Standard 3: Accurate and cost-efficient proposal budgeting.
Develop an accurate and cost-efficient proposal budget including a budget narrative based on project activities and timeline, and in accordance with CRS policies and donor requirements.
Work with partners to develop detailed budgets and budget narratives in line with the project activities schedule and staffing plan, and adjust as needed.
Partner budgets are an important part of a CRS project budget, given partners’ role in implementing many field-level activities. CRS accompaniment of partners as they develop their budgets:
- Helps the partner to create a budget that is realistic, complete and meets CRS and any donor requirements.
- Ensures a shared CRS and partner understanding of the costs involved in implementing and managing the project.
- Ensures that CRS and partner budgets “tell the same story.”
- Primary responsible: CRS proposal budget lead
- The CRS budget lead oversees the process of working with partners to develop their budgets.
- Others involved: CRS proposal technical lead; CRS proposal coordinator; CRS finance manager (FM); partner’s budget lead and other partner proposal development team members; CRS head of operations (HoOps); CRS proposal MEAL lead and any sector leads; proposal decision-makerThe proposal decision-maker is a senior staff (typically the country representative) with responsibility for making strategic decisions related to CRS’ response to a specific funding opportunity. This includes partnership/consortium-related negotiations and agreements; recruitment and selection of key personnel; definition of preliminary budget parameters (including any CRS cost-share); other critical budget decisions; and review and approval of final versions of proposal documents (including budgets). This is a critical, though not full-time, proposal development team role.
or country representative (CR)
- The CRS proposal technical lead and proposal coordinator support the budget lead in working with the partner to review activities and associated costs;
- The partner budget lead and partner proposal development team members develop draft budgets;
- The CRS FM and HoOps assist with costing guidance and compliance with donor requirements;
- CRS proposal MEAL lead and any other technical (sector) leads assist with costing inputs;
- The proposal decision-maker or CR provides final approval and also may provide assistance with any sensitive budget discussions with partners.
- According to the proposal timeline; finalize by deadline in plan.
This key action contributes to the following ProPack I “standards of quality”:
- The budget and budget notes are congruent and “tell the same story.”
- Technical and finance staff and stakeholders work in tandem on the activities schedule and budget drafts.
Follow these steps to work with partners to develop and finalize accurate, detailed partner budgets and budget narratives:
- Prior to starting the budget development process with partners, the proposal coordinator, technical lead, and decision-maker (the latter as needed, e.g. for particularly challenging partnership issues) work with the budget lead to confirm that CRS and partners have the necessary information and understanding to work together effectively to develop the partner budget. This may include:
- Updating or confirming the partner’s projected budget ceiling. Though CRS should have provided each partner with a preliminary figure at the beginning of the proposal development process (see Standard 3, key action 1 for guidance), subsequent project design discussions and initial budget development may have led to refinements in the project scope, scale, timing, and individual partner roles and responsibilities, which in turn may have affected projected budget breakdowns.
- Confirming that partner leadership is comfortable with the preliminary project activities schedule and the partner’s responsibilities within that schedule (remember that the activities schedule is a key input for project budget development).
- Reviewing any partner capacity assessments and action plans completed as part of project design (see Standard 1, key action 2), or other assessments which include information relevant for budgeting project-specific partner capacity strengthening.
- Confirming the approach for partner budget development (see “Tips” in box below).
Tips for budgeting with partners: Budgeting can be a sensitive issue and may require an individualized approach with each partner. The CRS proposal development team must promote an appropriate balance between clarity and transparency with respect to each partner’s programmatic and geographic project scope, and efficiency and sensitivity in the process of developing partner budgets. Developing the project Proframe, identifying and scheduling major activities, and, as possible, defining the major unit costs and cost drivers are all important steps to complete in a participatory process with all partners present. Detailed partner budget development may need to be done separately with each partner. Discuss the most appropriate approach as a proposal development team.
- The budget lead adapts (as needed) and shares budgeting guidelines, formats, and templates (developed under Standard 3, key action 2) to assist partners with developing their own detailed budgets and budget notes. These should include any unit cost guidance for activities or costs that will be presented in both partner and CRS budgets.
- See ProPack I, Chapter IX, Activities Schedule and Budgets, pages 122-124 for additional guidance, including the list of points to confirm with partnersPer ProPack I, points to confirm with partners include: cost categories, how to use the activities schedule to guide costing of activities, how to ensure project costs are linked to project results, and the importance of presenting cost calculations in a transparent manner. regarding their understanding of the budget and budget preparation.
- As suggested in ProPack I, consider organizing a short training for the partners to review the budget development process, guidelines, formats, and templates before or as part of the project design workshop.
Pay close attention to proper partner budgeting for project transitions: As highlighted in ProPack I, ensure partners have the information they need to properly budget for project transitions, including start-up and close-out (see Standard 2, key action 3 for more guidance on start-up, scale-up, and close-out planning and activity scheduling). An accurate understanding of the timeframe for project transitions and the level of effort involved in managing these transitions will greatly reduce project management headaches and help with realistic and accurate resource planning at CRS and partner levels.
- The budget lead, in conjunction with appropriate members of the proposal development team (e.g., proposal technical lead, any sectoral leads, proposal MEAL lead, and the FM or HoOps), meets with the partner(s) to construct or support refining of partner budgets.
- CRS-partner budget development may take place as part of an “activities schedule and budget workshop” as outlined in ProPack I, or through a series of joint and individual partner workshops and meetings, once CRS and partners have developed the overall activities schedule.
- Whatever the approach to developing individual partner budgets, make sure both programming and operations staff, especially finance, jointly review the activities schedule and develop the budget and budget narrative.
- The budget lead reviews each draft partner budget for realism and completeness on its own, and for coherence in relation to the draft budgets of CRS and any other partners. Pay special attention to:
- Ensuring consistency with CRS and other partners (if applicable), particularly for equivalent items such as workshop costs, transportation, etc.
- Examining overall budget ratios, both partner program-to-administrative costs and ratios between partner budgets and the CRS budget.
- Reviewing the draft budgets carefully against programming, supply chain management, and staffing plans, to ensure realistic and complete budgeting for start-up and close-out.For example, and as highlighted in ProPack I, close-out budgets may need to include severance benefits, incentives as per project retention plans and local policy, planned spending slow-downs, etc. Start-up budgets may need to phase in personnel expenses for staff hired at different times; travel expenses may vary by month in the early months to account for more intensive community engagement, or conversely, to allow for the preparation of necessary materials and resources prior to community engagement.
- Reviewing local partner budgets to ensure partners have included sufficient funding for operations costs, including utilities, rent, supplies, and other costs needed for the staff who will support the project (whether budgeted as direct costs, or captured under an ICR rate if allowed by the donor).
- The budget lead, with support as needed from other CRS staff, accompanies partners to revise their budget and budget narrative if required.
- Realignment may be necessary if a partner’s first budget is too high or too low.
- Realignment also may be necessary due to project design refinements, such as in geographic coverage or type or scope of activities.
- Realignment can be a capacity-building opportunity. Consider providing written feedback on changes needed (and include this written feedback in the proposal handover file). This documentation is also useful for understanding the rationale for project budget decisions later in the design or start-up/implementation process.
- The budget lead incorporates partner budgets and budget narratives into the master budget files and sends to the proposal coordinator for circulation for review.
- The budget lead ensures partners make changes based on any feedback from regional review.
Who prepares partner budget narratives? CRS should provide partners with a template and a model for how they should prepare budget notes for the donor/funding opportunity. However, there may not be time to have the partners develop well-edited budget notes, particularly for partners with less experience with donor expectations and requirements for budget narratives. For a complex proposal, a CRS proposal development team member (e.g., the budget lead or budget narrative writer) can review, edit, and finalize partner budget notes.
- The proposal coordinator ensures partners receive the final version of their budget and budget narrative as submitted to the donor.
When CRS is a sub-recipient
- This action focuses exclusively on partners; see the "how" steps above.
- If as a sub-recipient CRS has sub-recipients of its own, follow the same process to develop the budget, after negotiating CRS’ budget with and obtaining other necessary budgeting guidance from the prime.
- Follow the same process for emergency projects.
- If you are working on a large-scale emergency where several Caritas Internationalis (CI) Members are responding and/or supporting a response of the national Caritas, please refer to the Protocol for CI Coordination in Emergency Response, Emergency Framework and Toolkit for Emergency Response documents on the CI Baobab website. These documents provide guidance on coordination and the process of developing, implementing, monitoring and reporting on an Emergency Appeal for funding via the CI Network. If you are not registered on the CI Baobab site, please register here.When registering for the CI Baobab site, CRS staff should select "Caritas United States - CRS" as their organization and list the Humanitarian Response Department and email@example.com as the reference contact. If you have any questions, please contact CRS’ Humanitarian Response Department (firstname.lastname@example.org).
Tools and templates
Table of Roles and Responsibilities in Activity Scheduling and Budgeting (from CRS' ProPack I)
Policies and procedures
POL-FIN-SIC-011: Subrecipients Indirect Cost Recovery - USG Funded Subagreements
Assessment to Action Planning Workbook (from CRS' Institute for Capacity Strengthening)
Capacity strengthening basics: An introduction to CRS’ approach to capacity strengthening (Institute for Capacity Strengthening course)
Communication basics: An introduction to effective communication in partnership and capacity strengthening (Institute for Capacity Strengthening course)
ProPack I, Chapter IX, Activities Schedule and Budget, pages 122-130
Relationship basics: How CRS staff relate to partners and approach capacity strengthening (Institute for Capacity Strengthening course)
- Primary responsible: CRS proposal budget lead