50% of time for 18 months Unit Month Quantity 9 Unit rate 2.000 Total 18.000 Budget Funded by European Union Introduction What is project Logical Frmwrk Schedule Budget Stakeholders Partnership Procurement Services M&E Reporting Visibility BUDGET LINE 1 - Human resources (II)  For staff employed full time on the project, use month as unit.  For short term inputs (e.g. trainer for 2 days), use days as unit and calculate daily rate.  Show

1. Funded by
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Seminar on Project Preparation
How to develop activity based budget
Kiev, 3-4 September 2015

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Logical Framework
OVI
Overall
Objective
Project
Purpose
Results
Costs
Preconditions
SOV Assumptions
Activities Means
Logical Frmwrk

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Definition– Budget
Translation of planned activities into expected expenses
(and bills) in organised way, covering certain time frame.

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Activity schedule linked to
Logframe:
 Maintains objective-oriented approach of logframe;
 Breaks activities down into operational detail;
 Clarifies sequence, duration and precedence of
activities;
 Identifies key milestones (i.e. for contract payments);
 Assigns management responsibility.
Schedule

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Activity Schedule
Schedule

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Resource schedule and budget
A resource schedule and budget linked to the
Logframe:
 Maintains objective-oriented approach of Logframe
 Supports cost-benefit analysis
 Facilitates result-based budgeting
 Provides basis for mobilisation of resources
 Identifies cost implications
 Counterpart funding requirement
 Post-project financial sustainability
Salaries
Allowances
Vehicle Op.
Office
Tel/Fax
Seeds
Fertiliser
5000 5500
1250 1750
3750 4250
750 750
400 400
850 1100
2300 3100
Budget
Salaries
Allowances
Vehicle Op.
Office
Tel/Fax
Seeds
Fertiliser
5000 5500
1250 1750
3750 4250
750 750
400 400
850 1100
2300 3100
Budget
Salaries
Allowances
Vehicle Op.
Office
Tel/Fax
Seeds
Fertiliser
5000 5500
1250 1750
3750 4250
750 750
400 400
850 1100
2300 3100
Budget
Budget

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Resource schedule and budget
Budget

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Budget
 After initial plan (Logframe – Matrix)
 Process of consultations >> make a choice
 Future financial expenses
 Planned income and expenses within certain period of
time
Budget

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Expenses
 Direct expenses/costs: expenses directly linked to
activities (e.g. materials, travel, personnel, etc.);
 Indirect expenses (Administrative): expenses which
cannot be linked to activities (e.g. expenses for travel of
management, administrative costs, cost for rental of
offices, costs of administrative staff (usually a fix % of
direct expenses/costs);
Budget

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• Indirect costs: max 7% to cover administrative
overheads;
• Contingencies: max 5% to be used only after prior
approval by the Contracting Authority.
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Which are the direct eligible costs?
For example:
• Cost of staff assigned to the action (salaries and remuneration-related
costs normally borne by the beneficiary);
• Travel and per diem;
• Purchase or rental of equipment and supplies, cost of sub-contracted
services;
• Subcontracting expenditure of works;
• Other costs deriving from the action (translation, reproduction,
dissemination activities, insurance & financial guarantees).
See Art. 14.2 GC
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Eligible costs are costs actually incurred by the beneficiary or partners of
the grant which meet the following criteria:
• they are indicated in the estimated overall budget for the Action;
• be necessary for carrying out the action;
• be recorded in the Beneficiary's or the Beneficiary's partners' accounts
or tax documents;
• be identifiable and verifiable, and be backed up by originals of
supporting documents.
Eligibility of costs
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Cost eligibility criteria
i. Costs relating to services and works shall relate to activities
performed during the implementation period. Costs relating
to supplies shall relate to delivery and installation of items
during the implementation period.
i. Costs incurred should be paid before the submission of the
final reports. They may be paid afterwards, provided they are
listed in the final report together with the estimated date of
payment;
Art. 14.1 GC
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Cost eligibility criteria (1)
iii. An exception is made for costs relating to final reports,
including expenditure verification, audit and final evaluation
of the Action, which may be incurred after the implementation
period of the Action;
iv. Procedures to award contracts, as referred to in Article 10,
may have been initiated and contracts may be concluded by
the Beneficiary(ies) before the start of the implementation period
of the Action, provided the provisions of Annex IV have been
respected.
Art. 14.1 GC
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V.A.T.
• Budget must be prepared without VAT;
• Keep in mind that you might need financial resources to
cover VAT in advance;
• VAT EXEMPTION to be claimed on reasonable amounts
(as per instructions of the CA);
• Procedure defers from one country to another.
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Exchange Rate
• Old PRAG used average Inforeuro exchange rate of summarised
invoices for the reporting period;
• New PRAG uses actual bank exchange rate applied;
As this proved to be the issue and sometimes big loss for beneficiaries
with double currency accounts:
• Current option explored is to use monthly Inforeuro exchange;
• Check with your CAs what applies to your contracts.
Managing
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• Overhead costs which are not specified in any other budget
heading;
• Ineligible costs cannot be included;
• Costs incurred according to accounting principles;
• No need to provide supporting documents to the CA;
• Final amount depends of total eligible costs as reported in final
report and approved by CA.
Art. 14.7 GC
Indirect Costs
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Project budget
 Excel table with three “Worksheets”:
 Budget for applicant
 Justification of the budget
 Sources of financing
 Very important part of project proposal and is the base for
signing of the contract.
 Expenses have to be clear, justified, sufficient for the
implementation of activities and must be defined by budget
lines.
Budget

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How to go from project description to budget?
 Budget all your activities!
 For each activity define the necessary means and
after that costs/expenditure!
Budget

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Activities  Means  Expenses 
Budget lines
Training of
tourism workers
about the
possibility of
recreational
tourism in XY (2X
3 days; 30 pax;)

Trainers (1
foreign expert
and 1 local),
project
manager,
project
coordinato,
materilas,
food/coffee

Fees for external
experts (for the days
of training and
preparation);
(For members of the
team emplyed in the
institution which is
implementing the
project, these costs
are callculated in
their salaries);
Cost of one set of
materials x 60;
Food/coffe X number
of participants x
number of days

1. Human
resources
5. Services.
Conference
s and
seminars
How to go from project description to budget?
Budget

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Budget: Table 1
Budget

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Budget
 Headings:
 Human resources
 Travel
 Equipment and supplies
 Local office
 Other costs and services
 Other
 Contingency reserve
 Administrative costs
Budget

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General instructions
 Use the original table and DO NOT delete lines or
formulas; if necessary add lines.
 Budget is divided in a way to enter in one column the
budget for all years and in the second column, the budget
for only 1st year of implementation.
 Enter expenses in correspondent headings but, if you are
not sure, remember: it is important to show to which
activities the cost will relate and how the are composed.
Budget

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 All budget lines must be numbered;
 Make sub lines, e.g.:
3. Equipment
3.1. Purchase or rent of vehicles
3.2 Furniture, computer equipment
3.2.1 Laptop computer
3.2.2 Colour printer
3.2.3 Digital camera
General instructions(II)
Budget

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 Use right unit rates – some suggestions:
 Equipment – per piece or pcs
 Translation– per page
 Simultaneous translation– per hour
 Printing – per piece or pcs
 Audit, research, design (subcontracted activities
which produce tangible result/outcome) - contract
General instructions(III)
Budget

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BUDGET LINE 1 - Human resources (I)
 Show salaries of the members of the team (applicant and
partners) and those who will be hired for the purpose of
the project only.
 All expenses of external experts should also be shown in
the budget line 1.2 but in the way that is clear to which
activity they are linked to (e.g. trainer for capacity
development, environment expert, etc.).
 1.2 Salaries (gross, expatriate/international staff)
Budget

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Staff costs
• Agree which persons will be working for the project and see if they
are already working or they have to be recruited;
• Define the estimated monthly cost (as “month” is the unit of time in
budget);
• Find out in which month the persons will start working and on what
basis, if not full time.
Costs Assumption InitialdateDetaileddescription Enddate#ofunits UnitrateUnit
1. Human Resources
1.1 Salaries (gross salaries including social security
charges and other related costs, local staff)
1.1.1 Technical Technician 1 Beneficiary Month 12,00 3.000,00 Already in institution. 50% dedication Month 1 Month 24
Technician 2 Beneficiary Month 20,00 2.850,00 Recruited for the project. 100% dedication Month 4 Month 23
Technician 3 Beneficiary Month 2,00 2.600,00 Recruited for the project. Half dedication 4 months for final event Month 19 Month 22
Technician 1 partner 1 Month 5,50 2.000,00 Already in institution. 25% dedication Month 2 Month 23
Technician 2 partner 1 Month 20,00 1.900,00 Recruited for the project. 100% dedication Month 4 Month 23
Total technical staff 59,50 2.473,95
1.1.2 Administrative/ support staff Assistant Beneficiary Month 12,00 2.000,00 Already in institution. 50% dedication Month 1 Month 24
Assistant partner Month 5,50 1.600,00 Already in institution. 25% dedication Month 2 Month 23
Total administrative/support staff 17,50 1.874,29
Managing
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Staff costs (2)
Calculation of actual costs. You will need to calculate the monthly cost
for each year, for example:
Calculation of monthly cost
Alex Alexov Year 2015
Annual cost 25.713,00
Gross salary 19.500,00
Social Charges 5.460,00
Other remuneration related costs 753,00
# of working months in a year 10,50
Monthly cost 2.448,86
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 Staff not employed full time on the project e. if project
manager works on half time on the project that lasts 18
months, this should be shown in the following way:
 Use usual gross salary.
 Use month as unit for staff engaged for longer time.
Description Unit Number
of units
Unit cost Total
Project Manager (50%) Month 9 1850 16,650
Human resources (II)
Budget

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BUDGET LINE 2 - Travel
TO BE REFERRED to TRAVEL of PROJECT STAFF
• unit rate are maximum or average;
• specify meaning/modalities for local transport;
• should be most economic means.Managing
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Travel and subsistence costs
(included in category 2)
Managing
2. Travel6
2.1. International travel Per flight
2.2 Local transportation Per month
Budget
Cost incurred by staff or any other person taking part in the project;
Any flat-rate for the subsistence costs must not exceed the rates (per diems) set out in the :
• project budget;
• scales published by the European Commission at the time of signing the contract;
• scales set by national legislation, if applicable.
• Travel by plane has to be always in economy class;

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Subsistence costs
• Subsistence costs may be paid to staff or to participants to seminars and
conferences. Any subsistence cost to external experts has to be included in the
“category 5 other costs, services”
The cost per night called “per diem” cannot exceed the rates published by EC:
https://ec.europa.eu/europeaid/sites/devco/files/perdiem-2013-07-corrigendum-3-febr-
2014_en.pdf (last update 01/07/2013)
2. Travel
5
2.1 Travel
6
Per travel € 0.00
2.2 Per diem
7
Per day € 0.00
2.3 Other travel expenditures Per day € 0.00
Subtotal Travel € 0.00
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BUDGET LINE 3: Equipment & supplies
(Procurement procedures apply)
PURCHASE of EQUIPMENT is an INVESTMENT: may not
be budgeted under RUNNING COSTS
* ORIGIN of SUPPLIES IS BASED on WHERE they ARE
PRODUCED, NOT WHERE THEY ARE PURCHASED
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Equipment and supplies
(category 3)
According to article 14.2, the purchase or rental of equipment and
supplies (new or used) is eligible if it is specifically for the purposes of
the project. The cost of related services, such as transportation or
installation is also eligible. The costs have to correspond to market
rates.
Managing
3. Equipment and supplies7
3.1 Purchase or rent of vehicles Per vehicle
3.2 Furniture, computer equipment
3.3 Machines, tools…
3.4 Spare parts/equipment for machines, tools
3.5 Other (please specify)
Subtotal Equipment and supplies
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BUDGET LINE 4: local office
BUDGET LINE 5: other costs & services
Procurement procedures apply, except for audit (clarify procurement
planning and procedures (if any)).
• Vehicle running costs
• Telephone, water… (global price might be acceptable)
• Translation/Publication Services
• Event organisation
• External expertise
• …
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Local office
(category 4)
This category is intended to include the expenditure of any office
specifically for the purposes of the project.
The cost of the headquarters of the beneficiary and partners has to be
financed through indirect costs (category 8).
Managing
4. Local office
4.1 Vehicle costs Per month
4.2 Office rent Per month
4.3 Consumables - office supplies Per month
4.4 Other services (tel/fax, electricity/heating, maintenance) Per month
Subtotal Local office
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Other costs, services
(category 5)
This category includes the subcontracting expenditure and other
costs deriving directly from the requirements of the contract, as
described in article 14.2 of the General Conditions.
Managing
5. Other costs, services8
5.1 Publications9 Per item
5.2 Studies, research9 Per item
5.3 Expenditure verification/Audit Per service
5.4 Evaluation costs Per service
5.5 Translation, interpreters Per page/day
5.6 Financial services (bank guarantee costs etc.)
5.7 Costs of conferences/seminars9 Per event
5.8. Visibility actions10
Subtotal Other costs, services
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Other costs, services (I)
 Group expenses according to event (e.g. seminar) or
activity (e.g. printing of promotional materials or
brochure) into joint budget line with sub lines.
5.1 Publications Unit Number
of units
Unit
price
Total
5.1.1 Preparing project
leaflet
5.1.1.1 Designing the leaflet contract 1 600 600
5.1.1.2 Printing the leaflet pcs 1000 1,5 1,500
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Other costs, services: Example
5. Other costs, services8
5.1 Publications9 0
5.2 Studies, research9 0
5.3 Auditing costs 0
5.4 Evaluation costs 0
5.5 Translation, interpreters 0
5.6 Financial services (bank guarantee costs etc.) 0
5.7 Costs of conferences/seminars 0
5.7.1. Seminar for Tourist Workers on XY (2x3 days for 30 persons
each)
5.7.1.1. Materials for participants Per pcs 7 60 420
5.7.1.3. Refreshments Per person 64 100 6400
5.8 Visibility actions
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Other costs, services (II)
Example:
 Publications – brochure about the project, printing the
research results;
 Studies, research – studies about specific theme,
business plans, investment plans, market researches, etc.
 Auditing costs – audit for projects above 100.000 €
 Costs for seminars and conferences – room rental, rental
of equipment, catering, printing, etc.
 Visibility actions – press conference, posters, web page,
promotional material, etc.
Budget

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Indirect costs (1)
(category 8)
This category is described in article 14.7 of the general Conditions and
it is intended to cover the administrative overheads incurred by the
beneficiary and partners.
Managing
Subtotal Other
7. Subtotal direct eligible costs of the Action (1-6)
8. Indirect costs (maximum 7% of 7, subtotal of direct eligible costs of
the Action)
9. Total eligible costs of the Action (7+ 8)
10. Provision for contingency reserve (maximum 5% of 7, subtotal of
direct eligible costs of the Action)
11. Total eligible costs (9+10)
12. - Taxes 11
- Contributions in kind 12
13. Total accepted11
costs of the Action (11+12)
Budget

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Indirect costs (2)
(category 8)
These costs are claimed as indirect costs and:
• They are calculated as a fixed rate of the total amount of direct eligible costs
(categories 1 to 6). Category 8 is also used in budget, but not in actual
expenditure, as explained in previous slide;
• The flat rate does not need to be supported by accounting documents;
• It is incompatible with the receipt of an operating grant from EC by the
beneficiary or partners, that is, if the beneficiary or partner is receiving a grant
to finance its “regular operating costs”, no additional administrative costs can
be accepted as eligible, as it would be double funding.
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Contingency reserve (Art. 14.6 GC)
(category 10)
• The contingency reserve (no more than 5% of the eligible direct costs) can only be used in
case of unforeseeable circumstances and with prior approval by the CA.
• The request for its use has to indicate which categories of expenditure (1 to 6) will need
extra resources.
• Cannot be used for correcting mistakes in project design.
• The reallocation will be shown in the financial report and no accounting entries will be found
under this category:
Managing
Addenda or use of contingencies
Contract No
Implementation period of the contract (dd/mm/yyyy-dd/mm/yyyy)
Budget as per contract/last addendum
signed
Use of
contingencies/
addenda
Budget as per new addendum signed
(Only to be completed when an amendment is necessary)
Expenditures Unit # Units
Unit value
(in EUR)
Total Cost
(in EUR) Unit # Units
Unit
value
(in EUR)
Total Cost
(in EUR)
(a) (b) (a)*(b) (a) (b) (a)*(b)
1. Human Resources
1.1 Salaries (gross salaries including social security charges
and other related costs, local staff)
1.1.1 Technical Per month Per month
1.1.2 Administrative/support staff Per month Per month
Budget

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44
• debts and provisions for losses or debts;
• interest owed;
• items financed by another framework;
• purchases of land or buildings (except..);
• currency exchange losses;
• taxes, including VAT (unless..);
• credits to third parties;
• Contributions in kind .
Art. 14.9 GC
Non-eligible costs
Managing
Budgetc

45. Funded by
European Union
Introduction
What is project
Logical Frmwrk
Schedule
Budget
Stakeholders
Partnership
Procurement
Services
M&E
Reporting
Visibility
Project Finances - Advise
Consult also with your auditors early in project about
project financial administration, eligibility of costs, financial
reporting. In this way you can avoid unpleasant surprises
at the end of the project.Managing
Budget

46. Funded by
European Union
Introduction
What is project
Logical Frmwrk
Schedule
Budget
Stakeholders
Partnership
Procurement
Services
M&E
Reporting
Visibility
Budget: Table 2
JUSTIFICATION OF THE BUDGET
Budget

47. Funded by
European Union
Introduction
What is project
Logical Frmwrk
Schedule
Budget
Stakeholders
Partnership
Procurement
Services
M&E
Reporting
Visibility
Justification of budget headings
 Copy 1st column from table 1(Expenses)
 Two explanations:
 The need for this expense and link with activity
 Estimation of cost
 Be clear and explicit; “market research” or “usual price”
is not enough.
 Obtained price lists and name companies who provided
them . Keep in mind that in the case of procurement of
goods, you might need these prices lists.
Budget

48. Funded by
European Union
Introduction
What is project
Logical Frmwrk
Schedule
Budget
Stakeholders
Partnership
Procurement
Services
M&E
Reporting
Visibility
Budget: Table 3
SOURCES OF FUNDING
Budget

49. Funded by
European Union
Introduction
What is project
Logical Frmwrk
Schedule
Budget
Stakeholders
Partnership
Procurement
Services
M&E
Reporting
Visibility
Sources of funding:
 Financial contribution of the Applicant;
 Financial contribution of the European Commission
requested in the application;
 Contribution (also) of other European Institutions or
Member States;
 Contribution of other organisations;
 Total contributions.
Sources of funding
Budget

50. Funded by
European Union
Introduction
What is project
Logical Frmwrk
Schedule
Budget
Stakeholders
Partnership
Procurement
Services
M&E
Reporting
Visibility
Sources of funding
 All partners’ contributions should be recorded in
Applicant’s financial contribution.
 If more partners are contributing, please enter the
amount and % for each.
 In the column Percentage of total use % and if it is
necessary, two decimals.
Budget