DFID Guidelines on Humanitarian Assistance

May 1997 (Version 5.0a)

A MS Word version of this file is available here.

Section I: Scope of Guidelines | Section II: Administration | Section III: Format for Humanitarian Project Proposals | Section IV:  Format for Reporting | Annex A: The Logical Framework | Annex B: The Project Budget | Annex C: The Model Draft Accountable Grant Letter | Annex D: Appraisal Notes

Section I: Scope of Guidelines

These Guidelines are for agencies seeking support from the emergency funds of the Department for International Development.

DFID's emergency funds are available for

• Rapid onset disaster relief (definition at Annex D)
• Gradual onset disaster response
• Complex political emergencies, technological, or natural disasters
• Natural and technological disaster preparedness, prevention and mitigation
• Post disaster repair and rehabilitation
• Conflict preparedness, prevention and reduction, and mitigation
• Policy and institutional development, including monitoring and evaluation, training and research in all the above areas

Geographical range

DFID can provide assistance in response to natural and technological disasters anywhere outside the UK. Other humanitarian assistance including the response to complex political emergencies is limited to developing countries and the countries in transition of Central and Eastern Europe and Central Asia.

Agencies eligible

Registered charities, and other established bodies (such as academic institutions and companies) in UK, rest of Europe, and elsewhere are eligible to receive DFID emergency aid funds. Also eligible are inter-governmental bodies and agencies of the United Nations and Red Cross/Red Crescent systems.

Section II: Administration

To whom should the proposal be sent?

Proposals for rapid onset disaster relief in all countries should be sent to the Conflict and Humanitarian Affairs Department (CHAD) unless the project is in the context of a long-running complex political emergency or a frequently recurrent natural disaster, responsibility for which usually rests with the relevant DFID geographical department.

All other proposals should normally be sent to the relevant DFID department with responsibility for the country or region. Disaster preparedness and conflict reduction projects are funded by geographical departments and also from central budgets in CHAD. If in doubt on where to send your application, please contact CHAD who will advise accordingly. Organisations outside the UK can also channel proposals through the relevant British Embassy or High Commission.

How should the proposal be submitted?

Preferably by post or e-mail; by fax if there is a very tight deadline, in the case of rapid onset disasters. Proposals can also be submitted in Microsoft Word format on a 3.5" computer disk. The budget sections of proposals should be sent in Microsoft Excel. For the text, the recommended font size is Arial 12; please number paragraphs.

How does DFID decide whether or not to fund a proposal?

We appraise project proposals according to good practice standards, the agreed priorities and available funds in the context of our specific policies and strategies for the relevant issue, and country or region. Judgements are also based on assessment and monitoring visits by our staff in the field. The views of the relevant British Embassy or High Commission are also sought. In the interests of better co-ordination, we may also consult bodies such as the UN Department of Humanitarian Affairs, ECHO, European Community partners and other donors.

Further information such as Country Strategy Papers and other policy documents are available from the Publications section of the DFID website or from the Public Enquiry Point (PEP) (enquiry@dfid.gov.uk). The PEP can also provide the Office Instructions and Technical Notes used by DFID staff to appraise proposals to ensure that they meet feasible technical, institutional, social, economic, financial, and environmental quality standards. Annex D sets out some of the questions commonly asked by DFID when reviewing proposals for humanitarian assistance.

How quickly will DFID respond?

For rapid onset disasters, we can respond within hours. For other proposals, we shall let you have a decision as quickly as possible taking account of the nature and urgency of the project, the completeness of the information provided by you, and the resolution of any queries raised by us. If a final decision has not been made within three weeks of submission, we shall let you know where we are in terms of the project appraisal process. We shall also let you know the reasons for turning down a proposal.

How quickly will a funding decision by DFID be formalised?

If DFID decides to provide funds, we will send you an Accountable Grant Letter, along the lines of the model draft letter at Annex C, amended as appropriate for the specific circumstances. Once this has been signed and returned, DFID can advance all or part of the grant, as agreed. Please note that advance payments in respect of grants for projects lasting longer than three months will be funded on a quarterly basis. In particularly urgent cases, Accountable Grant Letters can be despatched and returned by fax, with original copies subsequently exchanged by post.

How is the start date and length of a project defined?

A project will be considered to have started on the date of signing of the Accountable Grant Letter. The length of a project will depend on specific circumstances. Most rapid onset disaster relief projects will be of a maximum of six months duration. Other projects, especially those concerned with rehabilitation and disaster/conflict prevention may be of a longer duration of 1-3 years.

What happens if the project changes once it's underway?

Any changes to the project's purpose and outputs require prior DFID consent. Changes in project activities which imply a greater than 10% change in individual budget lines also require prior DFID approval.

You should get in touch with DFID with full information prior to any significant alteration to the project. Subject to consideration of the specific circumstances, it is usually possible to agree changes and maintain the grant: the important thing is to discuss it with DFID as early on as possible.

Where can I get more information?

Approach the relevant DFID department which is responsible for the particular country or region. If in doubt on whom to approach or if you need information on general aspects of DFID's humanitarian aid policy and procedures, please contact CHAD.

Section III: Format for Humanitarian Project Proposals

The following format applies to all humanitarian project proposals, though not all questions will be necessarily relevant to all types of projects.

Basic data sheet

This will be at the front of the project document giving the following ordered information:

• Name of agency: name, designation, address, telephone, fax and email (if available) of the contact point in the agency dealing with the proposal;
• Name of project and location;
• Project cost: total project cost and duration; contribution sought from DFID, broken by year if appropriate;
• Grant payment details: Agency's nominated bank account number and name, bank name, address and sort code, into which DFID is requested to make payments;
• Problem addressed: a sentence that identifies the issue or problem that is tackled by the project and the people affected. If a rapid onset disaster, indicate type, location, intensity, date, and duration;
• Project summary: an initial sentence that identifies the purpose and key outputs of the project, followed by a brief paragraph outlining essential details.

Logical framework

Logical frameworks, or 'logframes' are recommended for all projects and are an essential requirement for projects greater than £100,000. See Annex A for recommended format. For smaller projects, if a logframe is not used, a narrative statement including a clearly stated purpose, outputs, activities, indicators and risks must be provided.

Project Rationale

The background to the project, and the approach adopted should be explained. The following points are not an exhaustive list and will not be applicable in all cases but they illustrate considerations in the justification of the project rationale:

Agency background

• How did the agency come to be involved in this issue or situation?
• What experience does the organisation have of working on this issue or in the country/province/region?
• Is the organisation a signatory to the Code of Conduct for the International Red Cross and Red Crescent Movement and NGOs in Disaster Relief? Does it plan to implement the Code of Best Practice in the Recruitment and Management of Aid Personnel? Is it involved in any other quality and/or standards initiative?

Project approach

• What problem(s) does the project address? What specific assessments have been made and by whom?
• How do the proposed outputs and activities help solve these problems? How does the project fit in with overall aims or policies of the system (agencies collectively, government where applicable) responding to the problems? What would happen without the project?
• What are the essential features of the project's operating environment including the problems and opportunities provided by the social, political, institutional and economic context, as relevant? Background analyses where necessary can be presented in annex(es).
• Were any alternative approaches considered to the ones proposed? If so why were they rejected?
• What are the expected benefits?
• Who are the main beneficiaries, and how will they benefit? Are there other stakeholders who may gain or lose as a result of the project? How will stakeholder participation be handled?
• Are the needs of particularly vulnerable or marginalised groups addressed? How?
• Will the beneficiaries of the project participate in it's development and delivery? How?
• Will men and women benefit from the project? How will any gender inequalities be handled?
• Are there specific issues in relation to conflict? How will they be handled?
• Do indigenous systems or services already exist that would normally be expected to address the needs outlined in this project? Does this project strengthen and underpin these or could it undermine them?
• Are any of the structures or services to be established by this project intended to be sustainable? If so how will sustainability be attained?
• What lessons have been learnt from previous experience in this area or type of project?

Management arrangements

Give a brief description of project implementation and monitoring arrangements to ensure the cost-effective and efficient attainment of the outputs identified in the logical framework, including:

• Project implementation and supervision arrangements; indicate in-country capacity of agency including length of presence and staff; indicate names, track record and expertise of any implementing partners;
• Extent of agency participation in any national/local co-ordination arrangements e.g. by national/local government authorities or United Nations system; specify any operating agreements with them; indicate if proposal has followed official request for help and (where appropriate) the project is within the framework of a DHA Inter-Agency Appeal;
• Other agencies operational in the area, and what goods/services they are supplying or intend to supply;
• Indicate the overall timeframe for the project, workplan, and timetable for specific activities;
• Reliability of the costing of project inputs; arrangements for procuring and transporting project inputs, to ensure local appropriateness and acceptability, as well as security and value-for-money under the circumstances;
• Systems for project monitoring (including financial tracking and accounting audit), quality control (including lesson learning, and corrections), and impact assessment; methods for data collection and monitoring specifying dates for any proposed visits by agency staff; responsibility for reporting.

Analysis of risks and undertakings

Key assumptions with regard to external factors that are outside project control but nevertheless necessary to the achievement of project outputs and purpose should be stated in the logframe. Many of the projects funded from emergency aid funds are recognised to operate under high levels of risk. In this section, indicate:

• The risk assessment that has been carried out to identify the main potential causes of failure, their likelihood of occurrence, and the seriousness of consequences that would be suffered;
• Options considered and the steps taken in project design and implementation to address, and minimise or mitigate the potential risks;
• Measures planned or taken to minimise the risk to agency personnel and assets, in areas of actual or potential violent conflict;
• Any undertakings or agreements made with partners which impact on project implementation; how observance of undertakings will be monitored; the implications of non-compliance.

Project budget

See Annex B for recommended format.

Lists of supplies and equipment

Specify details including a brief technical description and information on sourcing; costs need not be repeated if already included in the footnotes to the project budget (Annex B).

Section IV: Format for Reporting

What is the purpose of project reports?

Reporting is seen as an integral part of the project's work. Project reports are seen as management tools to:

• Help ensure that continuous learning and quality control takes place within a project for the benefit of the beneficiaries, the agency and its operating partners, and DFID;
• Enable lessons learned to be applied to future humanitarian assistance policies and practices;
• Assure DFID that its funds are used effectively and efficiently.

Frequency of project reports?

The terms of the Accountable Grant Letter (Annex C) will set out the particular requirements on reporting for a specific project. This will normally consist of Interim Progress Reports (IPR) at specified intervals, and a Final Project Report (FPR) within three months of the end of the project.

As a general guide, projects of three months duration or less need only produce an FPR. For longer projects, an IPR at quarterly intervals is suggested. This can be timed to coincide with the quarterly requests for payment (Annex C). If there is a major change of circumstances or alterations to the project purpose and outputs additional reporting may be required as agreed on a case-by-case basis.

Format: The basic data sheet

This should give the following ordered information:

• Name of agency: name, designation, address, telephone, fax and email (if available) of the contact point in the agency dealing with the project;
• Name of project and location;
• Duration of project: Originally planned start, actual date of start, and expected end;
• Project cost: originally approved project cost and any subsequent amendments; contribution given by DFID;
• Project header: a sentence that identifies the purpose and key outputs of the project;
• Status of report: is this an Interim Progress Report (indicate 1st, 2nd, 3rd etc) or a Final Project Report?
• Flagged issues which have arisen during project implementation and which require DFID guidance/decision.

Narrative report

The narrative report should use the logical framework (Annex A), developed as part of the original project proposal, as the basis for assessing and reporting on progress. A suggested format is as follows:

1. Insert statements from original logframe; the IPRs need only report against activities and outputs, the FPR need only report against outputs and purpose.
2. Insert statements from original logframe and any modifications.
3. Comment against each indicator outlining key issues faced, and any reassessment of assumptions and risks.
4. Rating scale: objectives likely to be... fully achieved=1, largely achieved=2, partially achieved=3, achieved to a very limited extent=4, failed=5, too early/unable to judge=X. Also specify performance gap.
5. Indicate actions proposed or taken as a consequence of assessment e.g. to overcome problems.

Situation re-assessment and lessons learnt

In this part of the report, indicate :

• A summary of principal benefits and achievements of the project, indicating the populations that have benefited;
• Any significant changes in the project's operating environment including key issues, problems and openings;
• How the humanitarian situation has changed since the last report;
• Effectiveness of inter-agency co-ordination arrangements and the role played by the agency itself;
• (For final project reports only): indicate lessons learnt: (a) positive aspects which may be replicable; (b) negative aspects to be avoided in future; (c) other general reflections for future humanitarian aid policy and practice; (d) how the project's experience will be disseminated for use by others.

Financial report

The financial report should use the project budget (Annex B), part of the original project proposal, as the basis for assessing and reporting on progress. A suggested format is as follows:

1. Insert budget line items as in original budget.
2. Inserted budget as originally approved/latest approved amended.
3. Indicate latest actual expenditure in period under report.
4. Indicate actual expenditure as %age of approved expenditure .
5. Comment on any significant variance (greater than 10%) with reasons and corrective action taken or proposed.

Updated logframe and budget

For ongoing projects, attach an updated logframe and budget, if applicable. Amendments to a logframe are usually admissible only at the level of activities and outputs; a proposal to make a significant change to the purpose of a project will usually necessitate a fuller re-examination of the original DFID grant. Changes of up to 10% in individual budget line items are permissable; greater adjustments require DFID's prior approval. If in doubt contact DFID for guidance as early as possible.

Annex A: The Logical Framework

Why use a logical framework?

The logical framework (logframe) is a useful tool in the design and planning, implementation, and monitoring of a project. It also makes it easier to report on a project, highlight changes and to adapt the project accordingly.

DFID recommends the use of the logframe because:

• It brings together in one place a clear, concise and accessible statement of all of the key components of a project;
• It clarifies and exposes the logic of how the project is expected to work, separating out the various levels in the hierarchy of objectives, and helping to ensure that inputs, activities, outputs and purpose are not confused with each other;
• It identifies the main factors related to the success of the project;
• It provides a basis for monitoring and evaluation by identifying indicators of success and a means of quantitative or qualitative assessment.

The structure of a logical framework

A logframe consists of concise statements laid out in a horizontal and vertical matrix. In preparing a logframe it is normal, having identified the problem the project will address, to work down the levels i.e. so that the inputs required to achieve the project are considered last. However having done this it is necessary to then consider whether the resources required are likely to be available and appropriate to the situation and modify the framework accordingly. Good planning involves thinking both down and up the hierarchy of objectives. A typical logframe format is illustrated below.

Note: Where the DFID contribution is towards a larger project, the logframe submitted should apply to the whole project with the DFID supported elements highlighted at the level of purpose, outputs and activities. This allows us to understand how DFID support fits into the overall project.

Annex B: The Project Budget

Financial information must be in sterling, indicating any exchange rate assumptions (and inflators used for multi-year budgets). Footnotes to the budget should indicate other details such as composite breakdown in individual budget lines where required (e.g. footnote on 'seed package' should detail contents), and steps taken by the agency to ensure most cost-effective sourcing (e.g. local and regional purchase, maximising use of local staff, hire of vehicles instead of purchase, use of existing assets and contingency stocks, etc).

The budget should be presented under the following headings:

• Sub-budget A: Supplies and materials for direct distribution to project beneficiaries, or use in project area, identified under sectors.
• Sub-budget B: Non-personnel costs of project.
• Sub-budget C: Personnel remuneration including salaries and allowances, fees, insurance and other employment costs (details in footnote).
• Sub-budget D: Personnel support costs.
• Sub-budget E: Other costs that cannot be categorised under the above headings.
• Sub-budget F: Agency management support including monitoring and reporting. This will not normally exceed 7% of the total of A to E; higher proportions should be justified in a footnote on basis of itemised actual costs.
• Sub-budget G: Contingency. This will not normally be necessary; under exceptional circumstances to do with the complexity of the project's working environment, a proportion not exceeding 5% of the total of A to E may be permitted, justified in a footnote.

It is requested that the budget be presented in a standard table in the following format. Indicate (line J) contributions from the agency itself or other donors including whether these have been requested or confirmed, and whether these are tied to particular line items. Indicate in the footnote to line K if the support requested from DFID is for the project as a whole, or for specific line items. For phased projects, indicate in a separate table, when funds will be required for particular components.

For multi-year projects, additional columns for each year with indicative figures for each sub-budget should be included. Disbursements for second and subsequent years will be subject to detailed budgets and workplans for that year being submitted to DFID.

1. This refers to staff, such as logisticians, who work in direct support of the project, but who may be located in third countries.

Annex C: The Model Draft Accountable Grant Letter

MODEL DRAFT FOR AN ACCOUNTABLE GRANT LETTER (RAPID ONSET DISASTER RELIEF AND OTHER HUMANITARIAN AID)

[Addressee]

Dear

[TITLE OF PROJECT]

I am pleased to inform you that the Department for International Development (DFID) is prepared to make a grant not exceeding {AMOUNT IN FIGURES} (AMOUNT IN WORDS pounds sterling) to {NAME OF RECIPIENT ORGANISATION} over {PERIOD OF TIME} for the purposes {EITHER} set out below {OR} set out in the attached Project Memorandum (Annex 1). {IF NOT INCLUDED IN THE PROJECT MEMORANDUM} The expected expenditure profile is as follows: {DELETE IF NOT APPROPRIATE}

RAPID ONSET DISASTER RELIEF:

2. Before the grant can be paid, your organisation is required to send to {NAME AND ADDRESS OF DFID CONTACT POINT} written acceptance of the terms and conditions of the grant, and written acceptance of the accompanying accounting instructions applicable to the grant.

OTHER HUMANITARIAN AID:

2. By copy of this letter I am asking DFID Accounts Department to send to your organisation the accounting instructions which will apply to the grant. We must receive your organisation's written acceptance of the accounting instructions before any grant can be paid.

OTHER HUMANITARIAN AID ONLY:

3. Claims for reimbursement of expenditure, {OR, IF FUNDING IS PROVIDED AS ADVANCES} requests for advances, should be sent to {NAME AND ADDRESS OF DFID CONTACT POINT}.

3/4. The provision of the grant is subject to the following conditions:

a) that your organisation will comply with the requirements contained in this letter and in the accounting instructions;

b) that your organisation will allow the DFID or its representatives access to project sites and to relevant records for the purposes of monitoring and evaluation;

c) that if any circumstances should occur which may impair the development value of the project, DFID and your organisation will consult about any actions which may be required. In such circumstances, DFID reserves the right to modify or terminate the grant.

d) that funds will not be used for any purposes other than those set out in {EITHER} paragraph 1 above; {OR} the Project Memorandum at Annex 1.

e) that your organisation will use their best endeavours to ensure the funds will not be used to meet the cost of import or customs duties (or any similar fees) imposed by the overseas Government on goods and services provided.

f) that the purpose and outputs of the project as set out in {EITHER} paragraph 1 above; {OR} the Project Memorandum at Annex 1 will not be changed in any way without the prior approval of DFID. Any requests for such changes should be directed in the first instance to {NAME AND ADDRESS OF DFID CONTACT POINT};

g) that interim progress reports/narrative and financial reports/a final project report {DELETE CLAUSES AS APPROPRIATE} will be provided to DFID {EITHER SPECIFY REQUIREMENTS FOR TIMING AND CONTENT OF REPORTS} {OR} {IF SET OUT IN THE PROJECT MEMORANDUM} as set out in paragraph {NUMBER} of the Project Memorandum, and in accordance with section IV of the DFID Humanitarian Assistance Guidelines;

h) that your organisation will exercise reasonable skill, care and diligence in the performance of the project and will indemnify and keep indemnified the DFID in respect of:-

(i) any loss, damage or claim howsoever arising out of or related to negligence by your organisation or by any person employed or otherwise engaged by your organisation in connection with the performance of the project;

(ii) any claim howsoever arising, by any person employed or otherwise engaged by your organisation.

i) that your organisation will ensure that such insurance arrangements that are reasonable and prudent in all circumstances are made for any person employed or otherwise engaged by your organisation including in respect of death, injury or disablement and emergency medical expenses;

j) that DFID reserves the right to call for and examine the insurance policy or policies and relevant renewal receipts.

k) that your organisation will give appropriate recognition to the provision of the grant by DFID in any press release or other contact with the media, and will provide representatives of DFID's Press Office with any necessary assistance required to formulate its own approach to the media in relation to the project.

4. The grant will be cancelled if for any reason the project has failed to commence within 3 months of the agreed starting date; or if there is any occurrence which in the opinion of the DFID is sufficient to defeat or substantially prevent or delay the achievement of the objectives of the project.

OTHER HUMANITARIAN AID ONLY:

5. I would be grateful if you would confirm in writing your acceptance on behalf of your organisation of the terms and conditions of the grant set out above.

Yours sincerely,

[ACCTGRT.2 1996]

Specimen Accounting Instructions I

ACCOUNTING INSTRUCTIONS FOR RAPID ONSET DISASTER RELIEF ONLY

1. The accounting instructions applicable to the administration of the grant are set out below.

ISSUE OF, AND ACCOUNTING FOR, FUNDS

2. We will make the funds available on receipt of your written acceptance of the terms of the grant and these accounting instructions. As soon as possible thereafter you will submit a statement detailing actual expenditure incurred, any interest gained from holding DFID's funds and declaring the amount of any unspent balance held. It is of the utmost importance that where funding has been provided during the January-March quarter the statement of expenditure is submitted as soon as possible after 31 March and before 30 April, where it is at all feasible, so that expenditure can be recorded against the DFID financial year in which it was incurred.

3. You must account for the funds in the same currency as that in which we issue the funds to you.

4. You or another responsible officer in your organisation must certify the statement on the following lines:

"I certify that all expenditure detailed above has been actually and necessarily incurred for the purposes of the project in accordance with the terms and conditions set out in the grant letter and accounting instructions, that the amounts shown as interest received, and as an unspent balance, are true and accurate."

5. Statements so certified will be accepted as a proper discharge for the moneys provided by the DFID. Documentary evidence of the payments made by you, or to you, will not normally be required. However, the DFID reserves the right to call for and examine such evidence. Please note that ALL STATEMENTS MUST BE IN AN ORIGINAL FORMAT; FAXED OR COPIED DOCUMENTS WILL NOT BE ACCEPTED.

6. The National Audit Office may carry out examinations into the economy, efficiency and effectiveness with which your organisation has used the DFID's funding.

ANNUAL AUDITED ACCOUNTS

7. You are required to provide to the DFID annual audited accounts for your organisation's financial year(s) in which DFID funds have been received or held. The accounts should be signed by the Finance Officer of your organisation and be certified by an independent firm of professional auditors as being a true reflection of your organisation's finances at the relevant time. The accounts should separately identify the funding and expenditure for the DFID's project, and should bear a certificate to the effect that the grant was expended in accordance with the terms agreed with the DFID. Two copies of the accounts should be provided, each bearing original signatures.

8. If it is not possible to identify separately in your accounts the funding and expenditure for the DFID's project, two signed copies of annual audited accounts should be provided together with an auditor's certificate confirming the total income and expenditure in respect of the DFID's grant.

9. Annual audited accounts should be provided within three months of the end of your financial year. Please let me know on which date your financial year ends.

REPAYMENT OF UNSPENT BALANCES

10. Any unspent balance of DFID's grant must be returned to the DFID immediately on completion of the project.

EQUIPMENT

11. You are required to maintain an inventory of all equipment, as defined below, purchased with DFID funds. The equipment covered by the requirement is:-

• All items with an initial values of £500 or more; and
• "Attractive" items such as computers, cameras and other electronic equipment regardless of initial value.

Your inventory must include the following:-

• Description
• Specific identification (e.g. serial number)
• Date of purchase
• Original value (including VAT if paid)
• Location and /or identity of user

A copy of the inventory must be sent to the DFID on completion of the project. All such equipment will remain the property of the DFID and must not be disposed of except as the DFID directs.

12. It is DFID's policy to make payments direct to a nominated bank account using the BACS system. Would you please let me have details of your organisation's bank account name, number and sort code.

13. I should be grateful to receive your written acceptance of these arrangements. Until we receive this no funds will be issued.

14. Please quote reference number ........ on all correspondence.

Yours

[AD17B]

Specimen Accounting Instructions II

ACCOUNTING INSTRUCTIONS FOR OTHER HUMANITARIAN ASSISTANCE ONLY

Dear[1]

NAME OF PROJECT

Please refer to previous correspondence informing you that DFID has agreed to make a grant of £ [2] towards the costs of the above project. The accounting arrangements applicable to the grant are set out in this letter.

ISSUE OF FUNDS, AND ACCOUNTING FOR FUNDS

2. We will make funds available at quarterly intervals in advance, on request, based on estimated expenditure for the period to be covered by the advance and, where appropriate, taking into account the actual expenditure incurred during previous periods, any unspent balance of DFID funds, and any interest gained from DFID funds.

3. You must account for funds in the same currency as that in which we issue the funds to you.

4. As soon as possible after the end of each quarter you are required to submit a statement detailing actual expenditure incurred, and any interest gained, during that quarter, and declaring the amount of any unspent balance held. If you wish a further advance, you should also submit a detailed request for funds to cover the following period's estimated costs. No further advance payment will be made until the previous but one advance has been fully and satisfactorily accounted for. It is essential that you submit the statement of actual expenditure incurred during the March quarter as soon as possible after 31 March, and at the latest by 30 April each year, so that expenditure can be recorded against the DFID financial year in which it was incurred.

5. You or another responsible officer in your organisation must certify each statement on the following lines:

"I certify that all expenditure detailed above has been actually and necessarily incurred for the purposes of the project in accordance with the terms and conditions set out in the grant letter and accounting instructions, that the amounts shown as interest received, and as unspent balances held, are true and accurate, and that the accompanying estimate of expenditure for the period to [4] is a realistic forecast based on existing information".

Statements so certified will be accepted as a proper discharge for the moneys provided by the DFID, and documentary evidence of the payments made by you, or to you, will not normally be required. However, the DFID reserves the right to call for and examine such evidence. Statements, and requests for advance payments, should be sent to [5] for approval and onward transmission to the DFID Accounts Department who will make payment. Please note that ALL STATEMENTS MUST BE IN AN ORIGINAL FORMAT; FAXED OR COPIED DOCUMENTS WILL NOT BE ACCEPTED.

6. The National Audit Office may carry out examinations into the economy, efficiency and effectiveness with which your organisation has used the DFID's funding.

ANNUAL AUDITED ACCOUNTS

7. You are required to provide to DFID annual audited accounts for each of your organisation's financial years in which DFID funds have been received or held. The accounts should be signed by the Finance Officer of your organisation and be certified by an independent firm of professional auditors as being a true reflection of your organisation's finances at the relevant time. The accounts should separately identify the funding and expenditure for the DFID's project, and should bear a certificate to the effect that the grant was expended in accordance with the terms agreed with the DFID. Two copies of the accounts should be provided, each bearing original signatures.

8. If it is not possible to identify in your accounts the funding and expenditure for the DFID's project, two signed copies of annual audited accounts should be provided, together with an auditors' certificate confirming the total income and expenditure in respect of the DFID's grant.

9. Annual Audited Accounts should be provided within three months of the end of your financial year. Please let me know the date on which your financial year ends.

REPAYMENT OF UNSPENT BALANCES

10. Any unspent balance of DFID's grant must be returned to the DFID immediately on completion of the project.

EQUIPMENT

11. You are required to maintain an inventory of all equipment, as defined below, purchased with DFID funds. The equipment covered by this requirement is:-

• All items with an initial value of £500 or more; and
• "Attractive" items such as computers, cameras and other electronic equipment regardless of initial value.

Your inventory must include the following:-

• Description
• Specific identification (e.g. serial number)
• Date of purchase
• Original value (including VAT if paid)
• Location and/or identity of user

You should send the DFID a copy of the inventory not later than four months after the start of the project and, in the event of changes, send an updated copy to the DFID at least every three months thereafter. A copy of the final inventory must be sent to the DFID on completion of the project. All such equipment will remain the property of the DFID and must not be disposed of except as the DFID directs.

BANK ACCOUNTS

12. It is the DFID's policy to make payments direct to a nominated bank account using the BACS system. Would please let me have details of your organisation's bank account name, number and sort code, and keep me informed of any changes.

13. I should be grateful to receive your written acceptance of these arrangements. Until we receive this, and your first request for funds, no funds will be issued.

14. Please quote reference number AG [1] on all correspondence.

Annex D: Appraisal Notes

D1. Definitions of humanitarian projects

Rapid Onset Disasters

Rapid Onset Disasters are defined as adverse happenings which have most of the following characteristics:

• Relatively sharply defined start of the event, usually with a specific trigger (although the background to a crisis - especially a political emergency - may be complex and prolonged);
• Potentially time-limited (i.e. there is a credible likelihood that the event will be of limited duration);
• Posing an acute, generalised threat to life, livelihoods, or basic well being (ie relatively significant numbers of people in a geographically discrete catchment area are affected);
• Local capacity to cope is, or is likely to be, overwhelmed.

Based on the above criteria, examples of rapid onset natural disasters include hurricanes / cyclones, floods, volcanoes, and earthquakes; man-made disasters include industrial or major transport incidents, and short lasting conflicts. Longer lasting conflicts will usually require more complex responses although from time to time a sudden change in circumstances in the midst of a slower onset or complex emergency may produce the need for a rapid response. For example, an upsurge in fighting in a long running conflict may generate sudden population movements requiring urgent shelter, food, water and health assistance.

Other types of event require more judgement before they can be classified as rapid onset disasters requiring an immediate response. For example, the generalised high prevalence of communicable disease due to a background of poverty or chronically poor health systems where one-off interventions would have a limited or unsustainable impact would not be classified as such an event. However, a sudden disease outbreak such as cholera in a refugee camp posing an urgent threat that can be rapidly brought under control through water and sanitation inputs would be considered to fall under this category.

Other types of humanitarian assistance projects

The types of projects, other than for rapid onset disaster relief, that are eligible for support from DFID's emergency funds were outlined in Section I. These include gradual onset disaster relief (e.g. drought and famine); care of refugee or displaced populations; disaster preparedness, prevention and mitigation; short term repair and rehabilitation following disasters; and conflict handling. Policy and institutional development activities in all these areas, including staff training, are also eligible.

D2. Agency performance and organisational appraisal

DFID's assessment of an agency's performance is based on direct field monitoring visits, and other reports. Our monitoring is conducted openly, and in full partnership with the agency concerned. The following six 'domains' of agency performance are tailored or prioritised to specific contexts:

1. Policies and strategies

What are the values and overall vision of the agency, and the clarity and specificity of its mandate and mission?

Depth of under-pinning analysis in particular country/region/theatre of operations? Has it done any? Does it pro-actively plan for different scenarios, i.e. does it demonstrate adaptability?

Does it have working principles? For example, do its approaches seek to (a) give adequate consideration to the medium-term implications of short-term relief actions; (b) minimise creation of dependency; c) prevent 'militarisation' of humanitarian assistance, and minimise diversion of project inputs and benefits towards fighting groups; (d) protect and promote humanitarian space.

Where is it positioned on relief-development linkage?

2. Management and delivery capacity

Basic management structure (numbers of expatriate/local staff). How are local staff treated with respect to their contractual arrangements and benefits?

Degree of delegated authority from HQ; supervision and support from HQ.

Adequacy of arrangements to protect staff and minimise risks to safety - in situations of armed conflict.

Internal management processes including workplans, communication arrangements, human resource management practices, and safeguards against misuse/abuse of resources.

Do its financial and reporting systems allow linkage between specific inputs and outputs?

Internal monitoring arrangements in place/any evaluations carried out (particularly, in case of commodity distributions: what are arrangements for pre- and post-distribution monitoring)?

3. External relations and links

Relations with other agencies. Does it resolve inter-agency differences of opinion amicably and constructively? Is it willing to make its own institutional interests secondary to the 'greater good' of the whole system, if required?

Regularity and willingness of participation in co-ordinating fora. Does it recognise DHA's co-ordination role (where present)?

Views of other agencies (is it known to the local DHA co-ordination unit, where relevant?), and British Embassies/High Commissions.

Does it take a responsible approach in its publicity and self-promotion?

4. Quality of proposals and reports

How reliable are the agency's judgements and claims? Does it make balanced use of data (instead of selective or distorted presentation) when lobbying for resources?

Does the proposal meet technical, institutional, social, economic, financial, and environmental quality standards as applicable to humanitarian aid projects?

Transparency of reporting: does this include an 'honest' appraisal of achievements and failures? Do reports disaggregate and give credit to the efforts of sub-contractors or other implementing partners?

5. Track record in practice

How close is the gap between the agency's stated policies and principles (see above) and its practices?

Familiarity with country, and continuity of presence of in-country staff.

Types of programmes; areas/sectors of demonstrated comparative advantage.

Actual methodologies adopted on the ground. E.g. how is targeting achieved in terms of selection of project areas? How are end 'beneficiaries' selected? What is the level of involvement of primary and other stakeholders? Are particular groups - e.g. women - participating appropriately? Does the agency actually succeed in reaching the most vulnerable?

Extent of involvement of local community or governance structures. Does it seek to minimise the creation of transient parallel structures which may bypass or compete with, or undermine local institutions?

Extent of involvement of local NGOs ("contractor" versus "partner" relationship, "using" versus "strengthening" approach) and commitment to capacity-building.

Estimates of target population not being served in project area. Extent of leakage (commodity distribution projects should be able to answer this).

How does the agency minimise risks, and anticipate and manage problems encountered during programme delivery? Is it able to does this 'ethically' e.g. without paying (armed) group for access?

6. Overall value for money

Coverage, e.g. area covered by services, 'beneficiaries' served, throughput of services, etc.

Total programme/project costs and sources of funding.

Administrative costs as % of total programme costs. If agency subcontracts to other agencies, what are the intermediary transaction costs?

Estimation of cost per unit, e.g. per 'beneficiary', per facility, per item delivered etc. for inter-agency comparison purposes.

Does the agency demonstrate a 'culture of economy', i.e. is it concerned with making best use of resources, especially when given as 'free goods' (as with service packages such as airlifts).

Perceived impact of programme (both immediate effects, and on longer term sustainability of benefits).

Summary

An overall assessment scores the agency on a spectrum from A to E, and includes a view on the gap between the stated policies of the agency, and its assessed performance. Future objectives of support for the agency may include agreement to make progress in areas where there is scope for improvement. DFID is keen to discuss its conclusions on performance with the agencies concerned, if they express interest in doing so.

D3. Appraisal of specific project proposals

In assessing an application for support from humanitarian funds, DFID will usually consider

• The technical and other design merits of the proposal (see questions in section III);
• The relevance of the project to DFID's humanitarian assistance strategies;
• The contribution of the project to DFID priorities in a specific area e.g., as contained in a Policy Statement or Country Strategy Paper;
• The performance assessment and reputation of the agency concerned (see section D2).

In a competitive process, proposals may be graded in relation to each other. A typical grading system (which considers not just the attainment of quantified outputs but also the quality of the underlying processes in the project) may be as follows:

A. Very good proposal; likely to achieve all of the planned outputs with full regard to the quality of the process

B. Good proposal; likely to achieve most outputs working through an acceptable process

C. Reasonable quality proposal; likely to achieve many outputs/acceptable process

D. Poor proposal; likely to achieve few outputs/weak process

E. Very poor proposal; unlikely to achieve outputs/unacceptable process

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