RESOURCE TRANSFER MODALITIES: AN OVERVIEW

1
UNDG ExCom
Harmonized Approach to Cash Transfers to
Implementing Partners
2
Objectives of the new approach

• Simplify procedures
• Reduce transaction costs
• Promote reliance on national systems
• Focus more on capacity development
• Increase overall effectiveness of UN operations
  in the field

3
Risk Management vs. System of Controls

• Assessment of financial management systems and
  capacities
• Choice of an appropriate cash transfer modality
  and procedures
• Assurance activities

4
Determination of risks

• Macro assessment
• a review of existing assessments of the national
  public financial management system
• once per cycle, preferably during the CCA
  preparation

5
Determination of risks (cont.)

• Micro assessment
• assessment of the adequacy of the implementing
  partners financial management systems and
  internal controls
• once per programming cycle
• threshold US 100,000 collectively from UN
  Agencies

6
Assessments Objectives

• Development
• Govt to identify strengths weaknesses in the
  Public Finance Mgmt system and practices
• Identify/coordinate areas for capacity building
• Management
• Assist in the identification of appropriate cash
  transfer procedures

7
Assessments Basic Principles

• Not meant to impose conditionality
• No formal rating
• Contribute to capacity development
• Government should be part of the process

8
Assessments Basic Principles (cont.)

• Existing assessments to be used
• If macro assessment not available, UN encourages
  Government to initiate one
• UNCT jointly interprets available info with
  experts assistance

9
Assurance Activities

• Assurance Activities depends on the risk and
  amount of cash transfers
• Invest more in Assurance Activities for weaker
  partners

10
Assurance Activities include

• Periodic on-site reviews spot-checks and special
  audits
• Programmatic monitoring of activities and
  results
• Scheduled Audits

11
Funding Authorization and Certificate of
Expenditure Form (FACE)

• New tool for all ex-com agencies
• Used to
• Certify expenditures
• Disburse funds for the next period
• Reprogramming undisbursed funds
• No need for back-up documentation (invoices,
  contracts and vouchers)

12
Roll-out who, when, how?

• Mandatory for all programme countries
• Effective date is linked to the beginning of the
  harmonized cycle
• Major roll-out event regional/sub-regional
  workshops for 1 operations and 1 programme staff
  per roll-out country

13
Roll-out (cont.)

• Workshops in 2005 for 2004, 2005 and 2005
  roll-out countries
• Follow-up country events by the staff trained at
  the regional workshops
• Support system agency-specific
• Learning materials www.undg.org