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Unit 6: Budgetary Control

Toyota Landcruisers are the budgeted vehicle at a unit cost of US$ 50,000. The PR Notes
also wishes to procure 200 laptops for its own staff at a unit cost of US$ 3,000.
NGO wishes to procure 60 microscopes locally at a unit cost of US$ 4,500 plus a 5%
procurement fee. The SR wishes to purchase these from a local supplier which is
approved by the local Government. The microscopes will be used at 10 laboratories
across the country with 40 staff.
4. Technical Assistance: Under technical assistance the PR budgeted two international
financial experts, one HIV advisor and one M&E specialist. The packages paid to
these persons include salaries, allowances and bonuses which appear to be excessive.
The NGO budgeted two local technical assistance persons in the areas of M&E and
finance. The salaries are 35% less than those in the PR’s budget.
And the INGO budgeted for one M&E advisor and one HIV specialist at rates
equivalent to those used by the PR.
5. Training: The PR budgeted:
 Biannual training for field workers, which will be held locally, in the capital
(each training course will be for 20 staff over 5 days); and
 Quarterly training for all program staff to be held locally over 5 days.
Per diems are paid to all staff attending trainings; the daily rates vary from US$ 25
per day to US$ 50. Travel allowances are fixed at US$ 50 and are paid to all persons
attending trainings.
6. Overheads: The INGO is charging 18% of the overall grant budget as an overhead
fee which needs to be paid to their head office in New York. 4% of the fee is supposed
to cover the salary of the local Country Director and the rent of the local office. The
head office in New York provides considerable IT and programmatic technical
assistance to the SR on a daily basis.

The NGO charges 13% overhead fees on their own budget.
7. Tax: The PR is in the process of obtaining tax exemption and an approval is expected
within three months after the grant signing. The PR is 100% confident that the
exemption will be obtained and has a confirmation letter from the Ministry of
Finance. Currently, the budget includes VAT on procurement of all products/services.
The budget for procurement is significant. The PR states that the budget should
include the VAT because VAT has to be paid first and reclaimed/reimbursed
afterwards.
Questions:
1. What should be the position of the PR regarding HR budget?

2. What is the proposed approach to budgeting for infrastructure and equipment?
3. What system the PR should have in order to follow-up on these costs during
implementation?

4. How do you propose to approach the training activities and budget?
5. What supporting documents should be used for the budget and attached to it?
Source: theglobalfund.org

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