The document outlines the budget proposal for grants financial orientation, specifying the required format and distinguishing between operational, management, and structure costs. It details eligibility criteria for expenses, including necessary documentation and compliance with regulations, and provides guidance on VAT treatment and contributions in kind. Significant attention is required to ensure coherence between the technical proposal and the budget, adherence to the approved budget items, and proper communication and audit of the budget.

1. GRANTS’ FINANCIAL ORIENTATION
BUDGET PROPOSAL
By: Joline Fatouleh

2. BUDGET FOR THE ACTION
Currency: Euros
Format:
The format of the budget should follow the format of Annex 32,
distinguishing:
A. Operational costs
B. Management costs
C. Structure costs.

3. ELIGIBLE COSTS
The type of costs that Enabel can subsidise are:
Operational costs are the necessary and indispensable costs for achieving the
objectives and results of the action.
It concerns services, goods, staff, equipment and infrastructure needed for
executing the action, including training, awareness-raising, study trips,
workshops, studies and/or consultancy.
Management costs are identifiable costs related to management, supervision,
coordination, monitoring, control, evaluation and financial audit which
specifically originate in the implementation of the action or the justification of
the Grant.
Structure costs are costs related to the achievement of the social purpose of
the beneficiary, which even though they are influenced by the implementation
of the action are neither identifiable or attributable to the budget of this
action.

4. ELIGIBILITY CRITERIA OF EXPENSES
An expense may be charged to the grant as operational cost or management cost if it
fulfils the following cumulative conditions:
A. Documented by a supporting document.
B. It is necessary for achieving the results of the action,
C. It is committed in accordance with the approved budget of the action;
D. It is actually incurred during the duration of the action;
E. It complies with the provisions of the tax and social regulations and the
applicable procurement regulations.
F. It does not relate to an ineligible cost.

5. ELIGIBLE AS OPERATIONAL COSTS OR
MANAGEMENT COSTS
The following direct costs of the contracting beneficiary are eligible as operational costs
or management costs
a) The cost of staff assigned to the action, corresponding to actual gross remuneration
and salaries, comprising social security charges and other statutory costs included in
the remuneration; provided that this does not exceed the average rates corresponding
to the contracting beneficiary’s usual policy on remuneration unless justification is
provided that the excess is indispensable for the achievement of the activity;
b) Travel and subsistence allowances, provided that they are in line with the contracting
beneficiary’s usual practices and do not exceed applicable scale at Enabel’s;
c) The costs for services, works and purchase of equipment specifically destined for the
needs of the action.

6. ELIGIBLE AS OPERATIONAL COSTS OR
MANAGEMENT COSTS
e) The costs arising from other contracts verified by supportive documents of
the contracting beneficiary for the purposes of carrying out the activity; The
costs arising directly from requirements imposed by the agreement
(dissemination of information, specific evaluation of the activity, audits,
translations, reproduction, insurance, etc.), including the costs of any
financial services (especially the cost of transfers and financial guarantees
where required under the agreement);
f) Duties, levies and any other charges, including the value-added taxes, which
have been paid and cannot be recovered by the contracting beneficiary;
g) Meals, drinks and snacks are accepted for the activities in the applicate
country if they are part of and required for these activities, justified and of a
reasonable amount;

7. STRUCTURE COSTS
Structure costs are lump sum and represent maximum <X %> (never above
7 % of the operational costs)
 the maximum amount of the structural costs (sum of the structural costs of the
contracting beneficiary) will remain the same (maximum 7% of the operational costs
of the initial grant)

8. IN KIND CONTRIBUTION
“Contributions in kind” means goods or services provided free of charge by
a third party to the contracting-beneficiary.
As contributions in kind do not involve any expenditure on the part of the
contracting-beneficiary, they shall not constitute eligible costs.
It is strongly encouraged to include and quantity the contribution in kind in
the budget.

9. VAT TREATMENT
 The taxation system to which the contracting beneficiary is subject will apply.
 Enabel would support in providing VAT exemption
 Contracting beneficiary/ Applicant are required to apply for VAT exemption for all
transactions above US $1,000.
 Comply with law in relation to thresholds (US$1,000)
 Except for food, hospitality and catering services
 Value-added taxes (VAT), which have been paid and cannot be recovered by the
contracting beneficiary is eligible cost; shall be covered by grant funds.
 Contracting beneficiary required to purchase services and goods from registered
vendors who can issue VAT invoices
 Original VAT invoices are required for all transactions no matter how much the value
is when services and goods are provided by a registered vendor.
 When services are provided by individuals (not firms/ companies); then deduction
of source certificate (for income tax) is required.

10. IMPORTANT POINTS OF ATTENTION
 Coherency between technical proposal & the budget
Respecting the items in the approved budget
Communication Budget
Audit Budget

11. THANK YOU