Hact Challenges and Responses

8/18/2019 Hact Challenges and Responses

1/6

HARMONIZED APPROACH TO CASH TRANSFERS (HACT)

RESPONSES TO KEY IMPLEMENTATION CHALLENGES

Backgroun

Adoption of the new harmonized approach by UNDP, UNICEF, UNFPA and WFP was a further step inimpementin! the "ome Decaration on #armonization and Paris Decaration on Aid Effecti$eness, whichca for a coser ai!nment of de$eopment aid with nationa priorities and needs% &he approach aowsefforts to focus more on stren!thenin! nationa capacities for mana!ement and accountabiity, with a $iewto !raduay shift to utiizin! nationa systems% It is en$isa!ed that #AC& wi hep A!encies shape their capacity de$eopment inter$entions and pro$ide support to new aid modaities%

Foowin! the e'periences of the first two years of impementation of #AC&, the end of ())* and end of +eptember ()) status updates indicated a number of chaen!es that seem to ha$e been faced bycountries% &his note summarizes some of the -ey chaen!es based on the impementation update pus

other feedbac- recei$ed from countries, "e!iona Director.s &eams and #AC& re!iona and country foca points% &he note pro$ides responses to these -ey chaen!es from the #AC& Ad$isory Committee andother coea!ues in #/s who ed the de$eopment of #AC& framewor- and are o$erseein! itsimpementation% &he ran!e of concerns has narrowed si!nificanty0 howe$er, there are se$era concernswhich re1uire additiona carifications% 2ne of the -ey responses is that there seems to be a need for impro$ed communication on the rationae for adoptin! #AC& both within the a!encies and to nationa partners%

Agr!!"!n# o$ #%! Go&!rn"!n#

' Na#ona* +ar#n!r, ar! r!*uc#an# #o acc!+# HACT a, an o&!ra** a++roac%

In some countries this issue is primariy a communications probem% It is essentia that a a!encies thatha$e adopted #AC&, promote it coecti$ey startin! with senior e$e nationa partners% It shoud beemphasized that #AC& has been de$eoped in response to the Paris Decaration on Aid Effecti$eness witha focus on promotin! the use of nationa systems% In order to assist the UN Country &eams a note 3&a-in!to country partners about #AC&. has been de$eoped, incuded in the wor-boo- and a$aiabe on theUND4 web5site 6http788www%und!%or!8inde'%cfm9P:(;; <

It needs to be stressed that7

o #AC& is intended in the medium term to ead to7 6i< reduction in costs for the nationa partners

and UN a!encies0 6ii< increasin! use of nationa systems0 and 6iii< contribute to buidin! the financiamana!ement capacity of nationa partners%

o In the e$ent that nationa !o$ernments are reuctant to accept #AC&, it shoud be made cear to

nationa partners that it is mandatory for UNDP, UNICEF, UNFPA and WFP to use the #AC& approachin cash transfers to nationa partners%

o "e!iona Directors. &eams can be re1uested to pro$ide support, if re1uired, in con$incin! hi!h5

e$e !o$ernment officias%

1

http://www.undg.org/index.cfm?P=255http://www.undg.org/index.cfm?P=255


2/6

- In ,o"! ca,!, go&!rn"!n#, %a&! r!.u!,#! *!ga* ocu"!n#, a++ro&ng HACT

#AC& was appro$ed on =) December ())> by the United Nations De$eopment 4roup% &hereafter,UNDP, UNFPA, UNICEF and WFP reported to their respecti$e E'ecuti$e ?oards as we as at the @ointeetin! of the ?oards% #AC& was aunched by the E'ecuti$e Directors of UNDP, UNFPA, UNICEF andWFP in Apri ()); and is mandatory for these a!encies% #AC& did not re1uire specific appro$a of the

E'ecuti$e ?oards because it represented a chan!e to poicies and procedures ony and not to anye!isati$e authority%

&he common operationa framewor- for transferrin! cash to !o$ernment and non5!o$ernmentImpementin! Partners was adopted by UNDP, UNICEF, UNFPA and WFP pursuant to the UN 4eneraAssemby "esoution ;B8()= on the &riennia poicy re$iew of operationa acti$ities for de$eopment of the United Nations system% Its impementation wi si!nificanty reduce transaction costs and essen the burden that the mutipicity of UN procedures and rues creates for its partners%

&he adoption of the new #armonized Approach to Cash &ransfers was a further step in impementin! the"ome Decaration on #armonization and Paris Decaration on Aid Effecti$eness, which ca for a coser ai!nment of de$eopment aid with nationa priorities and needs%

&he UN 4enera Assemby "esoution B(8() on the &riennia comprehensi$e poicy re$iew of operationa acti$ities for de$eopment of the United Nations system 6&CP" ())*< encoura!ed theor!anizations of the United Nations de$eopment system to further promote and e'pand the harmonizedapproach to cash transfers initiati$e%

/ 0,! o$ HACT 12 S+!ca*3! Ag!nc!,

+peciaized a!encies that are members of UND4 and to whom #AC& may appy ha$e aso a!reed to

adopt #AC& at the UND4 meetin! on (> Apri ()) =% +o far, FA2, #A?I&A&, UNE+C2, UN2P+ and

UNID2 confirmed that they wi use #AC& where appicabe to their operations in 3Dei$erin! as 2ne.

piots% I2 a!reed in principe but needs to conduct more detaied interna assessments before proceedin!0

UNCDF and 4AI +ecretariat are currenty e'porin! the possibiities of usin! #AC&%

4 A,,!,,"!n#, ar! ,o"!#"!, &!5! a, n&a,&! an #oo co,#*2 6%!r! go&!rn"!n# +ar#n!r,

ar! #%! +rnc+a* con#r1u#or, o$ #%! $un,7 # , a*,o ,!!n a, 1!ng +ro1*!"a#c #o carr2 ou#

"cro a,,!,,"!n#

#AC& was intended to simpify and harmonize usin! a ris-5based approach% If !o$ernment a!reementcannot be ensured the option is to assume hi!h ris- and continue with procedures of e'penditure$erification and auditin! that come at hi!her transaction cost for the partner and usuay ac- the cruciacapacity de$eopment eement%

&he assessments aow to earn about the partners practices, systems, poicies and procedures with a $iewof increasin!y usin! these% Capacity de$eopment inter$entions cannot be tar!eted where there is noassessment%

1 &he minutes of the UND4 meetin! that too- the decision on adoption of #AC& by +peciaized A!encies are a$aiabe at

http788www%und!%or!8docs8)B)8(>ApriUND4minutesFinaDraft%doc

2

http://www.undg.org/docs/9060/24April_UNDG_minutes_FinalDraft.dochttp://www.undg.org/docs/9060/24April_UNDG_minutes_FinalDraft.doc


3/6

#AC& does not reduce the need for the UN a!encies to ensure their fiduciary responsibiity for the fundstransferred by them to impementin! partners% Each a!ency wi determine the cash transfer modaitiesand pan assurance acti$ities based on assumption of hi!h ris-, the amount of cash transferred and thehistory of pre$ious cooperation% In the e$ent that assessments cannot be carried out, the assurance andaudit acti$ities woud need to be panned as for hi!h ris- partners%In the e$ent that an assessment of a nationa partner has been carried out by a donor a!ency or mutiatera

institution and this is deemed to be acceptabe for the purposes of #AC&, then it is not necessary for theUN a!encies to conduct a micro assessment of that partner%

If the +upreme Audit Institution was confirmed throu!h a macro assessment to ha$e ade1uate capacity,the findin!s of their audit coud substitute in part or in fu for a micro assessment% Any maGor issues notco$ered by the audit woud then ha$e to be co$ered in a shortened or truncated micro assessment% At thesame time on!5term arran!ements with the auditors wi aso enabe the UN a!encies to reduce the costs%

In the e$ent that there are no cash transfers bein! made to nationa partners then the a!encies do not ha$eto conduct the steps under #AC& such as a macro and micro assessment and use of the FACE form%#AC& woud not be appicabe and shoud be reported as such%

8 T%!r! , a*,o r!,,#anc! o$ #%! c!n#ra* go&!rn"!n# coun#!r+ar#, #o 1! ,u19!c# #o au# ana,,uranc! n ca,!, 5%!n #%!2 !*!ga#!:,u1con#rac# #o *o5!r *!&!* !n##!, (n #%, ca,! #%!

!#%!r #%! *o5!r *!&!* ,%ou* 1! a,,!,,! or #%! o&!r,g%# ca+ac#2 a# c!n#ra* *!&!* ,%ou* 1!

a,,!,,!)

&he #AC& framewor- specifies that micro assessments are conducted for the Impementin! Partners thatrecei$e or are e'pected to recei$e cash transfers abo$e U+H =)),))) combined from a A!encies, or asocay a!reed amon! the A!encies% &he entity of the impementin! partner that si!ns the AWP is the onethat wi be micro5assessed% It wi be recei$in! cash transfers from the UN a!encies and wi beresponsibe for submittin! FACE form wi be subGect to audit and assurance acti$ities and shoud ensure proper reportin! from the ower e$e entities in case of dee!ation8subcontractin!%

; 0NDP ,o"!#"!, "anag!, #, +ro9!c#, #%roug% Pro9!c# I"+*!"!n#a#on 0n#, (PI0) In"an2 n,#anc!, #%! go&!rn"!n# nca#! #%a# #%! "cro a,,!,,"!n# ,%ou* 1! *"#! #o #%!

PI07 no# #%! r!,# o$ #%! un#, o$ #%! r!*!&an# "n,#r2

&o address this matter a functiona re$iew shoud be carried out of the functions what and which unitcarries out the wor- and underta-es specific actions% If a the functions are carried out by the PIU, thenthere shoud ony be a dedicated assessment of the PIU% 2n the other hand, if the functiona re$iewindicates that functions are partiay carried out by the PIU and the ree$ant department of the ministries,then the PIU and the ree$ant departments shoud be subGect to an assessment%

+ince the issue is specificay reated to UNDP further !uidance on it shoud be sou!ht throu!h UNDP#/ and "e!iona Foca Points% &he ists are a$aiabe at7

http788www%und!%or!8docs8=)=8#AC&5#/s5A!ency5Foca5Points56);%(%())B8"E4I2NA5"E+2U"CE5&EA+5on5#AC&56);%)*%())


4/6

UND4 #AC& framewor- to a$oid mutipe interpretations and parae reference !uides% &hus far, it has been fet by that the #AC& framewor- shoud pro$ide the re1uisite !uidance%

Co""#"!n# o$ #%! 0N ,#a$$ an H!a, o$ Ag!nc!, an HACT co"+*anc!

= T%!r! , na!.ua#! co""#"!n# o$ #%! 0N ,#a$$ an H!a, o$ Ag!nc!,

#AC& is not optiona% &he primary responsibiity and accountabiity for the impementation of #AC& asa part of Common Country Pro!rammin! Process ies with the "esident Coordinators and respecti$ea!ency heads at the country e$e, reportin! to the respecti$e "e!iona Directors and the "e!ionaDirector.s &eam%

&hrou!h country by country foow up the reasons for inade1uate commitment of the UN +taff and #eadsof A!encies in #AC& impementation wi be identified and addressed by the "D& mechanisms%

> So"! coun#r!, %a&! no#! un!&!n an ncon,,#!n# "+*!"!n#a#on acro,, #%! ag!nc!,

Une$en impementation is an issue that needs to be addressed by 6i< A!encies at the country e$e0 6ii<

"e!iona Director.s &eams0 and 6iii< A!encies at the #/s e$e%

&he !oba update of #AC& impementation is a$aiabe on the UND4 web5site% &he update pro$idesinformation per country per a!ency% Country specific inputs ha$e been made a$aiabe to the a!encies andthe "e!iona Directors &eams who wi be foowin! up on impementation on a country5by5country basisto identify and address the reasons for inconsistent impementation%

'? Po,#+on!"!n#: !$!rra* o$ HACT !a*n!

+o far postponement8deferras ha$e been appro$ed in crisis countries as we as in cases where the pro!ramme cyces ha$e been e'tended or ne!otiations with !o$ernment ha$e been deayed due to interna poitica chan!es% &he decision on each case is ta-en by the "e!iona Directors &eams based on the

Gustification pro$ided in the Goint re1uest from the UNC&s on #AC& postponement% UNC&s are asore1uested to pro$ide re$ised wor-pans indicatin! the new e'pected date for fu #AC& impementation%

It is noted that there ha$e been a number of deferras% +ince most deferras are ony for one year andnotin! that this is a new too under impementation, it is e'pected that future deferras wi be on a hi!hye'ceptiona basis%

'' Conuc#ng "cro@a,,!,,"!n#, n coun#r!, 5#% a ,gn$can# nu"1!r o$ "+*!"!n#ng

+ar#n!r, r!c!&ng ca,% #ran,$!r, o$ 0S '??7??? a 2!ar an "or! , an !#r!"!*2 #"!@

con,u"ng an !+!n,&! !!rc,! T%, cau,!, r!*uc#anc! 12 #%! coun#r2 #!a", #o o #

#AC& framewor- aows chan!in! the threshod for micro5assessments if ocay a!reed by the a!encies%

If the a!ency6s< decides to appy a hi!her threshod for indi$idua partner or the a!encies a!ree to do sofor the shared partners they shoud see- the appro$a of the Comptroer6s< of the a!ency6s< concerned%

Ca+ac#2 1u*ng

'- A# #%, ,#ag! #%!r! , *##*! !&!nc! #%a# #%! +o#!n#a* o$ HACT a, a ca+ac#2 !&!*o+"!n#

a++roac% , 1!ng !+*o#! Ca+ac#2 !&!*o+"!n# a,+!c#, o$ HACT %a&! con,,#!n#*2

r!c!&! *!,, a##!n#on 12 coun#r2 #!a",7 5%c% "a2 1! u! #o #"! con,#ran#,7 +!rc!&!

*ack o$ "ana#! an +ror#2 $or an ag!nc2 a, 5!** a, *ack o$ r!*!&an# ca+ac#!, n Ag!nc!,

4


5/6

Capacity de$eopment is a centra part of #AC& and of the wor- any UN a!ency% Without identifyin!capacity !aps and pannin! to address them either throu!h bud!etin! for assistance by the UNC& or byfaciitatin! support throu!h other de$eopment partners ris- mana!ement cannot truy !o beyond ris- assessment%

It is ac-nowed!ed that a a!encies ha$e to focus their resources on their -ey thematic areas of

de$eopment, but financia mana!ement capacity shoud be seen as a cross5cuttin! underyin! capacitynecessary for any impementin! partner to effecti$ey wor- in the areas that matter most to the a!encies%ore detaied !uidance on how to support financia mana!ement capacity shoud be sou!ht from thea!encies directy, based on the commitment to underta-e or faciitate such capacity de$eopment in the#AC& Framewor-%

#AC& impementation re1uires stren!thenin! capacity both of the impementin! partners and UN staff in bud!etin!, pro!rammin! etc%

Tranng an *!arnng

'/ Lack o$ #ran! ,#a$$ a# #%! coun#r2 *!&!*

#AC& trainin! has been conducted at the country and re!iona e$e% 2$er >J) country foca points in=J) countries ha$e been oriented% Additiona trainin! of trainers was pro$ided for Eastern and +outhernAfrica% As a maGor outcome of these trainin! of staff possessin! the fu ran!e of competencies necessaryto faciitate #AC& trainin!s and support successfu impementation of #AC& across the re!ion has beencreated% &he first recourse shoud be the trained staff at country and re!iona e$e% &he materias of the #AC& &o& are a$aiabe for usin! in #AC& trainin!s by other UNC&s athttp788www%und!%or!8inde'%cfm9P:(;B

At the same time "e!iona Foca Points are a$aiabe to pro$ide support%

'4 Progra""! ,#a$$ %a&! no# 1!!n #ran! an %a&! no# #ak!n on #%!r r!,+on,1*#!, un!rHACT a# #%! coun#r2 *!&!*

&he approach re1uires in$o$ement of both pro!ramme and operations staff% +taff trained shoud brief their pro!ramme coea!ues and "epresentati$es ha$e to ensure, the pro!ramme staff incorporate #AC&in their re!uar pro!rammin! processes% &he re$ised E5earnin! Kit on the pro!rammin! process6UN++C< contains a #AC& modue as part of the pro!rammin! process%

Cr#!ra $or HACT co"+*anc!

'8 0NCT,- can 1! con,!r! HACT co"+*an# 5%!n

acro assessment has been competed or hi!h ris- has been assumed A partners recei$in! =)) ))) U+D 6or imit set by the a!encies at the country e$e< coecti$ey

from UNDP, UNFPA, UNICEF and WFP 6and any other a!encies that ha$e a!reed to adopt#AC& in the country< ha$e been micro assessed or hi!h ris- has been assumed for impementin! partners where micro assessment coudn.t be competed

2 UNC& for the purposes of this document ony refers to a!encies that ha$e a!reed to adopt #AC& in the country,

currenty these are UNDP, UNICEF, UNFPA and WFP but other a!encies or or!anizations that ha$e a!reed to adopt#AC& woud be incuded%

5

http://www.undg.org/index.cfm?P=256http://www.undg.org/index.cfm?P=256http://www.undg.org/index.cfm?P=256


6/6

&here is a!reement on #AC& impementation with the !o$ernment either in the CPAPs or

throu!h e'chan!e of etters Assurance and audit pan of impementin! partners has been de$eoped and impementation

mechanisms a!reed upon

+ince #AC& is a harmonized approach amon!st a a!encies in the country, if any of them does not meet

the abo$e criteria, the country cannot be considered #AC& compiant%

&he "esident Coordinator aon! with the "epresentati$es of the indi$idua a!encies certifies that theabo$e steps are compete and that the UNC& is #AC& compiant% &he "esident Coordinator shoud asoinform the ree$ant "e!iona Directors. &eam 6with a copy to De$eopment 2perations Coordination2ffice< once the UNC& becomes #AC& compiant%

Au# an A,,uranc!

'; T%!r! ar! ongong conc!rn, #%a# ,2,#!", o$ $$!r!n# ag!nc!, ar! no# 2!# a*gn! 5#% #%!

HACT +roc!ur!, In +ar#cu*ar7 #%!r! a++!ar, #o 1! con$*c#ng guanc! aroun ag!nc2

au# r!.ur!"!n#, #%a# con#rac#, #%! !,#a1*,%! #%r!,%o*, un!r HACT

2nce the UNC& becomes #AC& compiant 6meets a criteria isted under section =; abo$e< #AC&!uideines on audit appy% Unti UNC& becomes #AC& compiant a!ency specific !uideines appy%

LLL

#AC& Ad$isory CommitteeDecember ())

6

Documents

Hact Challenges and Responses