Reporting and Finance Instructions

REPORTING AND FINANCE INSTRUCTIONS

FOR THEDARWIN INITIATIVE:

These instructions are intended to provide further details on the reporting and finance requirements described in the Schedule of Terms and Conditionsfor the Darwin Initiative which form part of the Darwin Initiative grant award.

Reporting Instructions

The Department is required to report on the Darwin Initiative activities to Government. The information gathered from project reports and reviews provides evidence for continued support to these activities. Projects are therefore required to submit reports at specific times during the year, irrespective of the project start date.

Reporting schedule and requirements for Main and Post Projects and Darwin Plus

Report / Period covered in Report / Content / Submission deadline
Half year report / First Year: start of project to 30 September
Second Year onwards: 1 April to 30 September / Brief progress report against the work plan for the first half of the year / 31 October
Annual report / First Year: start of project to 31 March
Second Year onwards: 1 April to 31March / Review of progress of project over the year / 30 April
Final report / Complete project period / Reports on the impacts and achievements of the project as a whole / 3 months from project end date

All reports shall be submitted according to the guidelines and in the format provided by the Department and available for download at Completed reports should be submitted to Eilidh Youngat by the deadlines outlined above.

Please note that an annual report is not required in the final year of the project where the final report is due to be presented on or before 31 July of the same year.

Payment Procedures

For all Darwin awards (except Scoping, Fellowships and Darwin Plus awards under £100,000), the grant is payable in quarterly installments, with the first three quarters being paid against claims for 25% advance funding. The quarterly advance claims should be submitted as follows:

Claim / Amount / Covering the period / Submission date
Quarter 1 – advance / 25% of annual grant award / 1 April to 30 June / From 15 March
Quarter 2 – advance / 25% of annual grant award / 1 July to 30 September / From 15 June
Quarter 3 – advance / 25% of annual grant award / 1 October to 31 December / From 15 September

The submission date indicates when the claim needs to be received so it can be processed for the start of the quarter. This is in line with the Government’s Prompt Payment Initiative, where the intention is to pay within 10 working days of receipt and validation of a claim by the Department’s accounting department. We will endeavour to send the approved claims to the Department’s accounting department within 7 – 10 days of receipt. Please note that advance claims received before these dates will be held until the submission dates before they are processed. Claims received after the submission date will also be processed in line with theGovernment’s Prompt Payment Initiative.

Please note that the Quarter 1 advance claim will only be paid once your signed Award orAnnual Grant Acceptance Form has been received. They first payment for new awards may take a little longer than subsequent payments, as they cannot be activated until the Award Acceptance paperwork is received in full. Organisations with non-UK bank accounts should be aware that the first payment in particular may take some time to arrive and you should plan to submit your requests for funds as close to the available timing as possible.

Expenditure for each project year must be accounted for on an actuals basis and the fourth claim in each year will be based on the actual expenditure for the year less the three advance claims. This is referred to as the Quarter 4 (Q4) actual claim. You must submit a Q4 claim, even if you have no more funds to claim due to agreed budget changes. Failure to submit the quarter 4 actual claim by the following deadline may delay payment of the subsequentyear’s advance claims.

Claim / Amount / Covering the period / Deadline
Quarter 4 – actual / Expenditure for the year, less the advanced funds / 1 April to 31 March / 31 May*

*ongoing projects are strongly encouraged to submit their Q4 actual claim by this date. Claims submitted more than 6 months after the financial year end (ie after 30 September) may not be paid. Poor financial management is an issue of concern and may affect decisions for future applications.

Claim forms are available on the Darwin websiteat Claims which are not on the appropriate template will be returned. Other errors or omissions will also result in the claim being returned with a note of the reason for returning it. All claims should be submitted in hard copy format, with a wet signature (unless otherwise agreed), to Darwin Finance, LTS International, Pentlands Science Park, Bush Loan, Penicuik EH26 0PL.

Claims and payments from non-UK organisations

All projects should follow the processes outlined above. However, for grants held by organisations not on the UK mainland, it is possible to accept claims and paperwork by email as long as the original signed documentation is also submitted in due course. If material is not received within a reasonable period, the project is likely to see this arrangement rescinded.

Final year of Project

In the final year of a project, the 25% advance process continues, but an advance may not be claimed for the quarter in which the project is due to end. If your project does not end on 31 March, you should consider the implications this may have for receiving the final funds.

As soon as your project ends, you should prepare afinal claim, detailing the actual expenditure in the final year. Once the relevant receipts have been received and accounted for you should submit your claim. Ideally this will accompany the final report which is due within 3 months of the project end date. A retention is withheldfrom the final claim: this is the higher of 25% of the total award for the final year or £20,000, whichever is the higher amount. This retention will be paid once the final report has been accepted and any audit requirement has been met (see below). Where the final year’s awardis less than £20,000, the Department reserves the right to withhold funds from the penultimate claim.

Auditrequirement (Main, Post Project and Darwin Plus awards totaling over £100,000)

An audit of project expenditure is required at the end of the project and a letter from anindependent auditor must be submitted within 6 months of the end of your project, to allow your retention to be paid. A total of up to £1,500 may be allocated from your Darwin budget for these costs, but this amount is ring-fenced and any underspend on it may not be reallocated elsewhere in your budget.

The wording of the auditor’s letter should include the following wording and the figure quoted must match the actual total amount claimed, or provide a clear explanation:

“Name of Organisation:

Project Title:

Project Ref No:

I have examined the accounts, records and claims relating to this grant for the period [start date] to [end date]. I confirm that the total grant monies of [£total claimed] were fully and solely expended for the purposes set out in the original application (or as subsequently agreed with the Department) and in accordance with the terms and conditions for the grant.”

No audit is required for Scoping, Darwin Fellowship or Darwin Plus awards under £100,000.

There is no annual audit requirement for Darwin projects, although there is the possibility you may be identified for a Spot Audit.

Conditions for Payment

The payment cycle is dependent on the reporting schedule on page 1. Failure to supply the reports required at the right time, will have an impact on your payments. The conditions for payment can be summarised as follows:

Claim / Reporting requirement / Financial requirement / Other requirement
Quarter 1 – advance / n/a / n/a / Year 1 – signed Grant Acceptance Form received
From Year 2, signed Annual Grant Acceptance Form received
Quarter 2 – advance / From Year 2, prior year annual report received. / From Year 2, prior year Quarter 4actual claim received and verified. / n/a
Quarter 3 – advance / From Year 2, prior year annual report agreedby M&E reviewer / n/a / n/a
Quarter 4 – actual / Annual report received / Quarter 4actual claim received and verified. / n/a
Final claim,less retention / Final report / Final claim form / n/a
Retention / Final report accepted. / audit letter where required / n/a

Managing your budget

Project Change Requests

Darwin Initiative grants are payable on the basis of the details and work programme set out in the project application, so it is important to ensure any changes (particularly spending in different financial years and significant technical change, but also including changes to the project principals for which CVs were submitted with your application) have received approval before being applied.

Project change requests must be submittedto Eilidh Young at on the appropriate template from

Failure to receive approval for unspent funds to be carried forward into the subsequent financial year may result in the funds having to be surrendered to the Department. Please note that there is no guarantee that any changes to budgets will receive approval by the Department, due to budget constraints. Early requests for changes are therefore recommended.

Forecasting Exercise

The Department requires projects to undertake a forecasting exercise during each project year and will be in touch with details of what is required. It is intended that this be carried out in December 2014/January 2015.

Annex 1 - Clarifications for Darwin financial reporting

Staff costs

This budget line should clearly capture all Darwin costs and payments for services relating to individuals working on the project (but excluding Consultancy inputs – see below). Normally these will be payments made to team members for their time spent working on the project; however, local individuals making a short specific local input such as cooking for a field team may more appropriately be applied to elsewhere (T&S or Operating costs).

Staff costs included in the claim table should match the details provided on staff in Section 5: these details should also include name and role in the project; the period they worked on the project; the percentage of their time given to the project during that period; the actual cost to Darwin of their time. You should be able to provide evidence of the time worked on the project if requested.

Staff costs need not be restricted to the lead organisation – they should include all team members paid any part of their costs from Darwin funds.

Overheads

You should be able to clearly explain how this cost is made up and you should be able to provide evidence to support it if required under a Spot Audit. You should not apply overhead charges to any costs that already have a similar type of charge applied to them, such as the use of Full Economic Costing or a management fee arrangement. Overheads should be a one-off charge that recovers the cost to the organisation of managing the project.

Capital costs

When reporting on your capital spend, it is important to make a distinction between funds spent on ‘real’ capital costs and consumables. ‘Real’ spend is typically items such as equipment or vehicles which are expected to have a life at least as longas the project and may have a value beyond the project. Consumables are items which are used up more quickly and may be replaced quite often. For example, printer ink/toner, flash drives, field equipment such as clothing. Defra’s 10% cap on capital costs relates to ‘real’ costs.

Other - Consultancy costs

This is a split of the original ‘Others’ budget line to reflect the need to identify Consultancy as a separate heading and should reflect any ‘bought-in expertise’. Defra’s definition of Consultancy is: ”The provision to management of objective advice relating to strategy, structure, management or operation of an organisation in pursuit of its purposes and objectives. Such advice will be provided outside the ‘business-as-usual’ environment when in-house skills are not available and will be time limited. Consultancy may include the identification, or assistance with (but not delivery of) the implementation of solutions”.

Spend relating to Financial Year

Defra receives a budget from Treasury each year and has to account for spend relating to the year it was awarded. This means that projects have to be clear that they are spending and accounting for their funds on the same basis and you should not be applying informal/internal carryforwards within your own project budget. If you overspend on one line, you need to ensure you cover that from another line (with permission from the Department if there is more than 10% change to any budget line) or meet those costs from matched funding or from your own organisation’s funds.

For the purposes of reporting to Defra, the Actuals claim form should indicate spend incurred by the organisation holding the project award and should only cover costs being paid by Darwin funds. For example, if the UK organisation sends money to a partner, then the funds can be termed spent, even if the partner does not incur the cost until a different time period. The UK organisation is still responsible for ensuring that the project funds are spent timely and appropriately and in a manner acceptable to their own financial management systems.

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March 2014