Welcome to the introduction to

financial contributions

Christina Müller E270

 AGENDA
Monday 21.08.2017 Tuesday 22.08.2017
Getting to know each other Recap of Monday
Introduction to financial Discussion of open
contributions questions
Types of contracts Introduction in local
subsidies
Grant Agreements, Financial processing of LS
Subsidies, Financing
Agreements
Tasks and responsibilities Tasks and responsibilities

21.08.2017 Introduction to Financial contributions 2

 Task 1: Decision on Financial contribution or service
contract

Financial Contributions Service Contract

Recipient of financial contributions Service provider
(usually non-profit)
GIZ makes funding available to GIZ purchases a service
Recipients
No entitlement for claim for „service“ Entitlement for claim for services

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 Exercise – Service Contract or Financial contribution?

1. Procurements of goods for Recipient

2. Designing of a study for future GIZ Project implementation
3. Implementation of a workshop for GIZ Recipient personnel
4. Building a well for water in Syria
5. Supporting and capacity development of GIZ staff

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 The process on how to finance activities from a
Recipient

?
Project Recipient Project GIZ Office or Project Recipient
GIZ HQ

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 How to come up with a project idea?

Challenges
• Funds dilemma
• No overview of the Partners and what there needs are
• Implementing in remote villages
• No overview of what other donors are doing

 Provision of draft of Project proposal

 Communication

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 Tasks of the project

Project Recipient Project GIZ Office or Project Recipient

GIZ HQ

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 Task 2: Decision on the contract type

Financial
contributions

Subsidies Financing
Grant Agreement Local Subsidies
(Zuschussvertrag) Agreements

International or German Project´s Local organizations

local organizations implementing
organizations partner

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 Overview of responsibilities

Grant Agreement, Financing Local Subsidies

Agreement, Subsidy
Agreement
Responsibility for Recipient of funds GIZ
implementation
Bearing of losses Recipient of funds GIZ
Entry into and GIZ GIZ
financial processing
of Agreements

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 Task 3: Checking if pre-requirements for receiving a
financial contribution are fulfilled
• Positive Assessment of the Commercial and legal eligibility check

• Designation of the recipient by name (approval of donor)

• Separate service package

• Realistic contract duration

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 Task 4: Let´s go and prepare the required contract documents

Grant Financing Agreements Financing Agreements

Agreements, > 100.000 EUR < 100.000 EUR
Subsidies

1. In track mode: Contract draft in track mode: Contract draft in track mode:
Contract draft - in German - in language of
- in language of communication
communication
- Special Agreement
2. Budget in Euro Budget in Euro Budget in local currency
3. Project Proposal
4. Commercial and legal eligibility check (always)
5. If Subsidy Agreement: Tax exemption confirmation from Recipient

6. If first contract: Creditor data

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 What if….

…… the Recipient is forwarding funds to Third Party Organizations /

Institutions?
 Prepare Commercial and legal eligibility check for Third Party
…….we do not yet have the commission of our donor?
 Contact GIZ Office or HQ for advise
…….we want to finance activities of UN-Organizations or World Bank?
 Contact GIZ Office or HQ for advise
……..we have an EU-Cofinanced Project?
 Adaption of contract drafts

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 Exercise 1/2

Grant Agreements Subsidy Agreements

Contract language English German
Contract duration < 6 months: 90 % < 4 months: 100%
Advance payment > 6 months: quarterly > 4 months: two months
Security deposit 10 % None
External Audit > 125.000 EUR > 125.000 EUR
Special bank account > 50.000 EUR none
Cross calculation Up to 20% Up to 20%

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 Exercise 2/2
FA > 100.000 EUR FA < 100.000 EUR
Advance payment proc.
Contract German + Language of Language of communication
language communication
Advance Quarterly < 6 months: quarterly, max.
payment max. 50% of contract value 90% of contract value
max. 150.000 EUR > 6 months: quarterly
max. 50% of contract value
Security deposit 5% 5%
External Audit > 125.000 EUR none
Special bank mandatory optional
account
Cross calculation Up to 20% Up to 20%
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 Task 5: To whom shall the documents be sent?

Grant Agreements,
Financing Agreements
Subsidy Agreements
< 100.00 EUR
FA > 100.000 EUR

Headquarters
E270 GIZ Office

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 Now it is the turn of GIZ Office or HQ

Project Recipient Project GIZ Office or Project Recipient

GIZ HQ

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 Tasks of the GIZ Office or HQ

Verifying/
Discussing
Filing

Verifiying/
Sending
Drafting

Registering
in Cosoft/
ESPRIT

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 What to be aware of:

• Construction measures above 100,000 EUR

 Project contacts Construction Division in Germany
• Procurement of pesticides, medication or vehicles?
 GIZ Office / HQ contacts Procurement Department in Germany

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 Contract is sent to the Recipient

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 ….not quite done yet:

Finance departments of
GIZ Office/HQ:
Financial processing
Recipient Project Finance
of contracts Departments at
GIZ Office or
GIZ HQ
Project:
Monitoring
Project Recipient Project

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 Financial processing of Grant Agreements
1. Advance Payment 3. Advance payment Final financial
statement
Call for disbursement Financial statement Financial statement
Filled out, signed,
stamped and send in
original to HQ

Schedule of financial Call for disbursement Inventory list

requirements
Evidence of opening a Inventory list Record of surrender of
special bank account equipment and
material

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 Financial Processing of Financing Agreements

1. Call for disbursement (as soon as 80% of last adv. has been spent)
2. Evidence of the opening of special bank account
3. Statement of accounts accord.to Section 2.3 of Special Agreement
4. List of expenditures
5. Original bank statements of special bank account or copies certified by
bank
6. Duplicates or photocopy of invoices exceeding Euro 2,500
7. Duplicates or photocopies of contracts for supplies and services above
12,500 EUR
8. Copies of shipment from abroad exceeding 2,500 EUR
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The famous contract amendments
 Contract amendments

Project Recipient Project GIZ Office or Project Recipient

GIZ HQ

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 Task 1: Documents required for contract amendments

 Request for contract amendment or extensions from contract Recipient

 Contract drafts in track mode

 Updated project proposal

 Updated Budget

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 ….almost done:

Project:
Request for Audit

Project HQ ARGE Moore

(E270) Stephens
HQ:
Final invoice

ARGE HQ Recipient
Moore (Finance
Stephens department)

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 Audit of Financial Contributions (mandatory for
contracts > 125,000 EUR
Send the documents to responsible contract manager at HQ
1. Request for Services
2. Individual request for ARGE Moore Stephens
Annexes:
1. ToR
2. Checklist
3. Structure Audit report
For details follow the Link

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 Tips and tricks

• Ensure coherence of documents

• Training of Recipients
• Contract monitoring!
• GIZ Office or E200 responsible for negotiating the contract drafts
• Where to find your responsible contract manager?

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 Questions?

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