Key Actions by:

Standard 13: Effective financial management during project implementation.

Achieve financial consistency, accountability and stewardship through adequate, continuous financial planning, monitoring, controls and reporting.

Prepare financial reports that reflect all project expenditures in the financial system, for project manager review and submission to donors as required.

  • Why

    The process of preparing financial reports, and analyzing them against the achievements reported in project narrative reports, complements regular analysis of budget comparison reports, and is an important opportunity for project reflection and decision-making. Accurate and timely project financial reports that meet donor requirements and reflect sound analysis of the relationships between project time, scope, and cost, demonstrate to donors the quality of CRS project management.

  • Who

    • Primary responsible: Finance manager (FM) or HQ Overseas Finance staff
      • The FM (or other designated finance staff) prepares financial reports for non-USG grants, USG sub-awards, and monetization-funded projects;
      • The Manager, USG Reporting, Overseas Finance Operations prepares interim financial reports for USG prime awards and reviews/approves final reports for USG prime awards prepared by the Overseas Finance grants analysts (with exceptions per policy). See division of labor specified in the Grant Accounting and Reporting policy.

    • Others involved: Project manager/chief of party (PM/CoP); head of programming (HoP); IDEA staff if applicable; HQ Overseas Finance grants analyst; senior management team (SMT)
      • The PM/CoP reviews the financial report, and identifies questions for finance and/or for discussion with the SMT and IDEA staff (for centrally managed awards);
      • The HoP provides a “big-picture” review; depending on the donor and award,
      • The HQ Overseas Finance grants analyst may also review interim reports prepared by the country program (the grants analyst always reviews and approves the final financial report prepared by the country program before submission to the donor).

    Donor engagement staff review of financial reports to donors: In addition to the PM's or CoP's review of the draft financial report, for non-USG centrally signed grants, IDEA donor engagement staff also reviews the final draft report. This helps to ensure that CRS has identified and provided appropriate explanations for issues that may raise questions for the donor.

  • When
    • As requested by the PM/CoP based on donor deadlines (see Standard 8, key action 5 for information on establishing a calendar of project financial management tasks and deadlines)
    • See Standard 16 for information on project final financial reports
  • How

    Follow these steps to prepare accurate financial reports (scroll down or click here for guidance on USG prime awards):

    For non-USG awards, USG sub-awards, and monetization-funded projects:

    1. The PM/CoP sends a report request or reminder to the FM at least one month before the report submission deadline, highlighting any special needs or requests (e.g., request to finance to prepare a summary of exchange rate fluctuations which impacted the project budget).
    2. The FM prepares the financial report following donor guidelines (if applicable) and submits the report to the PM/CoP for review.
    1. Using previous Budget Comparison Report (BCR) analysis and action planning as a reference (see Standard 13, key action 2 for guidance on BCR review), the PM/CoP reviews the report, checking that:
    • Spending accurately reflects accomplishments and payments.
    • Recorded commitments (e.g., contractual obligations to sub-recipients) are accurate and updated.
    • CRS is managing any cost-share commitments appropriately.
    • Spending adheres to any donor requirements such as line-item flexibility.
    1. After analyzing the report, the PM/CoP:
    • Notifies the FM of any corrections required (including reclassifications).
    • Identifies any project implementation adjustments and decisions needed based on analysis of the financial report (see Standard 11, key action 3 on project planning and review meetings).
    • Highlights any issues or decisions requiring action from the CRS SMT and/or the project governance structure (e.g., decisions about reallocation of resources). For externally-funded projects, this includes issues requiring discussion with the donor.
    1. The HoP reviews the financial report, focusing on compliance issues, actions required, and anticipated donor questions.
    2. As necessary, the PM/CoP works with the following staff to prepare narrative information to accompany the final financial report:
    • Finance, to explain significant variances between expected and actual expenditures.
    • The HoP and IDEA staff (for projects with centrally-managed donor relationships), to address likely donor questions, including related to any differences between financial and narrative reports (e.g., overachievement of project activities/targets, but underspending). Use the “Checklist for High-Quality Donor Submissions” to review narrative information that accompanies the financial report.
    • SMT (including the CR) and IDEA staff as applicable, to prepare any requests for donor approvals of variances (see Grant Accounting and Reporting policy and Standard 15, key action 2 on communicating with donors about project changes).

    Alert donor engagement staff to financial management issues: Reach out to the IDEA award managerThe award manager is the individual responsible for managing a project in accordance with the terms of the award, and who represents CRS to the donor for that award. This is not a position, but rather an assigned role. (or other staff with donor relationship management responsibilities) as soon as the team identifies an issue or potential issue of likely concern to the donor. This may be during regular financial analysis or early on in financial report preparation.  

    1. The FM prepares the final draft of the report (clearly labeling it as “provisional”) and shares it with the PM/CoP and IDEA staff (if applicable).
    2. For financial reports submitted to a donor: The individual who submits the financial report uploads it to the award record in Gateway and sends a notification or a copy to the HQ Overseas Finance grant analyst for filing in the grant folder.

    For USG prime awards:

    1. The Manager, USG Reporting, Overseas Finance Operations prepares and submits the required USG financial report (SF 425) per CRS Grant Accounting and Reporting Policy and uploads to SharePoint after submission, for country program review and comment.
    2. The FM reviews the SF 425 with the PM/CoP, focusing on the issues in point 3 above. The FM informs the Manager, USG Reporting, Overseas Finance Operations of any reporting errors or omissions.
    3. The Manager, USG Reporting, reviews feedback from the country program (and any additional award manager), and submits a revised report to the donor if the changes are significant. Otherwise, CRS captures changes in the next interim financial report.  

    Do the financial and programmatic reports tell the same story? Financial reports and programmatic narrative reports submitted to donors must present a coherent story of project expenditure and achievement, and anticipate and address likely donor questions on significant variances (e.g., underachievement of programmatic targets with overspending).

  • Partnership
    • This is an internal CRS action with no special partnership considerations.
  • When CRS is a sub-recipient
    • When CRS is a sub-recipient on USG awards, the country program prepares the financial report. See guidance above.
  • Emergency projects
    • Emergency donors typically place fewer restrictions on budget line-item flexibility. This allows project teams to adjust to priority needs as the emergency response unfolds.
    • CRS frequently receives funding from multiple donors for an overall emergency response. This can create challenges for programmatic and financial reporting to the different donors. The following are tips for managing this situation:
      • At the beginning of the response, map out which expenses to charge to each donor, and establish an appropriate system for assigning expenses to the correct donor using CRS financial management system capabilities (e.g., DSPNs, T-codes – see Standard 8, key action 4 for guidance on budget coding and entry).
      • Negotiate synchronized reporting deadlines among donors, if possible (see Standard 10, key action 1 on agreement review and negotiation).
      • If reclassification of expenses is needed (for example, if donors approve funding at different times), try to move operational costs rather than programming costs. This will have less impact on the number of beneficiaries served per donor. If reclassification of programming costs is unavoidable, consider calculating a cost-per-beneficiary and using this figure to determine beneficiaries served per donor in addition to total beneficiaries of the emergency response. Clearly documenting the method of calculating beneficiaries is important both for audit purposes and donor accountability.
      • Schedule sufficient time to analyze expenses charged to different donors, and to reclassify expenses among donors if needed. It’s not unusual for this process to take more than a month.
    • 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 emergencies@crs.org as the reference contact. If you have any questions, please contact CRS’ Humanitarian Response Department (emergencies@crs.org).