1. The internal Cost Ratio for each Country Office will be assessed through the normal budget and approval process using Plan’s Cost Classifications:
1.1. Management are responsible for amending their budgets so that the Cost Ratio for their office is acceptable to the Plan Inc. Executive Team
1.2. Each CO Cost Ratio will be regularly monitored outside of the budget process by their Finance Department to ensure it is accurate
1.3. The Cost Ratio for any CO will be amended at any time in the event that the budget of that office is materially changed.
2. Each project budget must include Direct Costs and CO Apportioned Costs based upon the Cost Ratios of relevant office regardless of possible sources of funding:
2.1. The total cost of a project is the sum of the Direct Costs and Apportioned Costs
2.2. The Direct Costs for all entities involved in the implementation of project must be detailed in the project budget
2.3. The Apportioned Costs for the CO(s) responsible for the implementation of project must be detailed in the project budget
2.4. Partner costs necessary to ensure the effective implementation of project must be detailed in the project budget.
2.5. Each project budget must be approved by the relevant Manager(s) to ensure that necessary costs are accurately included.
3. Each donor proposal budget must be based on a project budget and include Direct and CO Apportioned Costs with the goal of maximising cost recovery:
3.1. The CO that will be credited with income for a donor contract is responsible for negotiating with donors to ensure that the maximum level of Direct and Apportioned Costs are included in each donor proposal budget
3.2. All costs included in a proposal must be allowable, articulated as defined by the donor and in compliance with all donor regulations
3.3. The level of Apportioned Costs that can be included in a donor proposal budget will be the maximum allowed by the donor however defined by the donor
3.4. The National Office that will be credited with income from a donor contract retains all ICR or equivalent provided by the donor
3.5. Indirect NO costs can be included within donor proposal budgets to the maximum level allowed by the donor, to the extent that inclusion does not result in a lower proportion of Direct or CO Apportioned project costs being covered by the donor
3.6. Any direct GH or RO costs recovered in donor contracts will be measured and an equivalent reduction in- the allocation of unrestricted budgets will be made.
4. In each Funding Approval Document (FAD), the Cost Ratio of the relevant Plan offices and the donor proposal(s) must be detailed at the relevant stages:
4.1. Where the full Direct and Apportioned Costs for the planned project are not met by a single donor grant, other sources of funding to cover those unmet costs for that project must be detailed in the Fund Approval Document
4.2. It is the responsibility of all parties involved in a project to agree upon and allocate sufficient funds to cover the full project budget and this is a condition of approval. This may be achieved through additional funding provided by the NO and/or CO involved, and/or through collaboration with other NOs or donors
4.3. Should there be agreement for additional funding to be provided by the NO, the costs associated with fundraising the additional funding may be quantified on the FAD
4.4. Where child sponsorship is used as additional funding this must be consistent with the prevailing child sponsorship commitments
4.5. Plan will minimise the amount of Child Sponsorship income allocated to cover Apportioned Costs in a project budget
4.6. Approval of the Fund Approval Document assumes approval of the total project costs made up of Direct and Apportioned Costs.
5. Each project budget should clearly identify to which fund costs should be allocated and those costs subsequently allocated on a monthly basis
5.1. Management must review individual donor agreements to ensure their cost allocation methodology does not violate the terms of the contract and is fully compliant with all donor regulations
5.2. Where the recovery of Apportioned costs is dependent on actual expenditure additional CO or project ratios must be calculated in compliance with donor regulations
5.3. Plan must maintain and retain adequate documentation in compliance with relevant donor regulations to support all cost allocations and cost allocation methodologies
