1. Summary and Rationale
Pursuant
to the UN General Assembly Resolution 56/201 on the triennial policy review of
operational activities for development of the United Nations system, UNDP,
UNICEF, UNFPA and WFP (UNDG ExCom Agencies) adopted a common operational framework for transferring cash
to government and non-government Implementing Partners. Its implementation will significantly reduce
transaction costs and lessen the burden that the multiplicity of UN procedures
and rules creates for its partners.
Implementing
Partners will use common forms and procedures for requesting cash and reporting
on its utilization. Agencies
will adopt a risk management approach and will select specific procedures for
transferring cash on the basis of the joint assessment of the financial
management capacity of Implementing Partners. They will also agree on and
coordinate activities to maintain assurance over the utilization of the
provided cash. Such jointly conducted assessments and assurance activities will
further contribute to the reduction of costs.
The adoption of the new harmonized approach is
a further step in implementing the Rome Declaration on Harmonization
and Paris Declaration on Aid Effectiveness, which call for a closer alignment
of development aid with national priorities and needs. The approach allows
efforts to focus more on strengthening national capacities for management and
accountability, with a view to gradually shift to utilizing national systems.
It will also help Agencies shape their capacity development interventions and
provide support to new aid modalities.
In preparing the Framework relevant
recommendations and good practices of OECD/Development Assistance Committee
have been considered. It will be rolled out in a
phased manner.
***
Four
cash transfer modalities are available to Agencies, within the frameworks of
programme content and operational agreements described in the Country Programme
Actions Plans (CPAPs):
·
Direct cash transfers to Implementing Partners, for
obligations and expenditures to be made by them in support of activities agreed
in annual work plans (AWPs);
·
Direct payments to vendors and other third parties,
for obligations incurred by the Implementing Partner in support of activities
agreed in AWPs;
·
Reimbursement to Implementing Partners for
obligations made and expenditure incurred by them in support of activities
agreed in AWPs;
·
Direct agency implementation through
which the Agency makes obligations and incurs expenditure in support of
activities agreed in AWPs.
It is desirable
that Agencies agree on a preferred common modality for each Implementing Partner, but each Agency may choose the most appropriate modality for specific
programmes and Implementing Partners.
Follow the links below to get more information
- HACT Guidelines
- What you need to know about the Framework for Cash Transfers to Implementing Partners
- Your Quick Guide to the Harmonized Approach to Cash Transfers to Implementing Partners