Challenging Referral Scenarios

For European entities it can be a concern if the payee and the grantee are not the same therefore it needs to be discussed with Legal BP.

Scenarios when Payee can be different:

Fiscal Partnership Scenario-

There are some instances where it’s acceptable for another entity/individual to accept grant funds on a grantee’s behalf. Additional due diligence is required in these instances to help mitigate fraudulent activity and any diversion of funds. BP Legal must vet these relationships (between the individual and grantee organization) on a case by case basis. In order to vet these relationships, we need to be able to supply justifications for these relationships to BP Legal. An example of a justification:

The grantee organization is in a sensitive or in a developing country and it’s not possible to receive funds to their bank account from OSF; therefore another entity/someone else receives grant payments on the grantee organization’s behalf. The payee only receives the money and handles it over to the grantee; no service fee is charged. There’s a letter that describes the grantee and payee scenario, which is signed by an authorized signatory of the grantee organization as well as by the bank account holder. If the payee and authorized signatory of the grantee organization is the same person, then someone else should be identified to sign the document on behalf of the grantee.

a)Note: BP Legal will insist that if the grantee is located in a Western country they should open a bank account

b)Authorization letter – a letter signed by the grantee and the entity receiving funds on the grantee’s behalf should be attached to the proposal record.

Fiscal Agent Scenario-

In instances where a Grantee doesn’t have the financial capacity (accounting and budgeting) to adequately manage and monitor a grant, then a fiscal agent relationship is likely. In cases where a grantee utilizes a fiscal agent, then the GO should ensure that the program has provided a justification for the fiscal agent. For all fiscal agent scenarios, it should be noted that BP Legal will inspect each instance carefully because there is higher risk for grantee non-compliance to terms and conditions of grant award if roles and responsibilities for managing the grant award isn’t clearly articulated for the grantee and fiscal agent. Also, the fiscal agent relationship is out of the ordinary in Europe and using a fiscal agent can bring an undesired suspicion of tax evasion, money laundering, fraud or worse from the authorities.

For these reasons, we must ensure that the fiscal agent arrangement is both valid and can be easily supported in case of an audit. Ensuring that the justification for the fiscal agent is attached to the FC record and providing the BP GO a heads up with the detail on the situation is key to ensuring that there is a seamless referral process.

Additional Grant Scenarios Require BP Legal Review:

Always:

•Contract online matches, except for expired contracts with no fee

•Recoverable grants

•Change requests to jurisdiction/governing law clauses

•Sanctions compliance – OFAC red countries

•Potential political activity

BP GO's Discretion:

•Conflict of Interest

•Not clearly a grant (primary beneficiary is OSF, OSF exercises too much control, budget not cost based)

NOTE: If grants contain oone of the above mentioned scenarios, please indicate to program that this might lengthen the process, especially in case of rapid response grants.

1 Comments

Kriszta

My overall comment to this article is that there must be other problematic scenarios, so BP will need to collect those too.
1) "An example of a justification:" - actually what follows is not a justification, it is rather the description of a possible scenario, right?
2) " Ensuring that the justification for the fiscal agent is attached to the FC record and providing the BP GO a heads up with the detail on the situation is key to ensuring that there is a seamless referral process." - I am not a native but this version l think is better: "Making sure that the justification for the fiscal agent is attached to the FC record and giving the BP GO a heads-up are keys to a seamless referral process."
3) "NOTE: If grants contain oone" - oone should be replaced with one
4) I am not sure why there is a reference to COI as GO discretion - I would need to check that with the team

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