Micro Assessment

What is a Micro Assessment? An assessment of the adequacy of the implementing partners financial management systems and internal controlsAn assessment of the adequacy of the implementing partners financial management systems and internal controls Occurs once per programming cycle (guidelines – Annex III, TN 1, 3 & 5)Occurs once per programming cycle (guidelines – Annex III, TN 1, 3 & 5) Threshold: US$100,000 collectively from UN Agencies per yearThreshold: US$100,000 collectively from UN Agencies per year

Why do it? Development objective: Development objective: Establish strengths & weaknesses of financial management practices of IPEstablish strengths & weaknesses of financial management practices of IP Identify possible areas for capacity developmentIdentify possible areas for capacity development Management objective: Management objective: Assist in identifying the most suitable CTMAssist in identifying the most suitable CTM Guides the decision on frequency and scope of assurance activitiesGuides the decision on frequency and scope of assurance activities Provides a risk rating, but… Provides a risk rating, but… does not pass or fail does not pass or fail

How to do it? Micro Assessment Checklists Checklist A (simple assessment)Checklist A (simple assessment) Worked with the partner for past 2 years Worked with the partner for past 2 years Good internal controls Good internal controls Timely financial reporting Timely financial reporting Same management Same management No major incidents No major incidents Same programme type Same programme type Volume expected to remain the same Volume expected to remain the same

Micro Assessment Checklists Checklist B (detailed assessment)Checklist B (detailed assessment) Conducted by qualified public accounting firmConducted by qualified public accounting firm A single firm may assess multiple partners, for:A single firm may assess multiple partners, for: Status of partner Status of partner Funds flow Funds flow Staffing Staffing Accounting policies and procedures Accounting policies and procedures Internal audit Internal audit External audit External audit Reporting and monitoring Reporting and monitoring Information systems Information systems

Micro Assessment Report Not more than 4 pages, and including: Overall risk rating (high or low risk)Overall risk rating (high or low risk) Summary of methodology usedSummary of methodology used Description of capacity in each areaDescription of capacity in each area Description of risksDescription of risks Recommendations for mitigating risksRecommendations for mitigating risks Completed checklistCompleted checklist Estimated budget per assessment – $5,000Estimated budget per assessment – $5,000 Cost may be shared among agenciesCost may be shared among agencies