BUDGETING

Training Unit 13.1

Principles for budgeting construction and implementation

Budgeting

In preparing a budget it is advisable to take into account some fundamental rules:

the Community subsidy and co-financing serve to cover intervention costs and not to generate profits;

the requested budget must indicate very clearly the sum requested from the Commission and private co-financing. If there is other additional public financing, the share of community financing reduces proportionally;

more community financing is forbidden, according to the principle of non-double financing of the same action.

Budgeting

The total budget of the plan is the result of an estimated expenditure worked out by all partners.

It is the result of the estimated expenditure for every planning activity.

This is therefore prepared: identifying the resources which are available to carry out the

expected activity plan;

the definition of forms of management of resources

the checking of the timing of the financing to be acquired.

Budgeting

The agreement among partners can provide for different forms of management of resources:

the body receiving the financing (that is the beneficiary) can decide to administer funds directly;

in the name of partners, or the management can be different and mobility costs can be distributed directly to beneficiaries.

Whatever the option, this must be put into legal form in agreements among the parties.

Budgeting

Some hints to take into account in the construction of the budget and in the carrying out of the project are:

Assign to each foreseen activity the accrued costs; Check consistency among planned activities, any costs

thereof and the subsidy asked from the Commission; Verify the resources which are available in partnership in

order to receive co-financing; Agree with partners the forms of financial management; Monitor payments and revenues; Avoid requests for the reimbursement of expenses

incurred before the approval of the project.

Budgeting

Macro item “expenses for project planning”

In this macro item all expenses incurred to carry out the project, except for those of mobility, are

included.

There are two main categories under which this macro item is divided:

management and monitoring expenses;

those for the training of participants.

Budgeting

Macro item’ “costs for mobility”Regards all out-of-pocket expenses incurred for the

participation of people in mobility.

Here too it is possible to distinguish two typologies:

travelling expenses; subsistence expenses.

It is advisable, whilst planning and constructing the budget, to have precise facts on real costs for the above mentioned services available, in order to avoid the risk of variance

during the carrying out of the project.

Budgeting

Content

Main rules to elaborate the budget. Interaction among partners for the drawing up of

the estimated budget. Need for financial monitoring. Supporting documents for budget definition. The main financial macro items. Activities that can be financed and items thereof. Ambiguity of tariff limits.