Elrha Due Diligence and Contracting Frequently Asked Questions

ELRHA DUE DILIGENCE AND CONTRACTING FREQUENTLY ASKED QUESTIONS

Last Updated: June 2017

Contents

Due Diligence and Award Process Q What is due diligence? Why do we have to provide this information? A. Due diligence is a process which by reviewing the organisations internal policies, accounts, code of conducts, reporting mechanisms can lead to determining the level of risk to funding the organisation. It is our legal duty to carry out this process on all grantees to make sure the funding is secure and that best practice processes and procedures are in place.

Q. What is the process for due diligence and contracting and how soon can I start my project? A. You may have received a positive funding decision, be on a shortlist, or we are preparing in advance. We need to complete the due diligence and sign contracts before the grant is fully confirmed. If you can send us the due diligence documents promptly, we should be able to complete this process within 6 weeks. As soon as the contract is signed, we will release the first part of the grant funding to you.

Q. Can I start my project before due diligence is complete? A. Once a positive funding decision is made, or you are provided with a date that you can start activities, should you wish to start the project and start spending money before the contract is signed, you are able to do so, but at your own risk, and on the understanding that our offer of funding is subject to successful completion of the due diligence and contracting stages. We will not sign the grant agreement until due diligence is successfully completed. Spending should not start before the funding decision is given – even if you get a positive funding decision we will not fund activities that occurred before this date.

Q. You have already done due diligence checks on our organisation. Do you need to do it again? How long does due diligence last? A. All checks last for 3 years except for checks on Trustees/Directors which last 12 months for organisations in the Standard bracket (see Due Diligence section below) and 6 months for all other organisations. This means that if we contract with you again within 3 years of performing due diligence we won’t have to run due diligence checks again.

1 Grant Agreement Q. Where can I find a copy of the standard Grant Agreement? A. We will email this to you along with the request for due diligence documents. Please ask us if you have not received this.

Confidentiality Agreement Q. Do we need a Confidentiality Agreement? A. No – the Grant Agreement includes appropriate confidentiality clauses

Due Diligence Documents Q. What documents do I need to provide? A. The due diligence process we use is related to size of funds requested and the profile of the organisation. There are 3 types of due diligence processes: Standard, Standard Plus and Enhanced.

Standard Due Diligence Applies to:  Universities registered in Europe or the US, Australia or Canada

 Charities registered in Europe or the US, Australia or Canada that have a turnover of at least £10m per year,

 UN agencies,

 The Red Cross or Red Crescent Movement.

Documents needed: 1. Lead organisation legal registration number and charity number if relevant 2. List of Trustees/Directors from lead and partner organisation (Full name, date of birth and nationality) 3. Child Protection policies (if project has direct or indirect contact with children) 4. Anti-Fraud, Anti Bribery, and Anti-Terrorism policy 5. Procurement policy (if ECHO grant and organisation is not a FAFA or FPA) 6. Security Policy (if in High risk country)

Standard Plus Due Diligence Applies to:  Grants of £50,000 and under for organisations that don’t fit into the “Standard” bracket

Documents needed: 1. Lead organisation legal registration number and charity number if relevant 2. List of Trustees/Directors from lead and partner organisation (Full name, date of birth and nationality) 3. Child Protection policies (if project has direct or indirect contact with children) 4. Anti-Fraud, Anti Bribery, and Anti-Terrorism policy 5. Procurement policy (if ECHO grant and organisation is not a FAFA or FPA) 6. Audited accounts for the past three years 7. Insurance policy 8. Security Policy (if in High risk country)

2 Enhanced Due Diligence Applies to:  Grants of £50,000 and over for organisations that don’t fit into the “Standard” bracket

Documents needed: 1. Lead organisation legal registration number and charity number if relevant 2. List of Trustees/Directors from lead and partner organisation (Full name, date of birth and nationality) 3. Child Protection policies (if project has direct or indirect contact with children) 4. Anti-Fraud, Anti Bribery, and Anti-Terrorism policy 5. Audited accounts for the past three years 6. Insurance policy

7. Financial Management Procedures 8. Bank Statement 9. Organisation structure (Organisation Chart)

10. Security policy (if project is carried out in country claimed high risk) 11. Procurement policy 12. Code of conduct

Language / Translation of Due Diligence Documents Q. Does Elrha need all due diligence documents to be in English A. Yes.

Q. Will Elrha translate any documents that are not in English? A. Elrha does not have budget or in-house skills to undertake this work, however if this is a significant issue we will discuss with the grantee to work out how best to move forward.

Legal Registration Q. Must we be a legally registered organisation? A. We cannot grant funds to an organisation that is not legally registered. We do not have restrictions on what country the organisation is registered in, but before applying you must be registered as an entity be it charity, research institute or limited company.

If you are implementing in a country that is not your organisations’ home country you must be legally able to work in that country. To note: some organisations use an implementing partner based in the country of implementation.

Procurement Policy Q. What is a procurement policy; what should it cover? A. Your procurement policy should guide how you go about buying goods or services. We are keen that you comply with best practice procurement process. In part because this is a good way to prevent fraud or bribery, but it is also a good way to ensure that you get value for money when procuring goods or services.

3 We will be interested to understand whether you seek more than one quote before purchasing, and whether you openly tender for suppliers. A best practice policy would include a clear threshold table indicating at what purchase value different processes will kick in. It may include standard templates for key steps in the process. Above all, it should clearly outline the steps that must be followed before goods or services can be procured.

Financial Management Procedures Q. What are financial management procedures and why do you need these? A. We ask for these procedures in order to understand how robust your organisation is at managing its finances, and therefore the risk involved in granting to you. We, and you, may be audited, and we are keen to minimise the risk of issues being raised by a potential audit, or funds being disallowed. Having solid financial management processes is a good way to protect against fraud.

We will be keen to understand your cash management policy, the process you undertake for any bank reconciliations, any software you use, and how transactions are identified through the finance system. We will want to understand whether you have clear segregation of duties, whether there is a scheme of delegation. We will also be keen to understand what processes you follow for monitoring spend on the project.

Child Protection Policy Q. We don’t work with children, why do we need a Child Protection Policy? A. If you work with vulnerable communities, you should have a Child Protection Policy to help ensure that your project does not expose children to the risk of harm or abuse. We may request your project staff have a DBS (Disclosure and Barring Service) check or the country equivalent. If your project is not going to work directly or even indirectly with children, for example if it is purely lab- based, then we will not need a Child Protection Policy, but we may include a clause in the contract to underscore the fact that the project is not working with children.

Q. What if we don’t have a Child Protection Policy but will be working in vulnerable communities A. You may want to ask your project partners if you could adapt their policy, if they have a good policy. Alternatively, we would highly recommend enlisting the services of an organisation called Keeping Children Safe who specialise in helping organisations improve their child protection safeguards. See https://www.keepingchildrensafe.org.uk/

Q. What are you looking for from our child protection policy? A. We expect to see a robust understanding of what Child abuse is in its many different forms and that the organisation is doing everything in its ability to ensure children’s safety and wellbeing. This includes running appropriate recruitment processes, ensuring that the organisations’ staff, volunteers or consultants receive child protection training and are aware of the procedures and processes to follow.

Anti-Fraud, Anti Bribery, and Anti-Terrorism policy Q. What are you looking for from our Anti-Fraud, Anti Bribery, and Anti-Terrorism policies? We want to see that malpractice is taken seriously, staff are trained on the different types of fraud and what behaviours are and are not acceptable. It is also important to see that there are

4 procedures and processes in place to mitigate and manage any whistle blowing or suspected malpractice.

Q We don’t have an Anti-fraud, Anti Bribery, and Anti-Terrorism policy. What should we provide? The information that covers these areas could be found in multiple documents and are not necessarily in one document with this title. For example, process around fraud could be contained in your organisations Procurement policy; anti-bribery and fraud could be in the Code of Conduct or your organisations Ethical Guidelines. Provide the necessary documents that cover these areas.

Project Partners Q Why do you need the names, date of birth and nationality of our partners Board or Trustees? It is the lead organisations responsibility to vet the partner organisations before embarking on the project. If the lead organisation is sub granting to a partner we also must run the partner(s) trustees or board members through compliance. The list of individuals are checked against prohibited parties lists. We are not legally allowed to engage with the individual or entity on these lists.

Security Policy Q Why do we need to provide a security policy? We will request this document if the country you are working in is deemed Very High Risk to High Risk, we take these recommendations from Save the Children’s internal country risk register. This is currently listed as:

Very High Risk High Risk Afghanistan Bangladesh

Central African Republic Burundi DRC (East) Chad Iraq (Central/South) Colombia Libya DRC Mali (North) Egypt Niger (Southeast) El Salvador Nigeria (North) Guatemala Pakistan Haiti Somalia Honduras Syria Iraq (North) Ukraine (Donbass Region) Kenya (North East) Yemen Lebanon Mali Myanmar (Rakhine/Sitwe) Niger

Nigeria

Palestine

Papua New Guinea

5 Philippines

South Sudan Sudan (Blue Nile/Darfur/ South Kordofan) Thailand (South) Tunisia Turkey