maintain all accounting records related to

Award Close Out

following (required) your award for at least three years following
submission of submission of the final financial report. The
final financial USG retains the right to audit you and/or your
report subrecipient(s) at any time during those
three years.

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 Figure 41—Key Close-Out Activities through an Organizational Development Lens

Program Management Human Resources Financial Management

• Engage subrecipients and/or • Prepare list of personnel who • Terminate leases as appropriate
partners in discussing close-out are departing. and obtain deposits if applicable.
options; agree on a way forward
• Work with key staff on • Manage office/facility close out.
(to close down the project or
employment transition
search for alternatives). • Notify service providers and/
as needed.
or vendors of termination of
• Communicate close-out
• Have contracts amended services and expected
processes to all relevant
to reflect the close-out date departure date.
stakeholders, including
(especially in case of
the host government. • Finalize consultant deliverables,
an extension).
payments, etc.
• Scale down or terminate all
• Plan for proper termination of
program activities. • Document final utilities payments.
staff and all committed salaries
• Remove signage and other and dues in compliance with • Ensure that payments by check
documentation from subrecipient local labor laws. clear before the bank account
and/or partner sites. is closed.
• Ensure liquidation of outstanding
• Verify acceptance of final project staff advances. • Close project bank account.
deliverables from AOTR. • Submit final financial report.
• Delete relevant information
• Debrief senior management and permanently from computers/
key field staff on lessons learned. cell phones.
• Finish archiving all final project
records in formats where original
data and information cannot
6 be altered.
• If necessary, secure off-site
storage for all project records
for the length of time both
your funding agency and host
government require.
• Submit final performance
Award Close Out

report to DEC
(http://dec.usaid.gov).

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 6

Award Close Out

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CAPResourceGuide_book.indb 132 10/22/10 12:49 PM
7 Assessing and Building
Your Organization’s Capacity
PHOTO CREDIT: ©RICHARD LORD, FHI 360.
 Assessing and Building
Your Organization’s Capacity
7.1 Overview

7.2 Getting Started

7.2.1 What Is Capacity Building?
7.2.2 Assessing an Organization’s Current Capacity
7.2.3 Who Should Lead the Assessment Process?
7.2.4 Five Tips for Building Organizational Capacity

7.3 Conducting Your Organizational Assessment

7.3.1 Organizational Capacity Assessment
7.3.1.1 Additional Online Organizational Assessment and
Capacity-Building Resources
7.3.2 Considering Organizational Assets
7.3.2.1 Board of Directors and Good Governance as Assets
7.3.2.2 Inventory Organizational Assets
7.3.3 Inventory Activities
7.3.3.1 Activity Wish List 7

7.4 Guide to Systems and Structures Needed to Succeed

7.4.1 Defining Your Capacity-Building Objectives and Creating an Action Plan

Assessing and Building Your Organization’s Capacity

7.5 Summary and References

133

CAP chpt7.indd 133 10/27/10 11:54 AM

 7.1 Overview Objectives
• Determine what systems and structures
Whether you have received a USAID award,
your organization should have in place to
have been working as a subrecipient on another
be eligible for USAID or other funding and
organization’s award, or have never received
to achieve its goals.
funding from USAID, your organization can
achieve its goals by focusing on common • Discover your organization’s potential by
guiding principles and building the systems better understanding its unique abilities
and structures necessary to support it for the and assets.
current grant and future opportunities. • Review the activities and services your
organization provides to better meet the
needs of beneficiaries.
Skip Ahead
• Unite your organization behind a common
f Five Capacity-Building Tips mission, goals, objectives, and an action plan.
f Organizational Assessment
f Good Governance Key Terms and Acronyms
f Systems and Structures Needed to Succeed • Acquisition—A USG purchase or contract
f Creating Your Capacity-Building Action Plan to obtain something for its own use. This
includes products, commodities, or services.
• Capacity Building—Strengthening the
ability of an organization to manage itself
Organizational development, technical and achieve its mission effectively.
expertise, quality programming, and growth are
not attained automatically. Most organizations • Governance—The process of providing
work at achieving their missions by using overall vision, direction, purpose, and
a systematic organizational development oversight to an organization through a
framework that includes: structure—a Board of Directors—separate
from the day-to-day management of
• Conducting Organizational the organization.
Assessments—Analyzing your
7 organization’s current activities, structures, • Management—The day-to-day operation
resources, and capabilities. of the organization.

• Prioritizing Capacity Need—Developing • Terms of Reference—Provisions that

an organizational improvement plan. describe the purpose and structure of a
project, usually created during the early
• Focusing on Long-Term Strategic stages of project management.
Planning—Defining where your organization
Assessing and Building Your Organization’s Capacity

hopes to be in the future (see chapter 8).

This chapter contains information and a

set of assessment activities that can help an 7.2 Getting Started
organization better understand its policies
Around the world, thousands of NGOs are
and managerial, financial, and administrative
responding to various social, economic, and
systems (7.3.1). Such assessments are not
political challenges. These NGOs range from
required, but many organizations choose
small groups of community-based volunteers
to do them during start-up and yearly
and faith-based organizations to regional and
thereafter. Should you decide to conduct an
international organizations. While some of these
organizational self-assessment, this chapter
organizations employ full-time staff and secure
provides guidance on how to examine your
significant donor funding, others operate on
organization’s assets, such as funding,
small budgets, relying on volunteers and the
reputation, and skills (7.3.2), as well as the
efforts of community leaders who support them.
activities and the services you provide (7.3.3).
Organizations like these may identify important
Taken together this information will help
needs in their communities, but have very
to create a capacity-building action plan
limited resources to address them. Frequently
(7.4.1), which will enable your organization
impeded by lack of funds, personnel, and
to more effectively carry out its programs and
leadership, these organizations are successful
serve the communities in which you work.

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 at meeting some needs, but may want to 2. Improve administrative and program
increase their services or their scope to better management systems and abilities,
serve beneficiaries and achieve lasting including setting up a strong accounting
results. To do this, organizations need to build system, improving the process of planning
their capacity. and managing projects, or hiring an
M&E specialist.
3. Strengthen technical expertise, through
hiring or training staff or volunteers in
7.2.1 What Is program planning and design, best practices,
and other similar technical areas.
Capacity Building?
This chapter provides three ways to view your
Capacity building is the structured process of
organization, first by looking at its systems,
improving the efficiency and effectiveness of
policies, and procedures; second, by focusing
an organization to achieve its purpose and
on its assets (not just money); and, third, by
provide quality services by strengthening its
examining its activities and/or services. Each
organizational and technical abilities.
perspective offers different insights into the
organization’s strengths and challenges. Those
Specifically, capacity building attempts to:
insights provide the building blocks to help you
1. Build a stronger, more sustainable create your Capacity-Building Action Plan
organization, including establishing formal (see Figure 42).
or systematic organizational structures and
developing and implementing long-term
planning and strategies.

Figure 42—Components of a Capacity-Building Action Plan

Assessing and Building Your Organization’s Capacity

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 7.2.2 Assessing an 7.2.4 Five Tips for Building
Organization’s Current Organizational Capacity
Capacity 1. Create a capacity-building task force.
The first step is taking a thorough look at the One person cannot undertake strengthening
organization’s systems, assets, and activities and growing an organization. Creating a
and asking, “Where are we now?” There are special team to help define goals and carry
numerous activities that an organization may out a capacity-building action plan will
pursue to answer this question. However, improve chances of success. Be creative
determining which activities to undertake is a about building this team. Consider recruiting
challenge, because organizations often do not competent representatives from the
know what systems are best suited for the tasks communities you serve as well as volunteers,
at hand, unless they go through a checklist of staff members from different offices
requirements and assess their own systems (if available), and some members of the
against this list. Board of Directors.

Later, when the organization is ready, it may 2. Prioritize, set achievable goals, and do the
ask, “Where do we want to go from here?” Are simple things first.
there new services for beneficiaries or new With capacity building, it is important to
areas we should pursue?” To answer these separate the work you can do from that which
questions, the organization needs a plan. you must do. Set goals that focus on what
Strategic planning is the process of creating the must be done and make sure these goals
bridge that links current activities and funding to are achievable. If getting started becomes a
a longer-term vision and plan. Chapter 8 of the challenge, take on a few simple tasks first.
Guide provides a framework for undertaking a The momentum from a small amount of
strategic planning process. progress can help energize the organization
to take on bigger challenges.

3. Set aside capacity-building time.

7.2.3 Who Should Lead
7 Some smaller organizations barely have the
the Assessment Process? staff or resources necessary to meet existing
service-delivery demands. So, when is there
The first key decision is to determine who time for capacity-building activities? Set aside
will facilitate capacity building overall. One designated time to focus on organizational
option is to bring in an external expert. Using growth. This may mean a few hours a week or
a consultant to conduct the assessment has a day once a month. The investment in time
Assessing and Building Your Organization’s Capacity

several benefits. Ideally, a good consultant spent now will pay off later.
offers an objective view of your organization,
brings knowledge of what other organizations 4. Involve the whole organization.
have gone through in similar situations, and
helps to tap into a network of other experts who Changes in an organization may cause
can help you. Use of a consultant also frees you anxiety. Staff may wonder, “Will the new
to concentrate on your core responsibility. That accounting system mean I lose my job?” or
said, this process can be effectively managed “Will these new efforts take our focus away
within your organization by staff, particularly if from what I believe is important?” One way
financial resources are not available to pay to address these concerns is to involve the
for consultants. whole organization in the effort to strengthen

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 and grow the organization. Communication In conducting a typical assessment, the
at staff meetings, special team exercises, organization discusses areas of its operation,
and establishing clear avenues for staff noted in Figure 43. It is based on an
involvement are essential. assessment tool and can help you take a
first look at your organization’s health.
5. Tap into free resources and opportunities Answering the questions should offer a fairly
for funding. clear picture of the systems and structures
currently in place as well as hints about
There are numerous efforts underway to
where there may be gaps.
build the capacity of organizations so they
can better deliver quality services in the
An assessment should be repeated after
places where they are needed. There
a year to determine how the organization’s
are free online resources (for example,
capacity has changed and to identify new
www.NGOConnect.Net), NGO networks, and
gaps and strategies to continue to improve the
even opportunities for grants to help expand
efficiency and effectiveness of the organization.
an organization’s capacity-building efforts.
The experience of researching tools, building
your network, and applying for funding is, in
itself, capacity building and can set in motion
efforts to achieve the organization’s capacity-
building goals. It may also be possible to 7.3.1.1 Additional Online
identify other NGOs in the community that Organizational Assessment
have similar needs and pool resources for
training to meet these needs. and Capacity-Building
Resources
In addition to an assessment tool that focuses
on finance, administration, and organizational
7.3 Conducting Your development, there are assessment instru-
ments that stress other aspects of your work,
Organizational Assessment including program performance, technical
programmatic areas, and monitoring. Most
tools can be customized to fit your particular 7
7.3.1 Organizational organization’s needs. The best tools are used
in a participatory manner, and the assessments
Capacity Assessment are undertaken as a team exercise. The key is
to get a wide range of involvement and opinions
An organizational capacity assessment is a and to guide those ideas toward an action plan
process for identifying an organization’s current that everyone can support.

Assessing and Building Your Organization’s Capacity

strengths and weaknesses. It allows you to take
a snapshot of the structures, policies, systems,
and processes that support an organization
and use them to help develop a list of activities
to build that organization’s specific capacity-
building action plan.

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 Figure 43—Organizational Capacity Assessment Checklist

1. Governance 9 Do you have a fundraising strategy

9 Do you have a mission statement or vision? or plan?
Strategic objectives and/or goals? Have you 9 Do you have a plan for generating
written them down and shared them with the cost share as part of your project?
entire staff? 9 Do you undertake regular audits?
9 Do you have a Board of Directors or Board of
5. Organizational Management
Trustees? Do Board members meet regularly,
9 Do you have a strategic plan?
and what is their purpose? Do they have
9 Do you have strategies for
some sort of terms of reference written down?
workplan development?
Do you have an organizational chart with
9 How do you address
reporting lines?
management changes?
9 Do you have legal status to operate within
9 How do you manage knowledge?
the country where you are working?
9 How do you involve stakeholders?
9 Is your organization registered with the
9 How do you address new
appropriate ministry or department of
opportunity developments?
your government?
9 Do you have a succession plan? 6. Program/Project Management
9 Do you comply with A-122
2. Administration
cost principles?
9 Do you have documented operational
9 If you have subgrantees, what systems are
policies, procedures, and systems?
in place to manage these organizations?
9 Do you have travel policies
9 What documentation is undertaken for
and procedures?
technical reporting?
9 What are your documented procurement
9 What linkages do clients have to services
procedures, and are they compliant with
of other organizations (referrals)?
USG standards?
9 How is the community involved in
9 Do you have fixed-asset control systems?
the project?
9 Is there a branding and marking plan?
9 What consideration is given to culture
7
3. Human Resources and gender?
9 Do you have written job descriptions for each
7. Project Performance Management
staff member?
9 What is the current project
9 Do you have recruitment and
Implementation status?
retention policies?
9 What procedures are in place for
9 Are there qualifications for each
Assessing and Building Your Organization’s Capacity

field oversight?
staffing position?
9 What are the service quality standards
9 Is there a personnel policy manual?
to which the organization adheres?
9 Are there staff time and performance
9 What are the supervision guidelines to
management policies?
ensure that program quality is achieved?
9 Is there a staff professional and salary
9 Do you have a monitoring and
history documentation?
evaluation plan?
9 Is there a staff salary and benefits policy?
9 How do you determine quality assurance
9 What is the role of volunteers and interns?
of the services being delivered?
9 Do you have an employee handbook that
9 Who is involved in official communication
has been shared with all staff?
within the organization?
4. Financial Management 9 Are staff part of the
9 Do you have an accounting system decisionmaking process?
in place?
8. Leadership and Team Dynamic
9 Do you have accounting policies?
9 What type of management does
9 Do you have a procurement policy
the organization possess, and how
and system?
does this influence the operation of
9 Are you regularly creating financial
the organization?
status reports?

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 Figure 44 contains several organizational assessment resources available online. While it is not a
definitive list, these resources can guide your organization through the process.

Figure 44—Online Organizational and Capacity-Building Resources

Tools and Resources Description

Organizational Capacity Resources A wide variety of resources on everything from budgeting

(http://www.ngoconnect.net) to organizational governance compiled by CAP on the
NGOConnect Web site

Institutional Development Framework (IDF) An online series of modules to help NGOs assess their
http://www.ngoconnect.net/cap-idf organizational capacity

Pact Resource Center A selection of resources for capacity building

(http://www.pactworld.org/cs/resource_center/
featured_resources)

Impact Alliance Resources An online community supporting organizations with their

(http://www.impactalliance.org/ev_en.php) capacity-building efforts; the site includes resources on a
variety of topics

The Manager A quarterly publication by Management Sciences for Health that

http://erc.msh.org/TheManager/index.cfm provides health professionals and others with information and
practical tools they need to manage programs. Online editions
are currently available in English; French, Spanish,
and Portuguese editions are forthcoming

Management Accounting for Non- A Web site that provides high-quality resources, training, and
Governmental Organizations (MANGO) networking opportunities to help NGO staff and trustees improve
http://www.mango.org.uk/guide/resources.asp their financial management capacity

In NGOs, the Board of Directors is typically

7.3.2 Considering made up of volunteers and should be separate
Organizational Assets from the organization’s management and staff. 7
It may be comprised of community leaders,
The purpose of inventorying your organization’s representatives of beneficiary groups, the
assets is to take a fresh look at the organiza- organization’s founders, and private donors.
tion’s resources, that is, the pillars supporting The Board should not include members of the
the organization’s ability to deliver on its organization’s management team or other paid
mission. Assets include people, skills, know- staff of the organization. The Board generally

Assessing and Building Your Organization’s Capacity

ledge, financial resources, relationships, meets regularly with the organization’s
products, geographic coverage, and the ability Executive Director and management team
to connect with the people in the communities to review progress. Its primary function is to
you serve. provide oversight to the organization, including
ensuring that it fulfills its mission, lives up to
its values, and remains viable for the future.

7.3.2.1 Board of Directors and

Good Governance as Assets Governance is the process of providing overall
vision, direction, purpose, and oversight to
One of an organization’s key assets is its an organization through a structure—a Board
Board of Directors. The Board, needed in most of Directors—separate from the day-to-day
countries to enable an NGO to register and management of the organization.
operate legally, mainly provides oversight, Management, on the other hand, involves the
but its members may also be advocates and day-to-day operation of the organization.
fundraisers for the organization.

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 Organizations are governed in different ways. activities to accomplish the goals of the
Some Boards meet frequently, especially when organization. These include:
organizations are young or are going through • communicating expectations—mission,
challenging changes. Other Boards are more strategy, policies—to the entire staff;
detached, meeting quarterly or annually to
review financial and performance reports • managing day-to-day operations and program
and to set goals for the coming year. implementation to fulfill expectations; and
• reporting results to the Board.
Although not an exhaustive list, the Board is
essentially responsible for:
It is critical to distinguish between the
• Defining expectations for the organization by: responsibilities of the Board and those of
- setting and maintaining vision, mission, management. When roles are clearly defined,
and values; an organization will be better able to function
and to meet the needs of clients, beneficiaries,
- defining or helping to define direction and other stakeholders; deliver quality pro-
(for example, helping to develop/approve grams; and comply with rules and regulations.
long-term strategic plan, approving annual
workplans); and If an organization is struggling to find the
- creating and/or approving the right balance, it should review its charter or
organization’s policies. other governing document, the Board’s terms
of reference, and the job descriptions of senior
• Granting authority by:
management staff to see how these parameters
- selecting, managing, and supporting the are defined. If these sources do not provide
organization’s Chief Executive Officer (CEO). clarity, the Board should define responsibilities
• Verifying performance by: and procedures more precisely. In the end, it
is part of governance—and therefore one of
- ensuring compliance with governing the Board’s responsibilities—to ensure that
document (for example, charter); organizational roles and structures are
- ensuring accountability and compliance clearly defined.
with laws and regulations; and
The organizational capacity assessment
7 - maintaining proper fiscal oversight.
(7.3.1) discussed in this chapter is a process
the management team should undertake with
Board members may serve as public faces the approval of and oversight by the Board
of the NGO, advocating on the organization’s of Directors. Where possible, the Board may
behalf. They may also take on fundraising want to be directly involved in some or all
for the organization by donating directly or activities. If there is no Board of Directors or
soliciting support from other sources. (For more
Assessing and Building Your Organization’s Capacity

similar structure governing your organization,

information on fundraising, see chapter 9, you may want to address that before taking on
“Seeking Future Funding.”) any capacity-building activities. Several online
resources are available to help you establish
The organization’s management team receives a governance structure for your organization.
its authority from the Board of Directors. This
helps to ensure that the management team is
accountable to the donors, community leaders,
and beneficiaries. Management also receives 7.3.2.2 Inventory
general direction from the Board through the
development of annual goals and long-term Organizational Assets
strategic plans.
For this exercise, tour your office, project sites,
Management is responsible for day-to-day and other sites where your organization works.
implementation of policies, procedures, and Starting with the categories listed below, talk

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 with staff, volunteers, and others and note the communities you serve? What is your
resources you see that make your programs organization’s reputation? Relationships
and organization run. If several people in your and your organization’s reputation are not
organization are participating in this exercise, always easily quantified, but you should not
have each person create a list separately, then undervalue this network of relationships and
come together and compare the results. your organization’s reputation.
• Knowledge and Experience—Think about
Consider these asset categories of the special knowledge and experience people
your organization: in your organization, including those on your
• People—Both staff and volunteers, including Board, may have. This is slightly different
the Board of Directors. Who are they? What from what is listed under “skills.” Your
are their roles? Do they understand and fulfill organization’s experience may have taught
their roles? How long have they been a part you important things about your community
of the organization? and its people, culture, traditions, etc.
• Equipment—Computers, office furniture, • Mission—Sometimes, what binds people
vehicles, and other important items. Where together in a community is a belief in a
or how were they obtained? Was common mission. For some, that belief
anything donated? is religious faith; for others, it may be
community ties, national pride, or patriotism.
• Space—Any real estate or property you
A strong belief in a mission is a great
use—buildings, office space, meeting space,
motivator and can often be more powerful
a clinic, a community garden. Does it belong
than money in getting things done.
to the organization or the community? Is it
rented or donated?
• Skills—What formal training have your
employees received, whether through degree
programs or short-term seminars? What skills 7.3.3 Inventory Activities
do people have, even skills they do not use
Once you have assessed the organization’s
in their current positions? Is someone a good
systems, policies, procedures, and assets, it is
gardener or mechanic or skilled at working
time to consider the organization’s activities.
with computers?
While the organizational assessment and action 7
• Funding and Income—Money, or lack of plan (7.4.1) provide a blueprint for improving
it, is often the biggest roadblock between the current operations of an organization, a
what an organization can do and what it strategic plan guides the overall programmatic
wants to do. What are the organization’s direction an organization will take. When
sources of funding or income? Does it have developing a strategic plan, an organization
any money in the bank? What options does looks at what it is doing now and asks what

Assessing and Building Your Organization’s Capacity

the organization have for securing additional it would like to do in the future.
funds? Can the organization fund any of the
capacity-building efforts out of its own funds, An organization may start with a simple
or must it wait to secure additional funds inventory; for example, for each activity, you
before moving forward? may note who is involved, how often the activity
• Relationships and Reputation—What takes place, how much time you spend on it,
relationships does the organization have any costs related to it, and how you measure
with local and regional leaders? What its outcome. You may estimate time spent
relationships does the organization have by your organization in each area, and you
with other NGOs in the community or do not have to include every last detail.
the region, or with private companies The goal is to get a general overview of what
and businesses? Does it have any your organization currently does. An example
existing relationships with donors? Most appears in Figure 45.
important, what is its relationship with the

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 Figure 45—Sample List of Organizational Activities

Activity Who How Often How Much Time Costs Outcome Measure

Fundraising Executive Monthly 2–3 days/month No direct costs • Number of RFPs

Director responded to
• Amount of
US$ raised

Palliative Care Volunteers Daily 30 minutes per visit Home-based care Number of
Home Visits kits, transportation households visited
per month

Training Training Monthly • 5 days of training Training Number of

Volunteers Manager • 10 days of materials, meeting volunteers trained
planning, prep room facility,
time, and refreshments for
post-training volunteers
assessment

• What are some administrative management

7.3.3.1 Activity Wish List issues that we have not dealt with properly?
Organizations often do not have the time to
do everything they want to do, nor do they As you list each activity, think about when
always know what needs to be done. Once you you ideally would like to begin each activity,
complete the list of current activities, begin a assuming you had the resources and time. Is a
similar list of activities you need or want to do, particular activity urgently needed? Is it needed
but for which you do not currently have the in the next few months, or is it something that
time or resources. would be nice to do?

Start with these questions: Finally, for each activity, list what you would
need (for example, funding, training, personnel)
• What services do our beneficiaries need in
to make each one happen, as in Figure 46. If
addition to those we already provide?
7 you note several things that are preventing you
• What activities have we seen other from moving forward, try to determine whether
organizations do that we could incorporate any one particular roadblock is in the way. Keep
into our programs? Why do we want to in mind how the lack of certain assets may be
incorporate them? Are they consistent with affecting your ability to move forward. Down the
our mission and vision? line, making this link will help you prioritize your
next step. (For more information on securing
Assessing and Building Your Organization’s Capacity

• What activities have we wanted to implement

for a long time but have had to postpone funding to attain essential assets, see chapter 9.)
because of other pressing issues?

Figure 46—Sample List of Activities and Needed Materials

Activity When is it needed? What would it take?

Upgrade accounting system Urgent New software and training

Implement Voluntary Counseling Next 3–6 months Funding for training and test kits, volunteers, and at
and Testing (VCT) program least one professional staff

Train volunteers to use TB/HIV 6–12 months Technical assistance, TB/HIV home-based care kits
home test kits

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 7.4 Guide to Systems 2. Are the activities listed on your activity wish
list (7.3.3.1) short-term or long-term priorities?
and Structures Needed If you were to select the one or two most
to Succeed critical items, which would they be? What do
you need to make these priorities happen?
Earlier, you listed current (7.3.3) and potential
future activities (7.3.3.1) as well as the resources 3. Looking at your asset inventory (7.3.2.2),
your organization has on hand. In this section, how do your current resources and capacity
you compare that picture with a generic align with the needs of your programs? Can
picture of the basic systems and structures an you handle them with existing resources, or
organization needs to succeed. This will help do you need to fill in resource gaps first?
your organization think about the gaps it may
need to address to successfully manage The analysis should identify a number of
USAID- or other donor-funded programs. different things to work on. If there are more
than five, they may have to be prioritized. If
the capacity-building plan is much bigger than
that, it might be hard to get started. Start small
7.4.1 Defining Your and save the rest of the list. As first goals are
achieved, begin work on successive items.
Capacity-Building Objectives
and Creating an Action Plan Take each priority item and formulate a
specific goal statement that articulates what you
The final step in assessing your organization want to do and sets a deadline—for example,
is to bring all of your previous work together by “We want to develop a functional volunteer
comparing your existing organizational capacity, recruitment and management
assets, and activities with your goals for the system in the next six months.”
future to help identify gaps and prioritize next
steps. The result should be the development of a Next, identify a point person for each goal,
capacity-building action plan for the organization. but do not expect this person to do all of the
work. In fact, many people may contribute
The most difficult task in developing this to the effort, but that one person should be
plan is setting priorities. The best way to help responsible for facilitating and tracking progress 7
resolve differences of opinion is to have your and reporting back to the rest of the team.
team refocus on the mission of the organization.
A well-developed vision or mission statement Breakdown of Goals
can help everyone in the organization to
understand the overall priorities and explain into Specific Tasks
why resources are allocated to advance What steps are necessary to reach each goal?

Assessing and Building Your Organization’s Capacity

those priorities. For each step or task, think about what resources
(money, people, etc.) are needed to complete it.
Set Organizational Capacity- Then estimate the time it will take to complete
it. Do not worry about getting this exactly right; if
Building Objectives you are not sure, do your best to guess. You can
With your capacity-building task force, review always adjust your estimates later.
the capacity issue lists you created during your
organizational assessment (7.3). Then discuss If time needed to complete each task under
the following questions among staff and even, a goal is totaled, can you still reach that goal
if appropriate, beneficiaries: within the originally estimated time? If not, you
1. Given the work you are currently doing might want to adjust your goal or figure out
(7.3.3), what are you not doing well? What ways to complete the tasks more quickly.
is inhibiting you from doing these activities
better? Is it lack of funding, training,
personnel, or something else?

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 Document Your Action Plan
Build a document, spreadsheet, or project plan such as the one in Figure 47:

Figure 47—Action Plan Example

Goal #1: Recruit 10 new volunteers from the community in three months.
Leader: Mary

Task Resources Time

1 Define volunteer roles volunteer coordinator two days

2 Design and print fliers paper one day

3 Host volunteer promotion at all staff members one day (must coincide with market day)
local market

4 Hold meeting with volunteer coordinator one day (one week after market day)
prospective volunteers

5 Conduct volunteer training training coordinator, one day a week, for three weeks in a row (starting
training materials one week after prospective volunteer meeting)

6 Take volunteers out experienced one day (one week after training)
on supervised visits to volunteers
beneficiaries

7 Volunteer graduation staff and volunteers, one day (one week after completing supervised visits)
ceremony refreshments

Next Steps It also can strengthen the relationship between

the partners, with the goal of contributing to their
The capacity-building task force should continue
7 to meet regularly to assess progress. Be flexible
mutual success.
and adjust plans as needed. Also, be sure to
When your organization has completed its
communicate regularly with the other members
assessment, the next question to ask is, “Where
of your organization and create opportunities to
do we want to go from here?” Are there new
involve them.
services for beneficiaries that we can provide?
Are there new technical areas that we should
Assessing and Building Your Organization’s Capacity

As your organization learns about itself and

pursue? To answer these questions, the
strengthens its organizational and technical
organization needs a plan. Strategic planning
capacity, staff may want to share their new
is the process of creating the bridge that links
knowledge and skills with your subrecipient(s)
current activities, capacities, and funding to a
(if any). By applying lessons learned via its own
longer-term vision and plan. Chapter 8 of the
assessment and planning process, the prime
Guide provides a framework for undertaking
recipient can help lead its subs in identifying
the strategic planning process.
organizational assets, gaps, and priorities.
Building subs’ capacity helps them to better
implement projects and grow as organizations.

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 7.5 Summary and References
References • A Handbook of NGO Governance:
The Central and Eastern European
Managing USAID-funded programs requires Working Group of Nonprofit Governance
a solid organizational foundation to meet the http://www.icnl.org/knowledge/pubs/
required technical, administrative, reporting, Governance_Handbook.pdf
and other demands. That does not mean that
an organization must be perfect before it can • Expert Discusses Effective Principles,
take on these programs. But it does mean that, Procedures for Nonprofits
to be effective, one must understand where http://useu.usmission.gov/Article.
the organizational strengths and weaknesses asp?ID=1DE58E9F-10A5-48A1-B002-
exist and put programs in place to address any EF8A788838E2
critical gaps.

At the same time, it is also important to build • Board Source: Building Effective
on your organization’s unique abilities and Nonprofit Boards
assets. By building on your strengths, your http://www.boardsource.org/
path toward eligibility for USAID funding will be
much shorter, and your capacity to carry out
and sustain your programs will be much better.
Especially when your organization comes
together behind a common mission and plan
of action going forward.

Assessing and Building Your Organization’s Capacity

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CAPResourceGuide_book.indb 146 10/22/10 12:49 PM
8 Sustainability
PHOTO CREDIT: ©BILL DENISON, FHI 360.
 Sustainability
8.1 Overview

8.2 Getting Started

8.2.1 Annual versus Strategic Planning
8.2.2 Preparing for Strategic Planning
8.2.3 Twelve Key Questions before Starting Strategic Planning

8.3 Strategic Planning

8.4 Strategic Planning Online Resources

8.5 Summary

Sustainability

147

CAP chpt8.indd 147 10/27/10 11:56 AM

 8.1 Overview • Horizon—The amount of time an
organization will look into the future when
Whether your organization is newly founded preparing a strategic plan.
or a well-established one with an office full of • Strategic Planning—An organization’s
experienced workers, planning for the future is process of determining its direction or
essential if you intend to be around for the long strategy and making decisions related to
term. While you may be certain of your current pursuing it. According to an adaptation
funding stream and projects, these tend to have from the Field Guide to Nonprofit Strategic
a short time horizon—one to three years—after Planning and Facilitation, “Simply put,
which things are likely to be less certain. Even strategic planning determines where an
if you have a good idea about what might organization is going over the next year or
happen in the future, such as potential awards more, how it’s going to get there and how
and partnership opportunities, there is always it will know if it got there or not.”
the possibility that things will change—funding
opportunities may or may not be there, staff • SWOT—Strengths, Weaknesses,
may move on, or the needs of the communities Opportunities, and Threats anaylsis, strategic
you serve may shift. planning tool that helps an organization
examine itself and the external and future
This chapter briefly defines strategic planning environment in which the organization operates.
and outlines some benefits that can be gained
from the process and its product: the strategic
plan. It goes on to provide an overview of the
steps involved in strategic planning (8.3) and
8.2 Getting Started
concludes with links to in-depth resources and How does strategic planning help my program?
tools. Once you have created your strategic
plan, it is a good idea to make sure it is a The strategic planning process helps prepare
good fit with your annual workplan (chapter 3) your organization for the future by creating
and budget. a bridge that links your current awards and
activities to your long-term vision and the
necessary resources, systems, and procedures
Objectives to achieve that vision. It lets you see how your
• Determine whether your organization is ready organization fits into the larger world in which it
to undertake strategic planning. works. In addition, the resulting plan can serve
as a signal to donors that your organization
• Use what you learned from your organizational
has its house in order—that your organization
capacity assessment (chapter 7) to inform the
knows where it is going and how it will get there.
strategic planning process.
• Walk through the strategic planning process.
8 • Unite your organization behind a strategic Why Develop a Strategic Plan?
plan that will sustain it in the future. f It can serve as a framework for decisionmaking.
f It can provide a basis for more detailed
Key Terms and Acronyms planning at the project level.

• Action Plan—A specific series of steps f It can serve as a road map for the future
and as a catalyst for change, as well as a
Sustainability

describing what needs to be done, how,

benchmark for future strategic plans.
when, and by whom to accomplish one or
more objectives. Written action plans can
be used at the organization, project, or
activity level.

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 Before getting started, consider doing
8.2.1 Annual versus the following:
Strategic Planning • Talk with Other Organizations.
An annual plan has very clear inputs (for Consult with other organizations to find out how
example, the amount of funding you have they went about their strategic planning. Ask
received and the start and end dates for your who helped with their plans, what worked well,
award). A strategic plan often has numerous and what they would do differently next time.
variables. In fact, part of the purpose of a
strategic plan is to identify and try to quantify • Read Online Resources.
some of these variables.
Online resources alone, some of which are
Annual planning focuses on operations and listed at the end of this chapter, may not be
thus drives the organization forward by setting sufficient to guide your process, but they
concrete goals and giving staff specific direction should give you a good sense of what to
on what needs to be done to achieve intended expect. You may find tools you like, and
outcomes. Strategic planning examines the you can search online for a consultant with
external environment and the fit between the specific experience using these tools.
organization and its environment. Although
strategic planning also involves goal setting, • Involve your Board.
it is broader in scope—covering all aspects of
Strategic planning is a process the
an organization’s work—and considers longer-
management team should undertake with
term issues than are addressed in annual plans.
the approval of and oversight from the Board
Typically, strategic plans look three to five
of Directors. The Board may want to be
years ahead.
directly involved in some or all of the strategic
planning activities.

8.2.2 Preparing for

Strategic Planning
As with an organizational capacity assessment
8.2.3 Twelve Key
(chapter 7), the strategic planning process Questions before Starting
should involve a core team made up of
representatives from the organization’s Strategic Planning
management, administration, finance, and
While there is no “right” time to do strategic
technical departments as well as Board
planning, answering the questions in the
members. The amount of time it takes
following checklist can help you decide whether
to complete the process depends on the
your organization is ready to go forward. 8
organization’s size, the nature of its leadership,
experience with strategic planning, availability
of information, and commitment to the process.
It is best to set aside time to focus on strategic
planning. It may mean a few hours a week or
one day a month. The entire process may
Sustainability

take as little as a month or as long a year.

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 12 Questions to Determine Whether 7. Is there access to data that reflect the
Your Organization Is Ready to Engage in trends—political, economic, social, and
Strategic Planning Source: Beryl Levinger* technological—that affect the organi-
zation’s beneficiaries, donors, partners,
Your organization is ready to engage in strategic and competitors? ‰ Yes ‰ No
planning if you answer “yes” to each of the following:
8. Is there access to data that reflect the
1. Is there a willingness to work toward organization’s current resources and
developing the best fit between the performance level? ‰ Yes ‰ No
organization and its external environment
by examining the following questions: 9. Is there the ability within the organization to
respond to problems with new solutions?
• What outside our organization might affect us
‰ Yes ‰ No
positively or negatively (external factors)?
• Where are we now (internal assessment)? 10. Is there consensus regarding the
organizational mandate given to the
• Where are we going (strategic goals
planning team? ‰ Yes ‰ No
and objectives)?
• How will we get there (activities)? 11. Are there adequate resources (including
• How will we know whether we are on facilitators from within or outside the
track (results)? organization), so that the planning team can
do each of the following tasks:
• What is our blueprint for action (budget)?
‰ Yes ‰ No • Clarify organizational mission and values.
• Identify clients/stakeholders.
2. Is there a high likelihood that consensus can • Assess the external environment
be reached on the following issues:
• Assess the internal environment.
• What do we hope to achieve?
• Identify the strategic issues it faces
• What do we believe?
• Formulate strategies to manage these issues.
• What is our purpose?
• Establish an effective organizational vision
• What makes us distinctive or unique? for the future
‰ Yes ‰ No
• Convert the vision into activity plans,
budgets, and key result areas that can
3. Is there an absence of impending doom
be monitored.
and crisis? ‰ Yes ‰ No
• Monitor performance “actuals”
4. Is there a deeply held commitment on versus “expectations.”
8 the part of top leadership to engage in
• Make adjustments to the plan.
strategic planning? ‰ Yes ‰ No
‰ Yes ‰ No

5. Is there a shared understanding about

the nature of strategic planning among 12. Is there agreement on the planning process/
organizational stakeholders? model to be used? ‰ Yes ‰ No
‰ Yes ‰ No
Sustainability

6. Is there a competent group of people

willing and able to serve on the strategic
planning team? ‰ Yes ‰ No

*Beryl Levinger is Distinguished Professor of Nonprofit Management at the Monterey Institute of International Studies and Director of the Center for
Organizational Learning and Development at the Education Development Center.

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 8.3 Strategic Planning If you hire a consultant to guide your strategic
planning process, you might also want to
A strategic planning process and its results are assign an internal point person or team to
only as good as they are honest and useful— work with the consultant and to manage
honest means looking at internal and external implementation of the strategic plan in
factors objectively, and useful means putting moving the organization forward. That way,
into words the specific goals and action steps to when the consultant finishes, the strategic
help guide the organization forward. plan can be left with the point person(s), who
will understand the plan and what is expected
after the planning process ends.
Step 1. Prepare to Plan: Clarify
the Mandate and Scope of Work Each consultant or facilitator will have his
• Create a strategic planning team. or her own approach. However, be sure the
consultant and internal point person(s) clearly
To get buy-in and improve the chances that
understand what the desired outcomes are
the plan will not sit on the shelf, involve
and what is expected of each of them in order
the people who will be responsible for
to avoid confusion and other problems during
implementing the plan. Make a list of the
the process.
needed skills and experience of those who
might be involved in the process. Invite
• Develop a workplan and timetable and
a cross-functional team (representatives
assign specific tasks to individuals.
from programs and services, management
and operations, finances and fundraising, Develop a workplan and allot time to the
and governance) to ensure that the plan is process. Be clear about the roles each
developed collaboratively and realistic. participant will play. Among the most
important tasks are coordinating and
• Assign an internal point person and/or recording the process. Designate one or
engage a consultant. two people who will provide administrative
support and capture discussions in writing.
Although you may have someone on staff
with the right expertise to guide a team With strategic planning, it is important to
through an in-depth examination, it is often separate the work you can do from that which
preferable to have a consultant who has you must do. Set goals that focus on what
no vested interest in the organization. An must be done and make sure these goals
outsider can bring an objective, fresh view of are achievable. If getting started becomes a
your organization and the perspective of what challenge, take on a few simple tasks first.
has worked for other organizations facing The momentum from a small amount of
similar issues. If you decide to have someone progress can help energize the organization
in your organization conduct the strategic to take on bigger challenges.
planning rather than a consultant, you
8
should ask the following questions: Step 2. Review your Vision,
- Is that person able to be unbiased Mission, and Values Statements
in looking at both the strengths and
Strategic planning starts with a focus on
weaknesses of the organization?
the organization’s mission, vision, and
Sustainability

- Can that person diplomatically and values. Although these terms are often
effectively guide the group to consensus? used interchangeably, they are not identical.
- Can that person manage conflict that They represent a framework to define and
might arise during an examination of communicate the purpose of your organization
the organization? starting from the highest, long-term level
(vision), down to the very specific, short-term
level (objectives).

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 Vision • What do we believe (values)?
An organization’s vision is often an inspiring • What outside our organization might affect us
statement of what it is striving to achieve. NGOs positively or negatively? (external factors)?
often focus on the problem they hope to solve
by painting a picture of a vision they have for • Where are we now (internal assessment)?
the future after the problem has been solved • Where are we going (strategic goals
or mitigated. and objectives)?

Example: “XYZ NGO envisions our • How will we get there (activities)?
community free of poverty and hunger, where • How will we know whether we have
everyone has access to basic education, arrived (results)?
health care, and economic opportunities.”
Figure 48—Goals and Objectives Examples
Mission Statement Goals Objectives
Your mission statement takes your vision a
step further, by summarizing the actions your Broad, Narrow, short-term
organization is going to take to make the long-term
vision a reality. It is a statement that clarifies Where we The steps needed to get there
the purpose of the organization and its want to be
daily business.
Abstract, Precise, measureable
Example: “Our mission is to fight poverty general
and hunger in our community by building Expand • Recruit 10 new volunteers from
education, health care, and economic community local churches/mosques.
development programs that meet the participation
• Pair volunteers with
needs of the community.” in youth
staff mentors.
development
Values program. • Meet monthly at youth center
with all volunteers.
An organization’s values are its deeply
held beliefs that shape the organization’s • Develop an annual program/
actions. Your organization may have event to recognize the top three
several core values. individuals who were invaluable
to the program.
Examples: “Our organization believes in Remove the • Expand access, ensure
providing equal opportunities for everyone barriers to that at least 15 children
in the community, regardless of gender, education from community complete
religious beliefs, or ethnicity.” and expand their education.
educational
• Raise funds from businesses
8 “Our organization believes that all children opportunities
in the region to pay school
have the right to basic education.” to attend
fees and other expenses for
secondary
at least 15 children from
school.
“Our organization believes that our priorities the community.
must be driven by and be in harmony with the • Organize volunteers from
desires of the community.” the community to work one day
Sustainability

a month on projects to renovate

While an organization’s purpose is not likely to and expand the existing school.
change, it may change its way of thinking and
approach to a problem as time goes on and it
Step 3. Identify the
implements activities. While one does not want
to change a strategy continually, organizations Strategic Goals
should periodically review their mission and Strategic goals are broad statements of intent
vision statements. This is an opportunity to that link directly to the mission statement. While
bring staff together and align the mission of the your vision, mission, and values may never
employees with the overall mission and vision of change, your strategic goals will likely evolve
the organization. over time.

To begin, answer the following basic questions: Example: Strategic Goal—Increase the
• What do we hope to achieve (vision)? income of female-headed households in X
province through better animal husbandry
• What is our purpose (mission)? and marketing.

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 Step 4. Define the through improved livestock breeding and
raising practices and better marketing.
Strategic Objectives
Your organization should determine how to
accomplish its strategic goals in the next three Not Very SMART objective:
to five years by developing objectives that are • Change animal husbandry practices
Specific, Measureable, Achievable, Realistic, (not specific, measurable, or time-bound).
and Time-based (S.M.A.R.T.):
• Specific—Is there a description of a precise
or specific behavior/outcome that is linked to Steps 5 and 6. Look at Strengths,
a rate, number, percentage, or frequency? Weaknesses, Opportunities, and
• Measurable—Is there a reliable way Threats (SWOT)
to measure progress toward achieving “SWOT” (pronounced swat) stands for
the objective? Strengths, Weaknesses, Opportunities, and
• Achievable—Are we attempting too much? Threats. This is a key tool for strategic planning
With a reasonable amount of effort, can we because it examines the organization itself and
do what we set out to do? the external and future environments in which
the organization operates.
• Realistic—Do we have the resources—
staff, money, materials, etc.—to make a
Strengths and weaknesses refer to the internal
real impact?
workings of the organization; they are akin to
• Time-based—Is there a finish and/or a start current assets and liabilities. Opportunities and
date clearly stated or defined? threats exist outside the organization, and they
refer to the future.

Sample SMART objective: A SWOT analysis may be part of the planning

• By [year], our NGO will support initiatives process or applied to a specific problem or
aimed at increasing the income of [Y number situation. A quick and easy way to approach the
of] female-headed households in X province analysis is by doing the exercise on the next page.

Figure 49—Example of the Types of Information to Include in a SWOT Analysis Matrix

Internal Factors

Strengths (Assets) Weaknesses (Liabilities)

ASK: What do we do well? How do we know?
For example:
ASK: What could we do better? How would we measure
that we are doing better?
8
• Capacity For example:
• Resources (funding, supplies, etc.) • Financial management
• Location and geography • Human resources
• Innovation • Monitoring
• Resources
Sustainability

• Management
• Reach, awareness • Raising funds
• Volunteers • Recruiting volunteers
• Competitive advantages

External Factors

Opportunities Threats (Challenges)

ASK: What factors outside the NGO could help us ASK: What factors outside the NGO might hinder our
do better? doing better?
For example: Classify them by their “seriousness” and “probability
• Trends in our sector of occurrence.”
For example:
• What are government agencies doing?
• Change in government
• Partnerships, agencies, networks?
• Natural disaster

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 Exercise Step 7. Define How You will
To conduct a SWOT analysis, use the Realize Each Strategic Goal;
data and findings from your self-assessment Create an Action Plan
(chapter 7) and communication planning
(chapter 3) to pinpoint key themes; then Define the steps you will take to achieve your
take the following steps: strategic goals—these will be the backbone
of your action plan. Remember, strategies are
• Specify an objective of the organization. the paths that the organization will take toward
• Ask each person on the team to identify achieving the identified strategic goals. It is
the organization’s strengths related to this advisable to select a combination of strategies
objective, and provide each one with three for each strategic goal to maximize impact.
cards to write the three strengths, one on In your annual workplan (chapter 3) the steps
each card. Then collect and cluster the are spelled out in great detail. But in strategic
cards to identify the main themes the planning, you look at the big picture across
team has identified. a broader time horizon. Consider creating a
spreadsheet, or project plan, to capture each
• Repeat the exercise for internal weaknesses,
task, what and who are needed to accomplish it,
external opportunities, and external challenges
and by when it should be accomplished
or threats. Collect and cluster the cards
(see section 7.4).
to identify the main themes the team has
identified for each of the SWOT elements.
• Develop a matrix (see Figure 49). Step 8. Identify the Resources
Needed to Carry Out Your
The following are some points to think Action Plan
about when going through the different Answer basic questions, including:
parts of the analysis:
• What funding sources do we have? Where
• Strengths Section—Factors that will help else might we find funding?
your organization achieve its programmatic
objectives, such as the ability to satisfy your • What human resources do we need?
beneficiaries’ needs, highly efficient methods Who among our staff has the necessary
of delivering your service, outstanding knowledge, skills, and experience?
personnel, or a key location.
• Weaknesses Section—Factors that will Add the answers to your action plan.
make it hard to achieve your programmatic
objectives, such as a lack of skilled human
resources, which, with correction, you can Step 9. Create a Budget
8 convert into strengths. for Implementing the Plan
• Opportunities Section—External factors Once you have developed the action plan and
that can assist your program, such as the identified the necessary resources, estimate
government deciding to increase access to how much it will cost to carry it out over the next
health services in your project area. three years.
• Threats Section—External factors over
Sustainability

which you have no control and which can Step 10. Monitor and
adversely affect your program, such as
security issues that make it hard for you to Evaluate Progress; Adjust
work in an area or changes in government the Plan as Required
legislation that affect your services and The strategic planning committee should
compel you to adjust your program. continue to meet regularly to look at internal
progress and external realities. Furthermore,
In documenting your SWOT analysis, highlight it should be flexible and make changes to the
how you plan to build on strengths, address plan as needed.
weaknesses so they do not constrain your
organization, and ensure that opportunities
and threats do not adversely affect your ability
to perform the tasks that you outline in your
action plan.

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 8.4 Strategic Planning Strategic Planning Chapter Capacity Building
(pdf) for Local NGOs: A
Online Resources www.ciir.org/Templates/ Guidance Manual
System/Basket. for Good Practice,
There are many excellent resources available
asp?NodeID=91675. published by the
online to help guide your strategic planning Catholic Institute
process. Figure 50 lists a few to get you started. for International
Relations, 2005

Figure 50—Selected Online Resources Strategic Planning This checklist can

on Strategic Planning Checklist (NGO Café) be used to assess
http://www.gdrc.org/ngo/ the readiness of
Tools and Resources Description bl-stratpla.htm an organization to
engage in strategic
Civicus Strategic Planning This toolkit offers you
planning. Its primary
Toolkit a method for detailed
utility is to plan for
http://www.civicus.org/ strategic planning.
training and technical
new/media/Strategic%20 You can replicate
assistance that can
Planning.pdf the method in any
help overcome the
organization or project
obstacles noted.
that needs to do
strategic planning. Strategic Planning Adapted from The
(in nonprofit or not-for-profit Field Guide to
Developing Strategic Plans A tool for community-
organizations) Nonprofit Strategic
(pdf) and faith-based
http://www.wmich.edu/ Planning and
http://www.coreinitiative. organizations from the
nonprofit/Guide/guide7.htm Facilitation by
org/Resources/ Core Initiative and the
Carter McNamara,
Publications/Alliance International HIV/AIDS
Authenticity
StrategicPlanning Alliance, 2007
Consulting, 2008
Tool.pdf
Strategic Planning This short guide is
NGO Self-Assessment A simple four-step in Smaller Nonprofit designed to help Board
through a SWOT Exercise process that guides Organizations: A Practical members and the staff
http://www.network an organization Guide for the Process of smaller nonprofit
learning.org through the process http://www.wmich.edu/ organizations develop
of identifying its nonprofit/Guide/guide7.htm strategic plans to
internal Strengths strengthen and sustain
and Weaknesses as their organization.
well as the external
Opportunities and
Threats it faces. One
of many resources
8.5 Summary
8
Problem Solving: SWOTs & One of many Organizations that undertake sound strategic
Strategic Plans resources and tools planning are better situated to secure future
http://www.networklearning. available for free to funding as well as gain perspective on
org/index.php?searchword NGOs working in experience and their potential to strengthen
=SWOT&ordering=&search the development or their impact in the future. Ultimately, organi-
phrase=all&Itemid=1&optio humanitarian fields. zations that take the time necessary for
Sustainability

n=com_search Networklearning. strategic planning are more likely to become

org makes or finds
self-sustaining and make a difference over
manuals that can
the long term.
help NGOs build skills
and suggests other
Web sites with
good resources.

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CAPResourceGuide_book.indb 156 10/22/10 12:49 PM
9 Seeking Future Funding
PHOTO CREDIT: ©FHI 360.
 Seeking Future Funding
9.1 Overview

9.2 Getting Started

9.2.1 Five Tips for Seeking Funding

9.3 Researching Funding Opportunities

9.3.1 Defining Donors
9.3.2 Common Types of Donor Organizations
9.3.3 Private Sources of Funding

9.4 Applying for USG Funds

9.4.1 USG Funding Mechanisms
9.4.1.1 Acquisition versus Assistance
9.4.1.2 Cooperative Agreements versus Grants
9.4.2 USG Funding through Competitive Processes
9.4.2.1 Annual Program Statement (APS)
9.4.2.2 Request for Applications (RFA)
9.4.2.3 Request for Proposals (RFP)
9.4.2.4 Re-Competes
9.4.2.5 Multiple-Stage Competitions
9.4.2.6 Subgranting Mechanisms
9.4.2.7 Pre-Solicitation Notices

9.5 Designing Programs

9.5.1 Developing Targets
9.5.1.1 Defining Indicators
9.5.1.2 In-Country Demographic and Other Data
9.5.1.3 Past Program Data
9
9.6 Budgeting
9.6.1 Standard Budget Categories
9.6.2 Direct versus Indirect Costs
9.6.3 Cost Share
Seeking Future Funding

9.7 Eligibility Rules to Receive USG Funds

9.8 Partnerships
9.8.1 Seeking Subrecipients
9.8.2 Seeking Funds as a Subrecipient

9.9 Summary and References

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 9.1 Overview • Cost Share—The portion of project or
program costs the USG does not cover.
This may be in the form of cash or
The process of seeking funding can be
in-kind contributions.
challenging, intimidating, exciting, and stressful.
There is a great deal of competition, and, • Direct Costs—Goods and services
especially for small organizations, the future specifically purchased for the exclusive
of a program may depend on the ability to benefit of one project that are charged
secure funds. to that project.
• Grants—A method the USG uses to provide
Skip Ahead assistance. Under grants, the USG retains
f Research Funding Opportunities less control over the program, compared to
Cooperative Agreements.
f USG Funding Mechanisms
f Funding Competitions • Indicator—A specific data point an organiza-
tion tracks to monitor program progress.
f Designing Programs
• Indirect Costs—Costs that are required to
f Budgeting
carry out a project but are not attributable
f Partnerships to a specific project, such as electricity or
administrative support staff.
• In-Kind Contribution—Noncash
Successful fundraising demands using your
resources contributed to a project, which
resources efficiently to target specific funding
may include volunteer services, equipment,
opportunities aligned with your organization’s
or property. They may also count as any
work. This chapter will help you develop your
cost-share obligation.
fundraising strategy by showing you how to
research funding opportunities (9.3), apply • Key Personnel—Refers to project positions
for funding (9.4), and design programs (9.5) and to the individuals who fill the particular
and budgets (9.6). You will also find special slots. Typically, positions identified in a
sections on funding eligibility (9.7) and building Cooperative Agreement as Key Personnel
and leveraging partnerships (9.8) for increased are those leadership slots considered
funding opportunities. essential to successful implementation of
the overall project.
Objectives • Matching Funds—A percentage or fixed
• Understand different USG funding amount of non-USG resources that USAID
mechanisms and competition processes. sometimes requires recipients to provide for
a project to be eligible to receive funds.
• Learn about strategies for fundraising and
applying for funding. • MOU—Memorandum of Understanding,
a document that may be used as a
• Improve your ability to develop strong confirmation of agreed-upon terms when an
applications for funding. oral agreement has not been captured in a
formal contract. It may also set forth the basic
principles and guidelines under which parties
Key Terms and Acronyms will work together to accomplish their goals.
9 • Acquisition—A USG purchase or contract This should not be used if a transfer of funds
to obtain something for its own use. This is involved.
includes products, commodities, or services.
• NICRA—Negotiated Indirect Cost Rate
• APS—Annual Program Statement, a funding Agreement, a rate negotiated individually
solicitation that allows the USG to make between an organization and USAID to
multiple awards over a period of time. cover indirect cost. (For more information
Seeking Future Funding

• Assistance—USG funding to an individual or on indirect costs and NICRA, see USAID’s

an organization to achieve a public purpose. Best Practices Guide for Indirect Costing at
http://www.usaid.gov/business/regulations/
• Contract—The mechanism the USG uses in BestPractices.pdf.)
awarding acquisitions.
• Obligated Amount or Obligation—
• Cooperative Agreement—One of two The amount USAID has committed to the
methods the USG uses to provide assistance. program. There is no guarantee that USAID
The USG uses this method when it wishes to will reimburse the recipient for any spending
retain substantial involvement in a project. above the obligated amount.

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 • RFA—Request for Applications, a to a multiple-country region—experience
mechanism for grants or Cooperative working in an area usually suggests that an
Agreements, which means that USAID organization can provide insights into the
anticipates funding activities with limited political, cultural, and linguistic landscape.
oversight. RFAs are the most common It also means having staff and offices on
means of soliciting applications from NGOs. the ground and ready to go.
• RFP—Request for Proposals, a mechanism • Technical Expertise—Does your NGO
for contracts. Contracts may be awarded to specialize in delivering a particular service?
any type of organization, though they are In general, having a particular area of
used frequently for for-profits. technical expertise, such as behavior change
communications or setting up home-based
• Standard Budget Categories—Standard
care interventions, is more than just having
categories the USG suggests all awardees
experience; it also suggests you are a
use, including Personnel, Fringe Benefits,
competent provider in your specialized area.
Consultants, Travel/Transportation, Equip-
ment, Supplies, Contractual Services • Demographic Specialization—Does your
(subcontractors), Program Costs (sometimes NGO specialize in working with or providing
replaced with “construction costs”), Other services to a particular demographic
Expenses, and Indirect Costs. group, such as women, children, or high-
risk populations? Similar to technical
• Substantial Involvement—The right that
area expertise, specializing in a specific
the USG retains to provide input into an
demographic group may indicate particular
assistance project funded through
sensitivity in providing services to the
a Cooperative Agreement. This right
targeted group.
usually includes the ability to approve work-
plans, budgets, Key Personnel, monitoring • Special Resource Leveraging—Does your
and evaluation plans, and subrecipients. NGO have the ability to take advantage
The Cooperative Agreement specifies the of an important resource? Faith-based
areas of substantial involvement. organizations (FBOs) commonly leverage
private funds and volunteers who are
motivated by their faith to support the
organization’s initiatives. Similarly, NGOs
attached to specific universities and
9.2 Getting Started professional organizations often leverage
While there may be countless funding university staff or corporate resources.
opportunities out there, an organization
must weigh a number of factors and decide Large organizations may use a combination
which specific sources to pursue. When of these strategies, but many smaller
considering future funding, it is important to organizations usually have one primary
know your organization, have a clear mission asset on which they focus their fundraising
and vision, and understand what you do well. strategies. For example, an organization that
This will help your organization decide which specializes in providing services in a particular
funding sources to pursue and what kind of country is going to focus on exploring funding
programs to consider implementing. Such a opportunities in that country; an organization
thoughtful, realistic assessment will lead to that specializes in a technical area will focus
a better funder-recipient match. its efforts on finding opportunities to fund that 9
particular service.
Once an organization has found an appropriate
funding opportunity, the next step is to sell itself To raise funds successfully, you must build on
as the best organization for the job. Each NGO your organization’s strengths. If not, you will
has its own strategy for differentiating itself from waste time and resources going after awards
Seeking Future Funding

other organizations and selling its expertise, you are not in a good position to win or end up
experience, and capacity. NGO strategies going after funds for activities that do not fit with
commonly include one or more of the following: your mission. Developing a targeted fundraising
• Geographical Experience—Does your strategy allows you to maximize your efforts,
NGO have experience providing services stay true to your mission as an organization,
to a particular geographic area? No and ultimately increase your chances of winning
matter the size—from a single community the awards you seek.

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 5. Start pilot projects with private funds
9.2.1 Five Tips for if possible.
Seeking Funding If your organization has private funds,
consider starting a pilot project. Pilot projects
1. Apply for a reasonable and appropriate
developed on a small scale using all of the
amount of funding.
same technical design, project management,
When applying for funding, check the M&E, and budgeting principles as full-scale
solicitation for the budget range and develop projects can give your organization valuable
a program scope (for example, geographic experience you can use later in applying for
coverage and proposed targets) to fit within that funding. A proposal to expand an existing
range. (For more information on your program’s program—even a pilot program—is built on
budget, see section 9.6 on Budgeting.) more evidence than a new program. This
gives the donor more assurance that the
2. Provide specifics in proposals. proposed project has a strong chance
Technical reviewers who evaluate proposals of succeeding.
constantly ask, “How?” Do not just state
what you will do; explain how you will do it.
Describe how your approach is different and/
or how it has been successful in the past. 9.3 Researching
Explain how much it will cost and how you Funding Opportunities
will monitor the outcomes. Before you submit
a proposal, re-read the entire document and Choosing the best methods for your
constantly ask “how” questions: How much organization to raise funds takes thought and
does it cost? How will you measure it? How planning. Most organizations do not have the
will that work? How will you get that result? resources to pursue every funding opportunity,
so they will have to determine which funding
3. Build a network of partners. sources are most likely to support their goals.
Successful partnerships come in all shapes The variety of funding sources ranges from
and sizes, from large organizations to small, those designated for very specific purposes to
from private-sector businesses to charities others with almost no conditions or stipulations.
and faith-based groups. They can involve This section discusses identifying and
organizations that provide different services or understanding different funding opportunities
organizations that are similar to one another. that may be available to your organization.
The key to success is the organizations’ In the references section at the end of the
willingness to work together on a common chapter are links to resources (9.9) on various
cause leveraging the different strengths of fundraising strategies.
each. The wider your network of relationships,
the more potential partnership opportunities Fundraising takes time and skill. When seeking
you will have. financial support for your programs, you need to
dedicate resources to researching and applying
4. Be precise in responding to solicitations. for funding and exploring other methods of
fundraising. Most organizations have limited
Common mistakes made in responding to resources, so deciding how much staff time
solicitations include failing to address key and energy to divert from implementation to
9 points or criteria, missing a deadline by fundraising may be a challenge. However,
just a few hours, or failing to abide by the fundraising is not just a matter of spending time;
submission requirements. Weeks of work can it is also about using the time and skill you have
be lost if you do not include a budget or do as effectively as possible.
not use the proper template. When you decide
to respond to a solicitation, your first step
should be to examine it for exact submission
Seeking Future Funding

requirements—what documents are required,

page limits, due dates and times, submission
9.3.1 Defining Donors
instructions, etc. Make a checklist and be A “donor” usually refers to an organization
sure to check off each requirement before whose primary purpose is to distribute funding
submitting your final proposal. If possible, to nonprofit organizations to implement
submit your proposal early to avoid last- programs to achieve specific objectives.
minute problems. Donors may be governments, individuals,
businesses, or other organizations.

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 Hundreds of donors provide funding to on HIV/AIDS [UNAIDS—www.unaids.org] and
address a variety of issues in countries around United Nations Children’s Fund [UNICEF—
the world, some providing billions of dollars, www.unicef.org/]) are common examples.
others just a few thousand. Some provide open • Private Foundations—Large charitable
competitions, while others support specific foundations sometimes have grants for
types of organizations. Some provide funding programs. For more information, go to
the recipient can spend at its own discretion, www.foundationcenter.org.
while others may provide funding for a very
specific purpose. • Faith-Based Groups—Hundreds of
faith-based charities raise funds from
Finding suitable donors takes time and their members to provide grants and
research. This section outlines common types funding to organizations.
of donors. • Corporate Charitable Giving—Some large
corporations have programs to fund projects
in the countries in which they operate.

9.3.2 Common Types • Corporate Cause-Related Marketing—This

pairs corporate support of a charitable cause
of Donor Organizations with the purchase or promotion of a service
or product. One example is the Product Red
The following list may help you become aware Campaign promoted by rock band U2 lead
of donors or agencies that might be willing to singer Bono since its launch in 2006. By
support your programs or advise you on how to purchasing select Product Red-branded items
access resources to fund your projects: from companies like Gap Inc. and Starbucks
• Host Governments—Government ministries Corp., consumers can also support nonprofits
often have programs that provide funding to such as the Global Fund to Fight AIDS,
NGOs to implement programs. Their priorities Tuberculosis, and Malaria.
typically are outlined in country strategic
planning documents, which may include
details on how they plan to fund the needed
efforts in their countries. 9.3.3 Private
• Other Governments (Bilateral
Organizations/Agencies)—Just as the USG
Sources of Funding
provides funding through various agencies Support from private sources may come in the
like USAID, the U.S. Department of Health form of monetary and/or in-kind contributions.
and Human Services, or the U.S. Department Obtaining donations from individuals, found-
of Labor, other governments provide ations, and/or businesses has many advant-
development funding as well. Generally, this ages. Privately raised money often goes into
funding is organized by an agency similar to a general fund that supports an organization’s
USAID, for example, The United Kingdom’s day-to-day operations rather than being tied
Department for International Development to a specific program. Privately raised money
(DFID—www.dfid.gov.uk), the Canadian may be used as matching funds or cost share
International Development Agency (CIDA— to stretch your USAID-funded program further
www.acdi-cida.gc.ca), the Australian Agency (and potentially make you a more attractive
for International Development (AusAID— partner in the process). In addition, private 9
www.ausaid.gov.au), and the World Bank funds are often available immediately and have
(www.worldbank.org). fewer regulations, restrictions on procurement,
- Embassy Programs—Sometimes, foreign and reporting requirements.
embassies have funding to support small-
scale projects. There are numerous strategies for
raising money from private sources. Some
Seeking Future Funding

• Multi-Lateral Funding Organizations— organizations tap into connections to faith-

These organizations pool resources from based groups or other organizations that share
governments, the private sector, and their concerns. Others try to raise funds by
individuals to provide funding for specific generating public awareness about their work
causes; the Global Fund to Fight AIDS, and hoping that strong positive impressions will
Tuberculosis, and Malaria (http://www. prompt companies and/or individuals to support
theglobalfund.org/en/), and United Nations their programs.
agencies (United Nations Joint Programme

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 Most successful private fundraising strategies • Provide ways for individuals and
build on “who you know”—that is, connections organizations to become involved.
the people in your organization already People who support organizations like to feel
have. For example, if your organization is a involved. Consider ways of getting private
faith-based group, you may be able to tap companies and individuals more involved with
into a network of churches, synagogues, or your organization. For example, you might
mosques or individuals who share your faith organize special volunteer opportunities to
to raise funds. If members of your Board, or allow people to see your projects up close
staff, or even your volunteers, have personal and have a chance to contribute. Or, if
connections with businesses or other someone has demonstrated a commitment
organizations, you may be able to leverage to your NGO by providing significant support,
these to request donations. you might ask him or her to become a
member of your Board of Directors or serve
It is up to you to discover the connections that as an advisor on a particular project.
can help you raise funds. With creativity, there
is no limit to potential ideas. Here are a few Also, consider asking for in-kind support,
tips you might consider when raising funds. that is, resources other than monetary.
Instead of buying everything with cash, look
• Seek “repeat customers.”
for donations from the community. In-kind
Those in the business world know that
support, or noncash contributions, might
it takes a lot less effort to get an existing
involve items you would otherwise pay for.
customer to come back than it does to get
For example, when someone volunteers to
a new customer to come into their store for
offer you a service, supplies, or free help, you
the first time. The same is true for private
are receiving in-kind support. Such support
donations. Therefore, consider strategies to
can come from your organization’s members,
keep your existing supporters engaged. For
your local community, and others.
example, develop a newsletter describing
how you use funds or acknowledge large
The right combination of fundraising
donations through special plaques or
strategies and tactics is key and will differ
signs on project sites.
from one organization to the next. Figure 51
• Ask for donations. lists a number of potential sources of funds
If you tell a group, business, or individual discussed above, along with some of the
about the great work you do, but do not say advantages and disadvantages of each to
that you need support or do not explain how consider before deciding what mix of actions
to support your organization, then potential to take.
donors will not be aware you are soliciting
donations. Ask forthrightly and offer different
options to provide support, including in-kind
donations and cash contributions.

Figure 51—Overview of Sources of Fundraising*

Source Advantages Disadvantages

Individuals • Grassroots source one can build • Costly to develop, likely to generate
• Donors may become potential advocates small return for big effort
9 • Volunteers may be source of money and/ • Risky for inexperienced NGO
or connections to other sources • Needs significant buy-in from Board
of Directors, management, staff,
and volunteers
• In-kind volunteer service likely

Private Foundations • May be source of large sums of money • Large sums of money may
Seeking Future Funding

• Smaller funding may be ongoing be one-time

• Clear guidelines, processes • May be tied to very specific goals not
• Accessible, professional staff aligned with NGO’s
• Committed to social change
• May have rolling deadlines

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 Figure 51—Overview of Sources of Fundraising (continued)

Source Advantages Disadvantages

Corporate Foundations • May be source of large sums of money • May be tied to very specific goals not
• Smaller funding may be ongoing aligned with NGO’s
• Accessible, professional staff
• Attuned to community needs

Large Corporations • May be source of large sums of money • May be tied to very specific goals not
• Smaller funding may be ongoing aligned with NGO’s
• Professional staff • May want Board representation
• May have less-formal application process • Access may require
personal connections
• Must understand nature of business
(products or services)

Corporate Cause- • Generates short-term revenue • Short-term fix

Related Marketing • Boosts NGO image in marketplace • May be tied to very specific goals not
• Raises awareness of issue aligned with NGO’s
• Attracts volunteers • Association may tarnish image of NGO
• Generates publicity • May alienate key volunteers and/or
• Makes it easy and convenient for other donors
individuals to give • Distracts consumers from real issue(s)

Local Small • Very informal • Small amounts of money

Businesses • Money may be ongoing • Narrow range of interest
• Personal connections are key • Personal contacts mean a lot
• Local focus is important
• Not fussy about grant format

Churches, Faith- • Often looking for group projects • In-kind services most likely
Based Organizations, • May be grass roots-focused • Need to match their service, local,
Associations • Committed to public good or religious outlook

National/Local • Large sums of money possible • Application process may be

Government • Clear guidelines, processes, deadlines complicated, time-consuming
(that is, Host • Political clout helps • May require extensive
Governments) • May be source of ongoing funding reporting, recordkeeping
• Focus is public good • May be tied to very specific goals not
aligned with NGO’s

Multilateral • Large sums of money possible • Application process may be

Organizations • Clear guidelines, processes, deadlines complicated, time-consuming
(UNAIDS, UNICEF, • May be source of ongoing funding • May require extensive
Global Fund, etc.) • Focus is public good reporting, recordkeeping
• May be tied to very specific goals not
aligned with NGO’s
• Highly competitive

Bilateral Organizations • Large sums of money possible • Application process may be

(DFID, EU, AUSAID, etc.) •
•
Clear guidelines, processes, deadlines
May be source of ongoing funding
complicated, time-consuming
• May require extensive
9
• Focus is public good reporting, recordkeeping
• May be tied to very specific goals not
aligned with NGO’s
• Highly competitive
• Registration in-country may
be required
Seeking Future Funding

*Based on E.M. Hatfield at http://www.managementhelp.org/fndrsng/np_raise/np_raise.htm

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 To help find the right mix of fundraising approaches, you may consider creating a chart like the one
in Figure 52 for an NGO looking for support for its orphans and vulnerable children (OVC) program.
Figure 52—Sample Funding Source Analysis*

Funding Source Potential Time and Resources Time Unit Competition

Available Required to Pursue Potential Funding
Resources May Be Received

Ministry of Child US$10,000– Must participate in Grants awarded Competitive, but we

Welfare Orphans US$50,000 per weekly OVC Planning each year are well positioned
and Vulnerable year, renewable Sessions while in summer to receive a grant
Children (OVC) for up to 5 years, developing the for our district, since
Grants to work with district annual plan the district is very
governments on supportive of our
OVC priorities past work

XYZ Church US$5,000– Will take Grants awarded Somewhat

Foundation Grants US$50,000 approximately on a rolling basis; competitive, but
one-time grants 1 week to develop may be 3–9 we are the only
for funding to a proposal months before XYZ church-funded
strengthen the funding is received organization in this
church’s ability to region, which should
respond to position us well if we
OVC needs have a good proposal

Private Individuals Last year we Last year our Board Funding comes We have had
averaged about and executive team in regularly and small but steady
US$1,500 per traveled to church can be used for income in the
month total from groups and other immediate needs past from small
private individual, organizations to individual donations
which goes into raise funds. We also
our general maintain an e-mail
fund for both list and newsletter,
programming and both of which help
administrative generate funds.
costs This takes about
5 days a month
for 2 individuals
to manage

USAID Mission US$250,000– Approximately 3 Approximately 6 Very competitive; only

OVC APS US$500,000 weeks dedicated months before 6–8 agreements will
annually for 2–3 to developing the awards are made be awarded
years to provide proposal, using
OVC services mostly existing staff.
We may need to
contract an editor
to polish the
final proposal

9 * The data in this table are just an example and not based on actual funding research.

9.4 Applying for USG Funds Another helpful feature is the posting of award
announcements. An organization seeking to
Funding opportunities from USG agencies may be considered as a subrecipient on a larger
be found on two Web sites: award can monitor the site to see who received
an award, and then contact the recipient to
• Grants.gov (http://www.grants.gov)
Seeking Future Funding

determine whether it is seeking subrecipients

provides information on all USG assistance
to help implement the program.
(grants and Cooperative Agreements).
• Federal Business Opportunities or Looking over past announcements, which
“FedBizOpps.gov” (http://www.fbo.gov) are archived on the sites listed below, offers a
provides information on all USG sense of what was required in the past when
acquisitions (contracts). applying for a particular source of funds. For
Both sites contain helpful user guides, tutorials, example, if you are seeking funds from the
and other tips. In addition, you can search by USAID Mission in a particular country, you can
both agency and keyword. research the Mission’s past announcements

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 to see what types of funding it offered and
what it required from organizations during the 9.4.2 USG Funding through
application process. These requirements could Competitive Processes
change, but you may get some ideas about
how best to prepare your organization for One of the cornerstones of USG funding is that
future announcements. it is awarded on a competitive basis (except in
certain extraordinary situations). To make these
• Grants.gov Applicant Resources (http://
competitions as fair and open as possible, the
grants.gov/applicants/app_help_reso.jsp)
USG avoids actions that give one organization
• FedBizOpps Vendor Guide (https://www.fbo. an unfair advantage over another. Therefore, if
gov/downloads/FBO_Vendor_Guide.pdf) you ask the USG a question about a particular
solicitation, it only provides an answer if it does
Before you begin the process of applying so to all of the other organizations applying.
for USG funds, you must understand the
mechanisms the USG uses to award funding When the USG announces a particular funding
to organizations and how USG-funding opportunity, it generally provides the following
competitions work. three critical details:
• Eligibility Criteria—What types of
organizations are eligible to apply.
9.4.1 USG Funding • Application Scoring Criteria—How the
applications will be scored.
Mechanisms
• Application Requirements—What
The USG has two methods for awarding documents and information organizations
funding to organizations. The first is through must submit, how they must submit them,
acquisition, and the other is through assistance. and by when.
The USG awards contracts for acquisitions
and grants or Cooperative Agreements When applying for USG funding, you must
for assistance. address these criteria and requirements. If
the competition-scoring criteria give significant
weight to organizations that demonstrate
successful experience implementing similar
9.4.1.1 Acquisition programs, then you want to address your
versus Assistance organization’s experience in your proposal.

Acquisition is when USAID buys something. Types of Solicitation Mechanisms

This can be anything from pens and paper
The USG uses different types of solicitation
to special services, such as information
mechanisms to award funding. The most
technology, printing services, or health services,
common are competitive mechanisms such
and is achieved through contracts.
as Annual Program Statements (APS),
Requests for Applications (RFA), or Requests
Assistance is when USAID provides funding
for Proposals (RFP), often involving execution
(or something else of value) to another party
of one or more contracts/agreements for a
for the implementation of programs that will
contribute to the public good.
fixed period. However, the USG uses many 9
variations and strategies to achieve different
programming results.

9.4.1.2 Cooperative
Agreements versus Grants 9.4.2.1 Annual Program
Seeking Future Funding

The primary difference between grants and Statement (APS)

Cooperative Agreements is that the USG
An APS is a funding solicitation that allows
retains greater involvement in Cooperative
the USG to make multiple awards over a
Agreements through what it terms “substantial
defined period. Sometimes, the USG uses
involvement” (2.6). Depending on the specifics
APSs to make awards from different agencies.
of the award, substantial involvement may
include the right to approve implementation
The USG uses the APS to encourage potential
plans, workplans, M&E plans, Key Personnel,
applicants to propose innovative and effective
and subrecipients.

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 new approaches to address a specific new award. The solicitation has clear criteria,
challenge. APS applications follow general and applicants will be evaluated on a
themes that are outlined in the solicitation, competitive basis.
and applying local NGOs propose the actual
proposed activities by themselves. Applications Do not shy away from applying for a project
are generally accepted and reviewed on a when there is an incumbent. You never know
rolling basis over a defined period, for example, whether there may have been performance
a year. While the USG may set an award ceiling problems with the previous winner, or perhaps
for each grant, under an APS, applications may the USG will like the new approach your
be accepted for any amount up to the maximum organization offers.
and for variable periods. Usually, the USG sets
a total overall budget for the solicitation, and A unique aspect of a re-compete is that you
once those funds are committed or after one can do research to find out what worked well and
year, the call for applications is closed. what problems may have occurred under the
original award. Consider talking to community
leaders, beneficiaries, and subrecipients that
participated in the original program.
9.4.2.2 Request For
If you happen to be an incumbent on a
Applications (RFA) re-compete, do not take it for granted that
you will win. Incorporate the lessons you
RFAs are the most common means of
learned from your experience into your
soliciting applications from NGOs. An RFA
application and suggest new approaches
is a general solicitation with a stipulated
you will take if you win a second award.
deadline. The scope of an RFA may vary from
focusing on specific activities to being wide
open. With the exception of timing, an RFA is
generally as flexible as an APS. Like an APS,
it is a mechanism for grants or Cooperative 9.4.2.5 Multiple-Stage
Agreements, which means that it anticipates Competitions
funding activities with limited oversight.
The USG often uses multiple stages in
competitions, especially when it expects a large
number of applicants. The first stage requires
9.4.2.3 Request For a short concept paper that describes the
proposed project at a high level with a simplified
Proposals (RFP) budget. The USG reviews these concept papers
and allows a limited number of applicants to
Projects may also be funded through RFPs,
move on to a second stage, where they submit
which are acquisition instruments that lead
detailed technical applications and budgets.
to the execution of contracts. Contracts may
be awarded to any type of organization,
This process gives organizations an excellent
though they are used frequently for for-profit
opportunity to enter a competition without
companies, since payment of fees (that is,
committing the time and resources needed to
profit) is allowable under this mechanism.
develop a full proposal.
9

9.4.2.4 Re-Competes 9.4.2.6 Subgranting

A USG-funded project usually has a Mechanisms
limited period of performance, for example,
Seeking Future Funding

five years. However, if the circumstance that One strategy the USG uses to limit the
the project was attempting to address still number of awards it directly manages, while
exists when the project ends, the USG may still allowing it to provide smaller awards
decide to “re-compete” the program, starting to a larger number of organizations, is to
a new bidding process to continue the work. create a subgranting program. In this type of
The organization with the original award, program, the USG makes a single award to
called the “incumbent,” is eligible to apply but an organization with the capacity to compete,
must compete in an open competition for a award, and manage numerous smaller awards.

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 The USG often requires the implementing 9.5 Designing Programs
organization to subgrant to specific types of
entities for specific purposes—for example, Once you find a funding opportunity you wish
it may require that all the subgrants go to to pursue, the next step is developing a
community-based organizations (CBOs) to program concept that builds on your existing
provide OVC services in their communities. work and meets the program requirements
Sometimes, the subgranting programs come in the solicitation. The core of your program
with technical assistance, trainings, and other design should leverage your relevant existing
benefits for the subrecipients. For smaller projects, experience, partnerships, and data
organizations, this can be a great way to as much as possible. You must also develop
tap into USG resources. an approach to the additional programmatic
elements the solicitation requires but your
Most subgranting programs are run at the organization does not currently address. You
country level out of a USAID Mission, which may consider filling in these gaps through
represents the agency in-country. Since a third partnerships with other organizations or by
party manages them, these opportunities proposing to hire individuals with special skills.
are not posted on http://www.Grants.gov
or http://www.fbo.gov. Network with other Once the core program design is complete, you
organizations or contact your local USAID will need to determine the size of the program,
Mission to find out whether subgranting including the budget and geographical scope.
programs already exist in your country and You will follow up this step by laying out an
when the next round of solicitations will implementation timeline and determining what
be available. staff you will need to carry out your program.

Finally, you will need to create an M&E plan

(illustrated in Figure 53) that includes estimating
9.4.2.7 Pre-Solicitation Notices the total number of targets you believe your
program can reach. This plan should also
Sometimes, prior to an announced opportunity, include how you will count targets, monitor
the USG will post a pre-solicitation notice on progress, and measure impact.
http://www.Grants.gov or http://www.fbo.gov.
The USG uses this strategy to solicit feedback, These are not stand-alone components; in
questions, and clarifications from potential fact, they comprise the three parts of your
bidders before the competition begins. This is implementation model: activities, costs, and
an excellent way for you to get advance notice targets (3.4.1.1). This model presents how you
about what programs the USG is considering perform your work, the inputs required, and the
funding. The solicitation may change, but a expected results; it is the basis of your entire
pre-solicitation does give you extra time to program design.
explore potential partnerships and strategies
for competing.

Figure 53—Key Parts of an M&E Implementation Plan

Core Program Concept Project Size and Scope M&E Strategy

9
Seeking Future Funding

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 As you design your model, the individual
elements of activities, costs, and targets are 9.5.1.2 In-Country
intricately linked together. Changes in budget, Demographic and
for example, may affect your targets or force
you to modify your activities. Other Data
The next step in selecting your targets is
Program design requires a wide range of
to gather demographic and other data for the
talents, including technical experts, project
geographic area you are targeting. These help
managers, finance and budget experts, and
you to estimate the total potential population
people with local experience. You may also
in a particular area.
need input from people who have experience
with USG regulations and someone with good
If the solicitation to which you are responding
writing skills to bring everything together in a
does not specify a geographic area, you
well-written technical description.
can also use demographic and other data to
determine where needs are greatest. You can
No matter how many—or how few—people
combine these data with research on existing
are involved in designing a program, it is
projects to determine where there are gaps
important that everyone understands the links
in the existing program. Some countries also
among activities, costs, and targets.
publish more detailed data, which include
organizations, in what geographic areas they
The following sections provide tips and
work, and what services they provide.
suggested resources on developing targets
(9.5.1) and budgeting (9.6).
Many host governments publish demographic,
epidemiological, and program data on Web
sites that you can use to develop your target
estimates. Be sure to document the source of
9.5.1 Developing Targets the data and the process you used
to develop your estimates.
A key question you must answer when applying
for funding is, “How many people will we serve?”
Although trying to predict how many people you
might reach can be very challenging, you can
take steps to facilitate the process. 9.5.1.3 Past Program Data
Data from past programs can be extremely
valuable in helping you estimate targets, costs,
and time parameters; however, getting such data
9.5.1.1 Defining Indicators can be difficult. Potential sources include publicly
available evaluations of previous projects, a
The first step in estimating the number of
small-scale pilot project or similar program you
beneficiaries your program will reach is to define
are running in a nearby geographic area, and/
your indicators, which are signs of progress
or your partners, who may have relevant data
and change that result from your project’s
from similar projects that can help you design
interventions. Indicators become the data that
your program. If you are using data from another
you track or monitor over time to evaluate the
project, remember that potential differences from
success of your program. Some donors may
9 have a common set of indicators on which
one geographic area to the next may affect your
project estimates.
programs must report. In addition, the host
government may define its own indicators.
Solicitations that require you to report on these
additional indicators usually explain these 9.6 Budgeting
requirements in the funding announcement.
Sizing Your Budget and Program
Seeking Future Funding

As you list the required indicators, be sure

to have a clear definition of what the indicator The budget will determine the size and scope
means to enable you to count someone as of your proposed project. You will obviously
“reached” or “trained.” This definition is critical be expected to reach a lot more people with
in helping you determine how many people you a US$5 million project than you will with a
will reach with your program by clarifying the US$500,000 project.
amount of time and resources it takes to reach
that individual with a particular service
or intervention.

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 Some solicitations do not give an exact funding
amount, but they may provide a range or state Find It Online
the total available funding and the expected SF-424A—Budget Information—Non-
number of awards. For example, an APS Construction Programs
(9.4.2.1) might announce it has an estimated
US$20 million available to fund between five
and eight three-year projects. That would mean, In some cases, USAID modifies this list to
on average, the USG expects to award each better fit the program. For example, USAID
organization between US$800,000 and US$1.3 programs sometimes remove the “construction”
million annually. Using this range as a starting category and add a category for “program
point, you can estimate the geographic scope costs.” (For more information on financial
and/or number of beneficiaries you can expect management, see chapter 4.)
to reach.
The following section defines each category
Be wary of coming in below or above this and gives some examples of the costs included
range. If you are below this range, consider in each.
adding subrecipients that may be able to
cover additional areas and reach additional Personnel
beneficiaries. If you are significantly above
Personnel includes salaries for staff dedicated
the range, consider reducing the scope of
to the project, including regular employees and
your project.
long-term contract employees. Do not include
consultants or staff of subrecipients. For staff
From the USG perspective, it takes almost the
working on your project part time, only include
same effort to manage a US$50,000 award as
the portion of their salary relevant to the project
it does to manage a US$5 million award, which
and note the percentage of their time dedicated
means that managing dozens of small awards
to the project. Do not include any fringe benefits
is impractical. Therefore, if your organization
in this section.
is too small to manage a large award, you
may want to consider building a consortium
If you have someone on your project team
of partners to jointly propose a single, larger
who is under a contract, and you are not sure
program that fits within the estimated award
whether to list that person under personnel or
size in the solicitation.
contractual services, consider the following:
• Short-term contractor with a specific
deliverable may fit better under
9.6.1 Standard “contractual services.”

Budget Categories • All personnel listed in this section must

submit time sheets.
During the application process, you may • All individuals proposed as Key Personnel
be required to use the Standard Form (SF)- should be listed under personnel.
424A—Budget Information—Non-Construction
Programs. This form breaks down your budget
into standard budget categories: Fringe Benefits
Fringe benefits include costs associated
• personnel • other
with providing health insurance, pensions, or
9
• travel • fringe benefits other benefits to employees. Fringe benefits
are sometimes budgeted at a set rate based
• supplies • equipment on a percentage of salary, and an audit
usually determines this rate. If the individual
• construction • contractual is employed outside of the U. S., local laws
Seeking Future Funding

(or program may determine the fringe benefit rate or items

costs) • indirect costs
required to be provided as benefits.

Fringe benefits for staff working on the

program should be the same as for other
staff in your organization.

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 Travel Contractual
The travel budget should be broken down into This category may include individual consultants
the following: and subrecipients. When applying for a contract,
individual consultants should be listed with a
• local travel (travel that does not include any
daily rate and estimated number of days. It is
overnight accommodation);
a good idea to have a Contractor Employee
• domestic travel (travel within the country that Biographical Data Form for each consultant
will likely include per diem rates for lodging (Standard Form-1420, http://www.usaid.gov/
and meals and incidental expenses); and forms/a1420-17-1.pdf). Other contractors, in-
• international travel. cluding subrecipients, should be included here.

You should prepare separate detailed

The travel budget should include the following: budgets following the same budget guidelines
• airfare; for prime partners for each subrecipient named
in your proposal. (Programs that give numerous
• per diem (lodging, meals and
small, one-time grants to community-based
incidental expenses);
organizations may list these costs under
• vehicle rental; “program costs.”)
• taxis; and
• mileage or gas/petrol costs. Construction
There are very strict regulations regarding
The travel budget should not include: the use of USG funds for construction. If
construction costs are allowed, the solicitation
• vehicles to be purchased; will generally make that clear. Otherwise, this
• maintenance of vehicles; or category should be US$0.
• vehicle insurance or licensing fees. In some cases, the funding agency will modify
the standard form and replace this category
If you do not have exact travel plans, with something more relevant, such as
estimate the number of trips and budget based “program costs.”
on historical costs. You should not go above
standard USG mileage and per diem rates. Program Costs
For each planned trip, include the following:
Program costs cover beneficiary-related items,
• number of people traveling; such as test kits, training materials, charges for
• destination; renting training facilities, promotional materials,
services for beneficiaries, and expendable
• purpose; and
equipment under US$5,000 that may be used
• duration. in training or promotional events. You should
include as much as you can in this category, as
programs are encouraged to spend their funds
Equipment on providing benefits to recipients.
You should list all equipment with an individual
unit cost of US$5,000 or more under this Other
9 category. This includes vehicles. If a vehicle
costs less than US$5,000 (for example, a Other costs include all other operational and
motorbike), list it under “other.” Regardless of program direct costs attributable to the project.
cost or category, however, all vehicles require These may include publications, training, rent,
approval for purchase. If equipment costs less insurance, maintenance, electricity, water,
than US$5,000, such as office equipment, list it postage, telephone, and Internet expenses.
However, if you have a NICRA, do not include
Seeking Future Funding

under “supplies.”
costs that are covered by your indirect cost rate.

Supplies For example, if your NICRA includes office rent,

Include supplies, materials, and expendable do not include that here as well. Further, if you
equipment under US$5,000 in this category are using the “program costs” category, be sure
unless you have a section for “program costs,” to include any program-related costs in that
and it is more appropriate to list the items there. category when appropriate. See below for more
details on the program costs category.

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 Indirect Costs
Matching Funds
Indirect or shared costs are costs that are
required to carry out a project but are difficult The term “matching funds,” often used
to attribute to that one project, such as office interchangeably with cost share, is used when
rent, utilities, and administrative staff. Some program recipients are required to provide a
certain amount of non-USG monetary support
organizations go through a process with
to a project to be eligible for a USG award. For
USAID to establish a NICRA (2.5.2) and use example, if a solicitation states that the recipient
that to address these kinds of costs. But most must provide a 10% match to be eligible to
organizations do not have a NICRA (or only receive US$1 million in funding, an organization
have a NICRA for headquarters expenses), would need to provide US$100,000.
so they need a method to determine how to
allocate these kinds of costs.
also use noncash or in-kind resources toward
your cost share, including volunteer time,
donated equipment, buildings, etc. To count
9.6.2 Direct versus these resources toward your cost share, you
must document their source and value.
Indirect Costs
How does this help my program?
Costs that are easily attributable to a specific
The commitment of funds or other in-kind
project, such as the salaries of individuals
resources to share the costs of meeting the
working directly on the project, are called “direct
objectives of the project outlined in your
costs.” Shared costs are called “indirect costs.”
grant or Cooperative Agreement can help
(For more information on direct and indirect
your organization:
costs, see section 2.5.2)
• Improve program sustainability by
Know Your Cost-Share Commitment establishing secure and alternate funding
mechanisms and sources.
If applicable, your cost-share commitment
typically is listed in the following sections: • Facilitate greater commitment by
other partners that have a stake in
f The end of your award letter in section A.
program outcomes.
General Item 5—“Cost Sharing Amount
(Non-Federal)” • Build donor confidence in your organization’s
f Attachment A to your award, the Schedule ability to help itself.
• Part 4—“Cooperative Agreement Budget”
• Part 9—“Cost Sharing”
Note: Organizations may overlook potential
sources of in-kind contributions at their fingertips.
Volunteer hours that are tracked on time
cards, for example, can be reported as in-kind
contributions and count as cost share. While

9.6.3 Cost Share some organizations find the extra paperwork

burdensome, the USG often considers
organizations that leverage a lot of volunteer
When you apply for an award, you may choose hours to be attractive partners. Also, tracking
or be required to provide a share of the total
cost of the project from other sources (non-
and reporting the equivalent value of those 9
hours helps to demonstrate the value of your
USG). This commitment is referred to as cost organization when you are seeking new funds.
share, either in cash or other resources, and
increases the overall project budget.
What Counts toward Cost Share
While there may not be a matching funds
To be counted, a cost-share contribution must
Seeking Future Funding

requirement for recipients to be eligible to

receive funding from a USG agency, many meet all of the following criteria:
partners commit to providing non-USG • be included in the approved budget;
resources as a way to share project costs.
• be verifiable in the recipient’s records
(organizations should have a system in
To qualify as cost share, the contribution must
place, similar to their accounting system,
be from non-USG sources, such as private
that documents cost share);
foundations or individual donations. You can

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 • be necessary and reasonable to accomplish • Donated Supplies
project objectives properly and efficiently; Donated supplies may include expendable
• be allowable under the applicable USG equipment, office supplies, laboratory
cost principles (including reasonableness supplies, software, utilities (electric,
of the cost or value of the donated goods telephone, computer network, janitorial
and services); services), and workshop supplies. The value
assigned to expendable personal property
• not be paid for by the USG under another
counted as cost share must be reasonable
award; and
and must not exceed the market value of the
• not be included as a contribution for any other property at the time of the donation. Bills,
USG-funded program. invoices, and vouchers are sufficient proof
Although the solicitation may not require of valuation.
cost share, once you commit to a cost-share
• Cash Contributions (Project Co-Funding)
amount, you are obligated to provide it.
Cash contributions may include funding
Note: Certain regulations that apply to the use of from non-USG donors, such as international
USG funds, such as source/origin requirements organizations, foreign governments and
and the restricted goods provision, may not apply institutions, and private organizations or
to the use of non-USG cost-sharing resources. individuals. You should get a letter from the
For example, if a Mercedes-Benz motor vehicle donor clearly stating how much cash/funding
(non-USG source) was donated to be used on was donated.
the project, it could be recognized as cost share
because source and origin rules do not apply to • Donated Equipment, Buildings, and Land
cost share.
Equipment, buildings, and land may include
donated or discounted office space, donated
or lent equipment, and the temporary use of
Therefore, only commit to cost share that you donated space or facilities. The value of land
know you can generate. If you are unable to and buildings should be established by an
fulfill your cost-share requirement, your AO independent appraiser (for example, certified
may consider it sufficient reason to terminate real property appraiser) and certified by an
the award or withhold funds at the end of official in your organization. For donated and
your award. If your agreement has ended, lent equipment and the use of space, the value
the USG may require you to reimburse it for should not exceed its fair market/rental value.
the unmet cost-share contribution. However,
if you exceed your cost-share contribution, you
will be commended for providing more than Reporting Cost Share
your obligation.
To demonstrate that you are meeting your cost-
Examples of Types of Cost Share, Valuation, share obligation, you must record the amount
and Documentation (or equivalent amount in the case of in-kind
contributions) in your quarterly Federal Financial
• Volunteer Services Report using the SF-425 form. These amounts
must be verifiable in your organization’s records
Volunteer services—provided by professional
and are subject to auditing.
and technical personnel, consultants, and
9 other skilled and unskilled labor—may count
toward your cost-share obligation if the Cost Share from Subrecipients
service is an integral and necessary part of With the authorization of the AO, you may
an approved program. Rates for volunteers capture cost-share contributions from
should be consistent with those your subrecipients (if any) on the project to meet
organization and the local labor market your obligation. Require subrecipients to follow
Seeking Future Funding

pay for similar work. the same considerations described above.

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 Figure 54—Summary of Cost-Share Valuation and Documentation

Type of Valuation Supporting Documentation

Cost-Share
Contribution

Volunteer services • Rates must be consistent • Signed time sheet showing the hours worked
with those paid for similar • A rate calculation of how the time should be valued
work within the organization.
• If required skills are not found
in grantee’s organization, then
the rate should be consistent
with those paid for similar work
in the labor market.

Donated employee • Employee’s regular rate of pay • Signed time sheet showing the hours worked
time by another • A rate calculation of how the time should be valued
organization (for example, pay stub)

Donated supplies • Fair market value of the • Letter of donation being made
supplies at the time of • Valuation of the donated supplies from catalogue
the donation or Internet prices, bills/invoices, or quotes for
same supplies

Cash contributions • Actual costs incurred • Letter from the donor documenting the amount of
cash donated and the name of the project supported
• A bank statement showing the date and the amount
the grantee received and spent

Donated • Normally, depreciation • Letter stating what was donated

equipment, (in accordance with the • Accounting policy reflecting depreciation policy
building, organization’s policy) or use of organization
or land charges for equipment and • Comparable catalogue or market survey prices
buildings may be made. • Independent appraisal of the value of land
• Full value of equipment or
other capital assets and fair
rental charges for land may
be allowed provided the AO or
Grants Management Officer
has approved the charges.

Project co-funding • Actual cost incurred • Letter from donor stating what was donated or copy
of agreement or contract
• Copy of invoice paid by the other donor

9.7 Eligibility Rules to Special Eligibility Criteria

Receive USG Funds for U.S. Small, Woman-, or
Minority-Owned Businesses
The pre-award survey (see section 2.3.1) is the
first activity the USG will undertake to determine
In some cases, the USG uses special 9
optional criteria to encourage certain types
whether you are eligible to receive funding.
of organizations to apply and increase
their chances of success. One example is
Eligibility for Specific Programs solicitations that give extra points to small,
Each individual program may have additional woman-, and minority-owned businesses.
eligibility guidelines in the announcement. These usually only apply to U.S.-based private
Seeking Future Funding

Check each solicitation closely for program- businesses. If you feel your organization might
specific eligibility criteria. benefit from such a designation, be sure to
check the specific process for certifying
your status.

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 9.8 Partnerships sign-offs on day-to-day decisions take a lot
of time. A lead organization should empower
Developing partnerships is an excellent way subrecipients to contribute to the overall
to broaden the number of funding opportunities program, but should be able to manage the
that are relevant to your organization. In many day-to-day administrative tasks and help
cases, a particular funding opportunity is simply drive decisionmaking in a timely fashion.
too large for any single organization to manage • A subrecipient relationship should be
on its own. If your organization is able to handle collaborative. The prime partner would be
most but not all of the work, then you may want well served to seek input from the sub
to seek subrecipients to help with the additional and must work together with the sub. The
tasks. If your organization cannot handle the subrecipient, in turn, must respect the
majority of the work, but can contribute to an deadlines and other requirements the
important part of the project, you may want to prime partner sets.
find a larger organization that is applying for
funding and serve as a subrecipient on • All partnership models should have clear lines
its application. of communication, roles, and responsibilities
and regular processes for sharing exper-
iences and working through challenges.
Types of Partnerships Even partnerships with strong, experienced
There are many different ways to build a organizations can fall apart because of simple
team. The partnership model you propose to misunderstandings that could have been
implement your program may take advantage avoided through better communication.
of any combination of the following types of
partner relationships:
Subagreements, Subcontracts,
1. Implementing Subrecipient—An implementing
subrecipient is an organization that directly Subgrants, and MOUs
implements part of a program and probably When you enter into a partnership, usually
has a subagreement with its prime. some form of contract document clarifies the
purpose of the relationship, expectations, and
2. Contractor—A contractor is a business or the details of what funding and/or services
organization that provides a specific service are required.
to the project team and is probably under
contract with its prime. For example, a At the application stage, an MOU is probably
contractor may provide training or consult all that is necessary, since there is no guarantee
on the development of an M&E system. of funding yet. However, once an award is
made, it is important to establish more formal
3. Beneficiary Organization—A beneficiary contracts and agreements. Though there
organization is an organization that may be are many different types of agreements, the
responsible for implementation, but acts more following terms are common in agreements
like a beneficiary than an implementer.] In this between NGOs:
case, the primary goal of the program is to
• Agreement or Subagreement—This
build the capacity of that organization. Small
document is much like a Cooperative
community-based organizations are examples
Agreement between the USG and the prime
of beneficiary organizations. One probably
9 uses a subgrant agreement or an MOU with
partner and should outline the subrecipient’s
program, time frame, budget, reporting, and
such an organization.
other requirements.
While there is no formula for determining the • Contract or Subcontract—This is usually
right mix of partnership types for a particular used to purchase a good or a service. At a
program, here are a few things to consider: minimum, the document outlines the specific
Seeking Future Funding

goods or services being purchased, the

• Each subrecipient requires oversight. You
price, when the goods or services are to be
may want to limit the total number of partners
delivered, how payment will be made, and
to a number you can reasonably manage.
any other relevant terms. The emphasis of a
• A successful partnership has a lead contract is more on deliverables than on how
organization. Without a leader, every the partnership will work.
decision is reached by consensus, and

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 • Grant or Subgrant—The grant agreement later and then outline the process you will use
should specify how the grantee is to use for subrecipient selection.
the money and what obligations it has for
accounting or reporting in the future. Before searching for a subrecipient, outline
the criteria it must meet. Perhaps it needs
• Memorandum of Understanding (MOU)—
to have experience or presence in a certain
An MOU is often used when no direct
geographical area, or perhaps it needs to
transfer of money takes place, but there is
have implemented a similar-size program in
an expectation of other goods or services
the past. You may rank these criteria in order
changing hands between organizations. For
of importance, so they can help you evaluate
example, an MOU describes a relationship
objectively which organizations are the best
where a prime partner provides training,
fit for you.
support, or commodities to a community
organization to carry out its programs.
Strategies for finding good subrecipients
include working with NGO networks and
asking other organizations with which they
9.8.1 Seeking Subrecipients have worked in the past. It may take a lot of
time meeting with organizations and reviewing
Subrecipients can fill in gaps in your proposal their work, so be sure to get started on your
and make it stronger, and they can give you subrecipient search early.
on-the-ground presence in communities where
you have not worked before. They can also
bring expertise in certain technical areas where
your skills may be limited. Subrecipients can
help implement, or they can provide technical
9.8.2 Seeking Funds
assistance and training. They do not need to be as a Subrecipient
smaller organizations—in fact, often local NGOs
bring in large international NGOs to provide Monitor funding announcements and look for
technical support on a project. funding opportunities to which you may be able
to contribute as a subrecipient. Once you find
During the proposal process, if you feel there is an appropriate opportunity, find organizations
a gap that a subrecipient might fill, consider the that are planning or willing to apply for the
following options: award. This process is all about networking.
Try to determine whether there are NGOs
• If you know of an appropriate organization that are particularly well situated to respond
and have an existing relationship with it, to the award. Perhaps there is an in-country
name it in your application. This is the organization that is already doing similar work
strongest option, especially if you have and may be interested in expanding. Call the
worked with this organization successfully director to ask whether the organization is
in the past or you want it to take on a major thinking about applying and suggest how you
implementation role. might be well situated to contribute as a sub.
• If you know of an organization but do not
have experience working with it or are unsure One of the additional benefits of seeking funds
of its capabilities, mention it as a possible as a subrecipient is that the prime applicant
partner, but suggest that you will finalize the may have more resources to commit to
partner selection after the award is made. proposal development. The prime may ask 9
This gives you an opportunity to compete out you to contribute your portion of the program
the subaward or to conduct an assessment description and a budget. Do not hesitate to ask
of the potential partner before establishing an the prime applicant for guidance in developing
agreement with it. If this is the case, it may targets and budgets.
still be a good idea to sign an MOU with the
If the lead organization you are working with is
Seeking Future Funding

potential partner and clarify the post-award

process you are planning to use to finalize not successful, your chance to participate in the
the subaward. program is not over yet. As soon as the award
is announced, try contacting the successful
applicant and/or the USG and let either know
If you do not know of an organization or are
how you hope to contribute to the program. The
unsure about potential partners with which
successful applicant may not have named all
you have met, it may be best to explain in your
of its subrecipients yet and may add you to its
application that you will name subrecipients
team before the program starts.

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 9.9 Summary and Fundraising
• Know How Nonprofit: a place for nonprofit
References people to learn and share what they have
Fundraising is a challenging task, but with a learned with others
thoughtful strategy, program design, budget, http://www.knowhownonprofit.org/funding
and solid partnerships, you will increase your • The Community Tool Box: Soliciting
chances of success and continue to serve the contributions and in-kind support
beneficiaries who rely on your programs. http://ctb.ku.edu/en/tablecontents/sub_
section_main_1340.htm
• Network for Good: Information and tools
References for online fundraising
Forms http://www.fundraising123.org/fundraising
• SF-424A—Budget Information— • Selecting Fundraising Software
Non-Construction Programs http://www.techsoup.org/learningcenter/
http://apply07.grants.gov/apply/forms/ software/archives/page9939.cfm
sample/SF424A-V1.0.pdf

9
Seeking Future Funding

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 9
Seeking Future Funding

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CAPResourceGuide_book.indb 178 10/22/10 12:49 PM
Index
 letter to USAID 126
Index inventory
maintaining documentation
125
123
A remaining funds 121
accounting system 11, 33 subrecipients 119
accrual 33 timeline and checklist 127-129
cash-basis 33 communication 48-58
acquisition 165-166 audit 49-50
activity descriptions 38, 41 ethical guidelines 58
example 41 plan 49-50
outline 41 compliance 64-65
activity wish list 142 contracts 35, 44, 122, 126, 165-166
agreement dates 21 Cooperative Agreement 9, 16, 19-23
allowable costs 19, 78 sections 20-23
assistance 165-166 cost share 19, 21-22, 42-44, 68, 79,
audit 15, 19, 32-33, 35-36, 49-50, 106-109, 122 103, 120, 122, 171-173
audit package 109 documentation 172-173
final audit 122 valuation 173
subrecipients 107-108
award amount 8, 21, 72 D
example breakdown 72 data quality 92
detailed budget 43
award letter 20-23
Development Experience Clearinghouse 124
award phase 7-10, 18
drug-free workplace policy 36-37, 192
subagreements 18
tasks and timeline 10
E
economy seating 85
B
eligibility 165, 173, 193
baseline assessment 29, 46
small, women-, or
branding 51-56
minority-owned businesses 173
level 2 brand 52
logo 53 EPLS Web site 82-83
equipment
budget 12, 14, 21, 40, 42-45, 154, 168-172
19, 21, 23, 44, 55, 76-79, 83, 88-90, 124-125
cost share and matching funds 44
Excluded Parties List 8, 35, 82, 192, 194-195
detailed budget 43
direct vs. indirect costs 171
F
narrative 44
faith-based organization 36, 159, 163, 192
rebudgeting 40, 45, 72-73
hiring protections 36
significant rebudgeting 40, 72-73
summary budget 42-43 federal audit clearinghouse 108-109
workplan 40, 42-44 federal financial report (SF-425) 101-103, 122
financial management 66-74
burn rate 71-72
financial system 32-33
minimum requirements 32
C
Foreign Tax (VAT) Reporting 109-112, 122, 194
capacity building 135-137, 139, 143-144
forms
action plan 143-144
SF-270 30-31, 66-70, 119-120, 194
leadership 136
SF-424 13, 169
cash-basis accounting 33 SF-425 21, 30, 72, 101-104, 122
close out 116-130 SF-1034 30, 66, 70-71, 119-120, 191
award extensions 117-119 SF-1408 11
INDEX

cost-share requirements 121-122 SF-1420 16, 36, 44, 170

final audit 122
fundraising 73, 157-176
final Foreign Tax (VAT) Report 122
donor organizations 161
final performance report 124
research 160
final property inventory 125
USG funding 164-167
final request for funds 119-120
final SF-425 122

The Essential NGO Guide to Managing Your USAID Award 179

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 G P
geographic code 21, 80-81 partnerships 160, 167, 174-175
per diem 86-88, 170
Global Fund to Fight AIDS,
performance reports
Tuberculosis, and Malaria 161
21, 45-46, 104-106, 119, 124
governance 139-140 sample outline 106
grants 165-167 pipeline 71-72, 101
subgrants 174-175 pre-award assurances 13-14
pre-award phase 11-14
H pre-award survey 7-9, 11-13, 15, 32, 173
human resources 16, 35-37, 123-124, 130 survey questions 11-13
policies 35-37 findings 15, 23
procurement 18-19, 21, 33-35, 75-83, 191-193
I
allowability test 77
implementation model 65, 167-168
Excluded Parties List 8, 18, 35, 79, 82
indicators 40, 46-48, 92-93, 167-168
instruments 35
indirect costs
motor vehicles 78, 81
12, 16-17, 21, 44, 73, 90, 104, 171, 192
phases 75-76
policy standards 33-35
K
prohibited items 78-79
Key Personnel 14-16, 22, 44, 90, 169
restricted items 78
source/origin restrictions 80-81, 172
L
subrecipient requirements 76-77
learning and sharing 93-95
unallowable costs 12, 78
UN Al-Qaida and Taliban List 8, 18, 82
M
U.S. Treasury Blocked Persons List
management 28, 32-37, 40, 139-140
8, 18, 82
marketing 51, 56, 161
marking 19, 40, 54- 56, 192 program description 23, 37-39
donor requirements 54-56 program design 93, 167-168
marking and branding plan 54 past program data 168
program deliverables 55 program income 23, 67-68, 102-103
subrecipient requirements 55 prohibited items 78-79
meals and incidental expenses (M&IE) property 21, 78, 88-90, 125, 141, 172
85, 87-88
memorandum of understanding (MOU) 74, 175 Q
micro-purchase threshold 35 quarterly performance report (QPR) 104-106, 124
minority-owned businesses 34, 173
modification 16, 21, 45, 90, 118-121 R
monitoring and evaluation (M&E) rebudgeting 40, 45, 72-73, 76
22, 40, 45-48, 91-93, 167 requesting a modification 90, 118-121
baseline assessment 46-47 requesting an advance 67-70, 191
indicators 40, 46-48, 92-93, 167-168 requesting an extension 117-119
plan 167-168 reporting 97-113
system setup 46-48 due dates 100
targets 38-41, 47-48, 90-93, 106, 167-168 requirements 100-113
restricted items 78
N
negotiation phase 14-15 S
NICRA 17-18, 21, 44, 73-74, 171, 192 shared costs 17, 74, 171
establishing NICRA 17-18 source/origin restrictions 80-81, 172
INDEX

standard budget categories 42-44, 72, 169-171

O construction 169-170
obligated amount 8-9, 21,121 contractual 170
obligation ceiling 71 equipment 170
Office of Financial Management 30 fringe benefits 169
organizational assessment 134, 137-142 indirect costs 171
organizational capacity 136-140, 143 other 170
origin restrictions 21-22, 76-78, 80-82, 172

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 personnel 169 marking requirements 19, 55
program costs 170 procurement 19, 76, 82
supplies 170 requirements 18-19
travel 170 seeking subrecipients 175
selection process 19
Standard Form-270 (SF-270)
30-31, 66-70, 119-120, 192 substantial involvement 9, 15, 22, 64, 165
calculation area 68 success story 56-58
final report 119-120 sustainability 147-155
requesting reimbursement 69
top portion 67 T
targets 38-41, 47-48, 90-93, 106, 167-168
Standard Form-424 (SF-424) 13, 169
adjusting 92
Standard Form-425 (SF-425)
21, 30, 72, 101-104, 122 technical program management 91-95
bottom portion 103 travel 44, 84-88
final report 122 documentation 85
middle portion 102 Fly America Act 84
top portion 102 travel policy 85-88
Standard From-1034 (SF-1034) U
30, 66, 70-71, 119-120, 191 USAID team 30
final report 119-120 USG funding mechanisms 165-167
top half 70 acquisition vs. assistance 165
annual program statement (APS) 165-166
Standard Form-1408 (SF-1408) 11
cooperative agreements vs. grants 165
Standard Form-1420 (SF-1420) 16, 36, 44, 170
multiple-stage competitions 166
standard provisions 18-23, 36, 77, 191-194
pre-solicitation 167
standards of conduct 34-36
re-competes 166
start-up phase 25-59
request for applications (RFA) 166
timeline 29
request for proposals (RFP) 166
strategic objectives 38-41, 49, 153 subgranting 166-167
strategic planning 136, 148-155
USAID-funded property 88-90
action plan 154
post-award requirements 125
goals 152
mission statement 152
W
objectives 153
waiver 44, 55, 78, 81
online resources 155
women-owned businesses 34,173
SWOT 153-154
workplan 22, 28-31, 37-45, 105-106, 151
values 152
activity descriptions 41
vision 152
appendicies 40
subrecipients 14, 18-19, 22, 28, 55, budget 40, 42-45
65-66, 76-77, 82, 90, 99, 104-105, 107-110, executive summary 38
112, 117-121, 123, 172, 174-175, 194-195 implementation plan 38-39
agreements 18-19 logic matrix 39
audit requirements 107-108 management and staffing plan 40
close out 99, 117, 119, 123 monitoring and evaluation 40
foreign tax reporting 110 sections 38
INDEX

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Annex I
Annex I Allowable Cost—An incurred cost determined
to be an acceptable charge.
AO—Agreement Officer, the USAID official
with the authority to enter into, administer,
Glossary of Terms terminate, and/or close out assistance
and Acronyms agreements and make determinations and
findings on behalf of USAID.
AOTR—Agreement Officer’s Technical
A Representative (formerly referred to as the
A-122—This U.S. Office of Management and Cognizant Technical Officer. Under a contract,
Budget Circular, “Cost Principles for Non- this position is referred to as the Contracting
Profit Organizations,” establishes principles Officer’s Technical Representative), the USAID
for determining the cost of grants, contracts, official responsible for monitoring a grantee’s
and other agreements with non-profit progress toward achieving the agreement’s
organiz-ations. By design, the principles purpose and for serving as technical liaison
provide that the USG bear its fair share of between the grantee and the Agreement
costs except where restricted or prohibited Officer (AO). The AO will name and delegate
by law. authority for specific responsibilities to the
A-133—This U.S. Office of Management AOTR named in a Cooperative Agreement.
and Budget Circular, “Audits of States, APR—Annual Program Report, a report
Local Governments and Non-Profit due upon completing implementation of
Organizations,” sets forth standards for an organization’s annual workplan. See
obtaining consistency and uniformity among also SAPR.
USG agencies for the audit of states, local
APS—Annual Program Statement, a funding
governments, and non-profit organizations
solicitation that allows the USG to make
expending USG funds. Currently, for U.S.-
multiple awards over a period of time.
based organizations the threshold for an
A-133 audit is $500,000 per annum, and for Assistance—USG funding to an individual or
non-U.S.-based organizations the threshold an organization to achieve a public purpose.
is $300,000 per annum. See also Acquisition.
Accrual Accounting System—An accounting Assistance Objective Team—The USAID group
method that records financial events based that makes a preliminary determination on the
on economic activity rather than financial duration and type of funding instrument.
activity. Under accrual accounting, revenue Audit—An independent review and examination
is recorded when it is earned and real- of system records and activities.
ized, regardless of when actual payment
is received. See also Cash-Basis Audit Package—A package of forms and
Acounting System. information that includes the findings of an
audit and a corrective action plan to address
Acquisition—A USG purchase or contract each finding in the auditor’s report.
to obtain something for its own use. This
includes products, commodities, or services. Authorized Class of Service—Unless travel
See also Assistance. falls under certain exceptions, air travel
purchased with USG funds requires the
Action Plan—A specific series of steps customary standard commercial airfare
describing what needs to be done, how, (economy class or equivalent).
when, and by whom to accomplish one or
more objectives. Written action plans can Award Amount (or Award)—The total amount
be used at the organization, project, or that is anticipated to be spent over the life of
activity level. the project. See also Total Estimated Cost.

ADS—The Automated Directives System

(ADS— http://www.usaid.gov/policy/ B
ads/) encompasses the totality of USAID’s
Baseline (or Baseline Assessment)—
regulatory body. Additionally, it includes
A snapshot of the community or targeted
suggested but not mandatory procedures
beneficiary group prior to the start of
and links to examples of best practices.
a project.
Allocable Cost—A cost incurred specifically to
ANNEX I

Beneficiary—The individual, group, or

support or advance an award.
organization, whether targeted or not,

The Essential NGO Guide to Managing Your USAID Award 183

 that benefits, directly or indirectly, from CFR—Code of Federal Regulations, the
the development intervention. codification of the general and permanent
rules published in the Federal Register by
Board of Directors—The group
the executive departments and agencies of
governing the overall direction and
the USG.
mission of an organization.
Close Out—The final phase of a project
Brand—A visual representation of a
in which activities are finalized and
product or service, such as a logo or
administrative tasks completed.
graphic that is easily recognizable.
It is a project’s “signature.” Commodity—Any item that can be bought
or sold, usually a product or raw material
Branding—The process of developing an
(lumber, wheat, coffee, metals, etc.).
identity for a product or service using images
and words to evoke positive emotional Communication—The process of transmitting
responses in beneficiaries, which are ideas and information about the nature of
influenced by their interactions with the an organization and the issues with which
implementation of the brand (promotion, it deals; an ongoing, core activity that is key
customer service, other customers, etc.). to sustaining an organization. See
See also Marking. also Marketing.
Burn Rate—The rate at which an organization Contract—The mechanism the USG uses in
spend its award funds on a periodic basis, awarding acquisitions.
typically monthly. See also Pipeline. Cooperative Agreement—One of two methods
the USG uses to provide assistance. The
USG uses this method when it wishes to
C retain substantial involvement in a project.
CAP—Capable Partners Program, a USAID- See also Grants.
funded program that works to strengthen Cost Objective—The cost limit of an activity
the organizational and technical capacities within budget limits. A project cannot exceed
of non-governmental organizations, the cost objective that has been set for it.
community-based organizations, faith-
based organizations, intermediary support Cost Share—The portion of project or
organizations, and NGO networks across program costs the USG does not cover.
technical sectors. CAP provides technical This may be in the form of cash or in-kind
assistance, training, and grants management contributions. See also In-Kind Contrib-
to USAID Missions and operating units to utions and Matching Funds.
enhance their NGO programs. CTO—Cognizant Technical Officer (outdated
Capacity Building—Strengthening the term, replaced by either AOTR, Agreement
ability of an organization to manage itself Officer’s Technical Representative, or COTR,
and achieve its mission effectively. Contract Officer’s Technical Representative).

Cash-Basis Accounting System—A method

of bookkeeping that records financial events
D
based on cash flow and cash position.
Income is recorded when cash is received, Debarment—An action taken by a an official
and expense is recognized when cash is paid to exclude a contractor from USG contracting
out. In cash-basis accounting, revenues and and USG-approved subcontracting for a
expenses are also called cash receipts and reasonable, specified period; a contractor
cash payments. Cash-basis accounting does so excluded is “debarred.”
not recognize promises to pay or expectations DEC—USAID’s Development Experience
to receive money or service in the future, Clearinghouse, the largest online
such as payables, receivables, or pre-paid or resource of USAID-funded technical and
accrued expenses. This system is simpler for program documentation.
individuals and organizations that do not have
significant numbers of these transactions, or Direct Costs—Goods and services specifically
when the time lag between initiation of the purchased for the exclusive benefit of one
transaction and the cash flow is very short. project that are charged to that project.
See also Accrual Accounting System. Disallowed Cost—An incurred cost
CBO—Community-Based Organization. questioned by the audit organization that
ANNEX I

USAID has agreed is not chargeable to

the U.S. Government.

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 Due Diligence—The necessary assessment of a single form, the two most common USG
the past performance, reputation, and future financial reports—the Financial Status Report
plans of a prospective partner or other entity, and the Federal Cash Transaction Report.
with regard to various business practices
Finding—The answer to an audit objective
and principles. This normally involves,
that is supported by sufficient, competent,
at a minimum, examining their social,
and relevant evidence.
environmental, and financial records.
Fiscal Year—Sometimes called a financial year
DUNS Number—A unique nine-character
or budget year, a period used for calculating
number assigned to all businesses, which
annual (“yearly”) financial statements (http://
is required to do business with the U.S.
en.wikipedia.org/wiki/Financial_statement) in
Government for contracts or grants (see
businesses and other organizations. It may
http://fedgov.dnb.com/webform).
or may not correspond to the calendar year,
which is January 1 through December 31. The
USG fiscal year covers a 12-month period
E that begins October 1 and ends the following
September 30.
EIN—Employer Identification Number
(also known as a U.S. Federal identification Fly America Act—A regulation that applies to
number that identifies a business or nonprofit all USG-funded travel and requires the use of
entity); USAID uses it to facilitate payment for U.S. flag air carriers, with a few exceptions.
an award. FM (or FMO)—USAID’s Financial
Excluded Parties List—A database of Management Office.
individuals and organizations that are not Foreign Tax Report—The report that all USG
eligible to receive funding from USAID or any recipients must fill out annually to report the
USG agency. Recipients are responsible for Value-Added Tax (VAT) that was paid to the
using this online database to check vendors, host government. The reports are used to
consultants, and applicants prior to making ensure that U.S. foreign assistance is not
any purchases or hiring decisions being taxed.
(http://www.epls.gov). Other online sources
for verifying eligibility include the UN Fundraising—The process of soliciting
Consolidated List (http://www.un.org/sc/ and gathering contributions (money or
committees/1267/consolist.shtml) and the other resources), by requesting donations
U.S. Department of Treasury’s Designated from individuals, businesses, charitable
Nationals List (http://www.ustreas.gov/offices/ foundations, or governmental agencies.
enforcement/ofac/sdn/).
External Relations—Refers to the
efforts of an organization to enhance
G
communications, foster relationships, and Generally Accepted Accounting Procedures
build public understanding and support for (GAAP)— A standard framework of
the organization and its work. guidelines for accounting and financial
reporting. It includes the standards,
conventions, and rules accountants follow
F in recording and summarizing transactions
and in preparing financial statements.
FAR—Federal Acquisition Regulations, the Many countries use the International
body of U.S. laws that govern the USG’s Financial Reporting Standards (IFRS, http://
procurement process. en.wikipedia.org/wiki/International_Financial_
FBO—Faith-Based Organization. Reporting_Standards), established and
maintained by the International Accounting
Federal—Pertaining to the U.S. Government.
Standards Board (http://en.wikipedia.org/
Federal Audit Clearinghouse—An office within wiki/International_Accounting_Standards_
the USG in charge of receiving, processing, Board), which also provides a framework of
and distributing to USG agencies the Single accounting standards and financial reporting.
Audit reporting packages of thousands of
Geographic Code—The code that USAID
recipients of USG funding.
assigns to grantees to designate the specific
Federal Financial Report (FFR)—Also known countries from which they are authorized to
ANNEX I

as SF-425, a new USG financial reporting purchase goods and services.

form that replaces, and consolidates into

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 Gift—Any gratuity, favor, discount, Indirect Costs—Costs that are required to
entertainment, hospitality, loan, forbearance, carry out a project but are not attributable
or other item having monetary value. It to a specific project, such as electricity or
includes services as well, such as gifts of administrative support staff. See also NICRA.
training, transportation, local travel, lodging, In-Kind Contribution—Noncash
and meals, whether provided in-kind, by resources contributed to a project, which
purchase of a ticket, payment in advance, may include volunteer services, equipment,
or reimbursement after the expense has or property. They may also count as any
been incurred. cost-share obligation.
Governance—The process of providing overall International Travel—Any travel between
vision, direction, purpose, and oversight to an two countries.
organization through a structure—a Board
of Directors—separate from the day-to-day
management of the organization.
K
Grants—A method the USG uses to provide Key Personnel—Refers to project positions
assistance. Under grants, the USG retains and to the individuals who fill the particular
less control over the program, compared to slots. Typically, positions identified in a
Cooperative Agreements. Cooperative Agreement as Key Personnel
are those leadership slots considered
essential to the successful implementation
H of the overall project.
HIV/AIDS—HIV—Human Immunodeficiency
Virus, a virus that can infect people and
destroy their immune system, the body’s M
mechanism for fighting infection. AIDS—
M&E—Monitoring and Evaluation, the process
Acquired Immune Deficiency Syndrome,
of collecting and analyzing data and
the illness that results in the body’s
information for the purpose of identifying and
inability to fight infection.
measuring a project’s impact.
Horizon—The amount of time an organization
M&IE—Meals and Incidental Expenses, costs
will look into the future when preparing a
incurred during travel, such as breakfast,
strategic plan.
lunch, dinner, gratuities and tips for services,
HR Policies—A set of rules, values, or guiding laundry, toiletries, etc.
principles that define how an organization
Management—The day-to-day operation of the
addresses human resources-related
organization. See also Governance.
matters. Human resources policies should
reflect sound practice, be written down, be Management Decision—The evaluation of
communicated across the organization, and a recommendation by management and a
be reviewed and modified periodically to decision on an appropriate course of action.
reflect changing circumstances. Mandatory Standard Provisions—The set of
Human Resources—Refers to how employees rules and regulations that must be followed
are managed by organizations, or to the by recipients of USAID funds. (For more
personnel department charged with that role. information, go to http://www.usaid.gov/policy/
ads/300/303mab.pdf.)
Marketing—The processes and activities
I that contribute to an organization’s public
Impact—The identifiable, measurable results image that, when developed effectively—and
of project activities. reinforced by the good work of staff—help
Incidental Expenses—Expenses incurred earn the trust and confidence of beneficiaries,
during travel, such as gratuities and tips for local leaders, and donors. See also
services, laundry, toiletries, etc. Communication.

Indicator—A specific data point an organization Marking—Applying graphic identities or logos

tracks to monitor program progress. See to program materials or project signage to
also Target. visibly acknowledge contributors; identifies
organizations supporting the work.
ANNEX I

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 Matching Funds—A percentage or fixed Origin—Where an item was originally grown
amount of non-USG resources that USAID or manufactured. See also Source.
sometimes requires recipients to provide for OVC—Orphans and other Vulnerable Children.
a project to be eligible to receive funds. See
also Cost Share.
Micro-Purchase Threshold—The amount P
your organization sets under which your
Per Diem—The maximum amount of money
procurement process may be simplified. For
that the USG allows an individual to be
example, if your micro-purchase threshold
reimbursed for per day to cover lodging
is $1,000, you may be required to secure a
and meals and incidental expenses when
minimum of three bids on items above that
traveling on behalf of a project.
amount, but not on items equal to or below
that amount. Pipeline—The amount of funds obligated but
not yet spent, which is calculated by adding
Mission—The USAID representative body in a
all funds spent to date and subtracting that
country receiving USAID assistance.
amount from the total obligation to date.
Modification—Changes requested over the life See also Burn Rate.
of an award, such as additional obligations,
Pre-Award Survey—A review of an
program alterations, and changes in Key
organization’s financial system to determine
Personnel, which require approval.
whether the system meets USAID’s minimum
MOU—Memorandum of Understanding, a requirements before funding is awarded.
document that may be used as a confirm-
Prime (Recipient)—The recipient of USG
ation of agreed-upon terms when an oral
funding that directly receives the funds and is
agreement has not been captured in a formal
ultimately responsible for accurate completion
contract. It may also set forth the basic
of each reporting cycle and program targets.
principles and guidelines under which parties
will work together to accomplish their goals. Prior Approval—Written authorization from
This should not be used if a transfer of funds the USAID Agreement Officer prior to a
is involved. procurement or other action.
Procurement—Acquiring goods and services
in a fair, transparent way in accordance with
N applicable rules and regulations.
NGO—Non-Governmental Organization. Program Income—Funds earned by the
NICRA—Negotiated Indirect Cost Rate program for the benefit of the program itself.
Agreement, a rate negotiated individually For example, program income comes from
between an organization and USAID to charging fees for services or from the sale
cover indirect cost. (For more information of commodities. It is also earned by selling
on indirect costs and NICRA, see USAID’s equipment purchased with program funds that
Best Practices Guide for Indirect Costing at is no longer needed. Note: Program income
http://www.usaid.gov/business/regulations/ is different from income-generating activities
BestPractices.pdf.) in which the program’s beneficiaries keep
any income earned.
No-Cost Extension (also called a Non-
Funded Extension)—When the recipient Prohibited Items—Goods or services
requests and is given additional time beyond that cannot be purchased with USG
the award end date to use unspent funds funds under any circumstances. See
from the original award to complete activities. also Restricted Items.
Prohibited Source—Any person seeking
official action by the USG employee’s
O agency, or who does business or seeks to
Obligated Amount or Obligation—The do business with the employee’s agency.
amount USAID has committed to the Promotion—Any type of tactic other than
program. There is no guarantee that USAID advertising (for example, special events,
will reimburse the recipient for any spending posters, T-shirts, fliers) used by a marketer
above the obligated amount. See also (for example, an NGO) to increase the
Award Amount. awareness of a product, service, or idea
ANNEX I

among specific target audiences.

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 Q SF-1408—Standard Form-1408, Pre-award
Survey of Prospective Contractor Accounting
QPR—Quarterly Performance Report.
System, used to assess the adequacy of an
organization’s accounting system.

R SF-1420—Standard Form-1420, Contractor

Employee Biographical Data Sheet, used
Reasonable Cost—A cost that is generally during the hiring process to gather relevant
recognized as ordinary and necessary and information, including salary history.
that a prudent person would incur in the
conduct of normal business. Shared Costs—Goods and services
benefiting multiple projects and for which
Recipient—An organization receiving direct a vendor cannot invoice each project
financial assistance (a grant or Cooperative separately; therefore, the costs are charged
Agreement) to carry out an activity or to each benefiting project based on a pre-
program. See also Subrecipient. determined formula.
Restricted Items (or Restricted Significant Rebudgeting—Moving funds
Commodities)—Goods or services that between budget categories above a certain
may not be purchased without specific threshold set by USAID.
written permission in advance. See also
Prohibited Items. Source—Where one procures an item or a
service, regardless of its origin (where it was
RFA—Request for Applications, a mechanism originally grown or manufactured). This is
for grants or Cooperative Agreements, generally the physical location of the vendor.
which means that USAID anticipates funding See also Origin.
activities with limited oversight. RFAs are the
most common means of soliciting applications SOW—Scope (or Statement) of Work, also
from NGOs. called Terms of Reference (TOR).

RFP—Request for Proposals, a mechanism for Standard Budget Categories—Standard

contracts. Contracts may be awarded to any categories the USG suggests all awardees
type of organization, though they are used use, including Personnel, Fringe Benefits,
frequently for for-profits. Consultants, Travel/Transportation, Equip-
ment, Supplies, Contractual Services
(subcontractors), Program Costs (sometimes
replaced with “construction costs”), Other
S Expenses, and Indirect Costs.
SAPR—Semi-Annual Performance Report Strategic Planning—An organization’s process
(sometimes pronounced “Sapper”), a report of determining its direction or strategy and
due six months into the implementation of an making decisions related to pursuing it.
organization’s annual workplan that updates According to an adaptation from the Field
the USG on the project’s progression. See Guide to Nonprofit Strategic Planning and
also APR. Facilitation, “Simply put, strategic planning
SF-270—Standard Form-270, Request for determines where an organization is going
Advance, used to request funds for a grant over the next year or more, how it’s going to
or Cooperative Agreement. get there and how it will know if it got there
or not.”
SF-424—Standard Form-424, Assurance
of Compliance, used by organizations to Subaward—Funding issued to an organization
assure USAID that they will comply with the through an intermediary that manages the
necessary regulations and requirements funds for the original funder.
and are able to complete their Subrecipient (or Sub)—An organization
programs successfully. receiving financial assistance to carry
SF-425—Standard Form-425, Federal Financial out an activity or program through a primary
Report, used to prepare financial reports for a recipient (or other subrecipient). See
grant or Cooperative Agreement. also Recipient.
SF-1034—Standard Form-1034, Public Substantial Involvement—The right that
Voucher for Purchases and Services Other the USG retains to provide input into an
Than Personal, used to request funds assistance project funded through
and liquidate advances for a grant or a Cooperative Agreement. This right
ANNEX I

Cooperative Agreement. usually includes the ability to approve work-

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 plans, budgets, Key Personnel, monitoring USAID—United States Agency for International
and evaluation plans, and subrecipients. Development, an independent USG agency
The Cooperative Agreement specifies the that supports long-term and equitable
areas of substantial involvement. economic growth and advances U.S. foreign
policy objectives.
SWOT—Strengths, Weaknesses, Opportunities,
and Threats, a strategic planning tool that USG—United States Government.
helps an organization examine itself and the
external and future environment in which the
organization operates. V
VAT—Value-Added Tax, levied on the
purchase of goods and services, similar to
T U.S. sales tax.
TA—Technical Assistance. Vehicle—“[S]elf-propelled vehicles with
Target—An estimated number of beneficiaries passenger carriage capacity, such as
a program expects to reach for a particular highway trucks, passenger cars and buses,
indicator within a defined period. motorcycles, scooters, motorized bicycles
and utility vehicles” (22 Code of Federal
Terms of Reference—Provisions that describe Regulations 228.13 [b]).
the purpose and structure of a project, usually
created during the early stages of project
management. See also Scope of Work.
W
Total Estimated Cost—The total projected
cost of a project included in an organization’s Waiver—The written permission required to
Cooperative Agreement. eliminate the requirements of a specific
policy. Authorized individuals, such as
Agreement Officers, may grant waivers to
meet specific project needs.
U
Workplan—A document that lays out a
Unallowable Costs—Costs that cannot be
program’s planned activities, associated
reimbursed either because of regulations
resources, and targets.
or because they are not reasonable
or appropriate.
Unit Cost—The actual cost of a program
divided by the actual number of targets
reached. For example, a $100,000 prevention
program that reaches 1,000 people has a unit
cost of $100 per person reached.

ANNEX I

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Annex II
 Annex II - Conduct annual audits when certain
criteria are met.
- Submit reports on audit conclusions.
Common USAID
- Monitor subaward financial performance.
Standard Provisions
Standard provisions are a variety of laws, Allowable Costs
regulations and requirements that apply to
entities receiving federal funding from USAID. Defines the concept of allowable costs, and
Though they are “standard,” the actual explains your organization’s responsibility for
provisions that you find in your Cooperative ensuring that costs are allowable.
Agreement may vary based on the • Applies To: All Recipients
following criteria:
• U.S.-based vs. non-U.S.-based
organizations have different standard Amendment
provisions, with some overlap. Describes the process to amend the
• Some standard provisions must be included Cooperative Agreement.
in all Cooperative Agreements (“mandatory (See Modifications to Your Agreement.)
standard provisions”), whereas others are only • Applies To: All Recipients
included if they are relevant to your specific
program (“required as applicable standard
provisions”). Applicability of 22 CFR 226
Some standard provisions provide informational Applies all of the regulations under 22 CFR 226
notices to the recipient, while others require the to the recipient and subrecipients of the award.
recipient to take specific action. (See Subrecipient Requirements.)
• Applies To: U.S.-based Recipients
The following list is not a complete list of all
the standard provisions you may find in your • Actions Required: Ensure subrecipients
award. However, the list does include major have a copy of the standard provisions.
items that may affect your award, especially Non-U.S.-based NGOs must be given the
those that require you to do something to be standard provisions relevant to them.
in compliance.

Condoms
States that information provided about
Legend
condoms under this award must be medically
Applies to Non-U.S. Organizations accurate and in line with information in the
Condom Fact Sheet (http://www.usaid. gov/
Applies to U.S. Organizations
our_work/global_health/aids/TechAreas/
prevention/condomfactsheet.html) available
on USAID’s website.
• Applies To: All Recipients

Accounting, Audit
and Records Conversion of US Dollars
Summarizes the requirements for record to Local Currency
keeping and performing annual audit for States that your organization’s chief of party
non-U.S.-based recipients and subrecipients. in-country must consult with the USAID Mission
• Applies To: All Recipients on the process for converting dollars into
local currency.
• Action Required:
• Applies To: U.S.-based Recipients
- Maintain records for three years following
the end of the award. • Actions Required: Consult with the
ANNEX II

in-country mission.

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 Cost Share (Matching) subrecipients on the basis of the religious
character or affiliation.
Defines the rules and requirements for cost share
and matching. • Applies To: All Recipients

• Applies To: All Recipients with a cost-share or Implementation of E.O.

matching requirement defined in the schedule of 13224 - Executive Order on
the award
Terrorist Financing
• Actions Required: Document and
report the cost-share contribution from Reminds recipients that they are prohibited
your organization. from providing financing to individuals and
organizations associated with terrorism.
• Applies To: All Recipients
Debarment,
• Actions Required: You must check the
Suspension, and Other Excluded Parties List to ensure your
Responsibility Matters subrecipients, suppliers and contractors
States that you agree to notify the Agreement are not ineligible to receive USG funding.
Officer (AO) immediately if you learn that your (See Ineligible Suppliers and the
organization or any of its principle officers are Excluded Parties List.)
disqualified from receiving U.S. government
(USG) funds, which occurs when someone is
convicted of a crime. It also provides a clause
International Air Travel
you must include in your subagreements and Transportation
and contracts. States the rules surrounding international
• Applies To: All Recipients air travel funded under your agreement.
• Applies To: All Recipients
Disputes
Provides a process for resolving disputes Local Procurement
under this award. Describes the circumstances in which local
• Applies To: Non-U.S.-based Recipients procurement is permitted.
• Applies To: All Recipients
Drug-Free Workplace
Outlines the requirements of a drug-free Marking under
workplace policy that must be implemented USAID-Funded Assistance
within 30 days of the award.
Describes the marking and branding
• Applies To: All Recipients requirements under USAID-funded programs.
• Actions Required: Distribute a drug-free • Applies To: All Recipients
workplace policy within 30 days of the award
to employees who will be involved in the
federally funded program. Negotiated Indirect
Cost Rate (NICRA)
Equal Protection of the The provisions in this section will vary from
one organization to the next, based on whether
Laws for Faith- and Community- or not you had a provisional or predetermined
Based Organizations NICRA established when your Cooperative
States that beneficiaries of your program Agreement was awarded. There are important
must not be discriminated against based on follow-up steps you must take, which are
their religious beliefs. It further states that described in detail in the NICRA section of
faith-based organizations must separate their this document.
religious activities from the activities supported • Applies To: All Recipients who pursue
under this award, either in time or location. a NICRA
Finally, states that if the organization receiving
• Actions Required: Following the completion
funding under this award makes subawards, it
of your annual audit, partners with a pro-
ANNEX II

must not discriminate against potential

visional NICRA will need to propose a final
NICRA to your Agreement Officer

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 Nondiscrimination or treatment method to which they are
morally opposed.
No U.S. citizen may be discriminated against
based on the basis of race, color, national • Applies To: All Recipients
origin, age, handicap or sex. This is primarily
only applicable to NPI partners if they plan to
recruit and hire positions funded under their
Organizations Eligible
award in the U.S. (Human Trafficking/Prostitution)
• Applies To: U.S.-based Recipients This provision states that none of the funds
under this agreement may be used to promote,
support or advocate the legalization or practice
Non-liability of prostitution. However, that does not mean
If you are sued or taken to court by someone that prostitutes are ineligible to receive the
because of something that happened in the services you may be providing, so long as
execution of your program, the USG will not those services are not promoting or supporting
be held responsible. prostitution. A similar provision entitled
“Prohibition on the Use of Federal Funds
• Applies To: All Recipients to Promote, Support, or Advocate for the
Legalization or Practice of Prostitution”
Notices may also appear in your agreement, and
reinforces this policy.
Describes the official process for communicating
between your organization and USAID. This • Applies To: All Recipients
process applies to key formal notices, not
everyday communications. Participant Training
• Applies To: All Recipients This provision provides regulations that must
be followed if your program includes training
Ocean Shipment of Goods non-U.S. individuals outside their home country.
That includes training any of your non-U.S. staff
States that, if you plan to ship goods to the in the U.S., or a third country, or if you train
country you are working in via ocean cargo, you third-country nationals in the country where
must send at least half your cargo on privately- you are implementing. These regulations are
owned U.S. flag commercial ocean vessels. outlined in the Participant Training section.
A process is also described for applying for
waivers, if shipping via a U.S. flag vessel is • Applies To: All Recipients
not a viable option.
• Applies To: All Recipients Payment
• Action Required: You must submit copies Non-U.S. NGOs have three separate provisions
of the ocean bills of lading to specified USG on payment topics: 1) Payment Advances
offices at USAID and the U.S. Department and Refunds, 2) Payment - Advances, and 3)
of Transportation. Payment - Reimbursements. These provisions
lay out the following: 1) The processes for
requesting and disbursing funds from the
OMB Approval under the USG, 2) What happens if there are remaining
Paperwork Reduction Act funds at the end of the award, and 3) That
USAID reserves the right to require you to
Lists the various information you are required to
refund any amount which is not spend in
provide the USG under the standard provisions,
accordance with the terms and conditions of
and provides an estimate of how long it should
the award (i.e. costs not allowable under the
take you to comply.
regulations outlined in the Procurement section
• Applies To: U.S.-based Recipients of this guide.) Please note that, the process
outlined in these provisions calls for the use of
SF-1034 for requesting advances, and reporting
Organizations Eligible the liquidation of funds. However, USAID’s
(HIV/AIDS Funding) Financial Management Office has instead asked
This provision states that organizations NPI partners to use the SF-270 for requesting
eligible to receive funding can not be required funds (both advances and reimbursements), and
ANNEX II

to endorse or participate in a multi-sectoral the SF-269 A for reporting the status of funds.
approach, or endorse or utilize a prevention • Applies To: Non-U.S.-based Recipients

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 Procurement of this award. It includes regulations governing the
sale of personal property, which are designed
Goods and Services to ensure that they do not profit by selling items
Outlines the minimum standards that must that were brought into the country duty-free.
be included in an organization’s procurement
• Applies To: All Recipients
policies. (See Procurement Policy Standards.)
• Applies To: All Recipients
Reporting Foreign Taxes
Requires you to submit a report of any foreign
Prohibition of Assistance taxes that have been assessed and reimbursed
to Drug Traffickers to your organization.
This provision only applies to certain countries, • Applies To: All Recipients
as defined in USAID ADS Chapter 206
(http://www.usaid.gov/policy/ads/200/206.pdf). • Action Required: Submit report annually on
Currently, only three PEPFAR countries are April 16. (See Foreign Tax Reporting.)
listed: Haiti, Vietnam and Nigeria. Organizations
operating in those countries must follow a Revision of Award Budget
special procedure for gaining approval of
subrecipients, and must include a special This provision states that you must seek
clause in their subawards. approval for significant rebudgeting, as well
as other major changes in your scope.
• Applies To: Recipients operating in Haiti,
Vietnam or Nigeria • Applies To: All Recipients

Public Notices Standards of Accessibility for

This provision encourages you to notify the Disabled in Construction
the public about your work, and requests you For projects that include either new
include a statement in any press releases construction or renovation, the resulting
related to your USAID-funded project. Further, structure must meet or exceed U.S.
you are requested to provide your AOTR/COTR accessibility standards for the disabled.
and the USAID public affairs office copies of
• Applies To: Recipients with construction or
press releases related to your USAID-funded
renovation components in their program
project as far in advance as possible.
(See Marking and Branding.)
• Applies To: All Recipients Subagreements
The subagreements provision differs between
U.S.-based NGOs and non-U.S.-based NGOs.
Publications and
Media Releases The provision in agreements with U.S.-based
A copy of all publications that result from NGOs states that all communication with
your work funded by USAID must be sent to subrecipients, subrecipients, and contractors
the address specified, in the format specified. under the award must be directed through the
This provision also clarifies copyrights of recipient to USAID. These subrecipients are not
these materials. to communicate with USAID directly for issues
relating to this award.
• Applies To: All Recipients
• Action Required: Copies of publications The provision for non-U.S.-based NGOs
must be sent to the address specified in states that subrecipients must be screened
your agreement. through the Excluded Parties List, and should
be made only with responsible organizations
that possess the potential ability to perform
successfully under the terms and conditions of
Regulations Governing a proposed agreement. Further, this provision
Employees and Standards states that subagreements must include
of Conduct certain required language and provisions.
This provision outlines standards of conduct of • Applies To: Recipients with subrecipients
ANNEX II

employees operating in foreign countries under

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 Termination and • Applies To: All Recipients
Suspension • Action Required:
This provision provides the grounds and - Maintain records justifying certain
process for terminating the award. procurement decisions.
• Applies To: All Recipients - Ensure vendors are not ineligible by
checking the Excluded Parties List.

Title to Property - Include section in subagreements with

procurements of $5,000 or more.
There are five different provisions that are
found in Cooperative Agreements that related
to the title to, use and care of property. Use of Pouch Facilities
Non-U.S.-based NGOs may see provisions
describing the restrictions on use of property In some cases, the in-country mission and U.S.
that they retain the title to, and use and care of Embassy may permit you to use the diplomatic
property when the title is with the USG or the pouch to transmit documents relating to your
cooperating country government. U.S.-based program, such as submitting hard copies of
NGOs will see a provision describing the use signed reports. The U.S. Embassy may also
and care of property in which the title remains permit your employees to send and receive
with the cooperating country government. small amounts of personal mail, but not boxes
or magazines. Please contact your in-country
See the Equipment section of the chapter mission to see if the Embassy in the country
on Procurement for more details on the use you are working in permits such use of the
of property purchased under this award. pouch facilities.

• Applies To: All Recipients • Applies To: All Recipients

USAID Disability Policy Voluntary Population

Requires that you not discriminate against Planning Activities
men, women or children with disabilities in There are two provisions relating to
your programming. population or family planning. The first states
• Applies To: All Recipients that USG funds may not be used for involuntary
sterilization or abortions. The second states
that USG funds cannot be used to coerce
USAID Eligibility Rules someone into using a family planning method
for Goods and Services that is contrary to his or her moral beliefs.
This provision has further detailed regulations
Summarizes procurement regulations and around family planning that is important to
restrictions relevant to your award. These understand if your NPI program, or a future
regulations and restrictions do not apply to USG-funded program you undertake,
procurements made with private sources of includes a family planning component.
funds to meet any cost-sharing requirement
under your award. (See Procurement.) • Applies To: All Recipients
ANNEX II

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