FINANCIAL REPORTING
“How to Work with USAID” Training Series
Visit WorkwithUSAID.org to learn more.
LEARNING OBJECTIVES
● Review the process of filling out
federal financial reports.
● Learn how to request an advance or
reimbursement from USAID.
● Identify key elements to include in the
annual Foreign Tax Report.
● Determine best practices to follow as
you prepare proper financial reports.
WHY USAID PARTNERS WITH ORGANIZATIONS
USAID Mission:
To lead the U.S. Government’s international
development and disaster assistance efforts on
behalf of the American people
These partnerships and investments help:
● Save lives;
● Reduce poverty;
● Strengthen democratic governance; and
● Help people emerge from humanitarian crises
and progress beyond assistance.
TYPES OF FUNDING OPPORTUNITIES
USAID offers two main types of funding opportunities.
1. ASSISTANCE: grants or cooperative agreements
The Agency provides funds to a recipient for a public purpose. The Agency functions as
a financial supporter with limited involvement. The Agreement Officer’s Representative
(AOR) is the partner’s main point of contact with USAID.
1. ACQUISITION: contracts
USAID purchases goods and services from a contractor for USAID’s own use or to
implement an Agency activity. USAID is an involved buyer and provides primary
direction under strict terms. The Contracting Officer’s Representative (COR) is the
partner’s main point of contact with USAID.
For details, see the “Understanding USAID Awards” module.
REGULATIONS AND POLICIES
U.S. GOVERNMENT REGULATIONS
● The Code of Federal Regulations (CFR) govern how USAID executes assistance awards.
● Federal Acquisition Regulations (FAR) include primary rules that guide how U.S.
Government agencies acquire supplies and services.
● The U.S. Department of State Standardized Regulations (DSSR) and the General
Services Administration’s Fly America Act/Open Skies Agreement detail rules on
allowances and travel.
USAID INTERNAL POLICIES
● The Automated Directives System (ADS) outlines operational policies covering all
Agency and partner activities.
● USAID Acquisition Regulations (AIDAR) govern how USAID administers public funds.
Find links to the relevant regulations in the “Resources” section.
THE STANDARD FEDERAL
FINANCIAL REPORT (SF-425)
ASSISTANCE AWARDS ONLY
PURPOSE OF THE SF-425
ASSISTANCE AWARDS ONLY
The SF-425 is a cumulative report that captures the financial status of an award at a
specific point in time.
The SF-425:
● Helps your organization and USAID determine whether your expenditures are aligned with
the implementation of your Activity;
● Enables USAID staff to reconcile their records to ensure accuracy in financial reporting
and oversight;
● Offers details both you and USAID can use to assess how quickly funds are being used; and
● Provides an opportunity for your organization to demonstrate that it understands and can
meet its financial management responsibilities to USAID.
Your AOR can provide reporting guidance.
Find the SF-425 here.
FORMAT OF THE SF-425
ASSISTANCE AWARDS ONLY
A completed SF-425 shows:
● How much money has been drawn down against the award;
● The source of money being used; and
● The balance of unused money at the end of the reporting
period.
Your organization should be ready to provide USAID with
supporting documentation that confirms the allocation of
funds to budget line items.
TOP PORTION OF THE SF-425
ASSISTANCE AWARDS ONLY
BOTTOM PORTION OF THE SF-425
ASSISTANCE AWARDS ONLY
TIMING OF THE SF-425
ASSISTANCE AWARDS ONLY
You must notify USAID when your organization has
spent 75 percent of an award’s obligated funds.
PERIOD DUE REPORTING PERIOD
Quarter 1 January 30
October 1 to December 31
(of previous calendar year)
Quarter 2 April 30 January 1 to March 31
Quarter 3 July 30 April 1 to June 30
Quarter 4 October 30 July 1 to September 30
Final Report 90 days after end of award Entire lifetime of award
THE SF-425: SUMMARY
ASSISTANCE AWARDS ONLY
● The SF-425 is a cumulative report that captures the
financial status of an award agreement at a specific
point in time.
● Your organization should be ready to provide USAID
with supporting documentation.
● Typically, the report is due to USAID 30 days after the
end of each of the Agency’s financial quarters. The final
report is usually due 90 days after the end of the award.
● You are required to notify USAID when you have spent
75 percent of your obligated funding.
● Check with your AOR for guidance.
REQUEST FOR ADVANCE OR
REIMBURSEMENT (SF-270)
PURPOSE OF THE SF-270
The U.S. Government uses the SF-270 to disburse funds.
This may be done in two ways:
● Giving funds in advance; or
● Reimbursing partners for expenses.
Your award agreement specifies the format you must use to request
advances or reimbursements. Your AOR may provide additional guidance.
USAID staff will reconcile any advance and reimbursement requests with
their records to ensure accuracy in financial reporting and oversight.
Find rules governing USAID advances at ADS Chapter 636.
HOW TO MAKE A REQUEST
Organizations submit requests with the SF-270.
● A request for reimbursement should reflect the exact
amount spent during the period. To support the amount
you request, you need to supply documentation, such as
copies of receipts and invoices.
● A request for an advance is an estimate of “immediate
disbursement needs,” or what you expect to spend in the
coming month(s).
Coordinate efforts with any sub-partners and subcontractors
so funding requests and spending are managed efficiently.
You may need to complete
Section 11 or 12, depending on
how much information your
award agreement requires.
COMPUTATION
OF AMOUNT
REQUESTED
CASH-FLOW BUDGET
When you request an advance, you will also submit a supporting
cash-flow budget that analyzes the award funds and timeline.
● Review pipeline funds that have been obligated to your project
by the Agency but have yet to be spent.
● Calculate the expenditure rate, an estimate of how fast you are
spending and expect to spend funds across the project timeline.
Your organization and USAID will use this information to estimate
how long your remaining funds will last.
SAMPLE PIPELINE ANALYSIS
Your funding request cannot be greater than the additional
funding required to expend the TEC (Column H).
A B C D E=C+D F=B-E G H=A-(B+G)
Total
Estimated
Cost (TEC)
Obligated
Amount
to Date
Costs
Incurred
to Date
Outstanding
Commitments
Total
Expenditures
Unexpended
Balance
Funding
Request
Add’l Funding
Required to
Expend TEC
$30,500.00 $20,800.00 $12,000.00 $7,800.00 $19,800.00 $1,000.00 $3,000.00 $6,700.00
Find details on rules governing forward funding here (and a supporting example here).
SAMPLE EXPENDITURE RATE CALCULATION
Here, 23.33 months indicates a “forward funding” issue.
AWARD TERM (MONTHS) 60
Number of months to date 35
Number of months remaining 25
Total estimated cost (TEC) $2,500,000
Total expenditures to date $1,500,000
Average monthly expenditure rate $42,857
Calculated by dividing total expenditures
to date by number of months to date
Money for future expenditures
(new funding request plus unexpended balance)
$1,000,000
Estimated # of months current money will last 23.33
Calculated by dividing money for future
expenditures by average monthly
expenditure rate
CERTIFICATION
A reimbursement request must be accompanied by a
statement from a representative of your organization certifying
that the information you are providing is correct and that the
sums claimed are proper.
Your certification statement may be included at the end of the
form or spreadsheet or prepared and submitted separately.
Find certifications details and sample language in the AIDAR Part 752.7003.
ADDITIONAL INFORMATION
Some USAID Missions require additional information with an SF-270.
For example, USAID Southern Africa often requests a supplemental
form that includes:
● Total expenses submitted to USAID prior to the request;
● Remaining advances at the date of the request;
● Immediate cash needs for the period; and
● The period the request covers.
Discuss the need for any supplemental information with your AOR or COR.
SAMPLE ADVANCE/LIQUIDATION TIMELINE
DEC
7th
JAN
7th
FEB
7th
MAR
7th
APR
7th
MAY
7th
FEB. 28
Monthly
Liquidation
(Jan.)
APR. 30
Quarterly
Liquidation
(Jan.-Mar.)
Submit Jan.
advance
request
Submit Feb.
advance
request
Submit Mar.
advance
request
Submit Apr.
advance
request
Submit May
advance
request
Submit Jun.
advance
request
Funds returned with liquidations remain
available for future advances.
*
Supplemental vouchers may
be submitted at any point.
*
Apr. and May advances are received before
your Jan.-Mar. excess funds are returned.
*
REQUEST REIMBURSEMENTS WITH THE SF-1034
Organizations with cost-reimbursement contracts will submit reimbursement
requests using the SF-1034 form, called the “Public Voucher for Purchases and
Services Other Than Personal.”
When partners request a reimbursement, the amount requested should reflect the
exact amount spent during the period. Remember you need to supply documentation
to support the amount you request.
As with the SF-270, organizations working with sub-partners and subcontractors should
coordinate their efforts so that funding requests and spending are managed efficiently
and without surprises. You may ask sub-partners to provide monthly funding estimates.
REQUESTS FOR ADVANCE AND REIMBURSEMENT
SUMMARY
● A reimbursement request should reflect the
exact amount spent during the period and
include a certification statement as well as
documentation to support your request.
● An advance request should be an estimate of
what you expect to spend in the coming month
and include a supporting cash-flow budget.
THE FOREIGN TAX REPORT
PURPOSE OF THE FOREIGN TAX REPORT
A Foreign Tax Report helps USAID assess whether your organization is using funds
for the purpose intended and whether foreign governments are complying with
bilateral agreements.
This annual reporting requirement is only for commodity transactions (not services)
and covers:
● Value-added tax (VAT) levied on commodities purchased in-country; and
● Customs duties levied on commodities imported into the country for use in
USAID-funded projects.
VAT or sales tax levied on items purchased outside of the host country where you are
implementing your USAID-funded program are not exempt.
REPORT FORMAT AND TIMING
Your award agreement will include detailed requirements. They generally include:
● The organization’s name and contact information;
● The USAID award number;
● An itemized list of commodity transactions greater than the equivalent of $500 for
which tax was paid; and
● Total reimbursements received during the fiscal year.
Note that if you have sub-partners with in-country purchases equivalent to at least $500,
you must also incorporate this data into your report.
The reporting period is October 1 through September 30,
and your report is due the following April 16.
SAMPLE FOREIGN TAX TRACKING LOG
ACCT. SYS.
REF. # DATE VENDOR DESCRIPTION
TRANSACTION
VALUE (PRE-
VAT)* VAT* PROJECT
DATE REIMB.
REQUESTED
DATE REIMB.
RECEIVED
210 23-Oct-20
ABC
Supplies
Office Furniture
$1,200 $120
NPI
Ethiopia
31-Oct-20 15-Jan-21
223 15-Jan-21
DEF
Imports
HBC Kits $1,000 $100
NPI
Ethiopia
31-Jan-21
235 02-Feb-21
GHI
Computers
Computers $2,000 $200
OVC
Project
236 02-Feb-21 JKL Inc. Printer $500 $50
OVC
Project
* You may want to track your payments and reimbursements in local currency.
FOREIGN TAX REPORT BEST PRACTICES
● Develop a list of exemptions and required taxes so that everyone in your
organization involved with procurements is aware of the rules.
● Create special codes in your accounting system to track payments of
exempt taxes as well as incoming tax reimbursement payments from
the host government.
● Establish a log that tracks the tax payment and reimbursement process.
● Ask any sub-partners and subcontractors that have relevant purchases
of commodities to submit their reports well before the April 16 deadline.
Find additional tips on foreign tax reporting here.
here.
SUMMARY
KEY POINTS
● Read the relevant parts of your award that describe financial reporting requirements.
● Meet USAID deadlines for SF-425s and SF-270s, so the Agency can process payments in
a timely manner, and remember to notify USAID when you have spent 75 percent of
your obligated funds.
● Before you submit any reports or requests, double-check to ensure that all required
information is included and accurate and all calculations are correct.
● Engage sub-partners and subcontractors early in the reporting process, since many
of your reports require information from them.
Alert your AOR or COR early to any reporting or budget challenges.
● Code of Federal Regulations (CFR) Chapter 2,
Parts 200/700
● Automated Directives System (ADS) Chapter 303:
“Grants and Cooperative Agreements”; ADS Chapter
304: “Selecting the Appropriate Acquisition and
Assistance Instrument”
● U.S. Department of State Standardized Regulations
(Allowances)
● Fly America Act/Open Skies Agreement
● SF-425:
○ “Federal Financial Report”
○ “Instructions”
○ Completed SF-425 example
● SF-270: “Request for Advance or Reimbursement”
SF-1034: “Public Voucher for Purchases and Services
Other Than Personal”
● SF-1034: “Public Voucher for Purchases and Services
Other Than Personal”
● “Implementation Tips for USAID Partners:
Foreign Tax (VAT) Reporting” and ADS 302.3.8.8,
“Reporting of Foreign Taxes”
● USAID Acquisition Regulations (AIDAR) 752.7003:
“Documentation for Payment”
● ADS Chapter 636: “Program Funded Advances”
● ADS Chapter 602: “Forward Funding” & supporting
example
● Training modules at WorkwithUSAID.org:
○ “Registering to Work with USAID”
○ “Preparing Budgets for USAID Assistance Awards”
○ “Preparing Budgets for USAID Acquisition
Solicitations”
○ “Monitoring, Evaluation, and Learning”
RESOURCES
THANK YOU
This module was produced by the United States Agency for International Development.
The presentation team includes staff from both USAID and the Partnerships Incubator.
USAID thanks all of the individuals who contributed their time and ideas toward the
development of this training module.
Email questions and feedback: IndustryLiaison@USAID.gov
