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Question from the auditors during the last audit about the calculation of personnel cost. The auditors did not recalculate the cost taking into account the employer's charges.
They accepted our explanation later on.

FPP advice: Employers' charges can be included in the calculation, as it is part of the staff cost, we would just recommend to make apparent the breakdown of our calculation to avoid any back and forth between us and the auditors.

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Which items should be reported in the inventory?

FPP reply: items above EUR 800

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2 concerns from Milka:

- The salary scale changed since the budget phase, and the salary are now above what has been budgeted. In the 2022 report, the salaries reported where lower than the actual ones to not report outside of the budget limit.

- There is a new tax in Kenya (house levy) of 3%, to be shared between employer and employee + the social security contributions have increased
-> salaries are impacted and not in line anymore with the budgeted salaries, how to manage this?

FPP advice: the actual salary scale should be applied, it would be too complicated to monitor the costs throughout the project if we are applying a former salary scale.

CIPDP should make a estimation of what would be the salary costs with the current salary grid and employers' charges and get in touch with FPP when they have an idea of the variation we are talking about. We can then assess what to do about this variation, if it can be covered by other categories.

We can plan a call to go through the updated budget together.

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- The methodology for exchange rate used by AIPP is: average of the bank rates at reception of the fund requests -> this was applied in 2022, should it be the same in 2023?

FPP advice: yes, the exchange rate methodology should be applied consistently throughout the project. Also, please do document the methodology and calculation so we can easily share it with the auditors.

Recommended methodologies for exchange rate by FPP:
- disbursement rate of the last disbursement request applied for all the transaction incurred in the period, before the next disbursement is received.
- weighted average disbursement rate: same rate applied to all transactions incurred in the year.

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What reporting templates should be used. We had 2 in 2022.

FPP reply: the 2 same templates will be used again in 2023 (if there is no new template provided by IKI by the end of the reporting period)
The 1st template is the IKI financial report, presenting the budget categories.
The 2nd template is FPP's and presents the whole transaction list with the inventory. Needed for reporting and audit purposes.

We will issue the templates in Dec 23 and send them over to all partners.

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How can we reallocate funds if we have an underspending in the personnel cost section?

FPP advice: we have a flexibility of 20% between the main budget categories. As long as the reallocations are within this limit, we can reallocate expenditure. If we exceed the 20%, get in touch with FPP and then we will liaise with ZUG.

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Manjeet
Agata
Marianne

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Michael

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Bethan

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Aisa
Leah

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Makeela

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Milka

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When should indirect costs should be reported in the financial report?

FPP advice: no specific rule. The indirect costs can either be charged on a monthly or quarterly basis, or just at the end of the reporting period.
At the end of the year, the total of indirect costs charged should be in line with the direct costs incurred multiplied by the approved admin percentage.

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The fund requests should be sent every 6 weeks and should cover the expenses needed for the next 6-week period. How are we supposed to report the salary costs, paid on a monthly basis?

FPP advice: the partners should be able to estimate the cost needed for the next 6 weeks.
Partners can include 2 months of salaries into one disbursement request if the 6 weeks crosses over two months.
ex: Period 11 was covering from 26/07/2023 to 05/09/2023
-> 2 end of months included in the period. If the partner pay the salary at the end of the month, 2 salaries cycle should have been included in this disbursement request.

Discussions with ZUG on the 6-week disbursement system were opened to see if we could change it to a 3-month basis. Unfortunately, for now we will have to stick to this timeline. If any evolvement on the question arises in the coming months we will let everyone know of course, but as we see it now it seems unlikely.

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It would be useful to have FPP finance person at the in-person annual meeting in Feb 2024 in Kenya. No finance person at the 2022 annual meeting in Chiang Mai and it could have been a good thing to anticipate on issues and questions from partners there on finance related subjects.

FPP follow up reply: we will look at opportunities for finance to attend the next annual review meeting to be held in Kenya and also offer partners one to one support, both in person and online.

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IMPECT is including indirect costs in their disbursement request, is that a good way to do it?

FPP reply: yes, the disbursement request should take the indirect cost into account so we don't underestimate our required costs every 6 weeks.