Danida Fellowship Centre December 2012 General Conditions for Grants to Development Research Supported through Denmark s International Development Cooperation
Contents: 1. Introduction... 4 2. Anti-corruption Policy... 4 3. Ethical and Other Approvals... 5 4. Agreements with Partner Institutions... 5 5. Grant... 5 6. Period of Grant... 7 7. Interest and Exchange Rate Gains and Losses... 7 8. Non-compliance and Revocation of the Grant... 8 9. Terms and Conditions of Employment and Salary... 8 10. Purchases... 9 11. Technical Reporting and Quality Assurance... 9 12. Accounts... 10 13. Audit... 11 14. Dissemination... 12 15. DFC s Supervision... 12 16. Rights... 13 List of Appendices: 1 The appendices can be downloaded from the Danida Fellowship Centre s web site at www.dfcentre.com Appendix 1: Annual Report Form Appendix 2: Disbursement Request Appendix 3: Accounts Form Appendix 4: Template for Management Endorsement of Accounts (if audited by the National Audit Office of Denmark) Appendix 5: General Guidelines for Accounting and Auditing of Grants Channelled through Governmental, Parastatal and International Organisations, 2007. See: http://amg.um.dk/en/technicalguidelines/financial-management/accounting-and-auditing/ Appendix 6a: Project Completion Reporting guidelines and forms, project granted prior to 2008 Appendix 6b: Project Completion Reporting guidelines and forms, projects granted in 2008 and later Appendix 6c: Overview of Project Achievements addition to 6b Appendix 7: Audit Instructions Appendix 8: Guidelines for DFC s Administration of Research Fellows from Developing Countries. See: http://dfcentre.com/research/how-dfc-administers-research-projects/researchfellows/. 1 The appendices apply for all on-going projects, except appendix 7, which for projects awarded prior to 2009 is only applicable in case, the responsible project coordinator/institution in writing has accepted to comply with the present General Conditions, and appendix 6a, which must only be used for projects granted prior to 2008. General Conditions, 7 th edition, page 2
Important Alterations in Relation to Previous Editions The Danish edition of the General Conditions has been discontinued. Rates for accommodation at the DFC hostel and DFC administration of senior researchers have been revised. A maximum number and maximum duration of extensions in time have been determined, and a deadline for applying for extensions is given. The larger strategic projects are all required to set up a website for their projects and to submit a Policy Brief at the end of the project. The requirements for auditing have been changed. General Conditions, 7 th edition, page 3
1. Introduction These conditions apply to the administration of grants to larger strategic research projects, and to individual postdoc and PhD projects (granted up to 2010), forming part of Denmark s international development cooperation. These conditions describe the requirements of the projects regarding budgeting, reporting, presentation of accounts, auditing and monitoring/evaluation. The conditions include relevant sections of the Ministry of Foreign Affairs General Guidelines for Accounting and Auditing of Grants Channeled through Governmental, Parastatal and International Organizations, see appendix 5. Any deviation from these conditions is communicated separately in the Letter of Commitment. On behalf of the Ministry of Foreign Affairs, Danida Fellowship Centre (DFC) is responsible for the ongoing administration of the approved research projects. The responsibility for the political and strategic aspects of the support to development research rests with the Technical Advisory Services Development Assistance (UFT) in the Ministry of Foreign Affairs, Danida. Further questions in connection with the administration of grants may be directed to DFC at e-mail research@dfcentre.dk or telephone +45 3536 1322. All correspondence to DFC must as far as possible be electronic and in English, and refer to the DFC file number. When a research grant is awarded, an agreement is entered between DFC and the following parties: the main applicant for the project (hereinafter referred to as the project coordinator), together with the head of the responsible institution on behalf of the institution in question (hereinafter referred to as the institution). The support is awarded to the institution and not to the project coordinator. The agreement takes effect with the institution s and the project coordinator s endorsement of the Letter of Commitment forwarded by DFC. The Letter of Commitment and the approved application (including appendices and any adjustments where the objectives, activities, output and budget are set out) in addition to these conditions for the management of the grant are hereinafter referred to as the grant framework. By entering the agreement the project coordinator and the institution pledge to carry out the project activities as laid down, to ensure that the overall and immediate objectives and outputs are achieved, to ensure that any conditions laid down in the Letter of Commitment are fulfilled, as well as observe the present rules and regulations for administrating the grant. During the project implementation, due consideration must be given to the current Danish development assistance policies. 2. Anti-corruption Policy Danida s anti-corruption policy must be complied with and the following paragraph must be respected as regards all agreements made: No offer, payment, consideration or benefit of any kind, which could be regarded as an illegal or corrupt practice, shall be made - neither directly nor indirectly - as an inducement or reward in relation to the project. Any such practice will be grounds for the immediate cancellation of the project and for such additional action, civil and/or criminal, as may be appropriate. At the discretion of the Danish Ministry of Foreign Affairs, a further consequence of any such practice can be the definite exclusion from any tendering for projects, funded by the Danish Ministry of Foreign Affairs. General Conditions, 7 th edition, page 4
3. Ethical and Other Approvals It is the responsibility of the institution to obtain all relevant ethical approvals and other required permits before the relevant project activities are initiated. The institution must further ensure that the research is carried out in accordance with current conventions and regulations. This must appear from the first Annual Report. 4. Agreements with Partner Institutions If support for cooperation with a foreign research institution is included in the project, it is recommended that the Danish institution enters a written partnership agreement with the foreign institution(s). It is recommended that the agreement between the institutions involved as a minimum include a clear agreement regarding how the project is to be organized, the distribution of responsibility for budgeting and accounts, how disagreements between project partners are to be resolved, how the project is to be implemented and concluded, as well as handing over or sale of project equipment, see paragraph 11. It is the responsibility of the project coordinator and his/her institution to ensure that the foreign partners involved have the necessary administrative capacity in order to administrate the allocated funds in a responsible and adequate manner, and that the project is carried out as an equal partnership between the partners. Partner organizations and others who receive part of the allocated funds must not be registered on either the UN or EU list of terrorist organizations. 5. Grant The grant must be used exclusively for approved objectives, activities, and budget items. It is not possible to provide additional funding once the project is underway and overspending cannot be covered. All expenditure must be effected within the project period. Adjustments between main budget lines within the approved total budget as described in the Letter of Commitment can be made without prior approval by DFC by up to 10% of the budget for the smallest of the budget lines from where or to where the funds are transferred on condition that the fulfillment of the project s objective has not been changed or depreciated. The alteration must follow the current application guidelines. Reallocation between budget lines must only be made in accordance with the preconditions of the grant and it is therefore not possible to cover activities not approved in the grant. Any reallocations between budget lines must subsequently be described and substantiated in the next annual report and in a note in the annual accounts, as well as in the final report and accounts, with reference to any accept from DFC of changes above the 10%.. Concerning study periods in Denmark of PhD and Master students from partner institutions in South, the current guidelines for the Danida Fellowship Programme are to be applied. The Fellowship Programme states that DFC must handle the practical details of the stay, see appendix 8. DFC will deduct the expenses (travel, accommodation, allowances etc. included in the budget line 9) directly from the grant, with information to the project by the end of the year. If DFC administers the stay in Denmark of senior researchers the notification requirements above and the guidelines in appendix 8 apply. Please note that DFC s administrative services for stays in Denmark of senior researchers (including post docs) are optional. For senior researchers accommodation at the DFC hostel (2013 prices) is DKK 225 / night, and in addition DFC charges an administration fee of DKK 6,000 per arrival; all figures are inclusive of VAT. General Conditions, 7 th edition, page 5
DFC must be advised minimum 4 months prior to initiation of the study period. The project coordinator is requested to meet with DFC to discuss the practical details concerning the study stays. For projects granted prior to 2009 2, the use of a budget margin for unforeseen expenses linked to approved activities is permitted, as long as the project coordinator and the institution deem that this will further the achievement of the objectives set out in the project. The budget margin may thus without the approval of DFC be transferred to the other main items, in connection with unforeseen expenses under these items, such as changes in prices and exchange rates, pay increases as a result of general price rises, legislative requirements and similar. For projects granted in 2009 and onwards all such expenses are to be covered by the grant. For project grants administered by a government institution or a self-governing institution registered as having an account on the Appropriations Act, the Ministry of Finance s rules governing grant-financed research activity included in the Ministry of Finance s budget guidelines are to be followed. Thus, for project support which has been granted through a process of competition, the budget may include an overhead of funds spent in Denmark of maximum 35 % for projects granted before 2009, and 44 % for projects granted in 2009 and onwards. For other public institutions (e.g. hospitals) an overhead of 3.1 % is included on all direct expenses. For technological service institutions (GTS-institutes), the overhead is 20 %. No overhead can be charged by the Danish institution for funds transferred to partners in South, as these funds can only be allocated an overhead of maximum 7 %. In addition, no overhead can be included of expenses relating to study periods in Denmark of PhD and Master students from the partner institutions in South; see paragraph above concerning DFC s administration of the study stays of students from the partner institutions. No administration fee can be included for international institutions, in as much these as stated in the Application Guide, can only be supported for their direct services to the project activities. In the budgets, the overhead is calculated of the total budgets. In the accounts, the overhead is allocated according to the actual spending. The following general administration costs are considered to be covered by the overhead contributions: Office expenses (rent, cleaning, stationery, transport, electricity and water, support staff and other operating expenses), Expenses relating to staff that carry out general administrative assignments, including budget and accounting tasks. The institute director s involvement in the cooperation. No additional funds can be allocated to these types of expenses over and above the overhead contribution. If funding for items covered by the grant is obtained from other sources not specified in the grant framework, the institution must inform DFC of this fact without undue delay. The Ministry of Foreign Affairs reserves the right to reduce the grant awarded by a corresponding amount. 2 No budget margin is included for projects granted in 2009 and onwards. General Conditions, 7 th edition, page 6
6. Period of Grant The project must be completed within the grant framework s approved timeframe. PhD- and MSc-studies started under a larger strategic research project must be finalized within the project period. In cases of delays in carrying out the planned activities, the project coordinator and institution may, no later than one month prior to the closing date for the project, submit a request to DFC for an extension of the project period within the allocated grant. The request must indicate the new closing date for the project. The extension must be well justified, and it must be explained why the extension is necessary in order to complete the project and meet the goals. The extension must be used to complete the originally planned activities and must not include activities not included in the original grant framework. An application for extension in time to DFC should not include a revised budget, as DFC does not engage in approving such revised budgets, but controls the annual and concluding accounting by comparing it to the original total budget as it appears from the Letter of Commitment. Based and conditioned on the practice of the concerned institution, long-lasting illness and parental leave may justify the extension of an individual PhD/Postdoc project. Request for extension of the period of a PhD project must include a statement of the supervisor confirming the necessity of the extension and the satisfactory development of the PhD project. As a general rule, a project cannot be extended more than twice, and for more than two years altogether. Disbursement The institution in Denmark and the partner institutions in the South must establish a separate finance account/activity for the grant in order to distinguish the funds from other grants. The number for this account/activity must be quoted in the disbursement request. The annual installments are disbursed on the basis of a disbursement request from the project coordinator and the institution (appendix 2). The request must cover the whole fiscal year and exclude expenses on researchers stay administered by DFC (budget line 9), as these are covered directly by the project account at DFC. For projects which cover several fiscal years, the disbursement request must be submitted immediately prior to the next fiscal year. The first transfer can be made in the first quarter with an on-account amount of 50 % of the requested disbursement and the second transfer can be made in the third quarter with the remaining amount, deducted DFC expenses on researchers stay in Denmark, as well as unused funds at the end of the year as outlined in the previous year s accounts. Disbursement of the second installment is conditional upon DFC s receipt of the annual accounts. Annual disbursements DKK 250,000 will be transferred in one installment. When transferring funds from DFC, no other confirmation of the transfer will be provided other than the quoted reference in the disbursement request. The transfer of funds to partner research institutions is carried out by the institution. 7. Interest and Exchange Rate Gains and Losses Interest gained cannot be used to finance grant-funded research activities, but must be specified separately in the annual accounts and returned to DFC. Calculating accounts kept in foreign currency must be at the same exchange rate as the original transfers so that artificial currency exchange rate gains and losses are avoided. General Conditions, 7 th edition, page 7
8. Non-compliance and Revocation of the Grant Non-compliance is deemed to occur if the project is not fulfilling the conditions of the grant framework, as defined in section 1. Among these: Non-fulfillment of the terms and conditions in the grant framework, plans and budgets as specified in the funding basis. Delayed commencement of the project: If the project is not initiated within six months after the anticipated project start date specified in the grant framework, the grant will be discontinued, unless the project coordinator and institution forward a justifying request considered acceptable by DFC. Other delays not been approved by DFC and lack of progress towards the planned goals for a period of time exceeding one year. Missing or unsatisfactory submission of reports and accounts. Lack of obtainment of the necessary ethical and other approvals and authorizations. Significant non-approved changes in the project in relation to the grant framework, including changes of main researchers and institutions. Other irresponsible administration of grant funding, including the violation of the conditions presented here. In the event of non-compliance, DFC is entitled to take appropriate action with a view to limiting the consequences of the violation, and may issue a written reprimand requesting the violation to be remedied within a given grace time, initiation of consultant or auditor investigations of the institution s administration, suspension of further disbursements, or phasing out or closing down of the project. In the latter case, the institution must immediately return all unused, and possibly also already disbursed grant funds to DFC and pay compensation in the event of financial loss. If the institution fails to remedy the non-compliance by the specified deadline, the Ministry of Foreign Affairs may discontinue funding, revoke any residual funding and claim repayment of amounts already disbursed. Should Danish support to a country be terminated as a result of a political decision, the support to research projects in the particular country may also be discontinued. A project agreement may be disconnected in writing by both parties (i.e. the institution and DFC) with three months notice. However, in the event of gross violation, the Ministry of Foreign Affairs is entitled to terminate the agreement with immediate effect. Before a possible termination, both parties are obliged to seek to resolve conflicts through negotiation. Unresolved conflicts cannot be brought before a court, but must be resolved through arbitration. 9. Terms and Conditions of Employment and Salary Employment conditions (announcement of employment, leave, salary, etc.) for staff in Denmark whose salaries are covered by the grant are the responsibility of the institution and must follow rules and regulations of the institution as well as the respective collective agreements with the Danish government. Funding for salaries of staff in partner countries disbursed through the grant, must follow the appropriate tariffs in the partner country for salaries in research institutions. Special care must be taken to avoid double salary, payment of consultancy fees, etc. Payment of salary or remuneration to individuals must be declared to the tax authorities and tax deductions must be made according to the appropriate rules. The institution is responsible for settlement of duty travel etc., and this must follow the relevant regulations of the Danish and the foreign institution respectively. General Conditions, 7 th edition, page 8
No additional funding can be provided in connection with illness and parental leave, but time extensions are possible according to the rules in force, see paragraph 6. The institution is responsible for insurance of project personnel. Thus, DFC and the Ministry of Foreign Affairs cannot be held responsible for injuries and accidents occurred in connection with implementing the project. If the project coordinator s or a main partner researcher s employment at one of the institutions comes to an end, it is the responsibility of the institution to ensure that the project is continued with a suitable new project coordinator/researcher. The institution must document the sufficient qualifications of that person and ensure that any change in the persons involved will not depreciate the fulfillment of the project s objective. Should it not be possible to continue the project in a way that ensures the objectives can be met, the institution must close the project down in such a way as to show the greatest possible consideration for the partners involved, especially ensuring that current PhD and Master students can complete their study programmes. Alternatively, enclosing confirmation from the surrendering as well as the receiving institution, DFC must be requested to approve the transfer of the management of the project to another institution. 10. Purchases All purchases must be made in accordance with international and/or national procurement regulations. Project expenses must not include VAT, if it is possible for the institution to receive VAT refund from elsewhere. All purchased equipment must be appropriately insured and kept in good working order. Prior to the completion of the final accounts, any vehicles and equipment of a value exceeding the taxable rate for small purchases must be sold off for the best possible price or handed over to partners in South. If any items are sold, the profit must be entered into the final accounts. If handing over items to partners in South, the accounts must indicate that the institution has in its possession a signed hand-over document. 11. Technical Reporting and Quality Assurance All research projects lasting several years must send annual report to DFC electronically by latest 1 July (appendix 1). The reports must, point for point, document the status of activities implemented and progress in direct relation to the objectives and outputs approved in the grant framework, with explanation in the event of any deviation from the original plan. The first annual report must document that all the relevant and necessary research permits have been obtained. Annual reports for projects including PhDs must enclose the supervisor s statements regarding the project s technical status and progress. For individual PhD projects, the supervisor s statement is considered sufficient reporting. The final report must be submitted at the latest six months after the completion of the project (appendix 6) to DFC by electronic submittal with a scanned signature page. The date of completion of the project is the completion date which is stated in the Letter of Commitment or other date, which appears in later written approval of extension. The report must describe the project s progress and results achieved. Furthermore, the final report must include an outline of the agreement regarding the possible handover of any vehicles, equipment and apparatus, and surplus by sale, if any, of purchased equipment and vehicles must be reflected in the final accounts. The final report must include a Policy Brief which must cover two pages and include a short description of where and how the project activities were carried out, the central findings of the project, concluding in policy recommendations of how the results can be used. General Conditions, 7 th edition, page 9
Furthermore, the annual and final reports must include a list of publications with links to where they can be found. For individual PhD projects, documentation must be submitted with the final report to verify the award of a PhD degree. The completion of a PhD project cannot be approved before this documentation has been forwarded. Annual reports and final report must be signed both by the project coordinator and the institution, who hereby indicate, that the report is true and accurate, and is complying with the conditions presented here. The reports will be subject to the approval by DFC of the administration of the project, while FFU and the Ministry of Foreign Affairs will assess the achievement of the approved objectives. The project coordinator will be informed whether or not the report has been approved at latest four months after submission. It is the responsibility of the project coordinator to report immediately to DFC noticeable deteriorations in the conditions for completing the project as approved, including significant problems in the project s or its staff s relations to the host country s authorities, partner organizations or project staff. Or if there is any suspicion of or actual cases of theft, fraud, corruption, misuse of funds, breach of contracts, court cases involving a larger amount of money, loss or possible loss of funds, qualifications or criticism in audit reports and other instances or misuse of funds. Such information should be reported immediately in writing, along with information on how the institution plans to resolve and follow up on the difficulties or irregularities reported, among other things with regard to the Ministry of Foreign Affairs duty to report to the National Audit Office of Denmark (Rigsrevisionen). The Ministry of Foreign Affairs can make the processing of new applications by the project coordinator conditional on compliance with the terms and conditions of previous grants. 12. Accounts It is the responsibility of the institution to ensure that adequate accounts are kept of the awarded research funds. Care must be taken to ensure that the adequate financial procedures are in place with proper internal control, and in accordance with good bookkeeping and accounting practice. The institution must keep the accounting records and materials in accordance with the Danish Bookkeeping Act s requirements and keep them for a period of 5 years after the completion of the project activity. It is the project coordinator s responsibility to obtain sub-statements from all partner institutions such that the project coordinator has a basis for drawing up and submitting one overall financial statement for the entire grant. Sub-statements, auditors statements concerning such sub-statements, bank statements and possible original vouchers from the partner institutions/enterprises are not to be submitted to DFC. The material must thus be kept on file by the project coordinator. It is the responsibility of the institution to approve the sub-accounts of the partner institutions. In the event of misuse of funds, see paragraph 11 above, any loss must be borne by the institution. It is the responsibility of the project coordinator to ensure that sub-statements annual financial statements as well as final financial statements from the partner institutions comply with the requirements for financial statements set out in paragraph12 and the requirements for auditing set out in paragraph13. General Conditions, 7 th edition, page 10
The institution must submit the project s accounts for the previous fiscal year to DFC by latest 1 July. When presenting accounts, the accounts form in appendix 3 must be used. The presentation of accounts must contain a declaration that the total amount transferred by DFC is entered as income, along with a statement of the year s project expenses distributed according to entries in the agreed budget and with the same level of detail. The accounts must also contain a report on the amount of unused funds at the end of the year. Any interest earned must be declared separately, as this must be returned to DFC at the end of the project. A final audited set of project accounts must be submitted to DFC at the latest six months after the completion of the project. Any deviations on individual items exceeding 10% between the total approved budget and the final accounts must be explained, and the permission from DFC must be quoted. The annual accounts and the final accounts must be submitted electronically and contain a scanned signature of the project coordinator and the institution s relevant accounting officer. With his/her signature, the institution s accounting officer endorses that the annual accounts are true and accurate and in compliance with the conditions presented here, including a confirmation by the institution that the grant has been used in accordance with the grant framework and agreement. 13. Audit Please take note that this paragraph is valid for projects awarded in 2009 and onwards only. The annual accounts of the grants must 1) for the Danish responsible institution, where responsibility for the audit rests with the National Audit Office of Denmark (Rigsrevisionen) pursuant to the Act on Auditing of State Accounts etc., always be signed by the project coordinator and endorsed by an employee duly authorised by the head of the institution, see appendix 7. and 2) for the partner institutions, as agreed with the National Audit Office of Denmark, be audited by an independent certified accountant. The accounts must be accompanied by a statement of endorsement declaring that the audit has been carried out in accordance with the conditions presented here (appendix 7), as well as good public sector auditing practice. Any reservations must be included in the statement of endorsement. The audit process tests whether the project accounts in all essence have been drawn up in accordance with these guidelines and the Danida rules for presentation of accounts and whether the transactions and use of the funds covered in the project accounts are in accordance with the grant framework, legislation and other regulations as well as concluded agreements and standard practice. In addition, an assessment is made of whether due financial consideration is shown in respect to the administration of the grant. The full set of final accounts must, as agreed with the National Audit Office of Denmark, be audited by an independent certified accountant. In order to ensure that the Danish accountant can base their analysis on the work of the local accountant, the Danish accountant should, preferably at the commencement of the project, be involved in the choice of the local accountant. The final accounts must follow the regulations described above under 2). Throughout the project period, as well as the 5-year archiving period, DFC and their accountant must be able to carry out the investigations of the material serving as the basis for the grant accounts, as and when DFC deems it necessary. General Conditions, 7 th edition, page 11
14. Dissemination It is the wish of the Ministry of Foreign Affairs that the funded research should be readily accessible to the public. At all public communication with regard to the grant and all contact with the press, the project coordinator shall inform that the grant is given by the Ministry of Foreign Affairs. The project coordinator must be aware of the rules concerning legal deposit of all publications. See www.pligtaflevering.dk. All projects are requested during the project period, and when relevant results of research and capacity development are available, to disseminate these to parties interested in development assistance and to the general public. This may happen by forwarding information to Embassies in the partner countries, cc. to DFC. As a minimum is must be stated in the final report how the dissemination has been carried out. The annual reports must include link to the website of the project, which all larger strategic projects must establish. The website must as a minimum include the basic project information as given in the application, updated descriptions of the achievements of the project and links to publications and other public presentations of the project results produced, proceedings of meetings etc. DFC must be informed about the link to the project website in the first Annual Report. Information about the grant, project, project coordinator and the involved institutions will be published in the Danida Research Portal, subject to the rules in the Danish Act on Processing of Personal Data (Act No 429 of 31 May 2000), see: http://drp.dfcentre.com/. Annual updates will be carried out by including the summaries stated in the Annual Reports. Important changes, which are to be included in the presentation of the project at the Portal, must be submitted to drp@dfcentre.dk. 15. DFC s Supervision The Ministry of Foreign Affairs, DFC, the National Audit Office of Denmark (Rigsrevisionen) and the Public Accounts Committee (Statsrevisorerne) have the right at any time to request all relevant information from the project. The project staff must provide assistance and full access to the project inspection, document review, accounts analysis, equipment inspection, etc. DFC has the right at any time to demand information regarding account status, incl. distribution of funds in relation to the approved budget. In addition, the supervision can, by agreement with the institutions, include several other measures on the part of DFC in order to ensure insight and follow up of the organisation s administration of the grant. These measures can be as follows: 1 Visits to the institution s administration with a view to inspecting the finance function s and the project management s procedures as well as the projects procedures and organisational aspects. 2 Spot-check inspections of the projects activities in the partner countries in the form of visits from DFC Research Unit. 3 Joint meetings for the project coordinator and their institutions 4 Implementation of reviews and evaluations of the research activities receiving support. Likewise, independent reviews of the projects may be implemented geographically or according to topic. General Conditions, 7 th edition, page 12
16. Rights The Ministry of Foreign Affairs retains the right to use reports and forwarded research results free of charge without offering further remuneration to the authors other than already allocated via the research grant. Should the grant recipient s utilization of patent rights, sale of know-how and their own production generate income, the Ministry will not demand repayment of the grant, neither in part nor in full. The Danish Act on Processing of Personal Data (Act No. 429 of 31 May 2000) gives you a number of rights when information is processed electronically, such as the right upon request to access and, if relevant, to correct information that is processed electronically. General Conditions, 7 th edition, page 13