International Development Fund: grant management stages

Pre-application processes

At the design stage for each funding round, the Scottish Government works with its expert independent assessors and consults with international development civil society networking organisations, the Scotland's International Development Alliance (Alliance) and Scotland Malawi Partnership (SMP).

For Malawi Development Programme funding rounds, the Scottish Government additionally consults with the Government of Malawi, to ascertain its current priorities within UN Global Goals, under the 2018 Global Goals Partnership Agreement. Those Government of Malawi priorities are then incorporated into the funding round documentation. This is a continuation of our practice of consultation with the Malawian Government, which began with the 2005 Cooperation Agreement. In 2014, for example, the Government of Malawi was particularly interested in having projects for the 2015 to 2018 funding round which focused on agricultural development and value addition, tourism, renewable energy, environment and natural resources management and finance and investment promotion.

We applied the same partnership principles in relation to the first Zambia and Rwanda funding round in 2017, consulting both governments in setting the priorities for the funding round themes, and involving them in stakeholder events as the funding round launched.

Each funding round is also designed to build upon and incorporate lessons learned from the way previous projects developed and from the fund round process itself. Most recently, in August 2017, we hosted a roundtable gateway review session jointly with the Alliance, to hear the view of participants in the Zambia and Rwanda funding round as learning prior to opening the Malawi funding round. These lessons are incorporated in funding round criteria, guidance and grant conditions. In this way, logframes were introduced in recent years, reporting templates have been updated and improved and timings of Stages (concept note and full application) of the recent funding round process adjusted after consultation.

We provide comprehensive guidance to applicants, which incorporates: essential eligibility criteria, assessment criteria, budgetary information, supplementary evidence required, grant conditions and FAQs.

Once the funding round has opened, the International Development Team run information seminars for potential applicants, in conjunction with their independent assessors, Alliance and SMP. The purpose of these seminars is to highlight any new issues or processes for the funding round, to reinforce the importance of good reporting/monitoring and evaluation, and enable potential applicants to ask any questions. These sessions are followed up with timetabled opportunities for potential applicants to submit questions about the funding round, which are then answered and disseminated to all as FAQs.

Grant applications assessment

Our funding application process was updated in 2017, moving to a two stage process of Concept Note followed by full application stage.

The rationale for this had been set out in the SG's 2016 consultation paper, that: "This method could, we consider, provide a better blend of the relevant expertise that may be required for a successful and sustainable development project, securing the best of both Scottish expertise in both the relevant field and development expertise. There are also benefits to applicant organisations through this style of application process, whereby fully fledged proposals with the time involved in that are not required of all applicants. Moreover, this may also enable us to better tailor our proposals to the priorities of the host country, thereby ensuring greater impact."

In response to sector feedback following the SG's Consultation on our international development policy in 2016, the SG's Zambia and Rwanda Development Programmes launched in February 2017 first operated as a two stage application process.

As the most recent example, for our Malawi 2018-23 funding round, using experience from the Zambia and Rwanda 2018 funding rounds, application organisations were asked to submit a Concept Note, containing a high level details of their proposal. There were then independently assessed, with successful candidates at the Concept Note stage being invited to submit a full application by the deadline, that consisted of:

• a word application form
• logical framework (logframe)
• budget in excel format

Accompanying the application, supplementary evidence was required in the form of:

• a letter of support from all intended partner organisations to confirm their support and involvement in the intended project
• a copy of the applicant's most recently audited accounts / independently-signed statement of income and expenditure: to provide evidence that the organisation has a financial track record relevant to the size of budget requested in the application

Any applications not submitted on time or which did not include all evidence required were deemed ineligible at this stage by the SG's independent assessors.

The Essential Eligibility Criteria were then applied by SG assessors, including that:

• applicant organisations must constitute a "legal person"
• applicant must have a presence in Scotland
• ensuring that Scottish Government grant funding would only be available to non-governmental and civil society organisations in Malawi, since the SG gives no funding direct to the Government in Malawi

Only applications deemed eligible were passed for review of their content by SG independent assessors.

At the next assessment stage, the Assessment Criteria applied incorporated a number of core areas as well as broader practices, including:

• project need
• project design
• financial viability
• quality and capability of partnerships
• evidence of applicant's commitment/capacity to conduct thorough and rigorous monitoring and evaluation and effective project and programme management
• an exit strategy to ensure sustainability of projects.

Applications had to attain a minimum standard across all criteria in order to be considered, and projects that attained high standards across core criteria were recommended for funding.

Following this assessment by the Scottish Government's independent assessors against the above framework, the International Development Team was provided with an independent written assessment of each eligible application, in order to allow it to make recommendations to Ministers for funding decisions.

A further step was also carried out for the Malawi Funding Round, in light of the 2005 Cooperation Agreement between the two Governments, to seek the views of the Government of Malawi on those projects recommended for funding.

Scottish Ministers then took decisions about projects recommended to them, as to which projects should be funded.

Conditional grant award letters

If an application is successful, the lead organisation will receive a letter of intention to fund the whole project, and confirmation of each year's funding, subject to the completion by them of satisfactory mid-year and end of year reports.

Funding for each year is subject to the annual enactment of the Budget (Scotland) Bill by the Scottish Parliament. It also depends on continued adherence by the lead organisation to the Scottish Government's grant terms and conditions and any decisions taken as part of Ministerial Spending Reviews which may arise in later years.

Grant letters are then issued – these are conditional grants, based on a set of Terms and Conditions, which must be adhered to.The project itself is detailed in the conditional grant offer letter, and the logframes and budget which were contained in the application are incorporated in the offer, to ensure that the grant must be used for these purposes.

Standard grant conditions have always included that:

• grantees shall return funds not used for the approved purposes to the Scottish Government
• grantees must provide six-monthly reports according to guidelines issued by the Scottish Government; and payments will be released only once these are approved.
• the Scottish Government will only pay for what grantees actually spend in a given financial year – the Scottish Government may ask grantees to return any funds not spent by 31 March
• unspent funding in any one year may not automatically be carried over to the subsequent year unless prior permission has been obtained from the Scottish Government and revised budgets have been approved
• the grant is not to be used for party political advocacy or activity
• in the event of the grantee becoming aware of, or suspecting, any irregular or fraudulent activity that may have any impact on the project or on the use of the grant, or any part of it, the grantee must immediately notify the Scottish Government of such activity and provide such other information as required by Scottish Government in that regard

In addition,since 2015, grant conditions have been further tightened, to now include:

• new specific conditions on random source expenditure checks
• new January reporting point requirement, in addition to the two six monthly reporting requirements, specifically on the project's current/forecasted position on budgets, to enable the Scottish Government grant manager to make early decisions about any budgetary changes that have arisen, and to agree those changes or claw back in any resulting underspend

Following media reports in February 2018 of serious misconduct and sexual abuse by staff working in the international development sector, specifically in relation to vulnerable groups, grant conditions have been further amended from 12 March 2018 to now make it explicit that partner organisations must have robust safeguarding policies in place (and have carried out due diligence on their in-country partner in that regard too), and as regards notifying any safeguarding incidents as well as any irregular financial activity. Any new funding will be subject to the following conditions (this page has been updated with our current safeguarding conditions, in place in our conditions grant offers as at financial year 2021/22):

• 4.7A The Grantee must have robust safeguarding policies, procedures and good practice in place to prevent any harm and abuse to all people it has contact with that may arise from misuse of power and position of its staff and representatives. Where the Grantee is working directly through a partner organisation, the Grantee is required to have undertaken due diligence in relation to safeguarding arrangements, including obtaining evidence of satisfactory safeguarding policies and / or procedures by the Grantee's partner organisation. The Grantee must report all and any cases of suspected abuse or malpractice relating to anyone involved within the Grantee or its partners, in delivery of the Programme or any beneficiary of the Programme to Scottish Ministers and the relevant authorities immediately. The Grantee must, upon request from Scottish Ministers, provide copies of the safeguarding policies and procedures underpinned by international standards referred to in this clause and those of their partners
• 4.7B In the event of the Grantee becoming aware of or suspecting:

1. any irregular or fraudulent activity in relation to the Grant or Programme, or any part of either of them; and/or

2. any safeguarding incident by or in respect of any person involved in the Programme; and/or

3. any credible suspicions of, or actual incidents that are not directly related to this Agreement but would be of significant impact to their partnership with the Scottish Government, including but not limited to events that affect the governance or culture of the Grantee or its partner, or safeguarding incidents involving beneficiaries of the Project,

The Grantee shall immediately notify the Scottish Ministers of such activity or incident and provide such other information as the Scottish Ministers may reasonably require in relation to the impact on the Programme and the use of the Grant. In so notifying Scottish Ministers, the Grantee must also confirm that such irregular or fraudulent activity or safeguarding incident has been referred to the relevant regulatory or other authorities (if it is safe to do so for the survivor(s)) as appropriate, in line with any statutory duty and otherwise in line with any guidance issued from time to time on Notifiable Events by either the Office of the Scottish Charity Regulatory (OSCR) or as appropriate the Charity Commission for England and Wales. For the avoidance of doubt, in this agreement, a "safeguarding incident" includes any incident of abuse or mistreatment of any vulnerable person or the misuse of power, authority or position of trust of any person involved in the project, programme, organisation or related entities

• 4.7C The Scottish Ministers reserve the right to suspend and/or terminate funding in the event that there is non-compliance with Clauses 4.7A and/or 4.7B and/or if it is of the opinion that the Grantee has failed or neglected in its duty of care to safeguard people and/or prevent financial mismanagement