Training on Humanitarian Program Finance and Budget Management

Module 1: Humanitarian Program Finance Fundamentals

• The role of finance in humanitarian program management.

• Key financial principles: stewardship, accountability, transparency, and value for money.

• The finance-program collaboration: integrated planning and management.

• Case Study/Hands-on Exercise: Analyze a humanitarian program where poor financial management led to program failure or donor sanctions.

Module 2: Activity-Based Budgeting for Humanitarian Programs

• Developing budgets from logical frameworks and activity plans.

• Costing assumptions: personnel, travel, supplies, transport, and indirect costs.

• Contingency and inflationary provisions in emergency budgets.

• Case Study/Hands-on Exercise: Develop an activity-based budget from a given logframe and activity plan, including all cost categories and contingency.

Module 3: Cost Allowability, Allocability, and Reasonableness

• Donor rules on allowable costs: direct vs. indirect.

• Allocability: assigning costs to the correct award.

• Reasonableness: ensuring costs are necessary and prudent.

• Case Study/Hands-on Exercise: Review a sample expense report and determine which costs are allowable, allocable, and reasonable under a donor grant.

Module 4: Cash Flow Forecasting and Liquidity Management

• Developing cash flow forecasts aligned with implementation plans.

• Managing liquidity in volatile emergency contexts.

• Mechanisms for cash transfers: bank transfers, mobile money, and cash-in-hand.

• Case Study/Hands-on Exercise: Develop a cash flow forecast for a humanitarian program over a 6-month period, identifying periods of potential cash shortfalls.

Module 5: Currency Risk Management in Humanitarian Programs

• Currency risks: exchange rate fluctuations in emergency contexts.

• Hedging strategies, multi-currency accounting, and forward contracts.

• Managing local currency needs vs. donor currency requirements.

• Case Study/Hands-on Exercise: Develop a currency risk management plan for a program operating in a hyperinflationary economy.

Module 6: Financial Reporting and Variance Analysis

• Donor financial reporting: formats, frequency, and requirements.

• Budget vs. actual variance analysis: identifying and explaining variances.

• Forecasting revisions and budget realignments.

• Case Study/Hands-on Exercise: Analyze a budget vs. actual report, identify significant variances, and develop explanations and corrective action recommendations.

Module 7: Internal Controls and Fraud Prevention in Humanitarian Finance

• Key internal controls: segregation of duties, authorization limits, and reconciliation.

• Cash handling and petty cash controls in field settings.

• Fraud prevention: detection mechanisms and whistleblower protection.

• Case Study/Hands-on Exercise: Review a field finance manual and identify gaps in internal controls, proposing enhancements.

Module 8: Partner Financial Management and Sub-Grants

• Financial capacity assessment of local partners.

• Sub-grant agreements: financial terms, reporting, and audit requirements.

• Monitoring partner financial compliance and providing support.

• Case Study/Hands-on Exercise: Conduct a financial capacity assessment of a potential local partner using a standardized tool, identifying risks and mitigation measures.

Module 9: Donor Audit Management

• Types of audits: financial, programmatic, and investigative.

• Preparing audit-ready documentation and files.

• Responding to audit findings, disallowances, and corrective action plans.

• Case Study/Hands-on Exercise: Simulate an audit exit conference, respond to a sample audit finding, and develop a corrective action plan.

Module 10: Budget Realignment, No-Cost Extensions, and Close-Out

• Managing budget realignments and no-cost extensions with donors.

• Grant close-out procedures: final financial reports, asset disposition, and records retention.

• Learning from financial performance for future proposals.

• Case Study/Hands-on Exercise: Develop a grant close-out plan, including final reporting timeline, asset handover, and lessons learned documentation.