I I - part - usaid

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(1) AID and the RTG will, agree on appropriate
maximum costs for each input package, and these will
be documented in Project implementation Letters.
(2 The RTG will finance all costs initially
and then seek reimbursement from AID of actual costs up to
agreed maximums. (For water resource improvements, only
half of these costs will be reimbursed by AID).
direct payment.
(3) AID will reimburse the RTG through a
Du-&ng the first year of implementation AID
will consider advancing funds for certain components, but
it -s expected that during subsequent years the MOAC will
be ab].e to budget adequate funds to directly pay for most
local cost components. In some cases, i.e. for local
studies or othur secv.tces it may be simpler and more
effective to directly disburse funds under the AID assistance,
and in these instai*ces direct payment procedures will be
utriized where appzopriate.
d. Budget ALrangemenrs
It is expected that th.s Project will follow
the lead of the FY 80 Mae Chaem Project and utilize an
integrated budget procedure to program RTG funds. A single
NERAD budget will be approved each year for the Project
rather than several independent participating agency
budgets as has been the case in the past. This will allow
for easier review and approval through the RTG budget
process and will aiso provide for better control since the
MOAC's Office of the Under-SecretaLy will be responsible
for both the planning/'implementat:on and budgeting process.
It Is also expected that the Northeast Regional Office of
Agriculture (NEROA) will serve as a channel tot at least
some of tre funds under the Project tSee Part iV for
institutional arrangements).