PHIG Policy Framework v1.2 · Policy 12 · Adopted 1 September 2026 · References: EU Model Grant Agreement Arts. 6 (eligible costs), 20 (record-keeping), 21–22 (reporting and payments), 25 (checks and audits); Financial Regulation 2024/2509; Horizon Europe personnel-cost rules (daily rates, time records)
1. Purpose
To ensure that PHIG’s funds — its own, donors’ and the European Union’s — are managed lawfully, economically, transparently and in a way that allows every euro to be traced, justified and audited.
2. Accounting system
- Double-entry accounting in line with Georgian law and, for EU grants, in a form that allows direct reconciliation of each cost item with the grant’s financial statement.
- Separate cost centres (analytical accounts) for each grant and programme; no co-mingling of funds.
- A professional accountant keeps the books; annual financial statements are prepared, approved by the Board and, above the thresholds set by law or donors, audited by an independent auditor.
- Bank accounts in PHIG’s name; electronic payments with dual authorisation above EUR 1,000; no cash transactions above EUR 200.
3. Internal control
- Segregation of duties: the person who initiates a cost does not approve the payment; the accountant does not approve.
- Authorisation: budget and grant budgets approved by the Board; every expenditure authorised by the Director within the approved budget; expenditure above EUR 10,000 outside the budget approved by the Board.
- Verification: deliverables verified before payment; invoices checked against contracts and procurement records.
- Reconciliation: monthly bank reconciliation; quarterly budget-versus-actual review by the Director, reported to the Board.
- Assets: register of equipment above EUR 500; depreciation per accounting rules; physical check annually.
- Fraud controls: as in the Anti-Fraud Policy.
4. Cost eligibility for grants
Only costs that are actually incurred, in the period, necessary for the action, identifiable and verifiable, recorded in the accounts, compliant with the grant and this policy, and reasonable, are charged. Indirect costs are charged at the rate the grant allows. VAT is charged only where non-recoverable. In-kind contributions by volunteers are recorded at value but charged only where the grant allows.
5. Personnel costs and time recording
- Persons charged to a grant hold a written contract stating their role and rate; pay follows PHIG’s usual practice.
- Time is recorded monthly on time sheets (or a declaration per grant where the person works exclusively on it) signed by the person and approved by the Director, showing days per action.
- Daily rates for EU grants are calculated per the grant’s method (annual personnel cost ÷ 215 days or as the grant specifies).
- Volunteers’ time is recorded separately and never charged as a cost unless the grant permits.
6. Reporting and records
Financial reports to donors in the required format and on time; supporting documents (contracts, invoices, proof of payment, time sheets, procurement files, deliverables) retained for five years after the final payment (three years for low-value grants) and made available for checks, reviews and audits, including on-the-spot visits.
7. Currency and bank
Grants in euro are held in a euro account; exchange rates applied as the grant specifies; bank identification validated with the granting authority.
8. Annual summary
A summary of income (fees, grants, donations) and spending (programmes, running costs, staff) is published in the annual report, in line with the Financial Sustainability statement.
9. Responsibilities
Board: budget, accounts, auditor. Director: authorisation, reporting. Accountant: books, reconciliations, payroll, tax. Project leads: time sheets and deliverables.
10. Review
Annually.
Part of the PHIG Policy Framework. Breaches and concerns may be reported under the Whistleblowing Procedure to info@accreditation.ge (subject “Confidential — integrity”).