7.5 Budget development process
The following is the sequence and scheduling of the required steps, according to the critical path method, to prepare a budget for submission to a potential donor. The complete list of accounts to be budgeted is detailed in Annex 17.17 Chart of Accounts for Emergency Programmes.
There should be flexibility in the schedule to accommodate more complex budgets that require more time to complete. Yet while it is important to remain flexible, the Budget Development Team requires some basic assumptions to start work:
- Most of the basic assumptions indicated in section 7.4 have been provided to the Budget Development/Management Team.
- The Budget Development Preparedness Activities have been carried out and the CO has a Budget Preparation toolkit with the recommended previously prepared inputs.
- Proposal writing may be carried out at the same time as budget preparation, but essential sections such as the activity plan and implementation schedules should have been agreed upon.
- If the available funding is notional, a bottom line figure should be provided.
Any significant deviation from these principles would mean that the process may need to be restarted.
| Activity | Who | Purpose | Schedule | Outputs |
| Initial coordination meeting | Budget Development Team | Discuss budget assumptions and donor fund application guidelines
Understand the scope of the project, operational challenges, required set-up (compound, camps, communications, etc.) and geographical areas |
Day 1 | Project staffing plan (project management and additional support services)
CARE to donor account map (Does this exist? If not, then develop one.)
Programme support requirements and structure |
| Distribute/ redistribute Budget Development Toolkit |
Finance Team | Orientate staff in the use of the toolkit
Explain toolkit contents |
Day 1 | All teams are familiar with budget preparation tools |
| Budget input: Procurement Plans (one-time and recurring purchases)- Account Series
51XX – Professional Services 52XX – Equipment Purchases (Expensed); 53XX – Materials, Services & Consumables; 54XX – Travel and Transportation; 55XX – Occupancy Costs)
|
Programme Team/ Procurement, Logistics and HR |
Identify one-time procurement activities, timing, prospective suppliers and cost estimates
Identify recurring procurement needs such as:
|
Day 2 (first session) Day 4 (follow-up/ wrap-up session) |
Procurement requirements included in the Direct Cost section of the Budget Format (BudgetMate, etc.) |
| Budget input: Project Staffing plans (Project Management and additional support services)-
Account Series 50XX – Personnel Costs; 5335 – Food Preparation services |
Programme Team and HR | Project staffing action plan (local hires, international hires, compensation packages)
Casual labour needs
|
Day 2 (first session) Day 4 (follow-up/ wrap-up session) |
Staffing plan included in the Direct Cost section of the Budget Preparation package |
| Budget input: Other direct costs -Account Series
57XX – Grants/ Sub-grants |
Programme Team/ Auditor/ DM&E |
Determine monitoring and evaluation needs, timing and cost
Travel costs (fares, per diem, accommodation) associated with monitoring
Sub-grants |
Day 3 | Costs included in the Direct Cost section of the Budget Preparation package |
| Budget input: Support Cost Budgets | Finance Team | Determine Fair Share Budget of SPC costs
General insurance costs
Determine Fair Share Budget of sub-office costs
Determine which CI Member costs need to be covered |
Day 2 (first session) and Day 4 (revisit AdRet/ICR costs) | SPC and Other Shared Costs in the Support Costs section of the Budget Preparation Package |
| Budget input: Consolidated Draft Budget | Budget Development Team | Calculate support/direct ratios and adjust as necessary
Identify additional costs not yet budgeted (see section 7.6 Commonly overlooked costs)
Calculate/recalculate CI Member costs
Review Procurement and Staffing plans and adjust as required |
Day 4 | Draft Budget of Project ‘Necessary Costs’
|
| Budget in the Donor Format | Budget Development Team | Apply donor exclusions/limits
Identify and document budget gaps
Update Funding Matrix
|
Day 4-5
|
Final Budget (in the donor format) for review by Emergency Response Team
Schedule of Budget Gaps/Excesses and Recommended Actions
Updated Programme Funding Matrix |
When the budget and accompanying schedules are handed over, the Emergency Response Team needs to officially submit the budget as per the donor’s guidelines for fund applications. The following is a diagram of the process described above.
Diagram-Budget development process