Policy: AID prefers to send approved project funds in installments with the later installments being sent subject to hearing from the implementing organization about the progress of the project.

Reasons:

1. Good Financial Practice: AID needs to assure our auditor and IRS that we are sufficiently careful in handling funds from our donors (a subjective matter). AID needs to demonstrate more care because our funding goes to organizations outside USA, which are not directly recognizable by the IRS. AID makes a statement to the IRS and its auditors that it has strong feedback requirements and tries to disburse money in installments to provide safety to our funds in case a project does not turn out the way we expected when we approved the funding.

2. Feedback Policy: AID needs feedback from projects, both from projects and legal point of view. Sending money in installments works well to get prompt feedback from the project.

Guidelines for implementation of this policy:

For practical purposes, this has to be balanced against practical delays in sending checks and constraints from the point of view of project implementation in India. The current guidelines are:

1. For any project amount greater than $3000, AID prefers to send in installments. Number of installments is typically 2. It could be greater if the total amount is greater than $6000. A particular project coordinator can request for a greater number of installments or smaller amount of installment than the typical numbers mentioned here.

2. An exception could be made in case of

i) Continuing projects, where we have supported a similar amount in the last few years e.g. Swanirvar, IIT Kanpur.
ii) A special situation with the project requires a higher amount in one installment than allowed by e.g. one-time FCRA clearance, or a one-time expenditure which cannot be phased.

Decision on this will be made by the BoD in consultation with the EB Projects members and/or the Projects Coordination team.

3. The later installments will be sent provided the coordinator of the project is assured that the project is indeed being implemented and there is no special situation warranting a review of the funding decision (in which case it should go back to the approving body, say, CSH). The project coordinator should fill up a new check request for the new installment with a comment to the this effect.

<< Back to AIDers' Zone