6.4 Cash budgets

The following are the steps to calculate the amount available for expenditure at the emergency site(s), and is to be documented in the Cash Budget Form (Annex 17.2) and referenced in all cash requests. From the contract amount:

• subtract ICR and/or Adret (Internal Cost Recovery/ Administrative Retention)
• subtract Shared programme costs (SPC) and other administration cost pools that are not related to field operations
• calculate and subtract all major procurement items and headquarters-earmarked items that will be procured by the CO headquarters Procurement Department
• calculate and subtract employee salaries not disbursed at the emergency site-for example, international staff salaries
• calculate and subtract employee benefit line items not paid in cash during the life of the grant but must be accrued by the CO (pension, annual leave, etc.)
• identify and list all budget deficits/excesses detected during the process. For example, overestimate/underestimated direct staff salaries and benefits
• identify and list all required cost items that are not included in the budget. This is common in grants where, due to donor expense restrictions, certain staff benefit costs were not considered or covered.

Once the amount available for expenditure at the emergency site has been calculated, a detailed Cash Budget must be developed by itemising all expenditures to be incurred at the emergency site(s). It is important to note that Cash Budgets are just subsets of the total grant budget and therefore final donor reporting must be prepared where the complete set of accounting books is maintained.

Cash Budgets are prepared using the attached Cash Budget Form by project and by allocating project costs to the different funding sources. In addition, all identified budget deficits and excesses detected must be listed in the Cash Budget to be resolved by the CO Leadership Team.