Grant scheme rules: Project cooperation in ODA-approved OSCE countries in Eurasia

1 The objective of the grant scheme

The objective of the grant scheme is to promote democracy and social development in Ukraine, Moldova, Georgia, Belorussia, Armenia, Azerbajdsjan, Kazakhstan, Kirgizstan, Tadzhikistan, Uzbekistan and Turkmenistan (Eurasia). 

The Ministry of Foreign Affairs’ budget proposition (Prop. S 1) sets out the underlying goals of the scheme for the year in question. These are described in further detail in the annual note of allocation to the missions and in the annual call for proposals. 

2 Target group of the grant scheme

The direct target group will in most cases be institutions in the public sector or civil society, and international organisations that are working towards the overall objectives of the scheme. 

The indirect target groups are the general population in the countries concerned. The specific target groups should be identified as far as possible in the projects for which funding is applied under this scheme. 

3 Criteria for goal achievement

There are very many factors that influence development in these countries. It is therefore difficult to document that a specific project has had an impact at societal level. The aim is therefore to establish with a sufficient degree of probability that the project has contributed to social development, and in what way. 

The relevance of the project for the scheme’s objectives must be documented. Clear targets and indicators must be drawn up. The total effect of the project can give an indication of the impact at societal level. 

The unit responsible for the scheme is responsible for evaluating the criteria for goal achievement as far as possible. 

4 Grant allocation criteria

Projects must be in line with the grant scheme objectives (see section 1) in order to qualify for funding.

Cross-cutting considerations such as the fight against corruption, the gender perspective, the environment and vulnerability to climate change must be taken into consideration in all projects. This means that grant recipients are to identify potential negative effects of the project, and address these for the whole project cycle. The grant recipient should seek to integrate proactive anti-corruption and gender equality efforts, as well as environmental and climate change considerations, into the project, or to include them as separate components. 

For projects of lesser scope and complexity, the relevance of these considerations must be determined in relation to the project in question. Priority will be given to larger-scale and multi-year projects. 

Projects funded by the scheme must comply with the OECD/DAC criteria for ODA. 

Where relevant, projects funded by this scheme are to comply with the principles and obligations set out in the Paris Declaration on Aid Effectiveness. 

Projects funded by this scheme must also comply with the rules for state aid, cf. the Act relating to state aid and other relevant legislation. 

Potential grant recipients will most often be Norwegian institutions in the public sector or civil society, and international organisations. Priority will not be given to actors engaged in commercial activities. 

Institutions in the public sector or civil society in recipient countries may qualify for support following an assessment of the opportunity the Norwegian authorities have for following up the project, experience of the organisation in question, and a corruption risk analysis of the country concerned. 

In exceptional cases, institutions in the public sector or civil society of third countries may qualify for funding. 

In the evaluation of the application, emphasis will be placed on projects where:

• The applicant can document close contact with local partners, and as far as possible the reliability of these partners.
• The applicant has assessed how the project fits in with other actors’ activities in the same field, with the aim of avoiding any overlap with other projects.
• The applicant can document relevant qualifications and expertise, including results from previous efforts.
• The applicant can indicate the added value that will be brought to the project in addition to the grant.
• There is a long-term perspective and continuity, and the project will be viable and able to continue without Norway’s support in a reasonable space of time.
• The applicant shows good insight into important issues in the region.
• The applicant has set clear, achievable goals.
• Change and reform processes will be promoted through transfer of knowledge and expertise.
• The project will contribute to closer cooperation with and integration into Eurasian structures or regional cooperation.
• The project is in line with priorities set by the recipient country’s authorities. Importance is attached to ownership of the authorities is such cases.
• The applicant brings additional funding or resources, or the project will mobilise funding or resources from other sources – local, national or international.
• Synergies may be created with other efforts or processes.
• Women have an important role to play and/or women are an important target group. 

Funding will not normally be provided for:

• export or import of goods or services
• marketing of goods or services
• business activities on a commercial basis
• operating costs beyond initial costs in the start-up phase
• establishing activities in Norway
• developing or testing new technology
• transport of relief supplies
• activities carried out by political parties with the exception of the youth organisations of Norwegian political parties, which may apply for funding from the Norwegian Children and Youth Council
• revolving funds 

Projects with overheads of more than 5% of the total budget will only be supported in exceptional cases. 

5 Information for potential grant recipients

Calls for proposals for funding under the grant scheme are announced once a year on www.regjeringen.no/ud. Here you will also find guidelines, priorities for the year in question, application forms, and an overview of projects that received funding the previous year. 

The Norwegian embassies in the region will provide information about the scheme in their contact with relevant recipients. 

6 Follow up and control

Follow-up and control are to be in accordance with the Ministry’s grant management manuals and the specifications set out in the grant scheme rules. Templates and forms are to be used in accordance with the Grant Management Manual, unless otherwise stated.

 

Grant management regime
Grant management regime I is primarily to be used. Any use of regime II or III must be in line with the Grant Management Manual – Management of Grants by the Ministry of Foreign Affairs, subordinate agencies and embassies. 

It is possible to delegate grant management under the scheme. In these cases, grant management regime V or VI is to be used in accordance with the Grant Management Manual – Managing Delegated Grant Schemes. The requirements for follow up and control of the grant manager must be set out in the letter of assignment or the agreement with the grant manager. Some of the funding under this scheme is provided from the embassies’ small grants funds and managed by the embassy concerned. See sections 6.2 and 6.3. 

6.1 The Ministry of Foreign Affairs

Application
Application requirements, deadlines and addressees are to be set out in the annual call for proposals. Applications received after the deadline will be considered if sufficient funds are still available. Applications from international organisations will be considered in any case. 

Normally the Ministry’s application form S01 (Norwegian)/S51(English) is to be used. Applications for funding for training, courses or seminars can, however, be sent on the simplified application form S02 Norwegian)/S52(English). Exceptions may be made for international organisations. 

In the case of applications for projects of more than one year’s duration, the total amount applied for must be specified, in addition to the amounts applied for in each budget year. A detailed implementation plan and budget for the first year must be included, but the implementation plans and budgets for the successive years may be briefer. 

Assessment and decision
The Norwegian embassies in the region are invited to give their opinion on the projects proposed. 

Template S03 (grant management regime I) and S05 (grant management regime III and, as far as possible, grant management regime II) are to be used for the decision document. However for decisions relating to the secondment or deployment of personnel, decision document ‘e’ (endorsement), or a specific decision paper, should be used. 

The inclusion of cross-cutting considerations, as mentioned in section 4 , are always to be taken into account. If there are reasons for not including these in the assessment, this is to be explained in the decision, but a simple explanation will be sufficient. 

The following sets out further specifications for grant management regime I (Project and programme support) that are to be taken into account where relevant.

Agreement, grant letter or letter of rejection
If the application is granted, a grant letter or agreement is drawn up in two copies. One is to be signed by a person authorised to represent the grant recipient and returned to the Ministry. 

Agreement templates are to be used in accordance with the Grant Management Manual, Funding may be awarded for up to three years, subject to approval by the Storting. Grants are usually paid in NOK. In exceptional cases, grants to international organisations may be paid in USD or EUR. 

Letters of rejection are sent by email. The template M10 is to be used as the basis for the letter of rejection. 

If decisions under this scheme can be considered as individual decisions under the Public Administration Act, they are subject to appeal under chapter VI of the Act. 

Disbursement
Norwegian, non-governmental recipients are to open a separate joint account for the receipt of all grants from the Ministry, and for the reimbursement to the Ministry of interest accrued during the course of the year by 31 January of the subsequent year. 

One-year agreements:
The number of instalments will be decided on a discretionary basis according to the size of the project, the risk involved and the type of recipient. The first instalment will be disbursed on receipt of the grant recipient’s written acceptance. 

Multi-year agreements:
Year 1: The first instalment for year 1 will be disbursed on receipt of the grant recipient’s written acceptance. The second instalment for year 1 will be disbursed on the basis of an updated implementation plan documenting progress, and a financial report showing expenditure in relation to the approved budget.

Year 2: The first instalment for year 2 will be disbursed on the basis of 1) the approved progress report with updated implementation plan and financial report, and 2) an approved, detailed implementation plan and budget for the next period. The second instalment for year 2 will be disbursed on the basis of an updated implementation plan documenting progress, and a financial report showing expenditure in relation to the approved budget.

Year 3: As for year 2. In the final year of the project, part of the grant is to be withheld prior to receipt and approval of the final report. 

Exceptions may be made for international organisations in accordance with the budget proposal. 

Reporting and audit requirements
One-year agreements:

• Progress report prior to the 2nd instalment if the grant is disbursed in more than one instalment.
• Final report and project accounts as soon as possible and at the latest three months after the project has been concluded. 

Multi-year agreements:

• Progress report with revised budget and detailed implementation plan for the next period within the agreed deadlines. These are normally considered and approved at an annual meeting. They form the basis for determining the amount to be disbursed for the coming year and any further disbursements.
• A disbursement request with an updated implementation plan and financial report prior to the disbursement of a second instalment each year.
• The final report and project accounts and audit as soon as possible and at the latest three months after the project has been concluded. 

The grant recipient is to use the Ministry’s report form for its reports. Exceptions may be made for international organisations. 

With regard to audits of project accounts that are to be submitted with the final report:

• For Norwegian recipients, where the grant is included in accounts that are subject to public audit, it is sufficient to submit project accounts that have been certified by the organisation’s financial controller.
• Financial reporting and auditing of accounts for funding to the UN and the World Bank are to follow the organisation’s internal rules for financial reporting and audit.
• In the case of grants under NOK 100 000, a careful risk analysis is to be made before an audit is required. As a main rule, the requirement for project accounts that have been certified by the organisation’s financial controller is sufficient in such cases.
• In all other cases, audits are normally required to comply with ISA 805. 

Other follow-up
Annual meetings should normally be held in connection with all multi-year agreements. This meeting can be in the form of a telephone meeting or in connection with a project visit. 

The unit responsible can also initiate a review of a project or groups of projects. These may be carried out internally or by an independent actor. 

Financial irregularities
The Ministry practises zero tolerance in relation to financial irregularities. Reasonable suspicion of financial irregularities is to be reported without undue delay and followed up in accordance with the current Guidelines for dealing with suspicions of financial irregularities in the Foreign Service. Planned disbursements are to be frozen until the case has been property investigated. Funds that are documented to have been misused are to be paid back to the Norwegian Treasury via the Ministry. Criminal proceedings are to be considered. 

Completion
Any unused funds exceeding NOK 1 000 are to be reimbursed to the Ministry as soon as possible once the project has been concluded. 

A termination letter is normally sent by email informing the grant recipient that the final report has been approved and that the agreement is regarded as terminated, and giving details of how any unused funds are to be used. 

6.2 The embassies’ small grants funds

Funding may be provided from the embassies’ small grants funds for projects that promote democracy and social development in Eurasia. These funds are managed in accordance with the grant scheme rules and the Ministry’s Grant Management Manual. Administrative and political guidelines are set out in the annual note of allocation to the missions. 

6.3 Delegated grant management

It is possible to delegate the management of parts of the funding under this scheme in accordance with the Ministry’s Grant Management Manual – Managing Delegated Grant Schemes. 

7 Evaluation of the grant scheme

Norad’s Evaluation Department is responsible for planning and carrying out evaluations of activities funded under the Norwegian aid budget. These evaluations may cover part or all of the scheme, or may examine cross-cutting themes, objectives or countries, and thus cover several grant schemes. The Ministry will also take part in joint evaluations and reviews with other donor organisations, the UN system and partner countries.