Oct 9, 2017 - As part of the effort to standardize and make management of Trust Funds ... finance, plus the Program Mana
Indicative Budgets for Trust Funds Information Note Updated October 9, 2017 Background As part of the effort to standardize and make management of Trust Funds (TF) more effective and efficient, and in consultation with development partners, the Bank committed to make “indicative budget” information available to development partners (DPs) for all new TFs, as reflected in the newly negotiated Administration Agreement / Arrangement (AA) template.1 The indicative budgets will be available on the Development Partner Center (DPC). They will not be included in an Annex of the AA in recognition of their “indicative” nature and the fact that they are provided “for information purposes only”. To help teams prepare good quality and consistent indicative budgets across the Bank TF portfolio, this note provides general guidance on their format and content. Format and content To streamline the preparation of the indicative budget across the Bank TF portfolio and the subsequent financial reporting, the following guidelines should be followed: • Indicative budget is prepared at the establishment of the TF and represent a financing plan for the overall TF (combining all donor contributions in the case of a multi-donor TF consistent with the development objectives of the TF. • Indicative budgets should cover the entire funding period for the total signed contributions (TF envelope) and not per individual donor contribution. • The list of activities/components will be broken down by Bank Executed (BE) and Recipient executed (RE) activities. • For freestanding TF, activities are the Recipient and/or Bank executed operation(s) that the TF will finance, plus the Program Management and Administration (PM&A) component. The indicative budget should not break down each operation into its own components (e.g. the components of an IPF as detailed in its PAD). • In the case of Programmatic TF, good practice is to keep the list of components at an aggregate level, with a view to minimize the total number of components, and to ensure that most components will finance multiple grants. • Teams can use the tool2 to dimension the size of the PM&A which is mandatory BE component. • Supervision in conjunction with RE component(s) is mandatory as well, and should be assessed based on specific country supervision coefficients (consult BPS via in case of questions). • The fee on RE activities for cost recovery should be listed separately and will be labeled as “Trust Fund Fee”3. As explained in the Cost Recovery Directive: "A fee will be charged to the trust fund on the RETF portion based on the cumulative amount of the RETF committed amounts, as follows: a 5% fee on the first $50 million (or equivalent) committed, plus 4% fee on the next $450 million (equivalent) committed, plus 3% fee on next $500 million (or equivalent) committed, plus 2% on any further amounts committed." • As part of the cost recovery, the Bank also charges an indirect rate (currently at 17%) on personnel under all BE components. However, the indicative budget should not provide such breakdown. 1
The new AA template will become operational on December 1, 2016. http://workgroup.worldbank.org/org/units/BPS/PPC/Pages/Default.aspx 3 Please see Cost Recovery directive for easier reference: http://intresources.worldbank.org/INTOPETRUFUN/Resources/10517501342646319496/Cost_Recovery_Directive_Revised_Feb242016.pdf 2
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The indicative budget will be accessible through the DPC, on the page of the corresponding TF. All development partners contributing to a particular TF have access to this page in the DPC.
Submission of Indicative Budgets • •
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Indicative Budgets (in the form of a PDF document) will be automatically generated by the TFP system based on the information entered in section 4.1 of the TFP and automatically uploaded to the DPC. Any revised indicative budgets should be submitted to “PDRM Staff” email address. Indicative budget revisions are decided by the TTL/Program Manager (for programmatic TFs with DP involvement consistent with the governance arrangements). Any revisions may be triggered by changes in TF development objectives, changes in TF envelope, or other substantial change in the TF. An indicative budget must also be prepared in the case of new contributions from the European Commission (EC) to TFs established before December 1, 2016 (when the indicative budget became mandatory for all TF), following the same procedure.
Financial reporting and indicative budgets • •
Financial reports provided to DPs in the DPC are organized by relevant accounting expense categories, rather than by TF activity/component. This will remain the primary format for financial reports, including unaudited financial statements. The Bank will aim to develop tools to make it easier for program managers to report total TF disbursements against the indicative budget. Table 1. The Name of the Trust Fund and TF #4 (Illustrative) Indicative Budget in holding currency
Bank Executed (BE) Component 1. Strengthening for Better Child and Maternal Health Results – Technical Assistance Component 2. Supervision of the RE Grants Component 3. Program Management and Administration Subtotal (BE) Recipient Executed (RE) Component 4. Strengthening for Better Child and Maternal Health Results Project Subtotal (RE) Trust Fund Fee (5-2% graduated fee assessed on RE) Total Budget in holding currency
4
Name and # as shown in the Administration Agreement
4,500,000 390,000 275,000 5,165,000
42,700,000 42,700,000 2,135,000 50,000,000
