NGO FPA

How do the financial thresholds based on the open amount affect a given partner?

The financial threshold based on the open amount defines ECHO’s accepted level of risk exposure to the partner. The accepted level of risk exposure is expressed as a percentage of the organisation's turnover. This amount decreases any time ECHO pays a pre-financing and increases again upon submission of a request of further pre-financing or of the final report.

Example:

  • Organisation maximum accepted open amount = € 2.000.000
  • Action budget: € 1.000.000
  • First pre-financing received: 50% = € 500.000
  • Available open amount: € 1.500.000

When the partner declares that 70% of the first pre-financing has been consumed (= € 350.000), it may submit a request for a second pre-financing.

  • Second pre-financing received: 30% = € 300.000
  • Available open amount: € 1.500.000 + € 350.000 – € 300.000 = € 1.550.000

As soon as the partner submits the final payment request (together with the final report), and assuming that the total incurred costs correspond to the initial budget, the open amount will return to € 2.000.000.