Project Set Up

Project Management Committee

It is important to have a management structure for the project that identifies the specific roles, responsibilities and interactions for the life of the project. Projects initiated by established industry organisations may already have such governance systems in place. Where this is not the case, you can establish a project management committee to steer the project.

This committee should represent the key:

  • stakeholders that the project has been established for;
  • professional support providers involved; and
  • individuals involved in the coordination and operational management of the project.

The role of the committee should be defined in a Terms of Reference – see Appendix 1 for a sample template. A schedule of meetings should be established to ensure the committee meets often enough to maintain an effective oversight of the project’s progress and performance.

Committee Members

The committee must include a project manager and a financial manager. It may also include a chairperson and a secretary. The following role descriptions are a guide to the tasks for each position.

Project Manager

The project manager takes care of the daily operational tasks and coordination responsibilities necessary to produce the outcomes sought by the project.

The three key areas of responsibility for the project manager are:

  • communication within the project;
  • implementing the project; and
  • monitoring and reviewing the project.

For many SFF projects the project manager is a consultant or scientist. In consultation with other members of the project, the project manager will:

  • set milestones;
  • prepare timelines for completing milestones;
  • set budgets in conjunction with the financial manager;
  • source and contract suitable subcontractors as required;
  • ensure committee meeting schedule is maintained;
  • monitor the budget to keep abreast of any fluctuations;
  • monitor milestones to ensure they are being met (including subcontractors’ contributions);
  • regularly liaise with project stakeholders to identify and resolve issues or problems that are encountered;
  • coordinate, sign and send request for payment and progress report forms to SFF;
  • communicate with SFF to identify any necessary project changes; and
  • prepare the final project report.

Financial Manager

It is critical that the financial manager role is undertaken diligently, and that any financial problems or issues are identified early. To accomplish this, a budget should be drawn up and monitored regularly. The budget should be based on the actual amount of funding available to the project – including funds approved in the SFF funding application.

The financial manager will:

  • control the bank account;
  • prepare a budget in conjunction with project manager;
  • pay accounts for any approved expenditure incurred;
  • ensure all financial contributions promised are received;
  • operate an accurate cash book;
  • be aware of the current financial position in relation to budgets at all times;
  • prepare and file GST returns (when applicable);
  • produce financial reports whenever required;
  • produce a set of annual accounts (or provide the relevant information to an accountant to produce such accounts);
  • track in-kind contributions; and
  • prepare and sign SFF request for payment forms.

Chairperson

The chairperson will ensure the successful functioning of the committee and focus the committee’s efforts on attaining the project’s objectives. This is a leadership role that can take a considerable amount of time. It requires knowledge of the group’s constitution and enthusiasm for the group’s objectives. It is likely that the chairperson will be a farmer, grower or other representative of the community of interest. In the event of no suitable candidate being available, this role can be taken on by the project manager or financial manager.

Important powers and duties of the chairperson include:

  • upholding the rules/constitution of the group/organisation;
  • ensuring that milestones accurately reflect those outlined in the SFF application;
  • acting as chair at meetings of the group;
  • ensuring all office-bearers are meeting the requirements of their role;
  • acting as project spokesperson; and
  • acting, subject to any expressed or implied instructions, on behalf of the group in the interval between meetings.

Secretary

As with the chairperson, the secretary should not assume office unless she or he has adequate time for the task, knowledge of the group’s constitution and enthusiasm for its objectives. In the event of no suitable candidate being available, this role can be absorbed into the project manager, chairperson or financial manager roles.

Duties the secretary would normally undertake include:

  • handle inward and outward correspondence;
  • prepare contracts for subcontractors;
  • prepare tender documents where necessary;
  • arrange meetings;
  • prepare minutes of meetings and circulate these to members;
  • assist the chairperson;
  • look after all material relevant to the group’s activities;
  • maintain all administration files;
  • issue notices and other circulars or newsletters; and
  • record agreed changes to milestones or budgets for the project manager to implement and communicate this with SFF.

Remuneration

All the above positions in a SFF project can be paid for their time and be reimbursed for costs incurred relating to the project. Any such payments should be reasonable and relative to that which would be paid in arms length transaction (being the open market value) for the task being undertaken.

If the group is set up as a non-profit organisation, payments must be made within the rules and constitution of the group (refer to Legal Status).

If remuneration is not paid, the input of the team should be recorded as an in-kind contribution to the project (refer to Managing In-Kind Expenses).

Legal Liabilities

It is recommended that when employing personnel, contractors or subcontractors, they are employed by the group as a contractor. This eliminates the group being liable for PAYE, ACC or having to have an occupational safety and health plan.

If your group is not an incorporated society, group members are liable for any debt or other contingent liabilities incurred by the group that are not able to be met from the funding received (refer to Legal Status).

Financial Considerations

When the financial system for a project is set up, remember:

  • actual expenses need to be used for the SFF request for payment form;
  • at the end of the project SFF requires a financial summary; and
  • project audits occur, and full financial information will need to be available.

The financial arrangements for a project can be managed by:

  • an existing organisation with an established financial management system; or
  • a new organisation where a financial system will need to be set up.

Projects Financially Managed by an Existing Organisation

If a new project can be financially managed by an existing organisation, the project establishment time will be reduced. The organisation responsible for the financial management does not have to be the applicant group. It can be a crown research institute, consultancy group, another company or a farmer association.

The organisation needs to have an accounting system that can track individual project costs. All income and expenses for an individual project need to be easily identified. This can be achieved by assigning appropriate project codes.

Projects Financially Managed by a New Organisation

If the project team sets up its own financial arrangements, it will need to:

  • apply for an IRD number (this is compulsory for all SFF projects);
  • apply for a change in balance date to align with the approval date of SFF funding (see Appendix 2);
  • apply for income tax exempt status – an accountant could be used to do this (see Appendix 3);
  • open a bank account (SFF recommends a new, dedicated, account is opened under the project’s name, and that all income and expenditure is channelled through this account. If there is more than one project, it is recommended that separate accounts be used for each project); and
  • prepare and file annual accounts.

The project may need to register for GST. Projects with an annual income or turnover of over $40,000 (GST inclusive, and includes all funding) must apply for GST registration. Projects with an annual income or turnover of under $40,000 (GST inclusive, and includes all funding) do not have to register for GST.

It is strongly recommend any services provided to the project are on a contract basis by GST registered individuals or entities (so no wages or salary are paid). This avoids issues of managing ACC levies, PAYE, occupational safety and health requirements and employment contracts.

Further information about IRD requirements is provided in Appendix 4.

Setting Up a Bank Account

SFF recommends you set up a separate bank account for each project under the project’s name. All income and expenditure for the project should be processed through this account.

The bank will require you to complete the normal account opening documentation. If the project does not require an overdraft, no guarantees or security should be required.

The bank will require that at least two people sign each cheque drawn against the project account. The financial manager should sign each cheque, plus one other person. Projects are required to have three or four people able to sign cheques.

Legal Status

SFF project groups can operate as a:

  • non-profit group – most common and recommended; or
  • incorporated society – groups applying for additional funding from non-SFF sources may be required by these funders to acquire incorporated society status.

See Appendices 5–8 for more information on non-profit groups and incorporated societies.

Contact for Enquiries

Fund Administrator
Sustainable Farming Fund
Ministry of Agriculture and Forestry
PO Box 2526
Wellington

Tel: 0800 100 087
Fax: 04 894 0741
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