GENERAL OFFICE & PROJECT CLOSING GUIDELINES

The closing of an office or project can be the result of numerous circumstances. The Country Manager should be responsible for overseeing the day-to-day in-country close out and for assuring that all steps are carried out appropriately, and that the proper coordination has occurred with the senior staff of the organization (e.g. Vice President of Programs, Vice President of Operations and Chief Financial Officer, Area/Region Director, Director of Compliance, Internal Auditor and the appropriate staff in Grants and Contracts, Finance, Technology, and Human Resources) at Headquarters (HQ). In some instances a pre-closing visit by representatives from HQ, and the Units listed above may be in order.

A checklist that summarizes all office/project closing activities listed in this document is provided (Exhibit 1: Office Closing Timeline as excel and as html).
Some of the most important activities that must be undertaken related to closing an office/project are:

Determining Necessity of an Office Closure

Because of the investments made, and the staff and financial repercussions, the recommendation to close an office is one that should be discussed among senior field and HQ staff.
Reasons for closing an office
Several circumstances can lead to the decision to close an office, including (but not limited to):

Often, the discussion about closing an office is initiated when funding is threatened, such as when a major donor announces a change in priorities and that funding will be drastically reduced or will cease as of a certain date; these procedures are written for the cases when the funding reduction or the contractual project end is the cause of the office closing.

NOTE: Reduced funding does not automatically mean that an office will close. However, it does mean that the Country Manager and appropriate staff need to initiate discussions about contingency plans and/or likelihood that the office can continue in light of funding changes. These preliminary discussions should be initiated by the Country Manager, and should include key organization management staff such as the Area/Region Director, Vice President of Programs and the Vice President of Operations and Chief Financial Officer.

A decision to close an office means that the office will physically close. Premises will be vacated and the lease terminated; all program activities, utility, and support services will come to an end; all assets will be disposed of; and all staff will be terminated or transferred to another program. The President of the organization should inform the organization’s Board of Trustees of all office closings. To help ensure compliance, Internal Audit and the Compliance Unit should be informed once the process of closing the office or project is initiated.

If a decision is made to keep certain staff, or to continue some program activities in the country, the distinction must be made that this is not a continuation of the current program. The scope of the activities that will be conducted would be different from that in the current program and would be funded by a different source.

To summarize, the suggested key responsibilities of staff members in preparing for the decision-making around closing an office are as follows:

Initiating discussions about office close-out
The Country Manager and the Area/Region Director should be responsible for initiating the discussions with the appropriate senior staff (e.g. Vice President Programs) concerning plans for closing the office.

Financial analysis and close-out budget
The Country Manager should be responsible for contacting the finance team and initiating plans to analyze the budget, the funds available, and pull together the timeline projecting how long the office can realistically stay open, based on available funds. This timeline and budget should be reviewed by staff such as the Country Manager, the Area/Region Director, Vice President of Operations and Chief Financial Officer, and the Controller.

In case of insufficient funding, the Country Manager should contact appropriate staff at HQ for prior approval for additional funding to cover the deficit (if funds are available). If the insufficient funding is a result of over-spending a complete report, including an analysis of budget versus actual spending, explanations for line item variances and a complete budget for close-out of the office or project should be prepared by the Country Manager and the in-country finance staff and presented to the appropriate staff at HQ.
The proposal to close the office, with budget and timeline for projected closing; or (b) a proposal to keep the office opening, again with a budget and request for special funding for maintaining the office should be reviewed by the appropriate staff and a decision made by the senior management. Once the decision has been made key staff should be informed including the potential members of the closing team, Internal Audit and the Compliance Department.

If a decision is made to close an office the President should be responsible for informing the Board of Trustees.

Confidentiality
Some of the steps involved in managing an office or project closing will at times require the use and communication of sensitive and confidential information. All staff who are involved in the process and who have access to such information are reminded that they are obliged to treat such information with discretion and must take all precautions to maintain confidentiality. The closing of an office or project does not absolve any staff member of this obligation.