FAF guidance April 2019 call
NIHR Global Health Research Units and Groups Financial Assurance Fund (FAF)
About the Financial Assurance Fund
In order to provide assurance that all contractors comply with management requirements on the use and distribution of Official Development Assistance (ODA) funding in low and middle-income countries (LMICs), NIHR has established a Financial Assurance Fund (FAF).
The purpose of the FAF is to act as a financial resource for existing NIHR contractors to apply to if they require further financial support in providing this assurance, so that specific areas of concern that may arise in relation to ODA funding to LMIC partners can be managed appropriately. The fund can be used to support financial management capacity building, to enable any necessary audit that is beyond the ability of the Unit or Group to provide itself, or to support any other request relating to financial due diligence if it satisfies the FAF application criteria and is ODA eligible. We would expect to see financial resources to cover the costs of routine due diligence checks, audits, and financial capacity building to be included in Global Health Research applications.
Consideration of whether other Units and Groups that are working with the same non-UK partners should be taken into account, as NIHR will support the same non-UK organisation twice through different UK institutions. Please ensure you review the attached Annex C ‘List of partners working with NIHR Units and Groups’ and contact other teams who may be working with the same partner to ensure you do not inadvertently apply for double-funding. Equally, where two Units/Groups are working with the same partner, you may wish to submit a joint application to build financial capacity in that institution. Please see later guidance on making joint applications.
Remit and scope
- The FAF is supplementary to the NIHR Global Health Research Units and Groups award.
- The funding limit for individual applications is £50,000. Joint applications with other Units and Groups can be made for up to £100,000. Joint applications are strongly encouraged from Units/Groups who are working with the same LMIC partner organisations or within the same LMIC, where joint exercises can add value to FAF activities.
- This fund is not for standard financial support of NIHR Global Health awards, but for specific financial capacity building in collaboration with LMIC partners where a clear need has been identified.
- It is expected that the majority of the funding will be provided to LMIC partners. Applications which include a high proportion (>30%) of UK funding may be putting themselves at a disadvantage.
- A Unit/Group can make a maximum of two applications to the FAF over the lifetime of their research contract.
- Awards from the FAF are expected to be for a period of one year, in order that the benefit of the FAF funding and interventions can be realised to support sustainable financial capacity and risk management before the end of the research contract. If funding is required for longer, clear justification must be provided. All funds must be spent within the main NIHR GHR contract period.
- Access to the fund cannot be requested in the final 12 months of the contract.
- Payments from the FAF to contractors will be made quarterly in arrears by payment schedule over the period of the FAF award, following receipt (by NIHR) of a signed award letter.
- It is expected that there will be a further call for applications to the FAF in September 2019 and further calls at least annually.
- Unsuccessful teams are eligible to re-submit to future calls, either with a revised application that takes into account panel feedback, or with a new application.
- Although the purpose of the FAF is to benefit partners in LMICs, only UK institutions can apply for funds from the FAF. Letters of support from partners should be included with any submission.
Out of Scope
The Financial Assurance Fund is not intended to:
- be used as a stop gap to enable standard reporting to be carried out;
- assist standard due diligence processes;
- support routine audit – audit will only supported when a clear case is made for additional audit need.
- Will the proposed use of the funds reduce risk and add value?
- Will financial management capacity be strengthened?
- Will the outcomes be sustainable beyond the end of the funding?
- Are the plans achievable?
- Can the benefits be measured?
- Does the application provide value for money?
Assessing Financial Capacity - GFGP
In order to make an application to the FAF, contractors will need to assess the concerned partners’ financial systems and financial management capacity and highlight areas of concern. A number of methodologies may be applied to assess need, and these should be fully described in the application. One example is the Good Finance Grant Practice (GFGP) standard online assessment tool which may be a useful resource to support this process: https://www.goodfinancialgrantpractice.org.
Elements of the partners’ financial system assessed as Bronze or Silver rating in GFGP could support an application for funds from the FAF, setting out the detail of the steps to undertake the support identified by the collaborating institution, and the budget required. This may include, but is not limited to, identification of extra resources needed, building financial management and reporting capacity, finance training or undertaking a compliance audit.
- Eligible costs may include staff costs and direct non-staff costs.
- Ineligible costs include equipment (such as PCs and laptops) and indirect costs. Staff and resources already funded should not be included in this application.
- Please note that VAT cannot be charged on top of the Total Funding Requested by any institution requesting funding. If there are particular items where the contractor or an overseas partner is unable to reclaim the VAT paid, this can be claimed as part of the Total Funding Requested. Please speak to the VAT expert within your own institutions if you have any queries relating to VAT.
- Contractors are required to provide documentation detailing the actions they will take as a result of these funds. Any deviation from the original plans will need to be justified and require approval from NIHR. This will need an approval or agreement letter from an appropriate representative from the finance team in the collaborating institution.
- Where FAF funds are being used to support additional audit, audit reports should be shared with Advisory Group once finalised. NIHR can also request to review any audit reports provided to the contractor. Directors will be given the opportunity to comment on the audit report before it is passed on to NIHR and the relevant Advisory Group.
- Contractors must provide updates to the NIHR as part of its annual reporting process in relation to this award. This will include financial reporting as part of the quarterly finance reporting. Any funds that remain unspent at the end of the FAF award period will need to be returned to NIHR.
How to Complete the Application Form
Applications need to be made through a task within your project in the MIS. If you wish to apply please e-mail NIHRGlobalHealth@nihr.ac.uk and the task will be activated for you. The task will be created and notification sent that it is available for you to view on your home page with you log in to the MIS.
Within the task, there will be a series of questions to answer, with a free-text response box for each question that has a character limit of 2,500 (approximately 1 x A4 page). If you wish to start preparing your responses offline, a Word template has been provided.
Completing your application
- Please complete the questions that appear in the MIS task. You will need to complete an Annex A for each partner and a summary of costs for the complete application in Annex B.
- Where you are asked for details of current financial controls in place, accounting records kept and due diligence done, please attach any relevant information to this application.
- Annex A for each partner and summary Annex B.
- Letter of support from your LMIC partners confirming the need for this funding and their understanding of how the funds will benefit them in the longer-term.
- For joint applications, a letter from the joint applicant and their partners where required.
Making a Joint Application
Where a FAF-eligible gap has been identified where there are potential benefits for more than one Unit or Group, NIHR are very supportive of joint bids for up to £100,000. These applications need to have a lead Unit or Group who will be responsible for the budget. A letter/s of support from the partner/s should be submitted as an upload.
Please ensure no other Units/Groups are applying for funding for any one particular overseas partner. You can do this by checking the list of partners in Annex C to these guidance notes. You may also find it helpful to consult the NIHR Funding and Awards website. By selecting Global Health in the ‘Select Award Type field and clicking on your own project, you will be able to see the list of your partner countries. Click on any one of these and you will see which other projects are also active in that country.
The SLACK FAF channel is a useful resource for liaising with other Units and Groups who may have overseas partners in common and this can be accessed at https://nihrglobalhealth.slack.com.
If you are applying on behalf of another Unit/Group as well as your own please make this clear when justifying the inclusion of this partner in this application.
The Partner Organisation lead representative and the Partner Organisation Finance Lead must sign Annex A. If this is not completed your application will be invalidated.
Guidance on Content
As part of the funding review process specific criteria will be considered (see above), therefore it is essential that the following areas are clearly covered in your application and that appropriate evidence to support your statements is provided. Some key areas to consider are:
- How has the need for this work come to light since your original GHR funding application?
- Has a clear financial capacity gap/need been identified? Have you identified a particular risk?
- How has the existing financial capacity of your partner(s) been assessed? Are there any resources available across other partners that could provide the required support to address the identified gaps in financial capacity?
- Be clear on the reasons why it is not possible to address these gaps with your existing funding.
- Is it clear that the funding will be used for financial capacity building in LMICs?
- If the funding is to support an individual, please provide details of their existing experience and how this will be developed as a result of this funding.
- Are the majority of funds being spent in LMICs?
- Does the application provide value for money? Are all costs fully justified?
- Is it ODA eligible? Include an explanation of eligibility if it may not be entirely clear.
- How have you drawn on best practice? For example, GFGP and local knowledge.
- For applications that include compliance audits, contractors are encouraged to make use of local rather than international auditors, in order to make use of LMIC talent, and support South-South collaboration.
- As well as financial management, any compliance audits undertaken should cover all areas that are related to finance including, but not limited to, human resources, procurement and governance.
- Outline how this funding will contribute to the partner(s)’ long-term increase in financial capacity.
- Examples of how the funding can provide longer-term benefits:
- training to allow partner countries to set up appropriate financial management systems
- supporting enablement of partners to achieve a GFGP rating
- development of a manual of policies and procedures
- enabling the partner to administer research grants and become a grantor
- embedding financial management good practice for research grants in LMIC partners
- training staff at LMIC partner organisations that will benefit the organisations in the long term, and can build institutional knowledge that can be passed on
- creating networks/communities within the NIHR cohort of finance managers who can discuss issues together and share learning
Delivery of Training:
- Who will deliver the training?
- How will the training be designed? Do plans have the potential to provide benefits to a wider group?
- What learning methods have you considered?
Please ensure all overseas institutions are detailed on Annex B. If there are no UK costs please note this in the description field.
- Insert extra rows if necessary, but please ensure the totals are still correct.
Deadline and assessment
Call opens: 8 April 2019
Call close: 1pm, 23 May 2019
FAF funding Committee: 4 July 2019
Outcome letters: End July 2019
Next call for applications to the Financial Assurance Fund:
Call opens: September 2019 (exact date TBA).
For any further information, please contact Linda Welch at firstname.lastname@example.org / 02380 597 527.