5.2.3 Making and managing budgets

• Agree on budgets before programmes start-negotiating them after the start is more difficult.
• Use formats and budget line descriptions that meet donor/CARE standards.
• Review budgets to ensure all costs are covered, and are not too high or low.
• Be clear on administration/programme split. A split of 40:60 is a common upper limit.
• Pay partner overhead. This is often 5-10% of budgets. If donors won’t pay it (and they often won’t), CARE can agree a split, or find other ways to budget it.
• Be firm. Some see emergencies as an opportunity to submit ‘fat’ budgets.
• Use established partner scales for salary, benefits, per diem and transport, within permitted donor limits. Otherwise, use CARE or common local rates.
• Avoid duplication of project staffing structure between CARE and partner. Remember that CARE is not a direct implementer and has different responsibilities.
• Include simple narrative notes in budgets to explain costs.
• Budget line flexibility should be clear. Establish which budget lines may vary, and by how much. Budget line flexibility is usually around 10%.
• Budget amendment must be governed by contracts. Justification is essential.
• Assign partner costs to a sub-grant account if possible. Otherwise, consider how to manage account codes.