Cost Reporting Manual for USAID Education Sector

To achieve this, it is essential to capture and analyze the true costs of USAID-funded interventions. A better understanding of the cost structure of donor-funded interventions will help set realistic expectations and maximize limited resources to support education in developing countries. By collecting and using cost data, USAID Missions and implementing partners can conduct a wide range of cost analyses at the activity level, country level, and USAID global education portfolio level. USAID has provided several resources on cost reporting and cost analysis on the Cost Measurement page of EducationLinks. The Cost Reporting Guidance and Cost Analysis Guidance outline the general objectives and principles of cost measurement as well as methods for cost-related data analyses. The main purpose of the cost reporting manual is to ensure consistency and accuracy of cost reporting throughout the activity implementation. Implementing partners should use this template to plan and set up cost reporting processes for their activity, train activity staff on accurate cost reporting, conduct periodic cost data quality checks, and submit cost reports to CORs/AORs. In cost reporting, implementing partners must use USAID's standard cost reporting categories to capture and disaggregate the entirety of activity expenditure according to the intended purpose of the expenditure. Planning cost reporting must be done prior to the beginning of project implementation, during the start-up process. The planning process involves determining objectives, selecting cost categories, and setting up a cost reporting system. Determining objectives involves considering how cost data can be used to support objectives of the activity, including transfer to the local government, scale up using USAID or government resources, or planning a new USAID activity. Selecting cost categories involves selecting the appropriate cost categories from the list of standard cost reporting categories in the Annexes to the Cost Reporting Guidance, based on the scope of work of the activity. Setting up a cost reporting system involves matching activity work plan tasks to cost reporting categories and subcategories, establishing procedures, roles and responsibilities for capturing data on contributions and details of interventions, data quality assurance, and reporting procedures. Planning and setting up a cost reporting system requires coordination between activity operations, finance, and MEL teams. The cost reporting manual should be considered a living document and should be updated as needed. The manual can be included as part of the activity's policies and procedures manual and used as part of activity staff orientation. Staff training is a critical component of the cost reporting process. Staff must record their time at the end of every day and bill to the correct cost category from their first day working on the activity. Staff should bill their time to the cost category that relates most closely to the tasks they are performing. Staff working on an activity are not expected to routinely split their time between many cost categories. If the employee's job description is broad and they support the activity on a range of different tasks that cut across multiple cost categories, they should charge their time to the general management and operations code. The cost reporting manual serves as a reference document for the activity staff to ensure they have a general understanding of the objectives and the principles of cost reporting. The manual provides activity staff with guidance on how to code their labor, travel, and other expenses for cost reporting. The completed manual will ensure clarity around billing staff time and continuity as new staff come onto the activity.