Standard 8: Timely and comprehensive project financial set-up.
Set up a project financial management system based on updated activity plans that supports a quick start-up and effective financial management throughout the project.
Review the draft donor agreement to make sure that CRS can meet the donor's financial requirements.
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Why
The donor agreement is a legally binding document. Signing an agreement that includes financial requirements that CRS cannot meet puts the agency at risk and undermines CRS’ project management credibility. Signing an agreement with financial requirements that are unclear or difficult to meet can also create significant project management and donor relationship challenges. Careful review of the proposed financial requirements by subject-matter experts helps CRS identify risks, seek revisions as needed, and avoid future project management problems.
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Who
- Primary responsible: Head of operations (HoOps), or finance manager (FM) if there is no HoOps, for country program-administered projects; IDEA staff for centrally-signed agreements
- The HoOps or IDEA staff guides the draft agreement through the financial portion of the review and engages other relevant staff in the country program or Institutional Donor Engagement and Advancement (IDEA) department.
- Others involved: Finance manager and other relevant country program/HQ subject-matter experts, depending on the nature and value of the award and as required by the Agreement Process Map (APM); the deputy regional director for management quality (DRD MQ), or the IDEA staff's supervisor; agreement ownerThe agreement owner is the designated or approved CRS staff member responsible for facilitating agreement review, incorporating feedback, adhering to a schedule for review, following-up with other participants in the review process and distributing the agreement and related documents at various points in the process.
; and regional finance officer (RFO), if requested by the DRD MQ
- The FM contributes technical expertise to the review, along with subject-matter experts, as required by the APM (e.g., HQ Overseas Finance Grants Management unit; IDEA Global Fund unit; USG and non-USG Public Donor Engagement teams; Foundations team);
- The DRD MQ or supervisor of the AMO provides quality control;
- The agreement owner incorporates information from the donor financial requirements review into the Agreement Review Summary (ARS) package.
Remember to engage the HQ Overseas Finance Grants Management Unit for draft agreements with terms inconsistent with the Minimum Standards for Agreement Financial Terms, and the Office of General Counsel for non-routine agreements valued at >$1 million and routine agreements valued at >$5 million, as per the Agreements Policy & Procedure.
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When
- Immediately after the donor shares the draft agreement
TIP: When possible, request an example of the donor’s standard agreement template immediately after receiving notification of donor approval. This can help expedite CRS’ review and identification of potentially problematic financial requirements, even while the donor may be finalizing specific award details.
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How
The review of donor financial requirements is part of the overall review of the draft donor agreement and is conducted in accordance with the Agreements Policy & Procedure, including the APM.
Follow these steps for a thorough review of proposed donor financial requirements:
- After receiving the draft agreement from the Agreement Owner, the HoOps and FM use the “Minimum Standards for Agreement Financial Terms with Donors” guidance to identify any deviations between the financial requirements in the draft donor agreement and CRS’ policy (e.g., Grants Accounting and Reporting policy), procedures, and preferences.
- The HoOps and FM share their analysis of the agreement against the “Minimum Standards for Agreement Financial Terms with Donors” guidance with the Agreement Owner.
- The HoOps and FM discuss with the Agreement Owner if any other subject-matter experts need to participate in the review (e.g., HQ Overseas Finance Grants Management Unit), particularly if the HoOps and FM review identified concerns with the financial requirements proposed by the donor.
- For draft agreements where financial reporting schedules or other financial requirements do not align with CRS policies and terms, the Country Representative (CR) will work with regional leadership and/or the donor relationship manager to negotiate a revised agreement if possible.
- The Agreement Owner sends a summary of the analysis of the draft agreement financial requirements, along with the ARS and Owner’s Agreement Review Checklist, to the next-level reviewer – i.e., the DRD/MQ.
- The DRD/MQ performs a final check, and takes the lead on any additional reviews and approvals required by the Agreements Policy.
TIP: If the donor is new to the country program, but not to CRS, reach out to another country program experienced in working with that donor, to better understand the implications of the donor’s financial requirements on project management. Talk to donor engagement staff and/or look at the donor institution record on Gateway to identify other country programs to consult.
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Partnership
- This action relates specifically to CRS’ internal review of the draft donor agreement. See Standard 8, key action 6, for more information on partnership and agreement financial requirements.
When CRS is a sub-recipient- Follow the same process in reviewing the financial requirements in CRS’ agreement with the prime.
Emergency projects- Follow the same process for emergency projects.
Key resources
Tools and templates
Policies and procedures
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FIN-POL-039-04E: Planning and Managing Cost Share Policy and Procedure
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POL-FIN-GRT-017: Grant Accounting and Reporting
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POL-OOD-001: Agreements Policy & Procedure (including the Agreement Process Map, Agreement Review Summary, Minimum Standards for Agreement Financial Terms with Donors, Owner’s Agreement Review Checklist)
- Primary responsible: Head of operations (HoOps), or finance manager (FM) if there is no HoOps, for country program-administered projects; IDEA staff for centrally-signed agreements
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