Project Modifications
Budget Reallocations and
Extensions of Project Duration
Instructions for Contractual Partners
Contents
1. Preamble ...................................................................................................................................... 2
2. Area of Application ....................................................................................................................... 2
3. Definition ...................................................................................................................................... 2
3.1. Modifications in Contractual Content..................................................................................... 2
3.2. Budget Reallocations............................................................................................................. 3
3.3. Release of the Contingency Reserve.................................................................................... 3
3.4. Extensions of Project Duration .............................................................................................. 3
3.5. Requests and Deadlines ....................................................................................................... 4
4. Appendices................................................................................................................................... 4
Austrian Development Agency, the operational
unit of the Austrian Development Cooperation
Zelinkagasse 2 • 1010 Vienna • Austria
phone.: +43 (0)1 90399-0
fax: +43 (0)1 90399-1290
[email protected] • www.entwicklung.at
MODIFICATIONS IN CONTRACTUAL CONTENT, BUDGET REALLOCATIONS
AND EXTENSIONS OF PROJECT DURATIONS
1. Preamble
The projects of the Austrian Development Corporation (ADC) are based on both funding agree-
ments and service contracts (hereafter referred to as contracts) concluded between the Austrian
Development Agency (ADA) and non-governmental organisations, implementing agencies and/or
other organisations in the partner country (hereafter referred to as the contractual partner).
Modifications in contractual content, budget reallocations and extensions of project duration are
contractual changes and require the prior written approval of the ADA1 and must on no account
result in an increase in the contractually agreed budget.
2. Area of Application
The rules set out here apply to all funding agreements covering bilateral development coopera-
tion, the co-financing of NGOs (with the exception of EU co-financing), humanitarian aid and busi-
ness partnerships.
They are not applicable to remunerations in connection with service contracts. In such cases pro-
curement regulations shall apply.
3. Definition
3.1. Modifications in Contractual Content
The project document, which is an integral part of the contract, determines the design, the inter-
vention logic and the method of implementing the project in question.
Modifications in Contractual Content are changes in a project which are both necessary and
justified as a result of changes in the basic project conditions – provided that the project purpose
remains unchanged. Taking the logframe matrix as a starting point, this could mean, for example:
Adaptation of Activities in line with changes in the basic project conditions in order to
achieve the expected results and the defined indicators (elimination of activities, planning of
additional activities, adaptation of the intensity of activities, etc.);
Adaptation of Indicators (and of the corresponding source of verification of these indicators)
in line with changes in the basic project conditions in order to be able to measure the extent to
which the expected results have been achieved.
Modifications in contractual content may not include fundamental changes in the design or inter-
vention logic of a planned project. Such changes could include:
Changes in the overall objective
Changes in the specific programme and project purpose
Changes in the target groups
Changes in the local project partners
In the event of such fundamental changes in the design and intervention logic of a project, a
new project is to be negotiated in line with the relevant guidelines of the chosen financing instru-
ment. This requires a reauthorisation of the contract.
1
cf, for example, §8 paragraph 1 of the Development Cooperation Funding Agreement.
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MODIFICATIONS IN CONTRACTUAL CONTENT, BUDGET REALLOCATIONS
AND EXTENSIONS OF PROJECT DURATIONS
3.2. Budget Reallocations
Financial Changes which arise during the implementation of a project and which impact upon the
contractually defined summary project budget (and not just upon detailed cost calculations) must
firstly receive the approval of the ADA in the form of a budget reallocation. No such approval is
required if the budget items in question are exceeded by no more than:
a maximum of 10%, (up to a limit of € 3,600 in the case of project volumes of up to and in-
cluding € 200,000)
a maximum of 10%, (up to a limit of € 10,000 in the case of project volumes of over
€ 200,000 and business partnerships).
and the overspendings in single budget items are covered by savings in other items.
The following are not permitted as part of a budget reallocation:
Reallocation at the expense of the budgeted costs for evaluation, documentation and public
relations work or at the expense of general measures of organisational development2. This
exclusion does not, however, apply to EU co-financing and business partnerships.
Reallocation between direct and indirect project costs3
An increase in the project administration cost (Projektbegleitentgelt)/ indirect project costs.
Budgetary changes are not permitted to result in an increase in the contractually agreed
budget. If additional financing and/or a budget increase is required, a new project is to be negoti-
ated in line with the relevant guidelines of the chosen financing instrument. This requires a reau-
thorisation of the contract.
3.3. Release of the Contingency Reserve
The contingency reserve can only be released if such a release is requested from and then
approved by ADA and may only be used to cover direct project costs.
3.4. Extensions of Project Duration
Any extension of the duration of a project as determined in the contract, the project sheet (Kurzin-
formation) or the project document is also to be approved in advance by the ADA. A justification
for any such extension is required, based on issues arising from the progress of the project.
Projects may be extended a maximum of once and for a maximum of one third of the original
project duration. In circumstances which can be shown to be extraordinary, additional exten-
sions or longer extensions can be approved.
2
cf. applicable guidelines for the PCM Template, Instructions for Activities, Quality Frame: Appendix 3 Pro-
ject Budget, (note g)
3
cf. applicable guidelines for Project Administration Costs (Projektbegleitentgelt), (PBE)
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MODIFICATIONS IN CONTRACTUAL CONTENT, BUDGET REALLOCATIONS
AND EXTENSIONS OF PROJECT DURATIONS
3.5. Requests and Deadlines
Requests by contractual partners for modifications in contractual content, budget reallocations
and extensions of project duration (hereafter referred to as requests) are to be made in writing
and in advance and at least one month before the end of the contract period. This request is
to be justified either by circumstances specifically related to the implementation of the project or
by changes of external circumstances. A request for budget reallocation is also to be accompa-
nied by a separate justification for each altered budget item.
This written request, signed by the approved signatory of the contractual partner, is to be deliv-
ered to
the coordination office in charge
or - in all other cases - to the responsible member of staff in the ADA head office.
4. Appendices
1) Example of a letter of request for an extension of project duration and budget reallocation.
2) Example of a table for budget reallocation
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MODIFICATIONS IN CONTRACTUAL CONTENT, BUDGET REALLOCATIONS
AND EXTENSIONS OF PROJECT DURATIONS
Appendix 1: Example of a letter of request for an extension of project dura-
tion and budget reallocation.
Request for Extension of Project Duration until [___] and Budget Reallocation
Project Number [___]
Dear [___]!
We would like to request an extension of the project mentioned above until [___], due to [___].
Furthermore, we would like to request a reallocation of the budgetary means earmarked for this
project in line with the reasons and quantities set out in the accompanying table. We intend to use
[the contingency reserve and] a part of the budget item(s) [___] for the following [existing/new]
budget items:
Budget item [___]: [justification] – [reallocated means]
Budget item [___]: [justification] – [reallocated means]
Budget item [___]: [justification] – [reallocated means]
Yours sincerely,
[___]
Appendix4: Table for budget reallocation on the basis of the contractually agreed budget
4
For a certain scale of budget reallocation it may also be necessary to update the logframe.
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MODIFICATIONS IN CONTRACTUAL CONTENT, BUDGET REALLOCATIONS
AND EXTENSIONS OF PROJECT DURATIONS
Appendix 2: Example of Table for Budget Reallocation
REALLOCATION
Development Cooperation Project Number [___]
[Project Title]
Project Duration: [from] – [to]
Approved Difference Reallocated Budget
Budget Item Budget (=Reallocation) [Date]
No. in Euro in Euro in Euro
1. Personnel Costs
1.1. Component W 31.050,00 0,00 31.050,00
1.2. Component X 3.600,00 0,00 3.600,00
1.3. Component Y 54.020,00 0,00 54.020,00
1.4. Component Z 68.030,00 0,00 68.030,00
Subtotal Personnel Costs 156.700,00 0,00 156.700,00
2. Materials and Equipment 60.700,00 0,00 60.700,00
3. Training 158.300,00 0,00 158.300,00
4. Miscellaneous 103.700,00 -5.430,00 98.270,00
New Symposium 0,00 8.400,00 8.400,00
New Activity UUU 0,00 16.800,00 16.800,00
New Activities VVV 0,00 4.200,00 4.200,00
Contingency Reserve 23.970,00 -23.970,00 0,00
Direct Project Costs 503.370,00 23.970,00 503.370,00
Project Administration Costs (PBE)/
Indirect Project Costs 15.849,00 0,00 15.849,00
Total Costs 524.219,00 0,00 524.219,00
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