Harmonized Approach to Cash Transfers to Implementing Partners UNDG ExCom

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

Risk Management vs. System of Controls Assessment of financial management systems and capacities Choice of an appropriate cash transfer modality and procedures; Assurance activities

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

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

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

Assessments: Basic Principles Not meant to impose conditionality No formal rating Contribute to capacity development Government should be part of the process

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

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

Assurance Activities include: Periodic on-site reviews: spot-checks and special audits; Programmatic monitoring of activities and results; Scheduled Audits

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)

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

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: