Harmonized Approach for Cash Transfer

1. Harmonized Approach for Cash Transfer QUICK GUIDE

2. Agenda • What is HACT? • Why HACT? • Assessments • Cash transfer modalities • Assurance activities • FACE • Who does this affect in what way? • Next Steps • Implementation challenges • Questions

3. What is HACT • HACT – Harmonized Approach to Cash Transfer • New method of transferring cash to government + non- government implementing partners • UNDG – ExCom agencies (UNDP, UNFPA, UNICEF and WFP) • Paris Declaration for Aid Effectiveness

4. Why HACT? • Decrease complexity of procedures • Reduce transaction burden and costs • Help improve capacity of national partners to manage aid • Uniform method across all agencies

5. Assessments • Risk management approach - NOT a form of conditionality! • Macro Assessment • National public financial management (PFM) system • Micro Assessment • Partner’s financial management system • Identify strengths + weaknesses in financial management systems at national and partner level

6. Macro Assessments • WHY? • Understand strengths /weaknesses of financial environment • WHO? • NOT the agency • Open and transparent review of existing assessments • If lack of data: agency advocates for assessment with GoK partners/WB

7. Macro Assessments (Cont…) • WHEN? • Once /programming cycle (during CCA) • Agency discretion • WHAT? • NO grade or pass/fail • Areas to look at: • National budget • National compliance with public sector accounting • Control of cash and assets • Audit and oversight • Systems and staff

8. Micro Assessment • WHY? • Capacity development • Financial management • WHEN? • Once /programming cycle (before AWP) • Total funds transferred > 100,000 USD • Agency discretion

9. Micro Assessment (Cont…) • WHO? • Staff or consultant/consulting firm • WHAT? • Method: 2 levels • Checklist A • If high risk or missing information, checklist B • Reviews accounting, reporting, auditing and internal control systems

10. Cash Transfer Modalities • Request funds through FACE form • 4 modalities • Direct cash transfer • Direct payment • Reimbursement • Direct agency implementation

11. Assurance Activities • WHY? • Expenditures are for the purpose intended • WHAT? • On site reviews (spot checks- new, special audits) • Scheduled audits • Programmatic assurances • Audit costs are charged to the programme budget • Government auditors?

12. FACE • FACE – Funding Authorization and Certificate of Expenditures • ONE form to: • Request funding authorization • Report expenditures

13. FACE Form

14. How Does this Affect Who? • RR/RC • General awareness of HACT • Feedback problems to Regional/ HQ level • Programme Lead • Awareness of HACT + FACE • Assurance activities • Finance Team • Technical Details of HACT + FACE

15. Next Steps • Congrats HACT Task Force !!! • Implementation Work Plan • Orientation to UNDP/RR/RC/UNCT • GoK • Macro and Micro assessments • Orientation + training to partners • Implementation of HACT + FACE

16. Implementation Challenges • GoK/ partners reluctant to use HACT • Macro assessment – no previous assessments • Micro assessment is time consuming/costly • UNDP staff capacity • Lack of training at partner level • Assurance activities – lack of guidance, co-ordination, further strengthening of activities • Working with consultants and audit firms

17. Questions THANK YOU !!!