MPTF Offi ce Manual 4. ENABLING for Fund Design ...

4. ENABLING FUND OPERATIONSo 4.1 Setting up a Fund code o 4.2 Access to Gatewayo 4.3 Setting up Gateway page and RBMo 4.4 Implementing Agency codes o 4.5 Setting up an MDTF1 vendor o 4.6 Testing the vendor process for National Fundso 4.7 Enabling crowd funding

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1. RESEARCH & DEVELOPMENT FOR NEW FUND SOLUTIONS

7. FUND CONTRIBUTIONS & DONOR REFUNDSo 7.1 Donor contribution agreements o 7.2 Setting up a Donor codeo 7.3 Donor commitmentso 7.4 Overdue donor commitmentso 7.5 Donor deposits & notificationo 7.6 Foreign exchange adjustmentso 7.7 Bank feeso 7.8 Refunds to donors

9. ALLOCATIONS, TRANSFERS & PO REFUNDSo 9.1 Holding the first Steering Committee meetingo 9.2 Risk management strategyo 9.3 Steering Committee allocationso 9.4 Setting up projects & budgetso 9.5 Fund Transfer Requests (i), (ii) and (iii)o 9.6 Refunds from Participating Organisations

10. REPORTINGo 10.1 Planning & communicationo 10.2 Narrative reportso 10.3 Managing UNEX datao 10.4 Statements of Sources & Uses of Fundso 10.5 Standard financial reports & tables

12. PROJECT & FUND CLOSUREo 12.1 Operational project closureo 12.2 Financial project closureo 12.3 Fund closureo 12.4 Transferring income to a new fund

11. PROJECT & FUND MONITORINGo 11.1 Project revisionso 11.2 Project expenditure monitoringo 11.3 Fraud disclosureo 11.4 Fund extension

FEEDBACK

8. AA FEES

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13. Portfolio Maintenance o 13.1 Managing portfolio pipeline

o 13.2 Delegation of Authority o 13.3 Managing deferred revenue

o 13.4 Inter-fund settlement o 13.5 Opening the new year o 13.6 Closing the Year-end

2. PRE-FEASIBILITY STUDY

3. ESTABLISHING THE FUND

5. MANAGING OUTSOURCED ADVISORY SERVICES

6. SUPPORT TO FUND PROMOTION & CAPITALISATION

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MPTF Offi ce Manual for Fund Design, Administration and Advisory ServicesVersion for ValidationJuly to December 2014

MPTF Offi ce Manual for Fund Design, Administration and Advisory Services

© 2014 United Nations Development Programme. All rights reserved. May not be reproduced by any means without written permission, except when citing and/or reposting a copy of this PDF document with appropriate attribution.

TABLE OF CONTENTS

GLOSSARY 4

ACRONYMS 6

INTRODUCTION 1

DESIGN1.0 RESEARCH & DEVELOPMENT FOR NEW FUND SOLUTIONS 32.0 PRE-FEASIBILITY STUDY 53.0 ESTABLISHING THE FUND 7

INITIATE4.0 SYSTEM PREREQUISITES FOR FUND OPERATIONS 11 - 4.1 Setting up a Fund code 13 - 4.2 Access to Gateway 15 - 4.3 Setting up a Gateway fund page including RBM 17 - 4.4 Setting up an Implementing Entity code 19 - 4.5 Setting up an MDTF1 vendor profi le 21 - 4.6 Testing the vendor process for National Funds 23 - 4.7 Enabling crowd funding 25

5.0 MANAGING OUTSOURCED ADVISORY SERVICES 276.0 SUPPORT TO FUND PROMOTION AND CAPITALIZATION 29

ADMINISTER7.0 FUND CONTRIBUTIONS AND DONOR REFUNDS 31 - 7.1 Donor contribution agreements 33 - 7.2 Setting up a donor code 37 - 7.3 Donor commitments 39 - 7.4 Overdue donor commitments 41 - 7.5 Donor deposits and notifi cations 43 - 7.6 Foreign exchange gains and losses 45 - 7.7 Bank fees 47 - 7.8 Refunds to donors 49

ADMINISTER (CONTINUED)8.0 MANAGING ADMINISTRATIVE AGENT FEES 519.0 ALLOCATIONS, TRANSFERS AND REFUNDS FROM POs 53 - 9.1 Holding the fi rst Steering Committee meeting 55 - 9.2 Fund risk management 57 - 9.3 Steering Committee allocations 59 - 9.4 Setting up projects and budgets 63 - 9.5(i) Fund transfer requests: authorizing review 65 - 9.5(ii), (iii) Fund transfer requests: approving and payment 67 - 9.6 Refunds from Participating Organizations 71

10.0 REPORTING 73 - 10.1 Planning and communication 75 - 10.2 Narrative reporting 77 - 10.3 Managing UNEX data 81 - 10.4 Statements of Sources and Uses of Funds 85 - 10.5 Standard fi nancial reports and tables 87

11.0 PROJECT AND FUND MONITORING 89 - 11.1 Project revisions 91 - 11.2 Project expenditure monitoring 95 - 11.3 Fraud disclosure 97 - 11.4 Fund extension 99

12.0 PROJECT AND FUND CLOSURE 101 - 12.1 Operational project closure 103 - 12.2 Financial project closure 105 - 12.3 Fund operational and fi nancial closure 107 - 12.4 Transferring income to another fund 109

13.0 Portfolio Management online only - 13.1 Managing MPTFO fund pipeline - 13.2 Delegation of Authority - 13.3 Managing deferred revenue - 13.4 Inter-fund settlement - 13.5 Opening the new-year - 13.6 Closing the year-end

Allocation: An amount approved by the Steering Committee for a project/programme.

Approved project/programme: A project or programme (including budget etc.) approved by the Steering Committee for fund allocation purposes.

Atlas codes: A series of codes ordered in a logical manner are tagged to each transaction to record, classify and report on fund transactions. These include: Implementing Agency codes (to track transfers to a specifi c Participating Organization), vendor codes (to set up an organization’s banking details for a fund transfer), general ledger codes (see Chart of Accounts) and fund codes (to separately identify each separate legal MDTF or JP).

Business Unit (BU): A generic term used to segregate organizations into separate ‘units’ so that business transactions can be recorded in the books of each entity.

Chart of Accounts: A list of the account codes used by the MPTF Offi ce to defi ne/record in the general ledger how fund monies have been received or spent. These codes are used to segregate fund income and expenditures into transparent categories to give interested parties a better understanding of a fund’s fi nances.

Contributor commitment: Amount(s) committed by a donor to a fund in a signed Standard Administrative Arrangement with the UNDP MPTF Offi ce in its capacity as the Administrative Agent. A commitment may be paid or pending payment.

Contributor deposit: Cash deposit received by the MPTF Offi ce for a fund from a contributor in accordance with a signed Standard Administrative Arrangement.

Cost recovery contract: An MOU or equivalent outlining the agreed-upon cost recovery methodology, rates, budget and total funds committed in exchange for fund advisory services.

Delivery rate: The percentage of funds that have been utilized, calculated by comparing expenditures reported by a Participating Organization against the ‘net funded amount’.

Fund administration: Negotiates, receives, invests, transfers, monitors and reports on fi nancial contributions and ensures a timely operational and fi nancial closure of the fund.

Fund administrator: Supports the design of the fund with the fund sponsor, supports its initiation with the fund Steering Committee and Technical Secretariat, and administers the fund.

Fund implementation: Prepares, co-fi nances, oversees the execution and evaluates the development impact of individual proposals supported by the fund.

Fund initiation: Establishes all policy, procedure and system prerequisites for the fund to promptly and effi ciently start its operations.

Fund operations: Mobilizes and allocates resources, and monitors and evaluates their development impact at the fund level.

Fund sponsor: The person or institution that champions the establishment of a fund to achieve transformative results.

Fund Steering Committee: Provides strategic direction to and oversight over the operations of the Fund from establishment to closure. .

Fund Technical Secretariat: Provides administrative and technical support to the fund Steering Committee.

Fund management: Comprises three set of activities: fund design, initiation and administration; fund operations; and fund implementation.

Fund design: Prepares the fund feasibility study, governance structure, and risk and result management systems.

General ledger: A segregated area within an accounting system where all fund transactions are recorded and can be summarized at each programme unit level (fund, theme, project) within a fi scal year.

GLJE: General ledger journal entry. A voucher used to record or adjust entries in the general ledger to refl ect the organization’s decisions or business activities undertaken.

Indirect support costs: A general cost that cannot be directly related to any particular programme or activity of the Participating Organizations. UNDG policy establishes a fi xed indirect cost rate of 7 percent of programmable costs.

Innovative fi nancing mechanisms: Comprises both innovative sourcing (mobilization of additional fi nancing from non-traditional sources) and innovative spending (non-traditional payment modalities to maximize the realization of opportunities such as outcome-based payments).

MDTF1 business unit: This separates UNDP-controlled resources from those it administers on behalf of a third party. MDTFs and JPs are funds held in trust by the MPTF Offi ce on behalf of the United Nations System, therefore a separate business unit (MDTF1) was established.

Glossary

Net funded amount: Amount transferred to a Participating Organization, less any refunds transferred back to the MPTF Offi ce by a Participating Organization.

Participating Organization: A United Nations organization or other intergovernmental organization that is an implementing partner in a fund, as represented by signing an MOU with the MPTF Offi ce for a particular fund.

Policy: A high-level principle that defi nes a course of action to determine decisions.

Process: Defi nes what needs to be done in action-oriented language and which roles (or functional levels) are involved.

Procedure: Defi nes how to perform a task that is usually being performed by a single role (i.e. not across levels or functions).

Project expenditure: The sum of expenses and/or expenditure reported by all Participating Organizations for a fund irrespective of which basis of accounting each Participating Organization follows for donor reporting.

Project fi nancial closure: A project or programme is considered fi nancially closed when all fi nancial obligations of an operationally completed project or programme have been settled and no further fi nancial charges may be incurred.

Project operational closure: A project or programme is considered operationally closed when all programmatic activities for which Participating Organization(s) received funding have been completed.

Project start date: Date of transfer of fi rst instalment from the MPTF Offi ce to the Participating Organization.

Risk: The product of the probability of a negative event occurring and the potential political, programmatic and/or fi nancial impact of such a negative event.

Risk management: The identifi cation, assessment and prioritization of risks followed by an agreed strategy and application of resources to minimize, monitor and control the probability and/or impact of negative events in order to maximize the realization of opportunities.

Theory of change: Articulates underlying assumptions of how and why change might happen as a result of an initiative.

Total approved budget: Represents the cumulative amount of allocations approved by the Steering Committee.

UNDP-MPTF Offi ce sub-unit: The MPTF Offi ce represents a UNDP sub-unit that provides Administrative Agent services to the United Nations System. Its offi ce revenues and expenses are therefore part of UNDP service provision and are recorded in the main UNDP ‘business unit’ (UNDP1) as part of UNDPs corporate results.

UNEX: An online system that enables Participating Organizations to upload their project expenses information and facilitates consolidation of information reported.

AA Administrative Agent

ACP Advisory Committee on Procurement

BP Business Process

BU Business Unit

CAR Central African Republic

CHF Common Humanitarian Fund

COA Chart of Accounts

DA Delegation Agreement

DaO Delivering as One

DEC Deputy Executive Coordinator

DMS Document Management System

DSRSG Deputy Special Representative of the Secretary-General

EC European Commission

EDN Earth Day Network

FA Finance Associate

FAM Fund Allocation Matrix

FAQs Frequently Asked Questions

FM Finance Manager

FMOG Fiduciary Management Oversight Group

FTR Fund Transfer Request

GBP British Pound Sterling

GID Group Id (contributor commitment)

GLJE General Ledger Journal Entry

GW Gateway

HC Humanitarian Coordinator

IA Implementing Agency

IATI International Aid Transparency Initiative

IOM International Organization for Migration

IPSAS International Public Sector Accounting Standards

IT Information Technology

JP Joint Programme

KPI Key Performance Indicator

LTA Long-Term Arrangement

M&E Monitoring & Evaluation

MDTF Multi-Donor Trust Fund

MOA Memorandum of Agreement

MOU Memorandum of Understanding

MPTF Offi ce Multi-Partner Trust Fund Offi ce

NGO Non-Governmental Organization

OA Operations Associate

OCHA Offi ce for the Coordination of Humanitarian Aff airs

OFRM Offi ce of Finance and Resource Management

OIC Offi cer in Charge

OIST Offi ce of Information Systems and Technology

PA Portfolio Assistant

PAC Product Appraisal Committee

PM Portfolio Manager

PO Participating Organization

POPP Programme and Operations Policies and Procedures

PUNO Participating United Nations Organisation

R&D Research & Development

RBM Results-Based Management

RC Resident Coordinator

RMS Risk Management Strategy

RMU Risk Management Unit

ROP Rules of Procedure

SAA Standard Administrative Arrangement

SC Steering Committee

SCA Standard Contribution Agreement

SDN Specially Designated Nationals

SOP Standard Operating Procedures

SUOF Statement of Sources and Uses of Funds

Acronyms

TOR Terms of Reference

TS Technical Secretariat

UN United Nations

UNDG United Nations Development Group

UNDP United Nations Development Programme

UNFIP United Nations Fund for International Partnerships

UNFIP United Nations Fund for International Partnerships

UNGM United Nations Global Marketplace

UNORE United Nations Offi cial Rate of Exchange

UNRIAS Representatives of Internal Audit Services of the United Nations Organisations and Multilateral Financial Institutions

US United States

USD United States Dollars

1

The UNDP Multi-Partner Trust Fund Offi ce (MPTF Offi ce) is a United Nations centre of expertise on pooled fi nancing mechanisms. It supports development eff ectiveness and United Nations coordination through the effi cient, accountable and transparent design and administration of innovative pooled fi nancing mechanisms.

OBJECTIVE OF THE MPTF OFFICE MANUALFund management comprises three distinct activities:

• fund design, initiation and administration;• fund operations (allocation of resources);• fund implementation

A key challenge in fund management is ensuring coherence and consistency across these three diff erent functions as well as smooth collaboration among the groups of stakeholders directly involved in these three functions.

This manual codifi es the MPTF Offi ce’s business processes to provide fund design, fund administration and advisory services for fund operations to the United Nations System and developing countries. The fi rst objective of this manual is to facilitate seamless workfl ows across all partners. Secondly, the manual is intended to provide a common learning platform to continuously streamline, supplement and enhance work processes based on experience. Thirdly, the manual will play a key role in onboarding new staff , especially those working full time on fund administration and fund operations issues. Finally, the manual aims to reinforce the accountability of the MPTF Offi ce as the largest United Nations fund administrator to stakeholders.

MPTF OFFICE SERVICE PLATFORMThe benefi ts and drawbacks of pooled funding mechanisms, and thus their attractiveness to fi nancial contributors, implementing entities and partner countries, are inherently tied to the quality of fund design and management. For example, a pooled funding mechanism potentially allows for greater aid coordination and alignment, increased funding predictability, better risk management and lower fund management

• Prepare Operational Manual and initiate fund operations• Provide administrative support to Steering Committee• Prepare resource mobilization strategy and investment plan• Manage accreditation process for implementing entities• Appraise project proposals and manage public communications• Monitor and evaluate portfolio performance and advise Steering Committee on

remedial actions as required

Fund operations (Technical Secretariat)

Fund implementation (Participating Organizations)• Project cycle management (project eligibility, assessment, formulation, supervision

and evaluation)• Mobilization of service and equipment for project activities• Project fi nancial management• Application of environmental and social safeguards• Result-based and knowledge management

• Develop fund governance architecture and fund performance matrix• Set up system pre-requisites and support the development of policy and procedural

pre-requistes for fund operations • Support resource mobilization• Ensure safe receipt and management of donor contributions, including investment

revenues and reporting on fund availability• Disburse funds to Participating Organizations in accordance with instructions from

Steering Committee• Consolidate programme and fi nancial statements and reports based on submissions

provided to the Administrative Agent by Participating OrganizationsEnure timely fund operational and fi nancial closure

Fund design, initiation & administration (Adm. Agent)

Fund management functions

INTRODUCTION

2

costs than single contributions. However, tailored design is critical: governance structures of pooled funding mechanisms can be easily oversized or include unnecessary and complex subcontracting arrangements, leading to higher transaction costs and implementation delays.

Effi cient fund architecture design and administration services help leverage the comparative advantages of pooled fi nancing mechanisms relative to individual contributioins and minimize the risks of drawbacks. With these objectives, the MPTF Offi ce service platform provides three key services:

• fund architecture design supports the preparation of fund feasibility analysis, legal agreements, governance structure, and result-based and risk management systems;

• fund administration includes negotiation and receipt of fi nancial contributions, treasury and investment management, fund transfers to implementing agencies, fund monitoring and reporting, and timely closure of projects and funds. The MPTF Offi ce fund administration services centre on the web-based MPTF Offi ce Gateway, which provides real-time online fi nancial data and programme information;

• advisory services to fund operations support the establishment of Technical Secretariats and the preparation of Operational Manuals as well as the assessment of potential funding sources.

DIVERSITY, STANDARDIZATION AND INNOVATIONEach Fund has a unique set of objectives and partners, and each requires tailored result and risk management systems, governance architecture and capitalization instruments. To accommodate such diversity and maintain quality assurance throughout the fund management chain, the MPTF Offi ce has standardized the basic building blocks of fund design and administration. The codifi cation of business processes produces multiple downstream effi ciency and productivity gains, which benefi ts all partners:

• rapid fund establishment and cash receipts, due to standard agreements and document templates requiring no additional legal clearance;

• rapid processing of cash transfers and a high level of accountability, due to standardized and transparent fund allocation procedures;

• consistent project monitoring, enabling knowledge sharing and implementation of timely remedial action;

• timely reporting and correcting of over-expenditures, ensuring the accuracy of annual reports;

• timely project and fund closure, due to standardized procedures, reducing costs for all parties and increasing the credibility of the United Nations System as a trust fund manager;

• strengthened risk management across all processes;• rigorous and independent evaluations at key decision

points.Process standardization is also critical to enabling the MPTF Offi ce to constantly innovate and develop new and better fund solutions to meet the evolving demands of its partners. Innovation in fund management is most often accomplished

through bringing together in a novel manner processes, services or technologies that are readily available. New combinations of existing processes enable the MPTF Offi ce to develop original solutions to emerging needs in a quick and accountable manner.

STRUCTURE OF THE MANUALThe MPTF Offi ce Manual for Fund Design, Administration and Advisory Services follows a process-based approach. It comprises a series of 46 fund-specifi c business process maps and accompanying descriptions. A business process map is a visual depiction of decision points and work fl ows in a specifi c organizational setting. Responsible entities are identifi ed in ‘work lanes’, with decision points and actions/documents to be produced/completed usually in coordination with other relevant parties. The accompanying text identifi es the objectives, overview, policies and completion/reference documents.

Business processes are not necessarily contingent on linear progression. The business process maps are generic, and actual processes might need to be adjusted to meet the unique requirements of diff erent types of pooled fi nancing mechanisms. Terminology can also vary across funds.

An electronic copy of this manual, with hyperlinks to all reference materials, is available on the MPTF Offi ce’s SharePoint. This manual is a work in progress and will be regularly updated. Feedback on the content of this manual is welcome and can be sent to [email protected].

3

OBJECTIVE1. The MPTF Offi ce’s research and development (R&D)

eff orts meet the needs of the United Nations for new product solutions that respond to demands made by United Nations stakeholders in a constantly evolving fi nancing landscape. New fund product solutions comprise new functionalities, new design elements and new and innovative fi nancing mechanisms.

OVERVIEW2. The MPTF Offi ce is regularly requested by stakeholders

to develop new fund solutions that include new functionalities, new design elements and innovative fi nancing instruments. Functionality solutions comprise results, risk and reporting management systems (Gateway). Design solutions involve the development of new elements that enable funds to better meet programmatic goals. Financing mechanisms comprise instruments such as the re-investing of phased-out subsidies, emission levies, carbon and biodiversity off sets and crowd funding.

POLICY3. The development of a new fund solution is a major

investment. The transparent prioritization of R&D initiatives in line with the MPTF Offi ce’s mission statement and strategic objectives as well as taking into account the expected total costs of R&D are imperative. New fund solutions can impact existing MPTF Offi ce business processes and may require the development of new policies. For this reason, Executive Coordinator

approval is required at the start of the process, and all relevant MPTF Offi ce teams (Programme and Operations) must be part of the new fund solution development process.

4. If stakeholders request a new fund instrument or if a thematic cluster group identifi es an undeveloped concept, the Portfolio Manager (PM) must ascertain whether a new fund solution should be developed. The MPTF Offi ce’s 2014–2017 Strategic Plan and the associated Annual Work Plan and Annual Outreach Strategy will inform the PM’s decision to commence the R&D process.

5. The PM will decide if IT and legal support is required and if in-depth feasibility studies are necessary. These may then be subcontracted to other UN(DP) departments or LTAs.

6. In assembling the team, the PM will take into account the anticipated required skills and associated costs for the purpose of ensuring cost effi ciency. Increased reliance on LTAs as opposed to MPTF Offi ce staff is encouraged, thus rendering the PM a task owner responsible for the R&D results produced by LTAs and other team members.

7. If the new fund solution is rejected, the R&D information will be archived on the MPTF Offi ce share drive. If it is approved, the new fund solution documents will be circulated, through standard knowledge products, to stakeholders for the purpose of information dissemination and raising awareness.

8. Standard knowledge products include but are not limited to: a 2-page Issue Sheet, an 8-page Issue Brief and

a full Issue Paper. As required, the PM will be responsible for having the new solution codifi ed and disseminated.

DOCUMENTS/TEMPLATESNew fund solutions:• Gateway functionalities• Legal agreements• Updated business process maps and policies• Innovative fi nancing methodologies

Knowledge products including but not limited to:• 2-page Issue Sheet• 8-page Issue Brief• Issue Paper

REFERENCE MATERIALS• MPTF Offi ce 2014–2017 Strategic Plan• Annual Work Plan• New fund solution TOR• Gateway functionality (e.g. grandparent, parent, child

code set-up for CAR)• Legal agreements and templates (e.g. NGO direct access

to funding in National Funds)• Updated BP maps (e.g. RBM inclusion in BP mapping)• Methodology for recycling of phased-out subsidies• Methodology for new carbon currency• Crowd funding system for humanitarian fi nance• 2-page Issue Sheet (e.g. Multi-Window Transition Funds)• 8-page Issue Brief (e.g. Pooled Financing Mechanism for

the New Deal for Engagement in Fragile States)• Issue Paper (e.g. Financing Recovery for Resilience)

PROCESS 1.0 RESEARCH & DEVELOPMENT FOR NEW FUND SOLUTIONS

44

1. R&D for new Fund solutions

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Version: 27 May 14

Trigger: MPTFO requested by client to develop a new product, i.e. a fund instrument that has not been developed before

Prepares draft product development plan

and outreach strategy for opportunity

Approve product development? If yes, assign PM

Assemble team and identify action

items

Yes

Finalize Fund product and submit

for broader consultation

Incorporate comments and

feedback

External request to develop Fund product received

START

END

No

Discuss proposed product and

outreach tactics, solicit feedback

Yes – advise PM; OR obtain more information from PM to

make an informed decision

Circulate fund product to external

and internal stakeholders

Receive direct feedback from

stakeholders if PM circulated

Circulate final product to internal

and external stakeholders

Approved

START Process Product Sub Process Decision END

Determine who will circulate new product

Internal request to develop Fund

product generated

Approve / cancel new

product

Circulate fund product to external

and internal stakeholders

Receive feedback from stakeholders, provide inputs to

PM

START

Trigger: Thematic cluster develops a concept to develop a new product, i.e. a fund instrument that has not been developed before

Directorate

Portfolio Manager

Move to bus. Dev.knowledge management/

archive process

CancelledEND

Draft Product

Draft Product

Draft Product

Final Product

Draft Product

Communicate systems impacts,

preliminary budget and timeline

to achieve changes

Can proposal be implemented

without systems modifications?

Is a technical consultant needed to

determine systems impacts of proposal?

No

Refer to process 5 ‘Managing outsourced

advisory services’

Yes

No

Provide feedback on finance and systems considerations and financial viability

Provide feedback on legal considerations

Provide feedback on legal considerations

Legal and finance/systems review conducted

simultaneously

5

OBJECTIVE1. A pre-feasibility study builds a business case in support

of the establishment of a new Fund, taking into account the comparative advantages of the proposed Fund versus other fi nancial management solutions.

OVERVIEW2. Awareness of an existing or new fund solution via

dissemination of standard knowledge products may trigger a requests from RCs/DSRSGs/HCs, United Nations agencies or governments for the establishment of a new Fund. During a pre-feasibility study, the PM must ascertain whether the proposed Fund is appropriate for all relevant stakeholders.

3. The key issue for consideration is the comparative advantages of the proposed Fund versus other fi nancial management solutions, including projects/programs, other funds or budgetary assistance. Furthermore, the proposed Fund should off er material advantages to all stakeholders and complement the existing fi nancing ecosystem, keeping in mind the high opportunity cost of establishing a Fund. As stakeholders have diff ering priorities, an assessment of the comparative advantages requires extensive consultation with all relevant parties.

POLICY4. The PAC checklist is the key document guiding the

pre-feasibility study. After reviewing a request for a new Fund, the PM (or PA if the fund management has been delegated) will prepare a PAC checklist that comprises

three clusters to be completed during the pre-feasibility study: (i) business case section (comparative advantages relative to other solutions); (ii) operational section (legal, IT and fi nancial dimensions, including fi nancial viability); and (iii) programmatic section (theory of change, past experience and lessons learned).

5. The PM will closely engage with the key client(s) at the drafting stage of the Fund Concept Note and draft Fund TOR. Consultation with other stakeholders and potential fi nancial contributors will focus on confi rming the business case as identifi ed in the PAC checklist.

6. The business case section identifi es the comparative advantages of the proposed Fund, captures key information about the Fund and forms the basis of the business case. The operational section assesses the specifi c requirements of the Fund in terms of legal and IT systems. It includes an initial proposed fund code structure and a fi nancial viability assessment. In establishing the threshold for the minimum size of the Fund, standard UNDG guidance will be used. The objective of the programmatic section is to ensure that the Fund TOR builds on lessons learned from past fund design eff orts by the MPTF Offi ce or other service providers, such as the World Bank, in order to increase the likelihood of success.

7. RBM and risk management are optional components of the new Fund. The decision to include RBM and/or risk management is made by the stakeholders based on the Fund’s context and required functionality (for example, fragile states’ governance environment, need to support performance-based payments etc.).

8. A Product Appraisal Committee (PAC) will be formed by the PM for the purpose of affi rming agreement to proceed to full fund development. The PAC members will include the EC/DEC, PMs and Finance Managers. Documents will be distributed to PAC members three to fi ve business days prior to the PAC meeting. All documents will be presented as fi nal versions except the draft Fund TOR.

9. When an expedited process is required, a virtual (electronic) PAC meeting will be held using an abbreviated PAC checklist comprising the business case and operational clusters only.

10. The EC will approve or reject the development of a new Fund on the basis of the recommendation of the PAC. Upon approval, the PM will proceed to the fund establishment process. If the EC rejects the development of the new Fund, the business case may be revised and resubmitted to the PAC.

DOCUMENTS/TEMPLATES • PAC checklist (three clusters/parts)• Final Fund Concept Note• Draft Fund TOR

REFERENCE MATERIALS• MPTF Offi ce knowledge products• Template PAC checklist• Template Fund Concept Note and examples• Template Fund TOR and examples from other funds• UNDG guidelines and SOP• Evaluation studies

PROCESS 2.0 PRE-FEASIBILITY STUDY

66

2. Pre-feasibility studyPo

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Receive Request for potential fund

(from a UN agency, RC or Government)

PM who receives the request

shares with EC for review (with

checklist)

Discuss design options client (scoping and

needs analysis)

Co -Draft Concept Note and/or draft

Fund ToR with client (including

RBM, if applicable)

Review checklist; assign PM to

Fund; informs MPTFO of decision

PM records potential fund in

share drive (Pipeline folder)

Where applicable, advise on

consultations with Government

Finalize PAC Briefing Package (PAC

checklist, Fund TOR, Concept Note, Fund

structure)

Hold Proposal Appraisal

Committee (PAC)

Approve development of

Fund architecture?

No Yes

TRIGGER: Executive Coordinator decision to explore a Fund Solution concept; or circulation of product to stakeholders has triggered demand for a new fund

END

START

Move to ‘Fund Establishment’

process

END


Complete draft PAC checklist

Draft PAC Checklist

Draft PAC Checklist

Decide if the fund will include

an RBM & risk management

structure?

Consult with stakeholders and

financial contributors to

assess the business case

Draft Fund TOR

Draft Concept

Note

Draft PAC checklist

Draft Fund TOR

Draft Concept

Note

Final PAC checklist

Start prospective fund outreach to stakeholders if needed to confirm business

caseInsufficient

business case

Business case confirmed

Draft Fund TOR

Draft Concept

Note

Draft Fund TOR

Draft Concept

Note

Draft Fund TOR

Draft Concept

NoteFinal

Fund TOR

Final Concept

Note

Upload documents to hard pipeline

folderDraft

Fund TOR

Final Concept

Note

Review existing relevant

evaluations or knowledge products Draft PAC

Checklist

This approval moves the fund

into the hard pipeline

This must include the preliminary child

code architecture

7

OBJECTIVE1. The fund establishment process translates the business

case into a detailed programmatic scope, fund architecture and governance structures that optimize the benefi ts commonly associated with pooled fi nancing mechanisms.

OVERVIEW2. The strengths and drawbacks of pooled fi nancing

mechanisms are an inherent function of their design. Appropriately designed funds can substantially increase aid eff ectiveness and reduce risk. Conversely, oversized funds in terms of unnecessarily complex governance structures or poor fi nancial architecture can lead to high transaction costs and lower transparency. Table 1 highlights the benefi ts associated with pooled fi nancing mechanisms as well as the drawbacks in the event of poor design.

3. The fund establishment process ensures that the benefi ts of pooled fi nancing mechanisms are maximized by fund design. It aims to right-size scope, fund architecture and governance in order to limit unwanted consequences that could diminish the Fund’s advantages compared to other solutions. For example, if improved coordination is an identifi ed comparative advantage in the business case, the Fund might be designed with a broad governance structure. If an identifi ed comparative advantage is the mobilization of innovative sources of fi nance, then the Fund might be structured with a strong capacity to evolve in terms of governance, risk management and RBM.

PROCESS 3.0 ESTABLISHING THE FUND

Strengths Drawbacks - Reduce aid fragmentation and duplication; - Strengthen strategic alignment and national

ownership by using established national systems; - Reduce risks through common risk assessment and

risk tolerance policy - Increase accountability by enabling transparent

resource allocation to Implementing Entities; - Increase aid predictability through multi-year

fi nancing strategies; - Reduce political, fi duciary and corruption risks to

contributors through robust fi duciary management systems and web-based monitoring of fi nancial fl ows;

- Broaden the fi nancial base of non-traditional or smaller contributors to participate via pooled funding mechanisms;

- Reduce transaction costs by generating economies of scale.

- Complexity of pass-through mechanism compared to single-agency mechanisms;

- Diffi culty of demonstrating impact and value for money in the absence of RBM at the fund level;

- Risk of oversizing or poorly designing fund, increasing transaction costs and implementation delays;

- Need to align large number of partners to provide quality assurance throughout the entire fund management chain.

Table 1: Strengths and drawbacks of pooled fi nancing mechanisms

8

POLICY4. The procedures for fund establishment are triggered by

the EC’s approval of the draft Fund TOR. Negotiations with the client and all legal stakeholders (the United Nations agencies and/or the government) on the draft Fund TOR continue until the Fund is right-sized, the comparative advantages are fully translated into the fund structure and the fi nal Fund TOR is approved.

5. For some Funds, the TOR will include RBM and a risk management system. RBM links programmatic outcomes to fi nancial fl ows and provides a greater connection between fi nancial fl ows and results. The RBM design should be completed by the time the fi nal TOR is approved. The development of a risk management system starts with a joint assessment of the contextual, programmatic and institutional risks faced by a specifi c Fund (which ideally takes place before the Fund TOR is fi nalized) and results in the approval of a risk tolerance policy by the Steering Committee during one of its fi rst meetings. The risk management system can include the establishment of a Risk Management Unit.

6. The Fund TOR must ensure compliance with existing United Nations pooled fi nancing guidelines (UNDG guidelines, CHF guidelines for CHFs and UNDP fi nancial rules and regulations). For UNDG guidance, refer to the UNDG Guidelines on MDTFs (which contain information on Steering Committee composition and the UNDG TOR template), the SOP guidance package for Delivering as One Funds and the Joint Programme guidelines.

7. If non-standard MOUs or MOAs are being used, time should be allocated for extended negotiations. Substantial changes in MOU language cannot be accepted without the approval of the Fiduciary Management Oversight Group (FMOG) of UNDG. In drafting and fi nalizing the MOA with governments, United Nations agencies and legal departments, some adjustments (in the case of the MOA) are to be expected. Legal approval is required for clearance of non-standard clauses of the MOA to ensure consistent application of and adherence to UNDP fi nancial rules and regulations. Funds with the European Commission as a contributor have specifi c requirements as well.

DOCUMENTS/TEMPLATES• Fund TOR• Generic MOU and MOA

REFERENCE MATERIALS• MPTF Offi ce knowledge products• Relevant evaluation and lessons learned documents,

including from the World Bank• Approved PAC checklist• CHF guidelines (for CHFs)• Guidelines on MDTFs (with UNDG Steering Committee

composition and UNDG TOR template documents)• SOP guidance package (for Delivering as One Funds)• Joint Programme guidelines (for JPs)• UNDG guidelines on thresholds

99

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1010

3. Establishing the Fund Po

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Version: 24 Apr 14

Sign MOU/MOA

Obtain legal review for any

language changes

Refine Fund TOR including RBM structure (or

rework)

Trigger: EC gives approval to proceed with establishing the Fund

START


Review draft MoU/MoA

Rework

Cleared

Draft Fund TOR

Review draft TOR inc. logframe and RBM framework

Cleared

END

Obtain fully signed MOU/

MOA from PUNOs or government

Rework

Determine if legal changes require FMOG approval

Facilitate FMOG review of MOU

changes

Legally cleared: MOU for a UNDG Fund

Are changes proposed to the standard MoU/

MoA?

Yes

No

Changes approved by FMOG for UNDG Funds

Legally cleared: MOA or MOU for a non-UNDG Fund

Draft Fund TOR

FMOG review

Legal review

Negotiate final TOR and MoU/

MoA with stakeholders

Draft Fund TOR

DraftMoU

Draft MoA

Approve final Fund TOR

On-going negotiation with stakeholders

Final Fund TOR

Continue negotiation with stakeholders on

MOA/MOU

Not legally cleared

Accept, reject or propose

other changesDraftMoU

Draft MoA

Legal review

FinalMoU

FinalMoA

DraftMoU

Draft MoA

Changes not approved by

FMOG for UNDG Funds

FMOG review

FinalMoU

FinalMoA

Move to Enabling Fund Operations

Refer to: RBM policy and guidance, yellow activities denotes an RBM activity

Draft MOU/MOA

DraftMoU

Draft MoA

DraftMoU

Draft MoA

Stakeholders include Government, UN agencies, donors and Legal,

include RBM structure

11

OBJECTIVE1. This process ensures that all system prerequisites are in

place for the Fund to start its operations promptly and effi ciently.

OVERVIEW2. Following the establishment of a Fund, fund system

prerequisites for fund operations are put in place. The completion of this process ensures that the Fund is ready to receive, review and process fund transfer requests. This process is divided into seven sub-processes:

(2.1) Setting up a fund code: sets up the fund architecture units and links fi nancial fl ows to programmatic outcomes;

(2.2) Access to Gateway: enables Technical Secretariats to upload information on their respective fund pages and analyse fund fi nancial and programmatic data;

(2.3) Setting up of Gateway fund page: enables web-based access to fund programmatic and fi nancial information, including RBM;

(2.4) Setting up an Implementing Entity code: enables fi nancial fl ows and RBM results to be tracked and analysed by Participating Organizations;

(2.5) Setting up an MDTF1 vendor: enables the transfer of funds to Participating Organizations or the process of refunds to donors;

(2.6) Testing the vendor process for National Funds: makes a ‘test transfer’ of USD 500 before the actual transfer takes place; and

(2.7) Enabling crowd funding: sets up a ‘donate’ button to mobilize individual private fi nancial contributions.

3. These system prerequisites to enable fund operations can proceed rapidly due to the existence of dedicated fund management systems, notably a distinct MPTF Offi ce bank account in line with the MPTF Offi ce fi rewall, a separate MDTF1 Atlas general ledger business unit and the online platform Gateway. This also ensures that, if required, new contribution agreements (see process 7) can be acted upon within days, immediately followed by Steering Committee allocation decisions and the execution of the fi rst transfer of funds (see process 9). Such expediency can be critical for certain funds, notably post-confl ict and humanitarian funds.

4. For new Participating Organizations (in addition to the current 45+ Participating Organizations), slightly more time may be required due to the need to create Implementing Entity and vendor codes. Furthermore, in the case of national governments a test payment is processed to ascertain the correctness of the vendor information before proceeding with the actual fi rst fund transfer.

5. Discrete system processes might also be needed to mobilize innovative sources of fi nance, such as setting up a ‘Donate’ button for issuing off set certifi cates. ‘Donate’ buttons are included in all Common Humanitarian Funds.

PROCESS 4.0 SYSTEM PREREQUISITES FOR FUND OPERATIONS

1212

Process 4.1 Setting up a fund code

Process 4.2 Access to Gateway

Process 4.3 Setting up a Gateway fund page including RBM

Process 4.4Setting up an Implementing Entity code

Process 4.5Setting up an MDTF1 vendor

Process 4.6Testing the vendor process for National Funds

Process 4.7Enabling crowd funding

13

OBJECTIVE1. This process establishes a rigorous fund architecture,

which is critical to linking fi nancial fl ows to programmatic outcomes, themes and results.

OVERVIEW2. Fund codes represent the broadest fund architecture

units: a separate legally established fund, a thematic area or cluster within a fund, or a group of legal funds established as separate windows under a common umbrella fund. Three types of fund codes are used by the MPTF Offi ce: grandparent, parent and child.

3. Grandparent fund codes cluster a group of legally separate funds under one umbrella fund, whereby each legal fund represents a separate fi scal window being managed by the same government mechanism and Steering Committee.

4. Parent fund codes are used to represent a legally established fund and to establish a separately identifi able ‘account’ in Atlas to manage the fund and record fi nancial and programmatic transactions as required by the MOU and SAA legal agreements.

5. Child fund codes are used to represent the individual sectors or themes within the fund architecture design.

6. Once a grandparent or parent fund code has been set up, a multi-window (grandparent) or fund (parent) page will be automatically generated on Gateway.

7. Fund codes for MDTF1 are maintained in a separate MPTF Offi ce-controlled coding ‘tree’ in Atlas and are not part of a broader shared table within UNDP. The coding logic and structure for fund codes must be adhered to as this enables automation and collation of funds information for presentation on Gateway and use in other reporting tools.

POLICY8. A grandparent or parent fund code can only be set up

when a fund has been legally established. A PM usually requests a parent or grandparent fund code to be set up when the fi rst SAA is signed. When there is reasonable assurance that the fund will be capitalized, a PM may seek exceptional approval (via email) from the Executive Coordinator to set up a fund page on Gateway (and therefore the grandparent or parent fund code) before the SAA is signed in order to use Gateway for outreach purposes.

9. A PM should complete a signed MPTF Offi ce fund code e-form and submit the following supporting documents to request a new grandparent or parent fund code. Signature can be electronic (on the form) or in hard copy, although electronic is preferred.

10. MDTFs and Joint Programmes: An MOU signed by at least two Participating Organizations and the MPTF Offi ce as the Administrative Agent (signed by the Executive Coordinator or OIC), as this formalizes the legal creation of a fund.

11. National Funds: An MOA countersigned by the national government and the Executive Coordinator, MPTF Offi ce.

12. For all funds: Either a countersigned SAA or the email approval of the Executive Coordinator in lieu of a signed SAA.

13. Child codes are requested by the PM using the same MPTF Offi ce fund code e-form approved by a Finance Manager to ensure that the coding structure meets both programmatic and systems needs.

14. Detailed policy on the information requirements to complete the e-form and the coding logic that must be used can be found here: MPTF Offi ce fund code logic.

DOCUMENTS/TEMPLATES• MPTF Offi ce fund code e-form• MPTF Offi ce fund code logic

PROCESS 4.1 Setting up a Fund code

1414

4.1 Setting up a Fund code

Fina

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Version: 30 June 14

Complete Fund Code e-form. Attach signed

MOU/MOA and SAA/EC approval

Trigger: MoU signed by EC and at least two PUNOs’ AND signed SAA

Review proposed coding structure &

supporting documents

Rework

Determine if GW page should be set up prior to

capitalisation

Wait for SAA to be signed

No

Approved –e-sign form

Create Fund code/s

department codes, associate

AX1

Notify PM, PA and core finance of the new codes


Is the request for a Fund code

for a Fund that has a signed SAA?

Yes – expedited process

No – EC approval needed

START

Yes - approved

Review contents of form, suggest

coding

e-Form correctly completed, supporting documents provided

Rework

If a new parent code has been established, this will automatically set up a new Fund Page on GW.

END

Fund code e-formMOU/MOA

SAA/ EC apvl

Fund code e-form

MOU/MOA

SAA/ EC apvl

This is necessary to manage the reputational risk of excessive ‘empty’ funds from appearing on GW

Copy UNDP CST for MPTFO to enable UNDP to set up corresponding Fund code for mapping

Consider RBM structure as per TOR or PAC minutes

15

OBJECTIVE1. Gateway provides transparent, real-time fi nancial and

programmatic information that is publicly available and supports strategic decision-making in fund allocations.

OVERVIEW2. Gateway is a web-based tool that serves as a centralized

knowledge management platform for the MDTFs and Joint Programmes administered by the MPTF Offi ce. It provides real-time fi nancial data on commitments, deposits and transfers and is refreshed every two hours from the MDTF1 general ledger for each fund account. Participating Organization project expenditures and programme results for RBM structured funds are updated formally on an annual basis or voluntarily on a quarterly or half-yearly basis.

3. Gateway houses key documents and communications materials such as the fund legal instruments (MOU, TOR) as well as annual programmatic and fi nancial reports. Within the fund management structure, it provides stakeholders with easy access to information for allocations and transfers by country, Participating Organization or thematic area.

4. Gateway uses access accounts to allow MPTF Offi ce staff to upload content and documents and to allow partner staff to upload documents to fulfi l narrative fund reporting requirements.

POLICY5. The policies below are limited to those with security

access. For outreach policies, refer to process 4.3, ‘Setting up a Gateway fund page’, and for policies on adding a fund or project page to Gateway, refer to process 4.1, ‘Setting up a new fund code’, and process 9.4, ‘Setting up projects and budgets’, respectively.

6. Information on Gateway is accessible to anyone via the internet; however, an account needs to be set up for an individual to make modifi cations to Gateway information. Issuing and maintaining Gateway accounts is referred to as ‘user provisioning’ . This process is managed by the MPTF Offi ce using the existing external access application in Atlas.

7. MPTF Offi ce staff are provided with ‘fund-level access’, which grants access to modify the content and upload documents to all fund and project pages, the general document repository, ‘News’ on the home page and other internal tools. Technical Secretariat staff are provided with access to edit content and upload documents on project pages and can also upload documents to fund pages, which requires further approval by an MPTF Offi ce staff member with ‘fund-level access’ before it is published on Gateway.

8. To maintain quality assurance over the content uploaded on Gateway, the Gateway function for Technical Secretariats should be centralized in one or two super-users. Therefore only two user accounts are established per country (or per Global Fund where the Technical Secretariat is based in New York/Geneva). It is recommended that a Gateway account-holder should be

someone who will be in that location for a minimum of 6 months.

9. Keeping user accounts current and deleting old user accounts is part of the Gateway user provisioning function. Therefore requests to Gateway user changes must be done in consultation with the Operations Associate (systems).

10. Gateway has been set up with the following security restrictions:

• An account is disabled after 60 days of inactivity and blocked after three unsuccessful login attempts. A user with a disabled or blocked account will need to have the account reset by the MPTF Offi ce Operations Associate (systems) (liaising with the UNDP Atlas security team).

• A login and password combination is required to modify content and upload documents. The login name (Xfi rstname.lastname) is created, and a unique password is assigned and communicated through an automated email that is sent only to the user. The user will be prompted to change the password on the fi rst login.

DOCUMENTS/TEMPLATES• Gateway access request e-form• Guide to using Gateway to modify content and upload

documents

PROCESS 4.2 Access to Gateway

16

4.2 Granting access to GatewayO

pera

tions

Ass

ocia

te (s

yste

ms)

Tech

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Fin

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M

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MPT

FO st

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user

Version 27 June 2014

TRIGGER: CO staff turnover with GW access rights


Request new user to be set

up

START

Send form to country office for completion

Provide context and contacts to OA to facilitate

new GW account

ALTERNATE TRIGGER: PA identifies need for TS staff to have access to GW (e.g.CO has not previously worked with MPTFO for a new fund)

START

GW access form

Complete form and submit to

OA

Review form for completeness and

accuracy

Create project account in Atlas (using external

access) for GW user

Review form for completeness and

accuracy

Link user to specific MDTF/JP projects they will

work on

GW access form

GW access form

Rework CompleteNotify Senior

Finance Manager for approval

Request training and support on access if needed

Email welcome and information

package, offer for training

Automatic email sentto user with

passcode and login

Troubleshoot access issues (with PS Support if needed) and provide

training on request

END

ALTERNATE TRIGGER: A new staff member joins the MPTFO office

Create full access account in Atlas (using External

Access)

START

Request training and support on access if needed

17

OBJECTIVE1. By providing easy, web-based access to programmatic

and fi nancial information, this process facilitates real-time fund monitoring and reporting to the United Nations System and its partners.

OVERVIEW2. The MPTF Offi ce has developed a public website for fund

management: the MPTF Offi ce Gateway (http://mptf.undp.org), which is refreshed every two hours from an internal Enterprise Resource Platform system, Atlas. A separate web page on Gateway is maintained for each MDTF, National Fund and Joint Programme.

3. Each Fund’s web page on Gateway collects, preserves, consolidates and shares the Fund’s fi nancial and programmatic information among United Nations organizations and their development partners. Development practitioners, parliamentarians, academics and the public can also access this information.

4. An optional online RBM system brings additional value to the Fund’s stakeholders, linking fi nancial fl ows to programmatic results at the level of the Fund and of the fund architecture unit.

5. The Gateway web page can also include a ‘Donate’ button to enable crowd funding for specifi c funds (mostly humanitarian funds).

POLICY6. Once a Fund is established (TOR approved and MOU

signed) and its codes are created (Process 4.1), the MPTF Offi ce sets up the web page of this Fund on Gateway. The PA develops the draft content of the Fund’s website using the approved TOR. Upon clearance by the PM, the PA uploads the web page content along with the key documents of the Fund (TOR, MOU and SAA) on the Fund’s web page.

7. For funds that have chosen the RBM, the PM enters the fund-level outcomes and indicators from the Fund RBM framework (annexed to the TOR) onto the Fund’s web page on Gateway.

8. Each fund’s web page on Gateway provides the Fund’s fi nancial and programmatic information. The fi nancial information includes: (i) funding framework, including balance available for programming; (ii) contributor commitments and deposits; (iii) approved programme budgets; (iv) transfers to Participating Organizations; (v) expenditures reported by Participating Organizations; and (vi) interest income and other expenses.

9. The programmatic information includes: (i) the Fund’s purpose, scope, governance structure and programmatic framework; (ii) the Fund’s key documents (TOR, MOU, SAA, Rules of Procedure/Operational Manual, annual reports, evaluations); (iii) project-level information (project description, programme documents and quarterly/annual reports).

10. Upon fi nalization of this process, the PM informs the stakeholders of the Fund about the web page creation

DOCUMENTS/TEMPLATES• Fund content for Gateway• Fund-level RBM content

REFERENCE MATERIALS• Fund TOR• Fund MOU• Fund SAA• Fund RBM framework

PROCESS 4.3 Setting up a Gateway fund page including RBM

1818

4.3 Setting up Gateway (Fund page & RBM)

Port

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Version: 24 Apr 14

Draft Key sections of the Gateway Fund Page based on approved Fund

TOR

Trigger: Gateway Parent and child codes have been established

START


Enter all required sections on GW

Fund page within 1 week of Fund code creation

Log into Gateway and enter fields for effect indicators and indicator type for all

fund outcomes

Upload final Fund TOR, MOU/

MOA and SAA template – do

not include signatures END

END

Review proposed GW text for Fund

ApprovedRework

Draft GW text

Final MOU/MOAFinal Fund

TOR

SAA Template

Fund Prospectus

NOTE: RBM activities are in yellow. This activity can only be completed once the child codes set up.

19

OBJECTIVE1. Implementing Entity codes are used to ‘tag’ transactions

made to specifi c Participating Organizations and enable fi nancial fl ows and RBM results to be tracked and analysed by Participating Organizations.

OVERVIEW2. The creation and management of Implementing Entity

(IA) codes is performed centrally by UNDP, and as such the MPTF Offi ce is required to follow the standard POPP process and use the associated templates. All United Nations agencies using Atlas use the same shared code tables. As a code may already exist for a specifi c Implementing Entity the MPTF Offi ce has not previously worked with, all IA code requests are facilitated by the Operations Associate (systems), who checks whether a code exists in the shared table before requesting a new one to be created.

POLICY3. ‘Implementing Entity’ is the Atlas term that broadly

refers to an organization that is eligible to be allocated resources within a Fund TOR, such as a Participating Organization.

4. At present, the MPTF Offi ce does not have a mandate to engage NGOs directly, so an ‘Implementing Entity’ (and therefore an IA code) is limited to a United Nations entity or government partner (refer to process 3.0, ‘Establishing the Fund’).

5. A new IA code can also only be established for a specifi c entity. For United Nations MDTFs and JPs, an entity is one that is refl ected on the offi cial United Nations System organization chart consisting of the funds and programmes, specialized agencies, functional or regional commissions, departments and offi ces of the United Nations Secretariat and other bodies and related organizations — or an intergovernmental organization with privileges and immunities similar to the United Nations (such as IOM). For National Funds, an entity is considered to be the national government rather than a specifi c ministry or other tier of government.

6. An agreement that establishes a business relationship between the MPTF Offi ce and the IA is required to set up a new code. For MDTFs and JPs, this is evidenced in the Fund MOU that is signed between a United Nations entity and the Executive Coordinator or the MOA for National Funds with a government.

7. It is important to note that IA codes also have an impact on the UNEX system, used by POs to report fi nancial expenditures. As noted in process 10.3, ‘Managing UNEX data’, each separate entity (as determined by each unique IA code) is required to complete a separate upload in UNEX; uploads for multiple entities cannot be merged and would be rejected by the system.

DOCUMENTS/TEMPLATES• Link to IA code request• United Nations System organization chart: http://www.

un.org/en/aboutun/structure/org_chart.shtml

PROCESS 4.4 Setting up an Implementing Entity code

2020

4.4 Implementing Agency code creation

Ope

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Trigger: PM provides MOU/MOA that has been signed by one or more Participating Organisations

Complete standard request form, submit

to FM

Submit scanned form and signed MOU/MOA

to PS support; file documents

PS Support creates new

implementing agency code

Advise PM, Finance, Treasury; update

code listing on sharepoint

Does implementing agency code exist in

Atlas

Inform PA and core finance of

coding

Review coding for imp. agency code in

line with policy

Is an exception needed on whether a new entity should be

created?

Coding cleared

Rework coding

No, approve creation

Exception granted?

Yes

Yes, approvecreation

ENDNo

END

Yes

END

No


Send standard email to request new implementing agency code (attach signed

MOU/MOA)

Does MOU/MOA include a PO new

to MPTFO?

Move to vendor creation process

STARTYes

Move to obtaining UNEX contacts

ENDNo

MoA/MoU

UNDP IA code form

MoA/MoU

UNDP IA code form

Note: Decision impacts reporting process and appearance on gateway,

and political ramifications of being seen as a separate entity

Note: A Participating Organisation (PO) that is new to one Fund, may already be participating in another Fund –if a PO exists on the ‘PO’ page of Gateway an Implementing Agency code already exists and does not need to be created

Refer to policy on protocol for coding structure

21

OBJECTIVE1. This process enables the MPTF Offi ce to transfer funds to

Participating Organizations or process refunds to donors.

OVERVIEW2. A vendor code is a precondition for the MPTF Offi ce to

transfer funds to Participating Organizations (process 9.5) and to process refunds to donors (process 12.4). It is an essential element underpinning the ‘multi-partner’ nature of the MPTF Offi ce’s services, enabling transfers to be made to a wide range of Participating Organizations and contributions to be received from (and hence possibly refunded to) a wide variety of contributors.

3. Considering that for a number of prospective vendors this may be the fi rst time they are requested to provide ‘vendor information’ to a United Nations organization, a number of exchanges between the prospective vendor and the MPTF Offi ce may be necessary in order for the MPTF Offi ce to obtain the required documentation for vendor creation and ensure that the information received is complete. Incorrect or incomplete vendor information may lead to payments being delayed.

POLICY4. While the creation of other codes, such as fund codes,

Implementing Entity codes and donor codes, is normally assigned to staff with a ‘fi nance profi le’, the right to create vendors is linked to the ‘buyer profi le’. Hence, when Programme or Finance identifi es the need to create a new vendor, they should collect the required supporting

documentation and provide this to the vendor creator (buyer).

5. The vendor creator is in charge of getting in touch with the prospective vendor to obtain the required vendor information. If in certain fund contexts it is decided that instead of the vendor creator the PM or PA will be the interface with the prospective vendor to get this information, they should seek concurrence from the vendor approver and obtain guidance.

6. The rest of the vendor creation process is executed between the vendor creator and the vendor approver. In line with the UNDP Internal Control Framework, the MPTF Offi ce has only two vendor approvers. The Deputy Executive Coordinator normally approves the vendors for MDTF1 and the Fund Operations Specialist for UNDP1. The buyer enters the vendor information in Atlas and the vendor approver ensures that the banking information is entered correctly. Specialist advice is sought from UNDP Treasury in case of questions, particularly on the banking information provided.

7. As indicated in the Internal Control Framework, the vendor approver must ensure that the vendor is authentic. This means that a full set of supporting documents is required to support the creation of a vendor, consisting of:

(i) documentation of a bona fi de business relationship between the MPTF Offi ce and the vendor. If a vendor is created for a new Participating Organization, this consists of a signed MOA/MOU; for a donor refund, this consists of a signed contribution agreement, Steering Committee minutes documenting the decision to refund the contribution and confi rmation by the donor that it wants

to have the contribution returned;

(ii) originals or certifi ed copies showing the complete name, address and banking details of the vendor, duly signed by an authorized company offi cial. This information is normally collected through a signed vendor form, duly completed and signed by the proposed vendor;

(iii) a certifi cation of bank account details from the vendor’s bank, which is the preferred method of ensuring that the bank information is correct.

8. Furthermore, a number of checks using the online UNGM and Atlas SDN need to be carried out before the vendor is approved, to ensure that the vendor submitted for approval does not appear on the United Nations Security Council 1267 Committee’s list of terrorists and terrorist fi nanciers and is not on the UNDP list of suspended vendors and removed vendors.

9. Once the above preconditions are in place, the vendor approver approves the creation of the vendor and the vendor creation process can proceed.

DOCUMENTS/TEMPLATESSigned UNDP vendor form, accompanied by bank information in the case of a non-United Nations vendor

REFERENCE MATERIALS• UNDP Internal Control Framework• MPTF Offi ce list of vendors• Vendor creation training from UNDP Treasury

PROCESS 4.5 Setting up an MDTF1 vendor profi le

2222

4.5 MDTF1 Vendor Profile Creation

Vend

or A

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(B

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Version: 24 April 14

Email proposed vendor; request

signed vendor form and supporting

documents

Create vendor in Atlas and submit

for approval

Approve Vendor record in Atlas?

Yes

File documentation

for record keeping

Trigger: Donor has requested a refund or a new Participating Organisation (PO) has been identified from a new / updated MOU

Receive and compile

documents to support request for new vendor

Vendor approved for

creation?

Sign vendor creation formYes

END


Review supporting documents for evidence

as per policy; confirm vendor is not on UNGM

list

Use standard email to provide: (i) full PO or donor name, (ii) email contacts of

proposed vendor; (iii) document evidencing need

for new vendor.

Check if proposed vendor is already listed in MDTF1

Atlas vendor records?

No

Check if vendor is listed on the UNGM list of suspended or

removed vendors

START

Submit documentation, information on

existing/new vendor and results of UNGM

search

No – request Buyer to obtain additional information from vendor

No –rework

END

Yes

Programme supporting

docs

Vendor form template Signed

Vendor form

Signed Vendor form

Supporting docs – see

policy

Vendor supporting

docs


docs

Signed Vendor form

Vendor supporting

docs

Approved Vendor form

23

OBJECTIVE1. This process makes a ‘test transfer’ of USD 500 before the

actual transfer takes place to National Funds to manage the risk of sending funds to an incorrect bank account through often complex banking arrangements.

OVERVIEW2. For national entities receiving funding for the fi rst

time, there is a greater fi nancial risk that the vendor information provided by a national entity is incorrect due to the usual reliance on intermediary banks and limited familiarity with United Nations vendor creation procedures. This risk is addressed through the undertaking of additional steps after the vendor creation process is completed. The key steps are: (i) making a ‘test transfer’ of USD 500 before the actual transfer is eff ected; and (ii) ensuring that the national entity shared the banking information with the Steering Committee as an input into the Steering Committee allocation process.

POLICY3. To avoid these additional steps delaying the fi rst fund

transfers to national entities, the PM explains the vendor creation process to the local UNDP country offi ce and government counterparts (if deemed appropriate) and collects information on the government regulations for creating a new bank account (or using an existing account) for the purpose of receiving funding from the MPTF Offi ce before the actual MOA is signed. Immediately after the MOA is signed, the PM requests the government counterparts through the UNDP

country offi ce (or interim secretariat) to fi ll out the standard UNDP vendor form and provide the banking details received from the bank. Once this information is received, the normal vendor creation process is carried out.

4. To ensure that the ‘test transfer’ can be carried out immediately upon fund establishment and before the fund capitalization, the vendor information received will be used to fi rst set up a new vendor in UNDP1. Next, the written approval of the Executive Coordinator will be obtained to use the MPTF Offi ce’s own resources in UNDP1 for carrying out the test transfer. The test transfer uses the standard fund transfer request process (9.3–9.5).

5. When the national entity confi rms receipt of the test transfer, the MPTF Offi ce ensures that this banking information is shared with the UNDP Country Offi ce/interim secretariat as an input into the Steering Committee allocation process. Furthermore, the vendor information received will then be used to also set up the new vendor in MDTF1.

6. Once the fi rst actual fund transfer to the national entity is completed, the MPTF Offi ce funds used for the test transfer can be reversed.

DOCUMENTS/TEMPLATES • Signed UNDP vendor form, accompanied by bank

information in the case of a non-United Nations vendor• Confi rmation of USD 500 transfer

REFERENCE MATERIALS• Vendor creation training material provided by UNDP

Treasury

PROCESS 4.6 Testing the vendor process for National Funds

2424

4.6 Setting up and testing a vendor for a National Fund

Vend

or A

ppro

ver

Ope

ratio

ns A

ssoc

iate

(B

uyer

)Po

rtfo

lio M

anag

erGo

vern

men

tU

NDP

CO

/Se

cret

aria

tTr

easu

ry

Asso

ciat

e

Version: 3 July 2014

Email proposed vendor; request

signed vendor form and supporting

documents

Create vendor in Atlas and submit

for approval

Approve Vendor record in Atlas?

Yes

Notify core finance and PM/

PA of vendor number; file

documentation

Trigger: A new National Participating Organisation (PO) has been identified from a new / updated MOA

Receive and compile

documents to support request for new vendor

Vendor approved for

creation?

Sign vendor creation formYes

END


Review supporting documents for evidence

as per policy; confirm vendor is not on UNGM

list

Use standard email to provide: (i) full name of government contact, (ii)

email contacts of proposed vendor and UNDP CO

support team; (iii) signed MOA evidencing need for

new vendor

Check if proposed vendor is already listed in MDTF1

Atlas vendor records?

No

Check if vendor is listed on the UNGM list of suspended or

removed vendors

START

Submit documentation, information on

existing/new vendor and results of UNGM

search

No – request Buyer to obtain additional information from vendor

No –rework

END

Yes

Signed MOA

Vendor form template Signed

Vendor form

Signed Vendor form

Supporting docs – see

policy

Vendor supporting

docs


docs

Signed Vendor form

Vendor supporting

docs

Approved Vendor form

Support government in

completing standard UNDP requirements in

vendor form

Obtain official documentation from bank

showing all required banking details of local (and intermediary – if

needed) bank

Complete UNDP vendor form, liaising with UNDP

CO if needed

Review completed form for accuracy before it is

signed and provide feedback.

Sign vendor form to evidence information is for the official bank that

the Fund transfers will be made into and bank details are correctVendor form

Official bank letter/

statement

Vendor form Official bank

letter/statement

Vendor form Official bank

letter/statement

Initiate $250 test transaction before

making first transfer for the fund

Move to process 4.1 setting up a Fund code and /or 9.4 setting up

projects and budgets

FTR checklist

Signed MOAHas the first donor

deposit been received?

Authorise test transaction to take place from MPTFO

budget or wait

No

Wait until deposit is received or fund is

about to be capitalised as per EC decision

Approved

No

Have the following been set up? -Parent Fund code - At least one child Fund code and one project under the child code- $250 project budget

Yes

EC email approval (if no donor deposit)

Track transaction with UNDP HQ bank

providers and confirm if the

sending bank can send the funds

Complete process 9.5 (i), (ii) and (iii)

ending with transfer notification is sent

out

Liaise with government to obtain confirmation of

receipt of transfer

Provide explanation from bank for transfer

failure

Bank cannot send the funds

Follow up with Gvmt and UNDP

CO to obtain correction

Banking details incomplete

Rework: voucher/vendor record

Lead and resolve internal rework

issues

Bank can send the funds

Confirm receiptEND

Yes

Note: This process involves PM, PA, FA,

FM

25

OBJECTIVE1. This process provides for the establishment of a crowd

funding mechanism to receive tax-deductible and regular donations from individuals throughout the world to support specifi c funds.

OVERVIEW2. The MPTF Offi ce can receive tax-deductible and regular

donations from individuals throughout the world who are willing to support a specifi c trust fund. Such a mechanism empowers individuals to support specifi c causes through a United Nations pooled fi nancing mechanism and ensure that their donations reach benefi ciaries and are used in an eff ective and effi cient manner. The donations are non-refundable.

3. Concerned funds have a ‘Donate’ button on their web page to receive individual donations. These donations are used like contributions from governments to fi nance the fund’s approved programmes. In addition to mobilizing increased fi nancial resources, crowd funding constitutes an important awareness-raising avenue for United Nations activities and broadening public support for United Nations mandates.

POLICY4. The establishment of a crowd funding mechanism begins

with a specifi c fund sponsor’s request. The PM and fund sponsor discuss: (i) the rationale for this instrument; and (ii) the identifi cation of suitable service providers. Based on past experience, the MPTF Offi ce preference is to work

with UNFIP as a public, not-for-profi t service provider. UNFIP, like many public, not-for-profi t US organizations, has 501(c)(3) status, which allows it to collect tax-deductible donations in the US. Those organizations provide systems solutions for ‘Donate’ buttons on their websites, which could be hyperlinked and placed on the respective web pages of Gateway.

5. If UNFIP’s services cannot be used, a competitive procurement process or a robust rationale for sole-source procurement must be undertaken. Potential service providers are requested to share the terms and conditions of their services, including service costs for the crowd funding mechanism. This information is analysed by the MPTF Offi ce, and the ultimate decision on using a crowd funding mechanism for a specifi c fund with the best available provider is made by the Executive Coordinator.

6. Upon approval of the proposed mechanism, the PM drafts and negotiates the standard SAA with the selected service provider. In most cases, the SAA will be concluded after the legal agreement specifying the terms and conditions, including the service costs of the service provider, between the fund’s proponent and service provider is signed. In those cases where such an agreement is not possible, the side letter to the SAA, including the service costs, is prepared by the service provider and acknowledged by the fund proponent and the MPTF Offi ce.

7. After the SAA is signed, the service provider establishes the ‘Donate’ button on their website. The MPTF Offi ce establishes a hyperlink to this button on the web page of the concerned trust fund.

8. In cases where the service provider is for-profi t, the ‘Donate’ button is jointly established by the MPTF Offi ce and the service provider.

9. When establishing the ‘Donate’ button, the service provider and the MPTF Offi ce include a disclaimer clarifying that these contributions are non-refundable. This is due to the high transaction cost of establishing MDTF1 vendors and making refunds to individuals.

10. Upon establishment of the ‘Donate’ button, the PM informs the stakeholders and requests the fund’s proponent to publicize the crowd funding mechanism.

DOCUMENTS/TEMPLATES• SAA with service provider• Side letter with terms and conditions or legal agreement

between service provider and the fund proponent

REFERENCE MATERIALSExamples:• SAA with Earth Day Network (EDN)/SAA with UNFIP• Side letter with EDN• Agreement between UN Foundation and OCHA• Legal agreement with Chase Bank for Yasuni ‘Donate’

button

PROCESS 4.7 Enabling crowd funding

2626

4.7 Enabling crowd funding

Serv

ice

Prov

ider

Fina

nce

Man

ager

Port

folio

Man

ager

Fund

Pro

pone

ntEx

ecut

ive

coor

dina

tor

Lega

l and

Tr

easu

ry


TRIGGER: Request from Fund proponent/stakeholders to enable crowd funding mechanism


Discuss rationale with PM for establishing an internet based

donate button & identify potential service provider

START

Decision to proceed?

Analyse the information and

establish the feasibility of setting up an internet based

donation mechanism

Confirms interest and provide necessary

informationTerms and conditions

Review and discuss terms and conditions

Terms and conditions

Approach provider and request agreement with terms and

conditions for donation collection mechanism services

Draft SAA with provider of donation mechanism

Negotiate SAA with provider

Negotiate SAA

Approve and sign SAA?

Establish donate link on GW Fund page and

inform stakeholdersPrepare final draft SAA

Communicate decision to

service provider END

Provide feedback based on technical review

Discuss SAA with legal and treasury

END

Consult on choice of service provider

feedback



SAALetter on

fees, if needed

Provider may need to conclude legal agreement with Fund proponent

END

SAALetter on

fees, if needed

SAA

SAASAA

SAA

27

OBJECTIVE1. Advisory services for fund operations reduce the time

required to start up a new fund and facilitate prompt fund capitalization and allocation to Implementing Entities.

OVERVIEW2. Fund operations include mobilization of resources,

allocation to Implementing Entities and monitoring/reporting of results. These functions are performed by Fund Steering Committees and Secretariats.

3. In some cases, the MPTF Offi ce may be requested by a fund sponsor to provide advisory services for fund operations start-up. Such services include: (i) the establishment of secretariats (including interim secretariat staffi ng, formulation of the Operational Manual and provision of support to the Steering Committee in the fi rst six months of operations); (ii) risk management (including assessment and accreditation of the fi duciary capacity of partners); and (iii) fund capitalization (including the development of investment strategy and innovative fi nancing instruments).

POLICY4. The MPTF Offi ce endeavours to facilitate prompt fund

operation within six months. A start-up period of longer than six months can result in lost credibility, a lack of momentum or suboptimal fund allocation. The provision of advisory services by the MPTF Offi ce is triggered by a specifi c client request and addresses the risk of delayed start-up.

5. Advisory services are optional and additional; they are not included in the 1 percent fund administration fee. Services are provided on a direct and full cost recovery basis in line with UNDP’s cost recovery policy. Occasionally, exceptions to this cost recovery policy can be provided by the Executive Coordinator if this is in the strategic interest of the United Nations System.

6. To provide these services, the MPTF Offi ce relies on pre-vetted LTAs, a pool of skilled consultants, notably for the services listed above. In estimating LTA budgets, the PM will refer to the standard costing template, which covers the costs of recruiting and managing consultants. The fi nancial ceiling until further procurement action for a specifi c LTA consultant needs to be taken (notably submission to ACP) should be considered as well. If no consultant is available as per an existing LTA, discretion should be used as to whether a full consultant recruitment process should be undertaken or the entire process halted.

7. The MPTF Offi ce remains accountable for the quality of the LTA’s deliverables. To exercise this accountability, the key responsibilities of the PM for advisory services include proper translation of the scope of work into detailed TORs to guide LTA services; identifi cation of a suitable LTA to be recruited; briefi ng and management of the LTA; independent assessment of the quality of the services and products delivered by the LTA, and remedial action if required; and fi nal review of the LTA’s performance. There are signifi cant reputational and fi nancial implications for the MPTF Offi ce in remediating the fi nal product, and it is imperative that advisory service processes be thoroughly conducted to mitigate this risk.

DOCUMENTS/TEMPLATES• Consultant TOR• Client service contract• Cost recovery contract• Contract with LTA consultant• Final evaluation of LTA consultant

REFERENCE MATERIALS• Procurement summaries of LTA recruitment processes• Listing of pre-vetted LTAs• FAQs for LTAs• Template consultant TOR• Standard costing template• Template client service contract• Template cost recovery contract• UNDP cost recovery policy

PROCESS 5.0 MANAGING OUTSOURCED ADVISORY SERVICES

2828

5. Managing Outsourced Advisory Services

Exec

utiv

e Co

ordi

nato

rPo

rtfo

lio M

anag

erCo

nsul

tant

Clie

nt

Version: 24 Apr 14

Scope request/opportunity for

internal discussion, including cost

recovery

Draft Advisory Services (AS) TOR and

budget, including identification of

proposed funding source. Use standard

costing template. Review LTA roster for consultant with required skillset/

experience

Proceed with developing TOR?

Yes

Meet with Thematic cluster for input into AS

TOR

No

Clearance of final TOR

Possible consultant on

LTA roster

Provide consultant with

AS TOR

Standard Contracting process for consultant

on LTA

Standard Consultant recruitment

process

Brief consultant on technical and quality

requirements, progress reporting and

outputs

Monitor progress for quality and against AS TOR

Yes

No

Accept final product and complete

consultant evaluation

Provides defined Advisory Services as per the TOR,

and routine feedback (PM/

client)

Approved

Process DecisionSTART ENDProductSub-process

START

Archive proposal as

per Advisory Services KM

process END

Combine comments into

final TOR

Submit final AS TOR and budget

to client for approval

Approve final TOR and funding

ApprovedNot approved

Obtain client approval for consultant

selected PRIOR to contracting

Review consultant CV and confirm

selectionRejected

Agreed Work with consultant as per

AS TOR

Provide final deliverables as

per TOR and contract

On completion

Review and clear final

deliverable

Rework

Accepted

Formalise cost recovery

arrangement through signed service contract

with client

Approve or rework cost

recovery contract

Approve or rework

Feedback loop PM & consultant

until work cleared

Obtain payment from client

END

TRIGGER: (i) Acceleration in the initiation, or capitalisation of a Fund is needed; (ii) PM identifies an opportunity for advisory services; OR (iii) a client requests advisory services

Draft AS TOR

Std costing template

Draft AS TOR


Draft AS TOR


Final AS TOR


Final AS TOR

Final AS TOR

Final AS TOR

Consultant CV

Consultant CV

Standard UNDP

contract

Standard UNDP

contract

Draft TOR deliverable/s

Draft TOR deliverable/s

Final TOR deliverable/s

MPTFO ‘Invoice’

UNDP Consultant

eval’n



Feedback

Budget: This could be seed funding from a donor direct to MPTFO or an existing project at a UN CO

If major revisions are proposed, consult with Executive Coordinator, otherwise changes are

managed by PM

If no consultant is available on an existing LTA, discretion should be

used as to whether a full recruitment process should be

undertaken or if the work should not proceed

29

OBJECTIVE1. This process assists fund sponsors with the marketing

of innovative fund solutions and is provided on an exceptional basis. Innovative solutions may comprise new design, new functionality or new fi nancing instruments.

OVERVIEW2. Support for fund promotion and capitalization relates

to distinct MPTF Offi ce services provided to clients on a limited, exceptional basis in order to support clients with the marketing of a new design, functionality or fi nancing instrument. Such MPTF Offi ce services include only the drafting and distribution of marketing materials and participating with the fund sponsor in the business briefi ngs of fund partners. For information on the process for the actual development of specifi c fi nancial instruments, refer to process 5.0, ‘Managing outsourced advisory services’.

POLICY3. By default, fund sponsors take the lead in promoting and

capitalizing funds. However, the MPTF Offi ce conducts some de facto marketing when the PM assesses the business case of the proposed Fund to right-size the architecture and disseminates knowledge products to stakeholders.

4. On an exceptional basis, the MPTF Offi ce can also assist fund sponsors with the marketing of innovative fund solutions. Fund establishment (completion of MOU/TOR documents) may trigger a requirement for the creation of marketing materials to raise partner awareness about a novel feature of a Fund. Such special cases are limited to those funds that are piloting new fund solutions developed by the MPTF Offi ce or working with new fi nancing partners (for example, with non-traditional donors). The decision to provide this special service and to recover costs (or not) is taken by the Executive Coordinator.

5. Marketing materials will take the form of a prospectus, which defi nes the Fund and details its programmatic objectives, architecture and capitalization structure. The information in a prospectus will be presented in a reader-friendly and visually attractive manner for a diverse external audience. The target audience will vary from fund to fund, and the text should speak to the relevant audience (for example, private sector fi nancial markets or traditional versus non-traditional donors). The innovative design and fi nancing aspects should be highlighted.

6. Based on sponsor demand, the MPTF Offi ce can lead or contribute to the drafting and development of the prospectus, working in close collaboration with the client and potentially with the use of LTAs.

7. Once fi nalized, the sponsor will lead the distribution of the prospectus to potential fi nancial contributors and stakeholders, with the MPTF Offi ce acting only in a limited support capacity.

DOCUMENTS/TEMPLATES• TORs for the preparation of prospectus/briefi ng materials• Prospectus/briefi ng materials

REFERENCE MATERIALS• Fund TOR• Concept note• Yasuni ITT prospectus• Nicaragua prospectus• Template SAA

PROCESS 6.0 SUPPORT TO FUND PROMOTION AND CAPITALIZATION

3030

6. Support to Fund promotion and capitalisation

Fund

co-

chai

rsPo

rtfo

lio M

anag

erEx

ecut

ive

Coor

dina

tor

Tech

nica

l Se

cret

aria

t or

equi

vale

nt

Version: 30 June 14

Trigger: Need identified for support to fund mobilsation


Convert Fund TOR or Concept Note

into draft Prospectus/brief

Draft prospectus/

brief

END

Determine if prospectus/brief

should be developed

Need identified for a prospectus/brief to market

the fund

START

Review prospectus/brief, is it ready to

be shared with stakeholders?

ReworkYes

Review prospectus/brief,

share with government;

provide feedback to MPTFO

Feedback

Finalise prospectus/brief and distribute to

Technical Secretariat

Wait for feedback

Disseminate to contributors and

stakeholders

Conduct briefing to potential

financial contributors

Support RC/HC in presenting the

Fund

Support RC/HC/EC in presenting

the Fund

Move to ‘Contribution agreements’ process

when potential contributor identified END

Final prospectus/

brief

Final prospectus/

brief

NoDraft

prospectus/brief

Draft prospectus/

brief

31

OBJECTIVE1. This process ensures the rapid conclusion of a

standardized legal agreement between a contributor/donor and the MPTF Offi ce for the receipt and application of funds provided by the contributor/donor.

OVERVIEW2. Fund contributions is the fi rst of the fi ve key fund

administration tasks (prior to transferring funds, fund monitoring, fund reporting and fund closing). Forward fi nancial planning to allocate funds is achieved through recording donor commitments that have yet to be received, which provides information on the transactions that can change the ultimate cash balance that a Steering Committee can allocate and disburse. This process is divided into eight sub-processes:

(7.1) Donor contribution agreements: this legally formalizes a donor’s intent to provide a contribution to a Fund.

(7.2) Setting up a donor code: donor codes are used to record donor-related transactions enabling the AA to provide analysis and reporting to stakeholders to make strategic decisions for resource mobilization and fund allocation.

(7.3) Overdue donor commitments: this provides the Steering Committee with an estimate of future cash fl ows based on legally concluded donor agreements, enabling advanced fi nancial and programme planning.

(7.4) Overdue donor commitments: where a donor chooses not to disburse funds for a signed commitment, the commitment needs to be cancelled and the Fund’s fi nancial planning updated.

(7.5) Donor deposits and notifi cation: rapid application of donor deposits is essential for the rapid transfer of fund resources.

(7.6) Foreign exchange gains and losses: commitments and deposits in non-USD currency may result in a higher or lower amount of USD funds than expected.

(7.7) Bank fees: this transparently provides the cost of fi nancial services in operating a fund that must be absorbed by the fund balance.

(7.8) Refunds to donors: this enables the return of contributions to the original donor where requested and in compliance with the legal donor agreement.

PROCESS 7.0 FUND CONTRIBUTIONS AND DONOR REFUNDS

3232

Process 7.8 Refunds to donors

Process 7.7 Bank fees

Process 7.5 Donor deposits and notifi cation

Process 7.6 Foreign exchange gains and losses

Process 7.4 Overdue donor commitments

Process 7.3 Donor commitments

Process 7.2 Setting up a donor code

Process 7.1 Donor contribution agreements

33

OBJECTIVE1. Donor contribution agreements legally formalize a

donor’s intent to provide a contribution to a fund. This is accomplished via the rapid conclusion of a legal agreement between a donor and the Executive Coordinator of the MPTF Offi ce. The receipt of the fi rst contribution after signature of the fi rst contribution agreement enables a fund to be operationalized.

OVERVIEW2. The signature of a donor contribution agreement

[represented by a Standard Administrative Arrangement (SAA), an SAA addendum or a Standard Contribution Agreement (SCA) or equivalent for the European Commission] by both the donor and the MPTF Offi ce is a mandatory prerequisite for cash received from a donor to be applied to a fund.

3. A key strength of the MPTF Offi ce as an Administrative Agent is the reliance on pre-negotiated donor contribution agreements. This enables the legal contribution arrangements to be concluded in a rapid, effi cient and cost-eff ective manner.

POLICY4. Donor contribution agreements are based on a

UNDG-approved template, the SAA, and are available in fi ve languages. The SAA is used by all United Nations agencies that operate as an Administrative Agent. The text of the donor contribution agreement is standard and non-negotiable. In the schedule of payments, annexed

to the SAA (Annex B), the timing of the deposit and level of earmarking, if any, at the approved level is specifi ed. The schedule of payments is unique to each agreement and will be customized according to the attributes of the Fund TOR. The non-negotiable nature of SAA text contributes to expediency, control of transaction costs and risk management of the fund.

5. Upon receipt of an indication of interest from a donor, the PM will decide whether to delegate document preparation to the PA, taking into account whether clarifi cations on the standard instrument will be required by the contributor and/or whether a specifi c cover letter will need to be prepared. In all cases, the PM remains accountable for the fi nal documents.

6. If a potential donor is from the private sector, due diligence must be performed prior to agreeing to accept the contribution for a fund. The PM must follow UNDP’s due diligence policy before making a recommendation to sign an SAA with a private sector donor. The policy requires, among other things, that the potential donor follow the principles of the United Nations Global Compact (see policies/hyperlink). This PM task cannot be delegated.

7. With the exception of the tailoring of the schedule of payment, the text of the SAA is generally non-negotiable unless formal approval is obtained from FMOG for substantial deviations. FMOG commissions a formal revision of the SAA template every fi ve to six years (the last revision was in 2008; the next one is planned for 2014), which involves extensive consultation with donors and United Nations Participating Organizations.

8. In response to a donor’s parliamentary requirements to include specifi c clauses, it is possible in exceptional cases to negotiate a cover letter between the MPTF Offi ce and the donor (example: cover letter with Norway), with the prior approval of FMOG. Cover letters with pre-negotiated text are permitted, provided that their content has been cleared by FMOG. Deviations from the standard SAA text and cover letter may contribute to the future revision of the SAA by the UNDG.

9. In line with the principles of pooled fi nancing mechanisms, contributions should be provided unearmarked by donors, and this should be the default position that PMs should advocate. However, should agreement on unearmarked funds not be possible, UNDG policy allows for earmarking to be agreed to at the sector or thematic level. The MPTF Offi ce can only accept earmarking at the sector or thematic level if the fund structure has child codes at that level. Earmarking of funds below the sector or thematic level (for example, to a project or a specifi c United Nations entity) is not permissible. If a donor provides a signed agreement with such earmarking, the PM will need to re-negotiate the document.

10. Earmarking should be recorded only in the schedule of payments of the SAA and not in any other section of the agreement. The default SAA template includes a standard schedule of payments to be used for unearmarked funding only. If a donor proposes to include earmarking, the alternative schedule of payments template must be used and completed correctly. Use of this template enables the MPTF Offi ce to systemically track earmarking, thereby managing the risk that donor conditions will not be met.

PROCESS 7.1 Donor contribution agreements

34

11. At a minimum, the following information must be included in the SAA prior to donor and MPTF Offi ce signature:

(i) the offi cial donor name, both on the cover page of the SAA and as part of the position title of the offi cial authorized to sign the agreement. The offi cial donor name on the SAA will be used to record the commitment in Atlas and will be the name refl ected on Gateway;

(ii) the formal fund name included on the fi nal Fund TOR;

(iii) the amount and currency of the contribution. The currency must be a convertible currency — that is, the currency must be one accepted by UNDP Treasury and be easily convertible into USD (UNDPs offi cial operating currency). The currency used should be the currency that the contribution will be transferred in (GBP, Euro, Yen etc.);

(iv) a schedule of payments as per template that includes a month and year for each commitment;

(v) the SAA must be countersigned and dated by both an authorized donor offi cial and the MPTF Offi ce; and

(vi) only the Executive Coordinator is authorized to sign or delegate signature of the SAA on behalf of the MPTF Offi ce. Where a delegation has been issued (for example, to the head of a UNDP country offi ce or to an MPTF Offi ce staff member acting as Offi cer in Charge), this delegation must be documented and recorded.

12. If the contribution is from the European Commission, the standard template document will be the FMOG/EC pre-negotiated EC Standard Contribution Agreement (SCA, to be tentatively replaced by the DA as of late 2014).

DOCUMENTS/TEMPLATES• New SAA/SAA addendum/SCA• Annex B of the SAA/SAA addendum: schedule of

payments• Annexes to the SCA• Cover letter

REFERENCE MATERIALS• Template of SAA and Annex B (schedule of payments)• Template cover letter• Template addendum to the SAA• EC Standard Contribution Agreement (SCA, DA)• UNDP private sector due diligence policy• FMOG minutes approving deviation from standard SAA

3535


3636

7.1 Donor contribution agreements

Port

folio

Man

ager

Port

folio

As

soci

ate

Exec

utiv

e Co

ordi

nato

r

Version: 30 Jun 14

Prepare donor agreement, (SAA

or Addendum) including schedule

of payments.

Trigger: Communication received of donor interest in providing funding

Prepare cover letter to donor

based on standard template/ special

template

Final check and sign SAA and cover

letter?

Communicate with donor for completion of

standard agreement

Review and clear against private sector due diligence policy if

applicable

Is the donor proposing any changes to the template or including earmarking other

than at the sector level?Yes

No

Choose: (i) clear minor changes; (ii) obtain FMOG approval for

substantive changes; (iii) require donor to amend;

or (iv) decline

Facilitate countersigned SAA

with donor

Not cleared

SAA cover letter

Depu

ty E

x.

Coor

dina

tor

Check list of donors that require a

special cover letter

Inform donor of requirement to use a standard

SAA

Donor does not agreeto standard SAA

Changes cleared

Finalise SAA for signature

Yes – private sector donor

No

Non-standard SAA, or non-traditional partner

Rework

Determine whether to enter negotiation or decline funding

Negotiate with private sector

donor on terms that can be

accepted

Yes – non privatesector donor

Donor agrees to standard SAA

Donor agrees on terms

END

Donor does not agreeon terms

Decline contribution or FMOG does not approve

Decline Negotiate


END

Draft SAA/Addendum

Draft SAA/Addendum

Draft SAA/Addendum

Final SAA/Addendum

SAA cover letter

SAA cover letter

Final SAA/Addendum

File originals on share drive

END

Final SAA/Addendum

SAA cover letter

Is request for a standard SAA with

a traditional government

partner?

START

No

Cleared or N/A

Facilitate countersigned SAA

with donor

Final SAA/Addendum

SAA cover letter

Standard SAA and traditional partner

Exceptional approval is required for any earmarking that is outside of policy

37

OBJECTIVE1. Attaching a donor code to each fund transaction enables

the MPTF Offi ce to accurately refl ect donor information on Gateway and in other analytical and fi nancial reports.

OVERVIEW2. Pooled fi nancing mechanisms operate on the basis

that individual contributions are co-mingled and not separately identifi able after deposit unless related to donor earmarking.

3. However, donor codes are used to record commitments, deposits and earmarked transfers, enabling the MPTF Offi ce to provide analysis in the form of funding frameworks, annual reports or Gateway information, which assists stakeholders to make strategic decisions for resource mobilization and fund allocation purposes.

4. This also enables the MPTF Offi ce to manage donor refunds as required.

POLICY1. All commitments and deposits must be recorded in Atlas

using the donor code that represents the donor’s legal name as indicated on the donor agreement (SAA, SAA addendum, EC contribution agreement etc.)

2. A key principle of pooled fi nancing mechanisms is that contributions are co-mingled and not identifi able to an individual donor or deposit. Therefore, transfers are

recorded using a generic donor code unless the transfer relates to a donor earmark. Transfers using earmarked funds must be made using the specifi c donor code to which the earmark relates. This allows the MPTF Offi ce to monitor the use of earmarks and automate the reporting tools to generate reports on earmarking.

3. Donor codes will only be established for donors that represent a specifi c legal entity or individual. They are based on a signed donor agreement, which the MPTF Offi ce must submit to UNDP as a supporting document to set up a new code. Where the donor is from the private sector, unless the contribution is USD 50,000 or more a generic ‘private sector’ code is used to prevent one-off donor codes being established and to reduce transaction costs.

4. The MPTF Offi ce uses the shared donor code table, which is maintained centrally by UNDP on behalf of all Atlas agencies. The UNDP donor code submission form must be used to request a new donor code. The Operations Associate (systems) checks the shared donor code table to determine if a particular donor already exists to prevent duplicate donors being set up in the coding table. A donor code may exist even if a donor is new to the MPTF Offi ce.

5. The PA must submit a legibly scanned signed SAA that clearly includes the donor’s legal name on the cover page, used consistently throughout the agreement. Additionally, the PA should indicate whether the donor is: (i) private sector; (ii) a programme country; (iii) a non-programme country; (iv) a multilateral institution; or (v) a not-for-profi t entity. The Operations Associate (systems) will complete the form, indicate that the code

is not for UNDP, facilitate approval by a Finance Manager and liaise with UNDP Peer Support to set up the code, This may take up to seven business days to complete.

DOCUMENTS/TEMPLATES• UNDP donor code creation form• Atlas shared table of donor codes

PROCESS 7.2 Setting up a donor code

3838

7.2 Donor Code Creation

Ope

ratio

n As

soci

ate

(sys

tem

s)Po

rtfo

lio A

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Fina

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Man

ager

PS S

uppo

rt

Version: 24 Apr 14

Trigger: SAA has been signed with a donor

Submit scanned form and signed SAA to PS

support; file documents

PS Support creates new donor code

Notify PA, Finance, Treasury of new code and update

Sharepoint listEND

Has MPTFO worked with this

donor before?

Request existing donor code – if

needed

Request OA to check for /create new donor code, with

signed SAA as supporting document, copy FM

Does a donor code exist in the Atlas

donor table?

Complete form to request new donor

code

Review form for accuracy

Check GW ‘contributor page’

START

Yes

No

Check Atlas donor table for existing

donor

Yes

Rework Approve & sign

Notify PA of existing code

END


Final SAA

Draft UNDP donor code

form

Draft UNDP donor code

form

Final UNDP donor code

form

Final SAA

Final SAA

Yes

A donor that is new to one Fund, may already be contributing to another Fund – if a donor exists on the ‘contributor page’ of Gateway a donor code already exists and does not need to be created

MDTF1 shares an Atlas donor table with all Atlas agencies. A donor code may already exist for a donor that is

new to MPTFO

Donor codes are created by UNDP which will not create a new donor without a signed agreement

39

OBJECTIVE1. This process provides a Steering Committee with a

real-time estimate of future cash fl ows based on legally concluded donor agreements, enabling advanced fi nancial and programme planning (such as right-sizing a request for proposal).

OVERVIEW2. Donor commitments represent a fi rm intention of future

funding designated for a specifi c MDTF, Joint Programme or National Fund, based on a fully executed legal agreement. They provide Steering Committees with an estimate of future cash fl ows a donor intends to deposit. Donor commitments describe the process to record donor agreements in Atlas and refl ect the commitment on Gateway.

POLICY1. All MDTFs, Joint Programmes and National Funds

are accounted for on a cash basis. Therefore donor commitments are recorded as a memorandum item rather than a receivable in the accounts receivable module in Atlas.

2. A donor commitment can be recorded when the donor agreement is legally executed between a donor representative and the MPTF Offi ce Executive Coordinator, as long as the agreement has been completed as per process 7.1, ‘Donor contribution agreements’.

3. Where the Executive Coordinator has delegated authority for signing an agreement on behalf of the MPTF Offi ce, the written delegation (email, letter etc.) should be submitted along with the signed agreement as supporting document to generate a commitment.

4. Only a standard SAA or addendum can be used (or a specifi c standard EC agreement). Emails, press releases and verbal representations do not constitute a binding agreement based on which a commitment can be recorded. If a donor requests substantial changes to the standard FMOG-approved agreement and these deviations are included in the fi nal executed agreement, FMOG’s written approval of the changes should also be submitted.

5. The accounting date for the commitment is the date when the last of the two parties signs the SAA or addendum (MPTF Offi ce Executive Coordinator or the donor). The signature may be handwritten or electronic, as long as the e-signature is system-generated.

6. Commitments are recorded in Atlas in both the currency of the intended contribution as per the SAA (which must be a convertible currency as determined by UNDP Treasury — that is, a currency that is easily convertible into UNDP’s primary currency, USD) and in USD. The UNORE in eff ect at the accounting date is used to translate non-USD commitments into USD. Commitments are recorded on the Gateway fund and project pages only in USD as UNDP’s primary currency, but the original currency and amount can be found via ‘track transactions’.

7. Additionally, commitments must be recorded using the donor code that represents the legal name of the donor, as shown on the title page of the SAA.

8. Where earmarking is included, this must be listed only in the ‘earmarking schedule of payments’ and in the MPTF Offi ce’s prescribed format (refer to templates). The commitment due date is recorded as the actual date specifi ed in the schedule of payments or, if the day is omitted, the last day of the month and the year listed for each tranche.

9. The MPTF Offi ce does not use the DMS process to record commitments. The MPTF Offi ce legal documents repository is used to generate a request for a commitment to be raised.

DOCUMENTS/TEMPLATES• Standard FMOG-approved SAA• Standard addendum• Schedule of payments template for unearmarked

contributions• Schedule of payments template for contributions with

partial or full earmarks• FMOG minutes approving deviation from standard SAA• User guide to using the legal documents repository

PROCESS 7.3 Donor commitments

4040

7.3 Donor commitments

Trea

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Asso

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Port

folio

M

anag

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Ope

ratio

ns

Asso

ciat

e (s

yste

ms)

Process: Recording contributor commitments in Atlas AR module Version: 30 June 14

Receive countersigned SAA/Addendum

Send link to signed SAA to OA with request for

donor code

Is there an existing code?

File original signed agreement

to shared drive and/or file

Is contributor an existing MPTFO

donor?Yes

Provide donor code to PA,PMYes

Refer to process 7.2 donor code

creation

No

Does SAA include all required financial

elements?

Facilitate resolution/clarification

Create [correct] GID to reflect

earmark

Yes

GID approved?

No

ENDYes

Move to step ** process 7.5 donor deposits

communication between TA, FM,

PM & PA

No

Is GID for an unapplied deposit?

END

Update ‘unapplied deposit log’

Yes

No


STARTNo

Upload [corrected] document to Doc

repository; complete request to raise GID

(commitment)Counter-

signed SAA/Addendum

Counter-signed SAA/Addendum

Unapplied deposit log

The ‘legal documents repository in sharepoint is used to notify on Commitments. See procedure for original entry and modifications

Donor codes are maintained centrally in

Atlas by UNDP. It is possible that the donor

exists in the shared tables even if new to MPTFO

New request can take up to seven days to

complete

Refer to policy. Purpose: to ensure the SAA includes the right information to accurately record the commitment

41

OBJECTIVE1. A donor may choose not to disburse funds for a signed

commitment. Where this occurs, the commitment needs to be cancelled.

OVERVIEW1. Commitments represent a donor’s formal intention to

provide funding. Donors may make such commitments contingent on events that will occur in the future, in particular where a multi-year commitment is being made. This could be in the form of future governmental approval of appropriations or the meeting of performance criteria by an MDTF or Joint Programme.

2. Where a donor determines that either the criteria to release a future cash deposit have not been met or a change in donor circumstance warrants a change in future funding intentions, a commitment may become uncollectable — that is, the deposit will not be received.

POLICY1. Commitments are considered collectable unless

otherwise communicated by a donor or the probability of collection is low.

2. Where a donor communicates in writing that funding for a commitment will not be provided, the commitment must be written off . The donor’s communication forms the supporting document for cancelling the commitment in Atlas.

3. PMs are required to monitor outstanding donor commitments and facilitate the collection of deposits related to commitments overdue by 6 months or more on their fund portfolio. All commitments overdue by 12 months or more must be supported by written communication with the donor that the commitment remains collectable. Commitments overdue by 24 months are considered to have a low probability of collection and unless evidence to the contrary is provided, the commitment will be written off . Where a commitment is 12 months or more overdue, the PM should consider negotiating an addendum to the donor agreement with a revised schedule of payments.

4. Correspondence relating to uncollectable commitments should be uploaded to the legal documents repository to request the amount to be written off .

5. A Finance Manager must approve the write-off in Atlas and notify the Executive Coordinator where either the amount is more than USD 2 million or the reason for the write-off justifi es escalation (for example, poor fund performance, the repetition of a donor cancelling commitments etc.)

DOCUMENTS/TEMPLATES• User guide for legal documents repository• Sample aged commitments listing

PROCESS 7.4 Overdue donor commitments

42

7.4 Overdue donor commitmentsTr

easu

ryAs

soci

ate

Fina

nce

Man

ager

Port

folio

Ass

ocia

tePo

rtfo

lio M

anag

er3 July 2014

File signed Addendum/donor communication/

EC decision to shared drive and/

or file

Identify existing GID

GID approved?


Upload document to Doc repository; complete request

to amend GID (commitment)

Donor letter/email

Reason for commitment

write-off

Create corrected

GID(process 7.3)

Submit Atlas notification to FM

No – Rework Atlas transaction

END

Notify EC if i) write off amount exceeds $2M or ii) repetition of

cancellation from donor

END

Change is reflected on GW

Change to SAA/Addendum

Donor cancellation

Alternate trigger: Ad-hoc donor correspondence received confirming commitment will not be deposited

Follow up with TS/Donors for items > 6 months

overdue to determine cause and seek deposit

Has cause of delay been identified?

Negotiate modified

addendum

Review listing for items > 2 years overdue;

Notify TA of cause of delay

and likelihood of deposit?

Yes: Donor/TS has confirmed in writing contribution will not

be received

Yes: A contribution is delayed by >1 year; or a contribution amount is reduced

For all items whether yes or no

Update over-due commitment listing with

reason

END

Generate monthly overdue commitment listing and circulate to

MPTFO

START

Trigger: By 15th of each month

Overdue commitments

Overdue commitments

SAA Addendum

START

SAA Addendum

Has no correspondence has been obtained by PM or correspondence reveals

commitment unlikely to be deposited?

Write Note for the Record to write-off overdue

commitment; discuss with PM

Create write-off entry in Atlas

Answer queries/ provide missing documentation,

further discussion with donor/TS

No – supporting documents insufficient

FM NFR

Yes

The ‘legal documents repository in sharepoint is used to notify on Commitments.

43

OBJECTIVE1. A donor deposit only becomes available for

disbursement (and only appears on Gateway) after it has been applied to a fund against a valid commitment.

OVERVIEW2. Fund deposits are eligible to be applied and become

available for programming when the cash has been deposited into a UNDP-MPTF Offi ce bank account and a countersigned SAA/SAA addendum/EC contribution agreement exists for that specifi c contribution.

POLICY3. Donor deposits may be received electronically into

an MPTF Offi ce bank account, by cheque or in cash, although electronic transfer is preferred. On receipt, a deposit is automatically recorded to ‘unapplied deposits’.

4. A deposit is not available for disbursement in Atlas until it has been applied against a commitment (GID) generated from a valid donor agreement. The agreement evidences the donor’s intention to provide funding for a specifi c named Fund and for a specifi c amount and therefore UNDP has the authority to use the funds as intended in the agreement.

5. A donor deposit without a signed agreement cannot be applied.

6. UNDP Treasury manages the deposit application process. The MPTF Offi ce and UNDP Treasury have agreed to

an expected service level of all donor deposits being applied within 15 business days of both the cash receipt and a donor commitment being available. The deposit application process is a batch process in Atlas, and therefore once a deposit is matched to a commitment, it will only be posted in the general ledger (and therefore on Gateway and available for disbursement) the following day.

7. The MPTF Offi ce Treasury Associate oversees the MPTF Offi ce’s bank accounts, including a daily review of all new deposits, and notifi es the MPTF Offi ce of all deposits. This notifi cation represents the cash receipt in the bank, not the application of the deposit. However, if a non-MPTF Offi ce bank account was specifi ed in the SAA/Addendum (that is, any UNDP non-USD bank account), the PM should advise the Treasury Associate when a deposit is expected as the MPTF Offi ce does not oversee these bank accounts and will need to liaise with the relevant Treasury staff to identify the deposit. Failure to notify Treasury of a deposit expected in a non-MPTF Offi ce bank account can cause delays in applying the deposit.

8. All contributions to MDTFs, Joint Programmes or National Funds are accounted for on a cash basis in USD, and therefore fund income will only be recorded after a deposit has been applied. The accounting date is the later of the date the deposit was received in the bank account and the date a valid commitment was recorded.

9. A donor notifi cation will be emailed to the donor within fi ve days after application has been confi rmed by UNDP Treasury, based on the standard template and the email addresses provided by the PA in the legal documents notifi cation. PAs must check that a correct donor email

address has been provided to prevent delays in sending the notifi cation.

DOCUMENTS/TEMPLATES• Notifi cation of deposit• Daily cash receipt sample• Donor notifi cation sample

PROCESS 7.5 Donor deposits and notifi cations

4444

7.5 Donor deposits and notifications

UN

DP T

reas

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Trea

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Ass

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Application of deposit to commitment (timeline for entire process can be up to 15 business days) Version: 8 May 14

Create Deposit ID (DID)

Notify MPTFO TA when process is

complete

Does the deposit relate to existing

commitment (GID)?

Notify MPTFO (PM/PA/Finance)

of deposit and corresponding

bank charge

Yes

Establish source of deposit –

donor or PUNO

Notify PM/PA of donor deposit and request SAA/addendum for

creation of GID

Notify Core Finance of PUNO refund and request

COA for application

Is there a signed SAA/Addendum for the deposit?

Yes

Move to process 7.1 donor

contribution agreements

** Check if the DID has been created by

UNDP Treasury

Email Treasury AR pending item to

match the Deposit ID (match

GID to DID)

Yes

Treasury runs application

process in Atlas to apply deposit to MPTFO fund (cash receipt)

TRIGGER: Report received from OIST with prior day’s treasury bank transactions

Review MPTFO bank accounts and

identify (daily) deposits

START

Refer to process 9.5

PUNO refunds

Notify TA once funds have been

applied subject to approval

Hold until UNDP Treasury has

completed DID creation

No

Check GL record for final approved

application

Wait

Details of deposit are recorded into log of ‘Unapplied

Deposits’

No

END

Move to process 7.3 ‘donor

commitments’

END

Identify bank charges from issuing bank


Download cash transaction file and

extract details of daily deposit

No


Move to process 7.6

foreign exchange and 7.7

bank fees

Issue donor notification

END

Cash transactions

Procedure 7.5(a)

The MPTFO bank accounts

are all USD accounts.

Treasury dept. is responsible for creating all Deposit IDs regardless of bank acct or Atlas Agency

Used in conjunction with Atlas report for tracking

45

OBJECTIVEThis process records foreign exchange gains and losses on a donor commitment deposited in a non-USD currency compared to its expected value when the commitment was made.

OVERVIEW1. Donor commitments may be made in USD or any

convertible non-USD currency (that is, a currency that is easily convertible to USD as determine by UNDP Treasury) (refer to process 7.1, ‘Donor contribution agreements’). Where a commitment is made in non-USD it is recorded as an estimate in USD based on the United Nations Operational Rate of Exchange (UNORE) in eff ect at the date the agreement was signed (refer to process 7.1).

2. When a donor deposit is received in non-USD, it is automatically exchanged into USD at the current fi nancial market rate for that currency. This is likely to be a diff erent amount from the estimated USD value of the commitment.

POLICY3. Where a non-USD deposit is received into an MPTF

Offi ce USD bank account, the bank service provider will automatically exchange the currency into USD. Where the non-USD deposit is received into a UNDP foreign currency bank account, UNDP Treasury services obtains the Bloomberg current market rate for the day, translates the deposit into USD and transfers this amount to the MPTF Offi ce bank account.

4. Given the fl uctuation in currency markets, the UNORE USD estimate of a non-USD commitment is likely to be diff erent from the actual USD achieved after exchange. This diff erence is an exchange gain where the actual USD achieved is higher than the UNORE estimate or an exchange loss when the USD achieved is lower than the UNORE estimate.

5. However, the funds follow a cash accounting methodology, so commitments are recorded as memorandum records and not in the MPTF Offi ce general ledger. Therefore all exchange gains and losses are generated solely as a result of the Atlas infrastructure and have no accounting impact. The net USD cash value of the deposit is what is recorded in the fund as income, even if the system mechanics record the transaction at the commitment USD amount plus the ‘gain’ or minus the ‘loss’.

6. PMs and PAs should be aware of these system mechanics as the programmable amount must be determined based on the net USD cash deposit amount and not on the system’s application of the deposit amount based on the estimated USD commitment amount.

DOCUMENTS/TEMPLATES• None

PROCESS 7.6 Foreign exchange gains and losses

4646

7.6 Foreign exchange gains or losses on deposits

UN

DP T

reas

ury

Trea

sury

Ass

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tePo

rtfo

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ssoc

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Record gains/losses on deposits into non-US dollar bank account. Note: Foreign currency received into a USD account does not generate an exchange gain/loss. Version: 9 May 14

Trigger: MPTFO contribution received in UNDP bank account (NOT an MPTFO bank account)

Notify TA of (potential)

MPTFO deposits into UNDP non-

USD account

Ask Programmes if deposit relates

to an MPTFO Fund

Is deposit for an MPTFO Fund?

Notify UNDP Treasury that deposit is not

related to MPTFO

No

Apply deposit per

UNDP process

Confirm deposit is for MPTFO to UNDP Treasury

and move to step ** in process 7.5 ‘Donor

deposits’

Yes

Transfer funds into MPTFO bank

Determine if deposit is for an MPTFO Fund. Reply to TA

with response.

Provide exchange rate and USD amount of transfer into MPTFO

bank

Create (correct) GLJE to record FX

gain/loss

Request applicable market rate and transfer

of deposit into MPTFO bank ac

Gain/loss is reflected on Gateway final USD amount of net deposit

is known

END

END END

ENDSTART Approve or

rework

Rework

Approve


Investment UnitContributions unit Treasury Acctng

47

OBJECTIVE1. This process transparently provides the cost of fi nancial

services in operating a fund and prevents the need for small adjustments to allocations, which can generate large transaction costs.

OVERVIEW2. Bank fees and charges are fi nancial services costs that

reduce the value of a deposit or the fund balance and therefore the amount available for programming. They are absorbed by the Fund.

3. Both sending banks (the fi nancial institution used by a donor to transfer funds to an MPTF Offi ce bank account) and receiving banks (the MPTF Offi ce’s bank service provider) may charge fees to perform the fi nancial transfer. Where this occurs, the bank charges the fee against the amount being sent, which reduces the contribution or Participating Organization refund received.

POLICY4. All bank fees must be separately identifi ed and recorded

in the Fund as a fi nancial services fee. The Fund must absorb all fi nancial services fees; therefore the bank fee reduces the total fund balance and the programmable amount of the individual contribution or refund.

5. All bank and investment fees charged on fund-related activities (bank account maintenance, investment transactions, sending or receiving bank charges on donor deposits, PUNO refunds etc.) are to be charged to the Fund, not absorbed by the AA fee. Bank fees charged by the sending or receiving bank are deducted from the contribution or refund, and Treasury only receives the net amount of the deposit. The deposit will be grossed up by the fee amount and the fee charged to the Fund.

6. Bank fees incurred through the general use and operations of a bank account (such as monthly service charges) are also absorbed by the Fund. However, these costs are not specifi cally identifi able to an individual fund and are therefore allocated across the full fund portfolio. This takes place annually in March after Treasury has confi rmed the fi nal bank service fees for the prior fi nancial year. This process is completed during the year-end closure work (refer to process 13.4).

DOCUMENTS/TEMPLATES• None

PROCESS 7.7 Bank fees

4848

7.7 Bank charges on deposits

Trea

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Version 3 July 2014

TRIGGER: Bank charges from issuing or receiving bank identified during deposit application process

END

Contribution reflected on Gateway has been ‘grossed-up’ so that the full contribution is reflected and the bank charges are separately reflected in the fund.

Notify UNDP Treasury of fees charged against

contributions

Create GLJE to charge bank fee

(and gross-up the contribution)


Approve or rework? Approve

START

Rework

Bank fees are charged to the Parent Fund of the Fund that the contribution is for.

49

OBJECTIVE1. This process enables the MPTF Offi ce to return

contributions to the original donor where requested and in compliance with the legal donor agreement.

OVERVIEW2. A refund to a donor may be required where surplus

funds remain at the closure of a fund that are not being transferred to another fund or where a donor requests a return due to ineligible expenses or a because a fund has not met the performance criteria in accordance with the SAA.

POLICY3. All refunds to donors must be executed in accordance

with the legal agreement and terms covering the original contribution as outlined in the SAA (or current legal agreement with the EC) and the Fund TOR.

4. Where funds remain after the operational closure of a fund, the amounts to be refunded to individual donors are determined by the Steering Committee as an outcome of the fund operational closure process (refer to process 12.3). The agreed-upon Steering Committee decision as documented in the signed minutes of the meeting form one of the supporting documents to make a refund to a donor.

5. Additionally, the donor should confi rm the refund amount in writing (such as email or letter) and request the refund from the MPTF Offi ce. This request forms the second supporting document to process the refund.

6. All refunds must be made to a valid donor bank account. Since many donors’ operations are decentralized, it is likely that one donor may have many diff erent bank accounts (for example, if a contribution is being returned to a country-specifi c donor location, the donor is likely to request a bank account in that country). Therefore in order to execute a refund, portfolio staff will need to initiate process 4.5, ‘Setting up a vendor code’, before the refund can be made. This process checks whether a vendor code for the specifi c bank account exists or whether a new code is needed. If a new code is needed, portfolio staff should be aware that the vendor creation process can take up to two to three weeks to complete.

7. The request should be made using the MPTF Offi ce refund to donors checklist signed by the PM. All refunds are made using accounts payable vouchers following the standard MPTF Offi ce Chart of Accounts.

DOCUMENTS/TEMPLATES • MPTF Offi ce refund to donors checklist• Sample fund closure donor allocation template• MPTF Offi ce Chart of Accounts• Steering Committee minutes documenting decision to

refund• Donor confi rmation of refund

PROCESS 7.8 Refunds to donors

5050

7.8 Refund to Donors

Fina

nce

Asso

ciat

e

Version: 25 Jun 2014

Trigger: donor confirmation on refund and bank details received from process 12.3

Move to process 4.4

‘Setting up a vendor’

Port

folio

Ass

ocia

te

Confirm payment and balance of

funds to PM/PA

Request Buyer to check if vendor

exists for refund

Provide instructions and

supporting documents for

each donor refund to FA

Yes

Prepare GLJE and AP Voucher

(Atlas notification to FM)

END

START

Donor letter/email/debit

noteNo

1. SC minutes2. Donor letter3. Refund checklist


Are supporting documents

complete and accurate?

Yes

No

Yes

Fina

nce

Man

ager

Print GLJE and APV and submit with supporting

documents to FM

Review and approve GLJE

and APVApprove

Rework – vouchers incorrect

1. SC minutes2. Donor letter3. Refund checklist

Rework - Supporting documents incomplete

51

OBJECTIVE1. The ‘Managing Administrative Agent fees’ process

ensures that the MPTF Offi ce deducts the agreed-upon AA fee up-front from every donor contribution and that it manages that income prudently to cover the AA services provided through to the closure of the Fund.

OVERVIEW2. Effi cient fund architecture design and administration

services fully leverage the comparative advantages of pooled fi nancing mechanisms relative to stand-alone projects and minimize the risks of possible drawbacks. Notably, these services reduce risks of: (i) delays in fund initiation; (ii) unnecessary transaction costs; (iii) breaks in programming; and (iv) build up of liabilities.

3. The standard legal agreements (MOU, MOA and donor contribution agreements) refl ect the agreed-upon rate for AA fees to cover the costs of AA services. The current agreed-upon AA fee is 1 percent, irrespective of which United Nations agency acts as AA. Stakeholders to the United Nations pass-through mechanism have accepted this 1 percent AA fee as good value for money for the agreed-upon set of AA services.

4. The AA fee income is meant to be suffi cient to cover the full costs of rendering AA services. In line with the United Nations-wide agreed-upon principle that ‘core resources should not subsidize non-core’, United Nations agencies are expected not to have to subsidize the delivery of AA services from other revenue streams. This explains the sole reliance of the MPTF Offi ce on the 1 per cent AA fee income to cover its total costs.

5. The MPTF Offi ce has put a system of linear recognition of AA fee income in place for managing the AA fees. This system enables the MPTF Offi ce to provide the full set of AA services up to the fi nal closure of every fund and safeguard the long-term fi nancial sustainability of the MPTF Offi ce. This system supports the UNDP IPSAS policy for revenue recognition of AA fees.

POLICY6. AA fees are charged at a fi xed 1 percent of the gross

USD contribution amount as per UNDG policy, which is refl ected in the standard legal agreements used to establish a Fund and in the contribution agreements with donors. Where the MPTF Offi ce acts as a fi scal agent for a feeder fund, either the originating fund or the receiving fund is charged the 1 percent fee, depending on fund design.

7. Since funds operate on a cash accounting basis, the fee has to be charged to the Fund that a contribution relates to, in full, at the time the deposit is made. However, it is understood by all stakeholders of the Fund that the totality of the AA fees received by the MPTF Offi ce should be suffi cient to cover the AA services provided through to the closure of the funds. Project fund operational and fi nancial closures account for a very substantial share of the fund management costs (see process 12.0).

8. To enable the MPTF Offi ce to do so, AA fees are treated as ‘exchange revenue’: AA fee cash income is recognized as income only in relation to the proportion of AA services actually delivered for the given MDTF or JP. A system of linear recognition of AA fee income is used, with the AA fee income related to any given donor contribution

being recognized as exchange revenue in a linear fashion over a period of several years. This is further spelled out in the IPSAS policy on revenue recognition of AA fees.

9. When AA fees are deducted from the contribution, they are charged as an expense to the Fund in business unit MDTF1. The opposite side of the transaction records the AA fee as MPTF Offi ce revenue in the books of UNDP under business unit UNDP1.

10. The 1 percent AA fee income is shared between the MPTF Offi ce and: (i) UNDP Headquarters, based on an agreement that 15 per cent of the AA fee income will be allocated to UNDP Headquarters for central services; and (ii) a limited number of UNDP country offi ces that performed some of the AA function for country-level funds under a delegation of authority from the MPTF Offi ce. The practice of delegation of authority to UNDP country offi ces is formalized through a delegation of authority letter signed by the Executive Coordinator and the UNDP staff member to whom delegation is being authorized. The policy to issue delegations of authority for newly established funds was discontinued in 2012.

11. For more information on the UNDP1 side of managing AA revenue, refer to process 13.2, ‘Managing deferred revenue’.

REFERENCE MATERIALS• Protocol on the Administrative Agent for MDTFs and JPs• Standard MOU, MOA and SAA templates• UNDP IPSAS policy on revenue recognition of AA fees• List of AA fee allocations by Fund between central

services, MPTF Offi ce and delegated country offi ces• Delegation of authority template

PROCESS 8.0 MANAGING ADMINISTRATIVE AGENT FEES

5252

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TRIGGER: Gross contribution posted to GL & GW (including any bank charges and forex gains/losses if appropriate)

Calculate revenue to be recognised immediately and deferred income (short and long-

term)

Create [correct] GLJE to deduct full AA fee from

Fund (MDTF1) and create current and/or deferred

revenue for MPTFO (UNDP1) as per policy

END

Wait until deposit is reflected on GW

before reviewing GLJE

Deposit is showing on

GW?

Approve or rework?Yes

No

Approve

Rework


Is the Fund decentralised?

Calculate 1% of the gross USD deposit

amount and allocate to MPTFO (85%):

Central Services (15%)

Calculate 1% of the gross USD deposit

amount and allocate to MPTFO : Central

Services : CO (%s listed in listing on sharepoint)

No

Yes

START

AA fee shows up on GW once GLJE posts to the General Ledger

Refer to Fund listing in finance sharepoint site for de/centralised and agreed % allocations

Refer to policy: Note – for EC agreements, 1% fee is replaced by estimated direct costs charged to the fund but 100% deferred

If the AA fee GLJE is processed before the deposit is applied the

Fund page on Gateway may show a deficit, or AA fees that are

higher than 1%, which is to be avoided.

53

OBJECTIVE1. The fund transfer process ensures a rapid, effi cient,

accountable and cost-eff ective transfer of funds to Participating Organizations.

OVERVIEW2. Fund transfer is the second of the fi ve key fund

administration tasks (following negotiating/receiving fi nancial contributions and prior to transferring funds, fund reporting and fund closing). It provides for the rapid, effi cient, accountable and cost-eff ective transfer of funds to Participating Organizations. Processing speed is particularly critical for humanitarian funds. This process is divided into six sub-processes:

(9.1) Holding the fi rst Steering Committee meeting: approves the Fund’s Rules of Procedure and guides the initial fund allocations by the Steering Committee;

(9.2) Fund risk management: leverages the potential of pooled fi nancing mechanisms to better manage risks and enables an earlier and faster release of development fi nance in high-risk contexts.

(9.3) Steering Committee allocations: documents the decision by the Fund’s Steering Committee to provide funding for an eligible proposal;

(9.4) Setting up projects and budgets: translates Steering Committee allocation approvals into discrete fund architecture units that link programmatic expenditures to results;

(9.5i) Authorizing review: forms the fi rst half of the Internal Control Framework over transfer of resources and required review of standardized documentation for fund transfer requests prior to the approving review;

(9.5ii and iii) Approving review: forms the second half of the Internal Control Framework over transfer of resources and requires reconfi rmation that a transfer is being made in line with policy.

(9.6) PUNO refund: ensures funds returned by Participating Organizations at the end of their project cycle are applied back to the originating fund for programming.

3. Each fund has a unique set of objectives and programmatic and fi nancial eligibility criteria as well as Participating Organizations. Some funds have to process several dozen fi nancial transfers a year. The fi nancial transfer process must balance programmatic and fi nancial accountability. A robust review and approval of fi nancial transfer requests by the AA is critical to avoid erroneous fund transfers to Participating Organizations, programming delays and build-up of liabilities. However, the effi ciency of the fund transfer process is primarily dictated by the effi ciency of the fund allocation process.

4. A minimum set of supporting documents across funds is critical for the prompt processing of fi nancial transfer requests. It is the responsibility of Technical Secretariats to manage the fund allocation process and ensure that it is translated into this minimum documentation. The MPTF Offi ce has developed a number of templates to facilitate this process and participates in Steering

Committee meetings to provide procedural advice in line with Fund TORs as required.

PROCESS 9.0 ALLOCATIONS, TRANSFERS AND REFUNDS FROM POs

5454

Process 9.4 Setting up projects and budgets

Process 9.3 Steering Committee allocations

Process 9.6 Refunds from Participating Organizations

Process 9.5 Fund transfer requests (i), (ii) and (iii)

Process 9.1 Holding the fi rst Steering Committee meeting

Process 9.2Fund risk management

55

OBJECTIVE1. Ideally, the fi rst Steering Committee meeting approves

the Fund Rules of Procedure. The quality of this document and the subsequent other building blocks that will make up the Fund Operational Manual directly impact the economy, effi ciency and effi cacy of the fund.

OVERVIEW2. A Fund Operational Manual is a critical and comprehensive

document for the lifecycle of a fund. An Operational Manual covers a wide range of issues, including the fund project cycle, allocation process and criteria, Steering Committee TOR, RBM, environment and social safeguards, gender policy, capitalization process, risk management policy and reporting procedures (see overview).

3. Given the need for comprehensiveness, a relatively long period of time is needed for completion of the manual. As a result, incremental documents are created as building blocks aiming to comprise the Operational Manual over time. This modular approach ensures a rapid initiation of the fund and establishes a feedback loop.

POLICY4. Following the approval of the Fund TOR and signature

of the MOU, and in collaboration with the MPTF Offi ce, the Technical Secretariat will prepare a Fund Rules of Procedure and Steering Committee TOR. These documents will build on the text included in the Fund TOR and refl ect best practices, documented in templates and evaluation documents.

5. The Fund Rules of Procedure is the fi rst ‘building block’ document that will guide the Steering Committee’s initial fund allocation eff orts. It is a precondition for transparent and accountable fund allocation. It should be approved at the fi rst meeting. The Rules of Procedure, which incorporates as a minimum a description of the project cycle process, the eligibility criteria, the allocation process and allocation criteria, and the Steering Committee TOR, has a critical impact on the ‘value for money’ of a fund. Additional policies, rules and procedures, such as a risk tolerance policy, can be included in the foundational policy package to be approved by the Steering Committee prior to any fund allocation.

6. To ensure that the fund operates smoothly as a

PROCESS 9.1 Holding the fi rst Steering Committee meeting

Requirements Sections and contentsMandatory for MDTFs, ideally before fi rst fund allocation

Rules of Procedure, including: - Project cycle - Eligibility criteria - Allocation process and criteria - Steering Committee TOR

Optional - Technical Secretariat TOR - Recapitalization process - Risk management system - Reporting - Auditing

Other areas to be covered

- Confl ict resolution - Environmental & social safeguards - Gender policy - Cross-cutting issues - Communications and disclosure - Scope of M&E

pass-through mechanism and with minimal additional delays and transaction costs relative to stand-alone projects, rules must be consistent and shall not contravene those of Participating Organizations.

7. Approval of the Rules of Procedure will be documented in the Steering Committee minutes, which must be signed by the Chair/Co-Chairs.

8. Within two days of receipt of signed Steering Committee minutes, the Rules of Procedure document will be uploaded to Gateway. The completion of this process will inform the MPTF Offi ce when reviewing and processing the fi rst fund transfer requests. When a fund follows an expedited process, the fi nalization of the Rules of Procedure document can be planned after the fi rst Steering Committee meeting.

DOCUMENTS/TEMPLATES• Fund Rules of Procedure• Steering Committee TOR• Signed Steering Committee minutes

REFERENCE MATERIALS• Template Fund Rules of Procedure• Template Steering Committee TOR• Library of existing Fund Operational Manuals

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9.1 Holding the first Steering Committee meeting

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TRIGGER: The MOU has been signed and the Fund TOR agreed by the Participating Organisations


Call for first Steering Committee meeting to

approve SC TOR and Rules of Procedure

STARTBased on MPTFO

templates and examples, prepare SC

Terms of Reference and Fund Rules of

Procedure

Review SC TOR and Rules of Procedure; provide feedback on

best practices; ensure mandatory

enclosures included; clear final products

SC TOR Fund RoP

Collate samples of templates and ensure all AA requirements

are included

Provide feedback until issues cleared

Review revisions and provide

feedback; ensure mandatory enclosures included

Fund RoPSC TOR

Review SC TOR, and ROP at first SC

meeting

Revise SC TOR and /or Fund ROP

Document decisions in SC

minutes

Upload SC minutes with attached final

approved documents on GW Fund page

Provide feedback until issues cleared

Approved

Review revised SC TOR, and /or ROP

Rework

Approved

Approve upload on GW Fund page

within; file minutes

Signed SC minutes

SC TOR Fund RoP

Revised SC TOR

Revised Fund RoP

Revised SC TOR

Revised Fund RoP

Revised SC TOR

Revised Fund RoP

Revised SC TOR

Revised Fund RoP

Signed SC minutes

Revised SC TOR

Revised Fund RoP

Signed SC minutes

END

Minor adjustments should be reviewed

via email; major adjustments

discussed at the next SC meeting

57

PROCESS 9.2 Fund risk managementOBJECTIVE1. This optional process leverages the potential of pooled

fi nancing mechanisms to better manage risks and enables an earlier and faster release of development fi nance in high-risk contexts.

OVERVIEW2. Pooled fi nancing mechanisms potentially off er a

number of options to better manage risks for individual development partners. The governance structure of a pooled fund provides a unique platform for development of a shared understanding of risks through joint risk assessments and a coordinated, dynamic management of risks through a risk management strategy (RMS).

3. Risk assessments and risk management are particularly important in fragile and confl ict-aff ected countries where levels of contextual, programmatic and institutional risks are high and capacity is low. Fully leveraging this risk management potential of pooled funds supports fund capitalization and enables an earlier and faster release of development fi nance.

4. A joint risk assessment form the basis of determining a fund’s risk tolerance and development of an RMS, which includes responses to, and a monitoring framework of, identifi ed risks. The RMS may also propose establishment of a Risk Management Unit. A fund’s RMS should be done as soon as possible and, where possible, before the fi rst allocation as it will aff ect project and partner allocation decisions and selection criteria.

POLICY5. The Fund TOR will indicate if a fund intends to carry out a

joint risk assessment and develop an RMS. Alternatively, based on need or a request by its stakeholders (government, donors etc.), a fund may choose at any time to develop an RMS based on a joint risk assessment. The Steering Committee will take the decision for the fund to carry out a joint risk assessment and develop a RMS.

6. Based on the MPTF Offi ce Guidance Note for Developing a Risk Management Strategy, the Technical Secretariat will prepare a proposal for the Steering Committee which details the steps, operational modalities and timeline for developing an RMS and possibly establishing a Risk Management Unit.

7. Upon approval by the Steering Committee, the Technical Secretariat follows the steps set out in the proposal for operationalization of the development of the RMS. The Steering Committee appoints a subcommittee to work closely with the Technical Secretariat. The development of the RMS may be carried out either in-house by the Technical Secretariat or through a consultant using an LTA.

8. The Technical Secretariat or consultant facilitates the conduct of a joint risk assessment, which identifi es the key risks based on a sound and shared analysis of the context. In fragile and confl ict-aff ected countries, this should ideally also include a confl ict analysis that identifi es the underlying drivers, features and dynamics of vulnerability and confl ict.

9. Based on the risks identifi ed, the SC decides on the fund’s risk profi le, which is the amount of risk the fund is prepared to accept, tolerate or be exposed to at any point in time. A fund’s risk profi le provides guidance on which risks can and cannot be taken and guides the fund’s responses to identifi ed risks.

10. Using the fund risk profi le, the RMS details responses for each risk identifi ed (treat, transfer, tolerate or terminate the risk) as well as a monitoring framework. Risks that have been mitigated and are within the fund’s risk appetite should be tolerated.

11. The Technical Secretariat presents the draft RMS to the Steering Committee and incorporates feedback. The fi nal RMS is adopted by the Steering Committee. Based on the approved RMS, the Technical Secretariat may need to update the Fund Rules of Procedure, including project and partner selection criteria.

DOCUMENTS/TEMPLATES• MPTF Offi ce guidance note for developing a risk

management strategy• Proposal for the development of a risk management

strategy• Joint risk assessment• Fund risk management strategy• TORs for a Risk Management Unit

REFERENCE MATERIALS• TORs for joint risk assessments• TORs of existing RMUs

5858

9.2 Risk management

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Trigger: Fund TOR mentions the needs for a Risk Management Strategy or stakeholder request


Appoint a sub-committee of the SC as the focal point to

take this forward.

Review the note/proposal

Draft and share guidance note on

Fund Risk Management

START

Prepare a note/proposal for tabling at the Steering Committee meeting

on developing a Fund Risk Management Strategy (RMS) and

possibly establishment of a RM unit

Approve the processfor defining the

Fund’s RMS

Rework withcomments

Conduct analysis and joint risk assessment as defined in the approved

note/proposal

Define TOR and manage LTA

Review draft Fund Risk Management

Strategy with stakeholders and receive feedback

Conduct analysis and joint risk assessment as defined in the approved

note/proposal

Will implementation be in-house or

through an LTA?

In-house (by TS)Outsource (by consultant)

Review draft Fund Risk Management

Strategy and provide feedback

Refer to process 5.0 Managing Outsourced

Advisory Services

Incorporate feedback and

finalise

Review Fund RMSRework

Update Fund Rules of Procedure and RBM if required

Approved

Provide feedback to Steering Committee on risk monitoring

END

RMS proposal

RMS proposal TOR

LTA contract

RMS guidance

note

Risk assessment

Risk assessment inc matrix &

strategy

Fund RoP

Fund RBM

Define risk profile for TS to

implement

Based on the risk profile and risk assessment develop a Fund Risk

Management Strategy and monitoring

framework

Submit analysis to SC to enable risk

profile to be drafted

In-house (by TS)

Risk assessment

Based on the risk profile and risk assessment develop a Fund Risk

Management Strategy and monitoring

framework

Outsource (by consultant)

Risk Mgt Strategy and monitoring framework Risk

assessment inc matrix &

strategy

Risk Mgt Strategy and monitoring framework

59

OBJECTIVE1. A fund allocation by the Steering Committee establishes

the basis for a fund transfer request (FTR) and provides the authority for the MPTF Offi ce to action that FTR in a rapid, effi cient, accountable and cost-eff ective manner.

OVERVIEW2. The fund allocation process documents the decision

by the Fund’s Steering Committee to provide funding for a proposal that has been appraised, in line with the procedures outlined in the TOR and the Rules of Procedure, as meeting the technical standards and eligibility criteria of the Fund. It also confi rms that there is suffi cient funding available to achieve the outcomes of the proposal and that any legally agreed earmarks on the use of funds have been respected. The Technical Secretariat supports this process by coordinating or completing the appraisal of the proposals submitted by Participating Organizations.

3. The appraisal process and outcome is documented in a project review appraisal form to provide assurance to fund stakeholders that the Technical Secretariat followed due process, considered eligibility and technical criteria and confi rmed fund availability prior to presenting a proposal for Steering Committee approval.

POLICY4. The Steering Committee must ensure that it makes

funding allocations that do not contradict legally agreed donor earmarks and takes into account

previous allocation decisions and performance. To enable the Steering Committee to make informed resource allocation decisions, the MPTF Offi ce, as the Administrative Agent of the Fund, issues a funding framework to the Steering Committee through the Technical Secretariat at least fi ve days prior to the Steering Committee meeting. The funding framework forms a necessary input into the fund allocation decision. It sets out the fi nancial position of the Fund and the balance of funding available for programming. It includes information on earmarking (if any) to enable to Steering Committee to adhere to legally agreed stipulations about the use of funds and to enable sectorial/thematic-based prioritization decisions.

5. The Steering Committee can only make allocations up to the programmable amount of the cash balance in the Fund. In exceptional cases, the Steering Committee may approve allocations up to the anticipated programmable amount of signed donor commitments to respond to urgent programmatic and contextual needs. Taking this approach increases the risk of over-allocating funds as a commitment may be cancelled, the value of a commitment may change due to exchange gains or losses where the commitment is made in a non-USD currency, and sending and receiving banking institutions may levy charges on the amount. Therefore, such allocations must be authorized contingent on the receipt of future cash fl ows, and this contingency must be stated in the meeting minutes and fund allocation matrix signed by the Steering Committee to evidence its approval.

6. Should a Steering Committee exceptionally authorize an allocation in excess of the programmable cash balance

of the Fund but within the total programmable amount committed to the Fund, the Steering Committee must indicate which proposals should be prioritized for transfer pending the receipt of the anticipated donor deposit. Furthermore, should a multi-tranche proposal be approved, the full amount of the proposal must be included in the total allocation authorized, and the conditions for second and subsequent tranches to be transferred must be spelled out (such as an annual request, performance criteria etc.). Second and subsequent tranches for transfer should be approved at future Steering Committee meetings once conditions have been met unless a formal written delegation is in place for the Technical Secretariat to make this decision.

7. Should a Steering Committee approve an allocation in excess of the programmable amount of commitments on the Fund, this approval will be considered null and void. An exception to this is the Common Humanitarian Funds, for which the resource planning and allocation processes are very dynamic and occur in a rapid manner to address humanitarian needs. Therefore, for this type of fund the overall approval of standard allocations (a six-monthly cycle of CHF allocation) projects may be in excess of the programmable amounts of the committed funds (signed SAA).

8. The Steering Committee has the authority to allocate funding to Joint Programmes/projects that have a reasonable expectation of being operationally completed by the operational closure date of the Fund, as established in the Fund’s TOR and MOU. Allocations cannot be made for projects where implementation is expected to continue beyond the operational end date of the Fund in eff ect at the time the decision is made, as

PROCESS 9.3 Steering Committee allocations

60

evidenced by the expected implementation completion date in the programmatic/proposal document submitted by the Participating Organization. This forms part of the appraisal review conducted by the Technical Secretariat.

9. Steering Committee decisions must be documented on a signed fund allocation matrix (FAM) prepared by the Technical Secretariat, and they may be further supported by optional written minutes of the meeting. To ensure accuracy of the FAM, Technical Secretariats are encouraged to share the draft FAM with the MPTF Offi ce for review before fi nalization/signature. The FAM must be signed and dated by the Chair and/or Co-Chair of the Steering Committee within the time specifi ed in the Rules of Procedure. The signature certifi es that the decisions detailed in the FAM are an accurate record of the decisions taken by the Steering Committee. If written signatures are obtained, the signatures must be on the FAM document. Electronic signatures are also acceptable and are considered to be the offi cial organizational email address of the Steering Committee member. If the electronic signature protocol is used, the email should be copied to Steering Committee members and have the FAM document attached to the email.

10. The Technical Secretariat supports the fund allocation process by managing the call for proposals process, conducting or coordinating a technical appraisal of the submissions (including substantive review by peer agencies or independent experts), and formulating recommendations on eligible proposals for presentation to the Steering Committee for decision. The Technical Secretariat summarizes its appraisal in the standard proposal review appraisal form, which, at a minimum, must include:

(i) consistency of the proposal objectives with the Fund TOR;

(ii) eligibility criteria are met, including fi t with fund purpose and eligibility of the requesting organization;

(iii) proposal implementation can reasonably be expected to be completed and operationally closed by the fund operational end date;

(iv) the proposal meets minimum fund allocation limits established by UNDG (USD 100,000 or more per allocation per United Nations agency; USD 50,000 for existing funds during a transition period) and maximum allocation cap if applicable;

(v) the proposal is appropriately costed and includes a budget submitted in the current UNDG budget category structure. At a minimum, the budget should cover the full timeframe of the proposal, but it does not need to be further broken down into years unless this is already known at the proposal stage;

(vi) risk level of organization applying for funding is consistent with the risk tolerance policy of the Fund (this is particularly relevant when Implementing Entities are NGOs); and

(vii) indirect costs adhere to United Nations cost recovery policy. Other more technically specifi c appraisal criteria may also be added as tailored to the needs of the Fund.

DOCUMENTS/TEMPLATES • Funding framework (a Gateway report)• Proposal review appraisal form• Project document template• Steering Committee minutes and annexed signed fund

allocation matrix

REFERENCE MATERIALS• Technical Secretariat guidance note referencing

Operational Manual, including Rules of Procedure, Fund TOR, budget breakdown of fund allocation etc.

• Template project review appraisal form• Template Steering Committee minutes and, in annex,

fund allocation matrix• Fund risk tolerance policy• United Nations cost recovery policy for pooled fi nancing

mechanisms• Guidelines for performance-based allocations (part of

SOP package for Delivering as One Funds)

6161


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9.3 Steering Committee allocations Po

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TRIGGER: First SC meeting has taken place and the Fund Rules of Procedure have been approved; AND (i) a regularly scheduled SC meeting is due; or (ii) evaluation of a call for proposal has been completed or (iii) a DaO allocation meeting is needed.


Call for SC meeting for Fund allocation, as per

Rules of Procedure

Confirm dates for SC meeting

Request AA to produce funding

framework with a specific cut-off date for data

Inform PA/FA of request, cur -off date for data and which

tables to use in Funding Framework (1 week lead time)

Select standard tables to be

included and use GW to produce

report

Review and submit FF to TS

Collate documents for SC

meeting and circulate prior to

meeting

Review current financial status of

fund during SC meeting

Review proposed allocations/projects

for fund, decide which proposals are

approved

Funding Framework

Funding Framework

Funding Framework

Funding Framework

START

Decide which proposals will be funded first in full

and use of earmarks

Liaise with treasury and confirm to FA (copy FM)

within 2 days that all transactions accurately

posted in GL up to cut off date

Proposal Appraisal

Form

Document decisions on what has been approved

for funding and disbursement priorities

in Fund allocation matrix signed by chair/co-chair

Submit signed FAM to AA, including

proposals and PAFs for approved projects

Move to process 9.2 setting up

project budgets and recording

allocations END

Signed Fund Allocation

Matrix

Proposal Appraisal

Form

Draft Fund allocation

matrix

Confirm all SAAs, transfers and SC minutes have been submitted for

processing (2 days)

Did the FAM allocation follow

due process?

Review submitted documents as per policy

Proposal Appraisal

Form


MatrixProposals inc. UNDG budget

& RBMDiscuss with TS/SC on

validity of the allocation decisions and

corrections needed

Does each proposal include all supporting documents, meet the RBM structure, or have

these listed as conditions for approval?

Yes

Discuss with TS to obtain documents/revisions – allocation

approved but cannot be transferred until corrections made

Obtain documentation/corrections from

PUNOs, resubmit to MPTFO PMProposals inc.

UNDG budget & RBM

Proposals inc. UNDG budget

& RBM

Proposal Appraisal

Form


Matrix


& RBM

Facilitate correction by the SC and to the

signed minutes; allocation is not yet

approved

No

Make corrections based on ROP to

authenticate allocations;

correct signed FAM

Revised signed FAM


Matrix

Yes

No

Proposal Appraisal

Form


& RBM

Draft Fund Allocation

Matrix

63

OBJECTIVE1. This process translates Steering Committee allocation

approvals into discrete fund architecture units (MPTF Offi ce Atlas projects) that link programmatic expenditures to results and lay the structural foundation for fund transfer, monitoring and reporting.

OVERVIEW2. Transfers or disbursements are not possible if a project

budget is not set up in Atlas. An MPTF Offi ce Atlas project is a discrete fi nancial architecture unit whose scope may diff er from fund to fund but which can be uniformly monitored, reported on, managed and closed. An MPTF Offi ce Atlas project allows for the translation of an approved allocation into an analytical structure, with programmatic and fi nancial systems-based reporting elements, in line with the overall architecture of the Fund.

3. Right-sizing MPTF Offi ce Atlas projects and ensuring the optimum number of projects per fund is critical for effi cient fund management. If RBM is included, it is indispensable to link fi nancial fl ows and programmatic outcomes. Miscalculations or mistakes in setting up new projects can result in mapping issues and increased transaction costs that are costly to correct and reduce the MPTF Offi ce’s credibility as a fund administrator over the long term.

4. MPTF Offi ce Atlas projects may or may not match Steering Committee allocations, as they follow a fund-level architectural logic. MPTF Offi ce Atlas projects may alternately represent a cluster or dissection of allocations.

POLICY 5. Given the risks associated with over- or under-sizing an

Atlas project, the MPTF Offi ce has developed a decision tool for PMs to guide the optimum scope of a project. The decision tool sets the parameters of appropriate fund size, including, but not limited to: (i) amount and number of allocation cycles and projects within the cycle; (ii) expected length; (iii) number of agencies; (iv) geographical scope (in case of Global Funds); and (v) results-based reporting requirements.

6. When an MPTF Offi ce Atlas project does not match Steering Committee allocations, the PA will maintain a mapping of project architecture. This fund architecture database reconciles allocations with projects entered in the UNDP Atlas system. The fund architecture database will be used as a check against duplicate allocations and money transfers.

7. The total amount in a project’s budget will refl ect the cumulative allocation decisions of the Steering Committee, but it is limited by the amount of resources actually available in the Fund.

DOCUMENTS/TEMPLATES• Fund architecture database

REFERENCE MATERIALS• Signed fund allocation matrix• Proposal review appraisal form• Proposals including UNDG budget• Decision tool to guide the optimum scope of an

MPTF Offi ce Atlas project

PROCESS 9.4 Setting up projects and budgets

6464

9.4 Setting up projects and budgets

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TRIGGER: PM receives a new signed FAM from SC


Create (adjust) new project ID in Atlas, if needed, as per PM

discussion

Does a new project need to be set up?

Yes

Increase project budget for

allocated amountNo

Set up (adjust) project budget for allocated

amount

Is project correct within fund architecture AND

has the budget been set up correctly in Atlas?

Finalise ‘project’ budget in Atlas (which indicates

project structure is approved)

END

Yes

No – rework project and /or budget

Set up GW project page’ submit FAM to FA stating

which allocations are approved (no conditions)

Create GLJEs to move cash to child fund for approved

allocations

Approve GLJEs for allocations? copy PA

on confirmation

No - rework

Yes – will update in GW tables

Signed Fund Approval

Matrix

Note conditional approvals on file – these are not

set up as projects until final

approval received

Set up RBM project details (product

indicators, baseline, targets)

Approve RBM data or send for rework?

ReworkEND Approve

Review FAM and determine if new awards/projects

are needed, discuss structure

with PA as per MPTFO policy

START

Does a new award need to be proposed?

No

Propose new award and project in Atlas, as per MPTFO policy

Has the award and project been set up correctly as per the

fund architecture and in Atlas?

Finalise ‘award’ in Atlas (project is set up automatically)

Yes

No - Rework

TS enters fields such as product indicators, baselines, targets and similar data for predefined effect indicators

65

OBJECTIVE1. This sub-process forms the fi rst part of the segregated

fund transfer process. In line with the MPTF Offi ce’s Internal Control Framework, it covers the portfolio staff ’s authorizing review of fund transfer requests prior to their approving review by fi nance staff .

OVERVIEW2. The UNDP Internal Control Framework mandates the

separation of authorization from approval. This manifests itself in an MPTF Offi ce internal two-step fund transfer process.

3. Authorizing review is the initial step of fund transfer in which a Technical Secretariat submits a fund transfer request following Steering Committee allocation approval. The authorizing review by MPTF Offi ce portfolio staff reviews the standard documentation for fund transfer requests for accuracy and completeness. It ensures that fund transfers comply with the decision of the Steering Committee and the Fund TOR. Considering the volume and required speed of disbursements across various unique funds, consistency of procedural and documentation processes is required.

4. This process also allows Treasury to manage the liquidity and investments of the fund portfolio, thereby maximizing fund earned income and enabling the MPTF Offi ce to rapidly eff ect cash transfer at the second stage of the fund transfer process.

POLICY5. Upon receipt of Steering Committee allocation approvals

and a fund allocation matrix, the Technical Secretariat will complete a fund transfer request and collate the supporting documents for signature and review. One fund allocation matrix does not necessarily correlate to one fund transfer request; an FAM can be split into various disbursements due to the lack of cash available in the account or the existence of conditional approval.

6. If the Steering Committee allocation approval is conditional, the Technical Secretariat will liaise with the Participating Organizations to address approval conditions. The Technical Secretariat can only clear conditions if the Steering Committee has delegated clearance authority in the Rules of Procedure; alternatively, the Steering Committee must approve clearance of conditions.

7. Supporting documents include a proposal review appraisal form and, if applicable: (i) modifi ed proposal; (ii) SC/TS clearance of conditional allocations; and (iii) SC delegation to TS on clearance.

8. The fund transfer request must be signed and dated by the Steering Committee Chair. In order to minimize the likelihood of returning to the Steering Committee for corrections, it is critical to maintain a focus on accuracy of documentation. To the extent that fund transfer requests are based on fund allocation matrixes previously reviewed by the MPTF Offi ce for accuracy, errors and omissions may be kept to a minimum.

9. Treasury maintains an average liquidity level of USD 10 million for daily transfers across the portfolio, and it invests the remaining funds. To manage portfolio liquidity and to ensure that transfers can be executed rapidly, the PA must notify the Treasury Associate of any FTRs that exceed USD 3 million.

10. Following receipt of a signed fund transfer request, the PA will confi rm whether a project/budget is already set up or needs to be created for cleared conditional proposals. The PA will produce the FTR checklist, ensuring the accuracy and completeness of supporting documents, prior to passing the fund transfer request to the PM for signature and the completed fi le to fi nance for approving review and actual fund transfer.

DOCUMENTS/TEMPLATES• Fund transfer request• Fund transfer fi le (supporting documents include

proposal review appraisal form and, if applicable, modifi ed proposal, SC/TS clearance of conditions and delegation of clearance)

REFERENCE MATERIALS• Template fund transfer request• Fund allocation matrix• Fund transfer request checklist• Proposal review appraisal formAnd if conditional:• Modifi ed proposal• SC/TS clearance of conditions• Delegation of clearance• Amended proposal appraisal form

PROCESS 9.5 (i) Fund Transfer Requests: Authorising Review

66

9.5(i) Fund Transfer Requests: Authorising Review

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TRIGGER: FTR due in accordance with Rules of Procedure of Fund and based on new or undisbursed FAM allocation

Review FTR, supporting documents. Is it complete

and accurate?


Prepare FTR based on SC

allocations and FAM

Review FTR for accuracy and sign

if approvedApproved

YesPass completed file

and checklist to finance for

processing and review as per ICF

Submit approved FTR with supporting

documents to AA

FTR checklist

Transfer file

END

START

Draft FTR

SC delegation of authority for TS to

clear conditions SC/TS

clearance of any conditions

Does the FTR include projects have been

cleared of conditions?

Complete process 9.2 to set up

project/budget and return to FTR

Rework


Matrix

Signed FTR

Signed FTR


clear conditions SC/TS

clearance of any conditionsSigned Fund Allocation

Matrix

Signed FTR

SC/TS clearance of

any conditions


Matrix


clear conditions

No

Yes

Review checklist; certify as accountable

Authorising Officer?

Rework FTR as needed

Review FTR for accuracy and sign

if approvedReworkApproved

Complete procedure 9a (Authorising

FTR checklist)FTR

checklist

Rework Authorise

Revised FTR

FTR checklist

Revised FTR

Note: This process can be completed in parallel with process 9.3 SC allocations

67

OBJECTIVE1. The sub-processes 9.5(ii) and (iii) form the second part of

the fund transfer request process, covering the Approving Manager’s approving review of fund transfer requests and resulting in a transfer to a Participating Organization.

OVERVIEW2. The approving review checks that a transfer is being

requested in line with policy and that the request is appropriately requested and authorized. This process results in generating a payment to rapidly disburse the funds and ensure that they are appropriately recorded within the fund architecture design to match fi nancial transactions with progammatic results.

POLICY3. Upon receipt of the transfer fi le from portfolio staff ,

the Finance Associate completes a series of checks based on the fund transfer checklist to ensure that the transfer meets the minimum policy and documentation requirements as outlined in sections 9.3 and 9.4. Any exceptions are elevated to the Finance Manager, which forms part of the Approving Manager review and approval. At a minimum, the following documents are required to support the execution of payment to a PO:

• A fund transfer request signed by the Steering Committee Chair that includes the basic generic information in the generic FTR template, such as: fund name, Participating Organization, allocation in USD, current transfer amount, theme or sector.

• A fund allocation matrix signed by the Steering Committee Chair that includes: (i) the allocated amount to an individual PO and to a specifi c fund architecture unit (child code and or project); (ii) whether the approval is conditional or unconditional; and (iii) which source of funds are being allocated (unearmarked or a specifi ed earmarked contribution).

4. If the FTR includes a transfer for an allocation that was conditionally approved, the Steering Committee or Technical Secretariat clearance of the conditions is required. If the TS provides such clearance, this should be accompanied by a delegation of clearance approval from the Steering Committee to the Technical Secretariat.

5. Programmatic proposals signed by the appropriate authority in the relevant Participating Organization(s), including a budget in UNDG categories. At a minimum, the budget (in UNDG categories) needs to cover at least the amount of the transfer (or cumulative transfer if the current transfer is the second or third etc. for the allocation). Therefore the budget does not need to agree to the specifi c amount of the transfer. The signatures of the Participating Organizations to whom the funds are being transferred indicate acceptance of the programmatic and fi nancial accountability for the amount of the (cumulative) transfer.

6. A completed and signed internal fund transfer checklist evidencing that all appropriate documentation is attached and checks have been performed.

DOCUMENTS/TEMPLATES• Template fund transfer request• Fund transfer fi le (supporting documents include

proposal appraisal form and, if applicable, modifi ed proposal, SC/TS clearance of conditions and delegation of clearance

REFERENCE MATERIALS• Fund allocation matrix• Fund transfer request checklist• Proposal appraisal form

And if conditional:

• Modifi ed proposal• SC/TS clearance of conditions• Delegation of clearance• Amended proposal appraisal sheet

PROCESS 9.5(ii), (iii) Fund transfer requests: approving and payment

6868

9.5(ii) Fund Transfer Requests: Approving Review

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Date/time stamp the request on

receipt

Submission complies with policy, all documents

submitted, PA has reviewed contact DB for

programme contacts

Sign checklist and submit with

documents to FM for approval

Return to PA with message on where

the submission does not follow MPTFO policy (copy FM in communication)

Move to process 9.5 ‘Transfer Payment’


START

Is the transfer linked to a critical

programme risk (in consultation with

PM)?

No – repeat process 9.3 to correct FTR

and/or checklist

Consider exception based on finance and

programme risks; consult with EC on high risk

exceptions

Declined, or partially declined: repeat process 9.3 to correct FTR or documents

Yes – provide justification to seek risk based exception

Review submission as ICF Approving Officer

Document exception and

approval in Note for the Record

Approved

Note exception granted on

checklist

Sign Checklist to evidence

approval, return file to FA

Approve

END

TRIGGER: PA passes completed file to FA for certifying review and processing

Return to programmes for rework – repeat process 9.3 to correct FTR and / or checklist

Procedure 9(b) conduct finance review as per ICF

No

Yes

Transfer file

FTR checklist

Transfer file

FTR checklist

FTR checklist

Note for the Record

Transfer file

FTR checklist

Transfer file

END

Decide on exception based on finance and

programme risks

Communicate high risk decisions

6969

9.5(iii) Transfer payment and notificationFi

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TRIGGER: Approving Officer has approved the transfer

Review GLJE.Does the COA

reflect the transfer request?

Print GL journal and APVs. Attach

supporting documents/file

and submit to FM for approval

Return to FA for correction No

Approve Journal and notify FA

(Atlas notification)

Yes

Prepare (correct) GLJE to move un-earmarked

cash from parent to child fund(s). Submit

Atlas notification to FM

Prepare AP voucher for each

PUNO(Atlas notification

to FM)

Review APVs -COA and vendor

information is correct?

Budget check and approve APV

(Atlas notification to FA)

Yes

Budget check fails

No


Review and identify issue

Resolve issue as per process

9.2 (project budget set-up)

Project budget issues

Return file to FA for transfer notification

Voucher approved

Transfer file

Transfer file

Procedure 9 Complete Transfer

notification

END

All other issues (e.g. KK or COA)

Resolve KK, COA or GL issues

PUNOs with multiple projects – use separate COA line for each project

Earmarked funds -refer to earmarking process

7070

Procedure 9 Transfer notification

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TRIGGER: FM notification -APV(s) and GLJEs have been approved

Check if the APV has been processed

in the scheduled pay cycle?

Wait until the voucher is paid (or

follow-up with Treasury if more

than 1 day)

No

Prepare the Payment

Notification using GW template

once the transfer appears on GW.

yes

Extract contacts from database

(programme and finance ). Prepare To and cc as per

policy

Send email notification


Voucher paid in paycycle

File notification, and note on GLJE and APV numbers

START

ENDTransfer file

GW is updated with Atlas data approx. every 2 hours.

All transfers use the standard template – no

exceptions for this

71

OBJECTIVE1. The expedited return and application of uncommitted

transfers and unused funds at the end of a project cycle enables limited fund resources to be reprogrammed for other strategic allocations (where possible) and contributes to the management of fi nancial and reputational risks linked to slow project and fund closure.

OVERVIEW2. At the end of a project cycle all uncommitted and

unspent funds need to be returned to the Administrative Agent by the Participating Organization. The MPTF Offi ce will not request a refund where the balance of unused funds for an individual project is less than or equal to the policy threshold.

3. A return of the project balance is the fi nal prerequisite before the closure of a Participating Organization project and fi nal project fi nancial reporting. All refunds need to be received and applied by the MPTF Offi ce before an MPTF Offi ce project or fund can be fi nancially closed. Additionally, the return of uncommitted or unused resources enables MDTFs to reprogramme these resources and contributes to the programmatic eff ectiveness and attractiveness of pooled fi nancing as a fund instrument.

POLICY4. The balance of uncommitted and unspent funds must

be returned to the Fund by a Participating Organization in accordance with the MOU and SAA. However, in

the interests of reducing transaction costs across the United Nations System, a threshold of USD 250 per MPTF Offi ce project per Participating Organization has been established. Therefore, only refunds that exceed this amount are required to be returned.

5. PO refunds of transfers are returned to the Fund for reallocation (in accordance with the Fund Rules of Procedure) but, where the funds were earmarked by the donor, retain the same donor conditions as the original deposit. All other refunds are considered unearmarked.

6. Refunds are applied to the project and the thematic area the project is associated with (as represented by the child fund code the project is attached to). Returned unearmarked funds are moved via GLJE to the parent level to demonstrate that they are available for allocation as unearmarked funds. Returned earmarked funds remain at the child fund code level.

7. Refunds are not recorded as fund income in the fund account as the funds do not refer to new money; they are recorded as a negative expense (a negative transfer). However, for presentation purposes, refunds are shown as a separate line item from transfers.

8. A PO follows its own fi nancial regulations and rules about whether interest earned on a transfer is remitted back to the MPTF Offi ce. The process to apply any such remittances is the same as the process in this section except that interest is applied only at the fund level and not the project level. However, the return of PO earned interest is applied as income as it relates to new money and is available for allocation by Steering Committees as unearmarked funds.

DOCUMENTS/TEMPLATES• Sample COA email to notify Treasury to apply refunds• Sample COA email to notify Treasury to apply PO

returned interest

PROCESS 9.6 Refunds from Participating Organizations

72

9.6 Participating Organisation refundTr

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Application of PUNO refund to project Version: 26 Jun 14

Create Deposit ID (DID)

Notify MPTFO TA when process is

complete

Email Treasury AR pending item to match the Deposit

ID (match GID to DID)

TRIGGER: Report received from OIST with prior day’s treasury bank transactions (refer to 7.5)

Review MPTFO bank accounts

and identify (daily) deposits

START

Establish PUNO as source of deposit

Notify Core Finance of PUNO refund and

request COA

Details of deposit are recorded into log of ‘Unapplied

Deposits’Unapplied deposit log

Is there sufficient documentation to

support the refund?

Request PO to provide project

number and reason (refund/

interest)

No

Interest or Refund?Yes Provide CoA to TAInterest

Refund

Create project budget in Atlas and notify Core Finance and TA

Treasury runs application process in Atlas to apply deposit to MPTFO fund (cash

receipt)

Notify TA if funds have been

applied or there are budget errors

Update ‘Unapplied

Deposits’ log


Deposit applied? Yes

END

Resolve budget error with PA or

CO

No

Wait for feedback

Update matrix and/or project

closure checklist

END

Request PA or DoA office to create project budget (if none

exists for current year)

Create project budget in Atlas and notify Core Finance and TA

Delegated Fund Centralized Fund

Treasury dept. creates all Deposit IDs regardless of bank acct or Atlas Agency


PUNO email/ financials / deposit reference

Refunds are posted to an expenditure acct and there a current year budget ($0) is needed

73

OBJECTIVE1. The annual reporting process ensures that all fund

stakeholders have timely access to a consolidated annual fi nancial and narrative report along with a certifi ed fi nancial statement for each of the funds they are involved in.

OVERVIEW2. Annual reporting is one of the fi ve key fund

administration tasks, along with negotiating/receiving fi nancial contributions, transferring funds, fund monitoring and fund closing. There is a clear link between the annual reporting and fund monitoring tasks: the annual reporting process ensures that annual reports are produced on time for each of the funds and that these reports document the progress of a Fund towards achieving its overall objective, outcomes and outputs as well as the Fund’s fi nancial status. They also spell out the ways in which Implementing Agencies have met their programmatic and fi nancial accountabilities. The reports then become a key tool for Steering Committees and other stakeholders to monitor the overall progress of the Fund, review lessons learned and good practices, and identify challenges and risks that require follow-up action.

3. This process is divided into fi ve sub-processes:

(10.1) Planning and communication: preparatory activities carried out between the fourth quarter of the previous year and January of the next year underpin a smooth, effi cient execution of the annual reporting process. This period ends with a message that formally launches the reporting period.

(10.2) Narrative reporting: the narrative inputs received from Participating Organizations are consolidated by either the Technical Secretariats or the MPTF Offi ce. The fund RBM systems in Gateway are used to help generate consolidated performance data for an increasing number of funds.

(10.3) Managing UNEX data: the fi nancial expenditure data uploads in UNEX, carried out by Participating Organizations, enable a consolidation of the expenditure data according to the RBM structure of the Fund. They also assist the Participating Organizations to address possible data quality issues.

(10.4) Statements of Sources and Uses of Funds (SUOF): The certifi ed fi nancial statements, signed by both the UNDP Comptroller and the MPTF Offi ce Executive Coordinator, meet the MPTF Offi ce’s requirements for fi nancial accountability for every fund in its portfolio.

(10.5) Standard fi nancial reports and tables: the consolidated report usually includes a fi nancial section with standard text and tables, which is combined with the programmatic results to constitute the annual consolidated report.

4. The timely preparation of the consolidated annual reports and the SUOFs is a requirement of the legal agreements (MOU, MOA, contribution agreements). The MPTF Offi ce aims to ensure full compliance with the annual reporting requirements and timeline for all of its funds. The MPTF Offi ce’s Key Performance Indicators (KPIs) foresee that 100 per cent of the Sources and Uses of Funds statements and the vast majority (that is, more than 90 percent) of the annual consolidated reports

relating to the previous year are completed by the end of May.

5. The annual reporting exercise is a learning exercise, and its timeliness, quality and cost eff ectiveness should be continuously enhanced. The annual reporting process starts with a planning phase that updates existing templates to include new reporting requirements as and when required. The MPTF Offi ce closely engages with all stakeholders during the reporting period to ensure the timely preparation of individual contributions. The reporting period is rounded off with a lessons learned exercise and meeting in June. The review meeting refl ects on the overall performance of the MPTF Offi ce against its reporting work plan and KPI targets, and identifi es areas across all sub-processes that worked well as well as potential areas for improvement. In addition, the discussions are a fi rst input into planning for the next reporting period, and they result in a list of ideas for further standardization and innovation to meet the annual reporting requirements in a timely, high-quality and cost-eff ective manner.

PROCESS 10.0 REPORTING

7474

Process 10.1Planning and communication

Process 10.2 Narrative reporting

Process 10.3 Managing UNEX data

Process 10.4Statements of Sources and Uses of Funds

Process 10.5 Standard fi nancial reports and tables

75

OBJECTIVE1. The annual reporting planning and launch process is

intended to incorporate new reporting requirements, streamline/automate report processes and enhance the overall quality and ensure the timeliness of the reporting exercise.

OVERVIEW2. During the planning stage of the reporting period,

the MPTF Offi ce carries out a number of preparatory activities, which are summarized in a reporting work plan. The planning stage comes to an end with the formal launch of the reporting period in January, which takes the form of an email to key stakeholders involved in the annual reporting process. The message reminds the POs that they are responsible for submitting narrative reports by the end of March and fi nancial reports by the end of April.

3. One key output of the planning stage consists of specifi c reporting templates for the narrative reports to be submitted by POs as well as fi nancial reporting specifi cations. Templates are updated every year during the planning period to incorporate new elements required due to changes in the external environment (for example, new budget categories) and/or lessons learned from the previous reporting cycle and to further streamline/automate reporting eff orts. These are intended to obtain standardized, high-quality inputs from Participating Organizations so that overall the consolidated annual reports are of high quality and transaction costs minimized.

4. Another output of the planning period is an overview of the division of labour of the tasks related to the production of the consolidated annual narrative report for each of the funds in the MPTF Offi ce portfolio. The overall tasks are normally divided between Secretariats of MDTFs (and convening agencies for Joint Programmes), MPTF Offi ce staff and consultants. The latter are mainly used for the high-profi le funds to support the writing of consolidated reports, editing and/or design and layout.

POLICY5. The MPTF Offi ce aims to ensure full compliance with

the annual reporting requirements of all of its funds. Timeliness is promoted by taking timely decisions on key aspects of the reporting period and providing timely information on reporting expectations to Participating Organizations.

6. In order to meet the planned timeline, the MPTF Offi ce starts the annual reporting process in the fourth quarter of the previous year. This early start allows time for a broad, portfolio-wide overview of: (i) the overall approach to reporting to be taken in a given year; and (ii) specifi c new elements to be introduced in the reporting process and templates. It further signals the start for certain preparatory actions to be put in place.

7. The quality of the consolidated report is another key concern for the MPTF Offi ce. This concern is addressed through the use of specifi c reporting templates for the narrative reports to be submitted by Participating Organizations. The narrative reporting template is reviewed every few years to take into account feedback from stakeholders and changes in UNDG guidance.

8. One important element of the reporting approach consists of taking a clear decision for each of the funds as to who will take the lead in preparing the narrative part of the consolidated report, notably the Technical Secretariat or the MPTF Offi ce. It is the policy of the MPTF Offi ce that over time the entities responsible for fund operations, be they Technical Secretariats for MDTFs or convening agencies for JPs, take on more of the lead role in steering the consolidated narrative reporting process.

9. Irrespective of who leads the consolidated narrative reporting process, it is possible to obtain support for the actual report writing from consultants, particularly for large and complex funds. For those cases in which consultants are used, an appropriately costed procurement plan must be prepared that refl ects solid value for money. Consultants are normally sourced from existing LTAs — either MPTF Offi ce LTAs or LTAs set up by other UNDP units.

DOCUMENTS/TEMPLATES• Current year’s reporting work plan• Current year’s procurement plan for reporting

consultants related to reporting• Current year’s reporting message, email list of addressees• Current year’s reporting specifi cations

REFERENCE MATERIALS• Procurement summaries of LTA recruitment processes• Listing of pre-vetted LTAs• Documentation of previous year’s reporting period

PROCESS 10.1 Planning and communication

7676

10.1 Annual reporting planning and communication

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Deadline: 15 December

Version: 9 May 14

Finalises proposed

consultant plan

Combine reporting letter and contacts

into draft email to be sent out

Review email and contacts

Facilitate planning meeting to agree on

(i) approach for reporting; (ii)

timeline; and (iii)responsibilities

TRIGGER: 15 October

Approve

Scope reporting accountabilities and requirements: who

produces the report for each Fund: MPTFO or

the Technical Secretariat.

Scope consultant needs, suggest LTAs to use for :

(i) writing (MPTFO reports only); (ii)

editing; (iii) layout (for flagship products)


Prepare draft reporting

timeline and letter

Draft cover letter

Draft workplan

Prepare draft consultant /LTA

plan

Request preparation of draft consultant LTA plan and advice on need to update reporting

specifications

START

Draft procurement

plan

Prepare list of contacts to

receive reporting letter

Communicate final workplan to

office

Finalise plans and letter

Proceed with contracting for

consultants under LTA

Rework

Approve

Final Procurement

planFinal

workplan

END

Rework

Post email and reporting

specifications on GW

END

Send out email launching reporting

Advise on need to roll forward or revise financial

reporting specificiations

Update or roll forward reporting

specifications, with Operations

Associate for UNEX, if needed

Update programme content of reporting

specifications, if needed

Draft workplan

Draft procurement

plan

Draft procurement

plan

Final cover letter

Draft reporting

specifications

Draft reporting

specifications

Final reporting

specifications

This includes for each Fund: 1. Who writes the narrative report: MPTFO or Technical Secretariat2. Consultant plan for MPTFO written narrative reports and editing/;layout of limited number of Secretariat produced reports (notably flagship products)3. Which funds are ‘exceptional’ and may have additional/ alternate tables from the standard tables.

Deadline: 15 November

Include Fund level and finance contacts; liaise with finance and PAs as needed, facilitate using the contact DB

Deadline: 7 January

Deadline: 7 December

77

OBJECTIVE1. The narrative reporting process stipulates the division

of responsibilities and coordinates the preparation of narrative reports among Participating Organizations, Technical Secretariats and the MPTF Offi ce throughout the reporting exercise.

OVERVIEW2. Annual narrative reports are essential to monitor the

programmatic performance of a Fund, share knowledge, identify new high-impact opportunities, manage contextual, institutional and fi nancial risks, and take remedial action as required. The narrative report process is a key element of the MPTF Offi ce’s services for fund monitoring and reporting. It documents the progress of a Fund towards achieving its overall objective, outcomes and outputs, and it spells out the ways in which Implementing Agencies have met their programmatic accountability for activities funded out of the Fund.

3. The MPTF Offi ce aims to ensure full compliance with the annual reporting requirements of all of its funds. As specifi ed in the standard legal agreements, the annual reports relating to the previous year are to be completed by 31 May. For the Common Humanitarian Funds the deadline is 15 May.

4. Guidance for the preparation of the annual narrative reports has evolved over time. While the MPTF Offi ce used to directly prepare narrative reports, the preferred approach currently is for Technical Secretariats (for MDTFs) or convening agencies (for JPs) to take the lead in drafting them as subject matter specialists. The

MPTF Offi ce remains accountable for the overall annual reporting process and supports the preparation of narrative reports with consolidated and standardized fi nancial and performance data. This evolving responsibility for narrative reporting is refl ected in the new UNDG guidance for JPs and DaO that is coming into eff ect in 2014.

5. The MPTF Offi ce can support the drafting of narrative reports by Technical Secretariats in two ways: production of standard tables generated by the MPTF Offi ce from its fund RBM systems; and the recruitment of consultants for the Technical Secretariats of large and complex funds.

POLICY6. The preparation of consolidated annual reports is a

requirement, as per the legal agreements (MOU, MOA, contribution agreement), that the MPTF Offi ce needs to meet. The timeliness of annual reporting is captured through a Key Performance Indicator in the annual work plan and is closely monitored.

7. One important element of the reporting approach consists of taking a clear decision for each of the funds as to who will be tasked with writing the narrative part of the report, notably the Technical Secretariat or the MPTF Offi ce (either staff or consultants). This decision is taken during the planning stage and from there shapes the narrative reporting process, with process 10.2(i) being used when the decision is made that the report is to be written by the MPTF Offi ce and process 10.2(ii) used when the report is to be written by the Technical Secretariat.

8. An important aspect that infl uences the narrative reporting process is whether a Fund uses the RBM features of Gateway. If a Fund uses the Gateway features, the performance information captured in the narrative reports of the PO is entered into Gateway, populating the data fi elds for performance on eff ect and product indicators. These inputs are processed by Gateway to produce standard performance tables, forming the basis of the consolidated narrative report.

9. POs are responsible for submitting narrative reports by the end of March, irrespective of the approach to reporting that is chosen for a given fund. The PM is responsible for overseeing the timely completion of the annual reports for the funds in his or her portfolio. Anticipated delays in completing a report by the due date must be brought to the attention of the Deputy Executive Coordinator.

DOCUMENTS/TEMPLATES• One consolidated report each for all of the MPTF Offi ce

administered funds, posted on Gateway• Overviews of performance and costs of consultants• Overview of the performance against the reporting KPI

REFERENCE MATERIALS• Documentation of previous year’s reporting period• CHF guidelines• SOPs for Delivering as One• Revised guidelines for Joint Programmes (2014)• Guidelines for the United Nations country results reports

(expected September 2014)

PROCESS 10.2 Narrative reporting

7878

Process 10.2(ii)Narrative reports written by the Technical Secretariat

Process 10.2(i)Narrative reports written by MPTF Offi ce

7979

10.2(i) Narrative reports written by MPTFO

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Liaise with PO for submission of

narrative report (with assistance of

Secretariat to monitor)

Feedback loop PM & consultant

until report cleared

Trigger: 1 March (3 months before deadline)

Oversee elaboration of consolidated

narrative report

Using Consultant? Yes

No

Is report on the list for

MPTFO review?

Review report

Circulate draft to stakeholders

Which reports will be reviewed by whom?

Communicate decision to PMs

Trigger: 1 May (1 month before deadline)

START

Feedback loop until report cleared

Issue final report by 31 May

Upload final report on Gateway

(including SUOF) by 31 May

END

Incorporate comments

Final narrative and financial

Report

Prepare standard message to

stakeholders and contacts for final

versionEmail

template

Generate RBM performance

tables and standard financial

report/tables from GW

Submit performance tables and financial report to PM

Is fund report to be written by MPTFO?

END

Go to process 10.2(ii).

No


START

Yes

Complete consultant evaluations

Facilitate lessons learned session

- Approach- Timelines

- Recommendations- LTA roster evaluation

END

Maintain monitoring table to track

timeliness of reporting

Log into GW, enter fields for

performance of effect and product

indicators, with comments

Clear RBM data in GW or send for

rework

Cleared

Rework

Workplan progress

Draft/edit narrative report

(inc. performance tables, charts,

photos)

Submit narrative report through Gateway or via

email

Draft narrative

report

Submit narrative report through Gateway or via

email

Submit performance tables and financial report

to consultant

Consolidate and edit report

Draft financial

reportPerformance

tables

Draft narrative and financial

Report

Draft narrative and financial

Report


Report

NOTE: The standard financial report/tables are available in MS Word direct from GW by

7May (after finance validation)

DEC will assign specific reports to EC for review

8080

10.2(ii) Narrative reports written by Technical Secretariat

Prog

ram

me

Asso

ciat

ePo

rtfo

lio

Man

ager

Tech

nica

l Se

cret

aria

t

Version: 30 June 14

Monitor progress of report

submission (not contents)

Accept report in GW to finalise

upload

Wait for clearance from FM on financial

data from process 10.5

Fund report is to be written by

MPTFO?

START

Download performance and financial tables from GW and

send to TS

No

END

Go to process 10.2(i)

Yes


Participate in lessons learned

session at the end of process

END

Log into GW, enter fields for

performance of effect and product

indicators, with comments

For RBM Funds, monitor TS upload of

RBM data Clear RBM data in GW or send for

rework

Rework

Cleared

Receive financial and performance

tables to base report on

Draft financial report

Draft performance

tables

Write narrative report,

consolidate with finance report and upload on

GW by deadline


Report

81

OBJECTIVE1. This process enables all Participating Organizations to

meet their fi nancial reporting requirements and allows a consolidation of the expenditures reported by the Participating Organizations according to the structure of a Fund.

OVERVIEW2. Participating Organizations are required to report on

the use of funds received from an MDTF or JP annually. Additionally, POs may voluntarily report more frequently on the use of funds, such as quarterly or semi-annually, where this meets their internal transparency policies (such as IATI adoption), facilitates early or timely project closure and/or ensures that PO information available to stakeholders on the Gateway refl ects what is recorded in their accounts.

3. The United Nations has agreed on a standard way for United Nations organizations to report on funding received through United Nations inter-agency fi nancing arrangements, such as MDTFs and JPs. UNEX assists in meeting these requirements and enables POs to upload their expenditure data that refl ects the use of transfers received from an MDTF or JP. In this way, POs meet their reporting obligations and provide information for the consolidation of the expenditure information across all POs for an individual Fund.

4. Participating Organizations are required in a Fund MOU to upload their fi nancial expenditure data in UNEX by the end of April, after which UNEX is closed and the expenditure data is uploaded in the MDTF1 general ledger. The expenditure data is then used to produce the standard fi nancial reports and tables for the consolidated reports in process 10.5.

POLICY5. Each Participating Organization (as represented by a

unique Implementing Entity code — refer to process 4.4) must complete a separate UNEX upload by the end of April.

6. To manage the integrity of PO data, UNEX contains a series of system controls and internal checks that need to be cleared before the data will be accepted and can be uploaded. The MPTF Offi ce manages the access and upload process, but the system is maintained by OIST Montevideo, Uruguay.

7. The primary control is over who can access the UNEX system to ensure that only a registered user from a PO actively participating in an MDTF or JP has the ability and authority to upload offi cial PO fi nancial data. This is achieved through managing access accounts and procedure 10(a), ‘UNEX user provisioning’.

8. Only a registered user from a PO with a UNEX account can upload data into the system. The UNEX system limits the number of staff members that may have an account to four per PO. Each staff member must have a unique email address for his or her access account, and that email address can only be linked to one account for a PO.

9. Once POs have completed an initial data upload in UNEX, UNEX automatically conducts a series of validation checks which may result in the identifi cation of mapping issues and/or over-expenditures. To maintain the reputation and quality of pooled fi nancing mechanisms and to provide assurance to stakeholders that the funds are being managed appropriately, both mapping issues and actual over-expenditures need to be resolved by the PO.

10. Mapping issues where a PO may have incorrectly mapped their projects to an MPTF Offi ce project result in a reporting ‘over-expenditure’ rather than being an actual over-expenditure (that is, the PO has actually incurred more costs or charged more costs to an MPTF Offi ce project than it has received in transfers.)

11. Mapping issues can be identifi ed and potentially corrected in the upload fi les that are produced. However, this requires a PO to engage in the upload process early.

PROCESS 10.3 Managing UNEX data

82

12. UNEX produces an error report for POs to highlight issues such as reporting against an incorrect or fi nancially close project. This error report is monitored by the Operations Associate (systems). Additionally, the UNEX system can be used by the PO to identify where the current PO upload will result in a cumulative over-expenditure. The Operations Associate notifi es the PO staff member uploading the UNEX fi le of the issues being generated by the draft or fi nal upload fi le. Where there are signifi cant issues with over-expenditures, the Operations Associate notifi es a Finance Manager, who may elevate the issue with the PO donor reporting unit (or equivalent) to facilitate correction.

13. The review and correction of mapping issues is an ongoing, year-round process. Where an issue cannot be corrected during the short reporting timeframe, the Fund Operations Unit manages process 11.2, ‘Project Expenditure Monitoring’, to facilitate accurate and timely correction by POs of any over-expenditures reported. Note: POs should only correct reported expenditures that are corrected in their general ledger. Therefore, if an error is noticed at year end reporting in April, it will not be able to be corrected in the current reporting year.

DOCUMENTS/TEMPLATES• UNEX user access request form• UNEX upload template• User guide to using UNEX• User guide to managing UNEX for the MPTF Offi ce

8383


8484

10.3 Managing UNEX dataO

pera

tions

Asso

ciat

e (S

yste

ms)

Fina

nce

Man

ager

PUN

Os

UN

EX

Mon

tevi

deo

Seni

or F

inan

ce

Man

ager

Version: 12 May 14

Monitor UNEX uploads and

review for errors/warnings

including over-expenditure

Establish list of all agencies where

reporting is expected and

maintain status

Notify FM where significant over-

expenditures occur, including update if

corrections are made

Send periodic updates on status

to office

If needed, send reminder to

agencies: deadline and

consequences of not reporting

Decide date UNEX should be closed

Lock UNEX for reporting period

– no further uploads are

possible

Notify Uruguay Montevideo team

of closure

Instruct OA to close UNEX on date

Move to process 13.3

year end closure

Notify agencies of over-

expenditures and other errors

Determine if follow-up communication is needed

with PM or PO HQ on reporting issues


Follow up with PO if needed wait

Forward email announcing

launch of expenditure

reporting (UNEX) to agencies

contacts

Notify UNEX center of reporting timeline & key dates; provide updated Fund code

crosswalk

START

Open UNEX for reporting period

TRIGGER: Early Feb – release of annual reporting time table; OR July for Q1/Q2 uploads; OR October for Q3 uploads

Request to update UNEX access focal

points, or other UNEX technology

queries

The email typically generates queries

from PUNOs during the whole reporting period

Respond to technical upload

queries

UNEX user provisioning

process

Access issues Upload issues


financial reports/

tables END

UNEX status UNEX

status

Status: Draft upload completed; upload with exceptions; final upload etc

Note: It is possible for a PO to still correct mapping issues at this stage, but it is not possible to correct mis-postings in the PO GL.

The deadline is 30 April, but Uruguay has a national holiday on 1 May, so closing COB 1

May has no impact on timeline. Need at least 24-48 hours to close and process. Delays impact

the time available for narrative reporting.

85

OBJECTIVE1. This process produces a certifi ed annual fi nancial

statement that provides a summary of the annual and cumulative fi nancial fl ows of each Fund under its care. The SUOF provides fund stakeholders with reliable fi nancial information on which to base decisions infl uencing the future of the Fund.

OVERVIEW2. A Statement of Sources and Uses of Funds (SUOF)

is the formal fi nancial statement for each Fund that summarizes the fi nancial activities that the MPTF Offi ce has executed on behalf of the Participating Organizations and the Steering Committee.

3. The SUOF shows stakeholders the costs related to the management of the Fund. Therefore, the SUOF shows whether the AA has charged only 1 percent in AA fees and whether Fund and PO earned investment and interest income covers the cost of the AA function, thereby maximizing donor contributions for programming. It also highlights the cost of a Technical Secretariat through the direct costs charged to the Fund.

4. The requirement to produce an annual certifi ed SUOF is outlined in the legal framework of each Fund in the MOU or MOA and each donor agreement (SAA), based on UNDG guidance of the minimum legal fi nancial information that must be produced for a Fund.

POLICY5. A SUOF is produced on a cash accounting basis and

shows a summary of the annual and cumulative cash income received and the cash disbursed from the Fund.

6. A SUOF must be certifi ed. The authority to certify fi nancial information vests with UNDP’s Chief Financial Offi cer and Comptroller and his or her delegates. Unless fi nancial information has been certifi ed by one of these UNDP staff members, all fi nancial information must be considered uncertifi ed.

7. As outlined in the legal agreements, a SUOF must be available for stakeholders (Steering Committee members, donors, Participating Organizations etc.) for each Fund within fi ve months of the fi scal year end (31 May). To meet the deadline of 31 May, the MPTF Offi ce provides a three-week lead time for OFRM to review the SUOFs prior to certifi cation. A full set of SUOFs should be submitted to OFRM for review and certifi cation by 10 May each year.

8. All information for SUOFs is fi nalized after the Fund earned investment and interest income and bank charges have been allocated among the funds as part of the year-end closure process (see process 13.0). However, the SUOF reports can only be reviewed and certifi ed by OFRM once the MDTF1 general ledger has been closed and balances rolled forward for the year. This ensures that the SUOF reports are fi nal and cannot change.

9. Each SUOF is to be signed by two or three diff erent signatories. The Executive Coordinator must approve each SUOF before it will be certifi ed by the UNDP Chief Financial Offi cer to evidence that the MPTF Offi ce has produced an accurate report drawn from the MDTF1

general ledger, for which the MPTF Offi ce Executive Coordinator has ultimate responsibility. For funds where part of the AA function has been delegated, the named UNDP staff member on the delegation of authority authorizes the SUOF for that specifi c delegated Fund prior to approval by the Executive Coordinator, thereby following the full accountability chain of the AA function.

10. Since the general ledger remains open until all POs have reported their annual expenses and these have been uploaded into the general ledger (around 5 May), there is a short timeframe to produce the fi nal SUOF. Therefore, where the fi nancial AA function has been delegated, ‘pre-fi nal’ SUOFs are submitted for signature by the delegated authority by 21 April, to be sent back to the MPTF Offi ce by 3 May.

11. The fund operations team agrees the contents of the SUOF report back to the MDTF1 general ledger, completes the review checklist and signs a copy of the SUOF to evidence that the report is complete and accurate. The Finance Manager reviews the work of the team and initials the fi nal SUOFs to evidence that the review is complete.

12. The ‘pre-fi nal’ SUOFs under delegation of authority are also checked against the fi nal reports to ensure that no changes have been made. The Executive Coordinator signs all the SUOFs around 9 May, and a full set of hard copy SUOFs is delivered to OFRM for certifi cation.

13. Once certifi ed, a copy is posted on Gateway, excluding the original signatures. The PM is responsible for ensuring that the fund stakeholders receive a (hyperlinked) copy of the SUOF. A copy of the original signed SUOF may be provided upon request.

PROCESS 10.4 Statements of Sources and Uses of Funds

8686

10.4 Statements of Sources and Uses of Funds

Exec

utiv

e Co

ordi

nato

rFi

nanc

e M

anag

erFi

nanc

e ‘s

uper

us

er’

Fina

nce

Asso

ciat

ePr

ogra

mm

e As

soci

ate

Version: 12 May 14

TRIGGER: 15 April

Book time in EC’s calendar for

signing session

Request final GL data extract and full set of SUoF

from Atlas

Download full listing of SUoF

and save on server (notify core Finance)

Complete full GL data extract for

MDTF1

Create ‘SUoF pivot’ and save

on server

Extract individual SUoF reports

under portfolio, name as per

naming convention

Print SUoF reports for

certification and file alphabetically (master file with

FM)

Compare final SUoF pivots to

pre-closure pivots, reconcile

differences.

Resubmit SUoF to DoA for signature in case of changes

to figures

simultaneously

Add watermark to final SUoF for posting on GW

Clear SUoF by signing

Facilitate OFRM review and

certification of SUoF reports by

UNDP Comptroller

cleared

Announce certification of SUoF; send DoA a copy of

certified report

SuoF reports available on GW from 31 May


MDTF1 business unit GL is rolled forward in

process 15.7


standard financial report/

tables END

Set up file to be submitted to

OFRM for certification

wait

rework

Upload GW version of SUOF

for each fund

END

Submit SUOF to DoA countries for

signature (15 April)

START

Final SUOF for DoA

Complete final check and sign on workpaper to evidence completion

Spot check FA reviews, correct

as needed

Ensure SUoF master list is

complete and file includes all reports and workpapers

Initial all SUOF pages of all

reports when complete and

accurate

Final draft SUOFs

Final draft SUOFs SUOF

workpaper

SUOF workpaper

Prior year SUOF

Final SUOF for signing Final SUOF

for GW

Excel GL data

SUOF pivot

Final SUOF for DoA SUOF file Final SUOF

for signing

Final SUOF for signing

SUOF file

Scan all signed SUOFs and save on

serverSigned SUOFs

Final SUOF for GW

No more transactions can be posted – the data is locked

down, final reporting can begin

87

OBJECTIVE1. This process ensures that all fund stakeholders are

provided with a standardized set of fi nancial tables and analysis, which in combination with the programmatic results summarized in the narrative part of the annual report enable them to monitor the performance of the Fund, form an opinion on the fi nancial health of the Fund and take decisions that infl uence the Fund’s future.

OVERVIEW2. The standard fi nancial reports and tables are used to

produce the fi nancial section of the consolidated annual reports. This fi nancial section is to be produced on time to meet the overall timeline for fi nalization of the annual reports, with accurate data and in a standardized and harmonized fashion.

3. A standard reporting template is in place for the fi nancial component of the annual report for all funds. This template is updated every year to incorporate new elements required due to changes in the external environment (for example, new budget categories) and/or lessons learned from the previous reporting cycle. There are specifi c reporting templates for diff erent types of funds, including Joint Programmes, Delivering as One Funds, Common Humanitarian Funds and MDTFs. For each of these types of funds, the fi nancial section, including tables, can be directly downloaded from Gateway.

4. The standard reporting templates must be used except when a specifi c exception for a Fund has been approved, in which case the PM can request a limited number of non-standard manual tables. Exceptions are usually approved for large funds covering a wide range of substantive issues and for funds involving the EC as a donor. The fi nal decision on the production of non-standard tables lies with the Deputy Executive Coordinator and is taken only after consultation with fi nance colleagues.

5. Once the fi nancial section is completed, it is combined with the narrative report to constitute the consolidated annual report, consolidating respectively the programmatic and fi nancial results.

DOCUMENTS/TEMPLATES• Standard fi nancial report format on Gateway, including

introductory section• French and Spanish translation of the standard fi nancial

report format

PROCESS 10.5 Standard fi nancial reports and tables

8888

10.5 Standard financial reports and tablesFi

nanc

e M

anag

erFi

nanc

e As

soci

ate

‘Sup

er-u

ser’

Version: 3 July 2014

Notify FAs of fund allocations for

spot check reviews

Create special tables for pre-

determined Funds based on

DEC communication

Notify FM after each review using

standard email and noting any

exceptions

Review finance report text and tables against

GL data using pivots created by super-user

Trigger: Phase 6 year-end closure completed: PUNO expenses are successfully loaded in Atlas

Announce completion of

reviews to MPTF Office with summary

of any systemic issues

Are there any systemic issues with the data in the standard tables or

reports?


reviews to MPTF Office – data can be

relied upon

Review and correct data

issues


reviews to MPTF Office – data can

be relied upon

No

Yes

END

END


Notify MPTFO that draft information is

available in GL/GW –including the full suite of Standard

Reports and Tables

START

Std reports

Manual tables

Create pivot for standard tables

and save on server – notify

core finance Std table pivot

Scope of the review is to review all standard Tables for a fund that has been selected

for a spot check

89

OBJECTIVE1. The fund monitoring process ensures that the Fund and

all of its associated projects are implemented on time, on budget and on scope and that due process by all parties is followed in the event that any adaptive change is required.

OVERVIEW2. Fund monitoring is one of the fi ve key fund

administration tasks (following negotiating/receiving fi nancial contributions and transferring funds, and prior to fund reporting and fund closing). It ensures that funds are implemented on time, on budget and on scope and that adaptive changes are made in a transparent and accountable manner. This process is divided into four sub-processes:

(11.1) Project revisions: accurate and timely recording of approved time/budget/scope project extensions in MDTF1 Atlas projects and Gateway;

(11.2) Project expenditure monitoring: early identifi cation and timely correction of fi nancial misreporting due to erroneous project mapping or early-stage over-expenditure;

(11.3) Fraud disclosure: timely and consistent information-sharing with all relevant parties in the event of fraud discovery;

(11.4) Fund extension: transparent decision-making regarding the strategic value of extending a fund operation end date while weighing up the programmatic and fi nancial implications.

3. Transparent fund monitoring requires the accurate and timely recording of progress and changes, including adjusted time/budget/scope plans as soon as they are approved. The cost of remedial actions can rise exponentially with time, and early identifi cation of needs for adaptive change is critical for cost containment. It is the responsibility of Participating Organizations to routinely monitor project progress and implementation against time/budget/scope performance targets, and it is the responsibility of Technical Secretariats to routinely review and consolidate this information at the fund level.

4. The MPTF Offi ce standardized fund monitoring processes and information systems such as the MDTF1 Enterprise Resources platform and Gateway aim to facilitate this process.

PROCESS 11.0 PROJECT AND FUND MONITORING

9090

Process 11.1Project revisions

Process 11.2Project expenditure monitoring

Process 11.3Fraud disclosure

Process 11.4Fund extension

91

OBJECTIVE1. This process ensures that in the event that time/budget/

scope extensions to an ongoing project are deemed necessary, project revision approvals follow due process by all parties and are accurately recorded in the MDTF1 Enterprise Resources platform.

OVERVIEW2. Keeping projects open beyond their operational and

fi nancial end dates is costly for all parties (about USD 5,000 to 8,000 per project per year). In particular, a large portion of the fund administration costs related to pooled fi nancing mechanisms are linked to operational and fi nancial closure. All time extensions have fi nancial implications, and so-called ‘no cost extensions’ do not exist for any party. As a result, changes in operational end dates reduce the fi nancial advantages of these structures, and cost considerations should be taken into account when deciding upon a time extension request.

3. Effi cient and transparent fund management requires accurate and timely reporting, including that of adjusted time/budget/scope plans as soon as they are approved. Timely incorporation of approved extensions into fund closure plans as well as MPTF Offi ce programmatic and fi nancial information systems, such as the MDTF1 Enterprise Resources platform and Gateway, is critical for the MPTF Offi ce to fulfi l its core accountancy, reporting and monitoring objectives as a fund administrator. Transaction costs associated with time extensions can be partially mitigated by the standardization of the information revision process.

POLICY4. It is the responsibility of the Technical Secretariat to

routinely monitor project actual operational closures against planned closures, and it is the responsibility of Participating Organizations to routinely monitor project progress and implementation against operational end dates.

5. In January each year, the Technical Secretariat will prepare and submit to the MPTF Offi ce a closure plan listing all upcoming (due within 12 months), pending or overdue project operational closures. Each project in the closure plan will be identifi ed as a stand-alone single-agency project or a Joint Programme, with the name of the lead/convening agency.

6. On a quarterly basis, the Technical Secretariat submits to Participating Organizations a rolling 12-month list of projects to be operationally closed. This list also includes projects for which operational closure is overdue.

7. Participating Organizations must decide whether all activities can be completed within the operational end date and within the budget using the current implementation modality. Participating Organizations will prepare a project revision form in the event that any of the following requests are necessary: (i) an increase or decrease in budget; (ii) a time extension; and/or (iii) substantial changes to the programme or project scope (according to the Participating Organizations’ internal procedures and policies — that is, reallocation of more than 15 percent of the budget across budget lines for most agencies). Project revision forms must be grounded in and address justifi ed programmatic needs

or implementation realities. When no change in budget, time or programme/project scope is deemed necessary, PUNOs will complete all activities as originally planned and move to operational closure.

8. A Participating Organization’s analysis may be guided by the following decision fl ow:

Operation end date: no change

Operation end date: extension

Budget: no change

Move to opera-tional closure

Request time extension only

Budget: increase

Request budget increase only

Request budget increase and time extension

Budget: decrease

Request budget decrease only

Request budget decrease and time extension

9. In the event that only a time extension has been requested by a Participating Organization, the Technical Secretariat will review and approve or reject the request to extend an operational end date, provided that Steering Committee delegation of such a decision is set out in the Rules of Procedure. On a timely basis, the Technical Secretariat will communicate to the Steering Committee a list of all projects with approved time extensions, along with supporting documents, for informational purposes only.

10. Budget modifi cations are de facto changes to original fund allocation approvals and therefore must be approved by the Steering Committee. In the event

PROCESS11.1 Project revisions

92

that budget modifi cations have been requested by a Participating Organization, the Technical Secretariat will call for a Steering Committee meeting to evaluate such requests. Along with the recommendation of the Technical Secretariat, documents to be provided to the Steering Committee comprise a project revision form (including the budget) and the draft fund allocation matrix. Meeting minutes and a new fund allocation matrix must be signed by the Steering Committee Chair. In cases of budget modifi cation, the Technical Secretariat will revert to either the fund transfer process (for budget increases) or the Participating Organization refund process (for budget decreases/refunds due to the MPTF Offi ce from PUNOs).

11. Following any Technical Secretariat or Steering Committee approval of time/budget/scope revisions, the MPTF Offi ce will be provided with the following documentation, as applicable: (i) project revision form (including budget); (iii) fund allocation matrix; and (iii) signed Steering Committee minutes.

12. The MPTF Offi ce’s internal procedures will vary according to the types of modifi cations approved. For changes to project scope and/or budget, the updated programme documents will be uploaded to Gateway.

13. For budget modifi cations, the PA will adhere to a budget change procedure, including checking for: (i) Steering Committee approval; (ii) accuracy of documentation with regard to the approved revision; and (iii) Fund TOR consistency of activities funded out of an increased budget. The MPTF Offi ce extension checklist will guide the PA’s procedural checking, after which the budget amount of the relevant MDTF1 Atlas projects will be updated.

14. For time extensions, the PA will adhere to a time extension procedure, including checking for (i) Technical Secretariat or Steering Committee approval, as required; and (ii) consistency of the revised project operational end date with the fund operational end date. The MPTF Offi ce extension checklist will guide the PA’s checking, after which the revised project operational end date of the relevant MDTF1 Atlas project will be updated.

DOCUMENTS/TEMPLATES• Annual closure plan• Project revision form, including budget• Updated programmatic document (for changes in scope)• Steering Committee minutes and, in annex, signed fund

allocation matrix

REFERENCE MATERIALS• Template closure plan• Template project revision form• Template fund allocation matrix• Template project revision form, including budget• MPTF Offi ce extension checklist

9393

11.1 Project revisions

Tech

nica

l Se

cret

aria

tPU

NO

Stee

ring

Com

mitt

ee

Send out list of projects to PUNOs that should be

operationally closed within 6 months, or which operational

closure is overdue, on a quarterly basis. Monitor against

plan

Routinely monitor project progress and implementation rate against operational end

date

Can activities be completed within operational end date

and within budget using current implementation

modality?

End date No Change ExtensionBudgetNo change Operational Time extension

Closure only

Increase Budget Budget increase & increase only extension

Decrease Budget Budget decreasedecrease only & extension

See options

Submit request based on justified

programmatic needs, or

implementation realities

Is request for a time extension

only?

Complete activities and

move to process 12.1 operational

project closure

Complete technical review of request for additional funds and

need to extend project end date (if applicable

Under delegation from S/C complete technical review of request to extend project end date

Submit PUNO requests including

recommendation of Technical Secretariat

Request S/C to convene a meeting and faciliate

YesNo

Evaluate requests for changes in funding

allocation (and associated time extension, if

applicable)

Notify PUNO of decision/s

Submit list of pTechnical Secr

approved a timfor (with no budget) to th

meeting for in

AcknowlextensionsSC meetingapproval re

END

START

Develop annual plan for project

operational closure and submit to AA

START

Closure plan Closure

plan

Extension appraisal

sheet

TRIGGER: January each year.

Prepare all relevant

documents to request change

For in/decrease in budget: section 1

For time extension: section 2

For substantial changes to programme/project scope:

section 3

Updated programme document

Extension appraisal

sheet

Fund allocation

matrix

Sign Steering Committee

meeting minutes and fund

allocation matrix for decisions

Extension appraisal

sheetFund

allocation matrix


Section 1: Budget revisionSection 2: Project revision Section 3: Updated programme content

Note: The plan should include a list of all pending and overdue projects due for operational closure based on the project operational end date. For each project include whether it is an individual stand-alone one agency project, or a joint programme and the name of the lead/convening agency

Port

folio

Ass

ocia

te

A ‘budget increase’ ‘also refers to a change in an individual UNDG budget line of > 15%

9494

Version: 4 Jun 14


projects the retariat has

me extension change in

he next SC nformation

ledge s in next g, no SC equired

Extension appraisal

sheet

Notify MPTFO of S/C and TS decisions. Submit S/C minutes, documented TS

approval and updated project documents to AA,

including an updated budget for budget changes

Take one of the following actions for each change in allocation approved by the

S/C

Budget decreaseonly

Budget decrease and increase

on same project: Refund MUST be received before additional transfer

For all budget changes check: 1) S/C approval obtained in FAM2) Proposal document is submitted including a revised budget

For budget increases also check: 3) TS has verified in the Extension appraisal sheet, that activities funded remain within the Fund TOR

Documentation submitted passes

all required checks

Update project budget amount in Atlas; obtain PM

approval and finalisation

No - rework

For all time extensions check: 1) S/C or TS approval obtained (as required) 2) Proposed end date is within the Fund operational end date

No - rework

Documentation submitted passes

all required checks

Update and finalise project

operational end date in Atlas

Confirm receipt and update to TS Yes

MPFO extension checklist

MPFO extension checklist

Has a change to the budget been

approved?

Has a change to the operational end date

been approved?

Yes

No Yes – Move to timeextension procedure

Upload documents

to GW

Request PUNO with a budget

decrease to refund the

amount of the decrease to

MPTFO

Notify TS when refund has been

received from PUNO

Fund allocation

matrix

Signed SC minutes

Extension appraisal

sheet

Fund allocation

matrixSigned SC minutes


Signed SC minutes

Extension appraisal

sheet Updated programme document


Updated programme document END

Yes - Move to budget change

procedure

Includes a revised UNDG budget for any

budget changes

Move to process 9.5

Fund Transfer Requests

ENDBudget increase only

Move to process 9.6

PUNO refund

Budget increase and decrease on same project

Extension appraisal

sheet

ENDAll changes are

complete

Note: only a s/m with Project Manager profile in Atlas can finalise the budget

95

OBJECTIVE1. Project expenditure monitoring ensures that

misreporting due to erroneous project mapping or early-stage over-expenditure is identifi ed and remedied as rapidly and transparently as possible.

OVERVIEW2. Time delays in correcting expenditure issues contribute

to delays in project closure and unforeseen cost accruals, and they aff ect the accuracy of annual reports. Consistent monitoring of project expenditures ensures the timely resolution of discrepancies and the accuracy of fi nancial information.

3. Participating Organizations may report project expenditures greater than allocations due to: (i) project mapping errors and duplications; (ii) incorrect attribution; or (iii) actual over-expenditure. Project mapping errors and incorrect attributions can take time to identify and unravel. The absorption of costs or allowances for over-expenditures requires time to implement and approve. Early identifi cation of these issues can mitigate costs associated with their resolution.

4. Stakeholder expectations include the delivery of projects on time, within scope and within budget. Expenditure monitoring is essential to ensuring continued stakeholder trust in the United Nations as an effi cient and transparent fund manager and continued stakeholder interest in future collaboration.

POLICY5. Participating Organizations submit quarterly, half-yearly

or annual project expenditure lists through UNEX as per their internal procedures. When UNEX is closed for the quarter or for the year, these expenditures are recorded in the MDTF1 Enterprise Resources platform and refl ected on Gateway.

6. Upon identifi cation of over-expenditure, a PUNO will be requested to determine the cause. Unresolved issues outstanding for longer than six months will result in resolution escalation.

7. Mapping errors and incorrect attributions should be corrected by Participating Organizations as quickly as possible in accordance with their internal policies and with the support of the MPTF Offi ce. Delays will contribute to added complexity and cost accrual for all parties.

8. Agencies are not allowed to overspend, although good faith over-expenditures occasionally occur (for example, due to exchange rate fl uctuations). In such cases, cost absorption by the Participating Organization should be concluded within six months. In the event that a Participating Organization decides against cost absorption, a request for additional fund allocation may be made to the Steering Committee.

DOCUMENTS/TEMPLATES• Project over-expenditure list

REFERENCE MATERIALS• Participating Organization quarterly/annual project

expenditure data• Fund architecture database

PROCESS 11.2 Project expenditure monitoring

9696

11.2 Project expenditure monitoring

Port

folio

Ass

ocia

teFi

nanc

e M

anag

erFi

nanc

e As

soci

ate

Part

icip

atin

g O

rgan

isat

ion

HQPo

rtfo

lio

Man

ager

Version: 25 April 14

Trigger: PUNO upload of quarterly or annual project expenditure is complete

Engage Technical Secretariat and

facilitate resolution

Conduct full portfolio analysis

to identify projects with

over-expenditure

Draft communication to each PO with over-expenditure with

list of projects overspent

Send communication to each agency with request to

determine cause of over-expenditure, or to escalate an issue that has not been resolved within 6 months

START

Determine cause: project mapping,

incorrect attribution or actual over-

expenditure

Is the cause actual over-

expenditure?

Oversee resolution of

over-expenditure due to mapping

issues, or attribution

Support FM and PO (at HQ or CO as needed) in

conducing detailed analysis on MPTFO data

to assist in issue resolution

No – finance unit leads

Yes – Portfolio unit leads

Is over-expenditure corrected by PO within

6 months


Has mapping, attribution been

corrected by PO within 6 months

Escalate to PM with description of MPTFO and TS actions taken to

date

No

Communicate issue to Steering

Committee and propose discussion at next SC meeting

END

Issue will have been or will be resolved in next UNEX upload. If not, process recommences

Support CO as needed to resolve issue as per PO

policy/process

Provide status updates on request to MPTFO

No – escalate

ENDYes

Issue will have been or will be resolved in next UNEX upload. If not, process recommences

END

Yes

97

OBJECTIVE1. The fraud disclosure process ensures timely and

consistent information-sharing with all relevant parties in the event of fraud discovery.

OVERVIEW2. Pooled funds provide a powerful platform for

the development of a shared understanding and management of risks in sensitive development contexts. A sound fraud disclosure policy ensures coordination among partners on remedial action and is a critical component of a pooled fund risk management system.

3. An incidence of fraud in an individual project taking place within the context of a broader pooled fi nancing mechanism aff ects the whole of fund operations. As a result, disclosure must encompass all the fund partners. In the event of a fraud discovery by a Participating Organization, the MPTF Offi ce facilitates timely and transparent information-sharing with donors, including regarding the implementation of appropriate recovery and prevention measures. Communication and transparency is a key requirement throughout the entirety of the fraud disclosure process.

4. The MPTF Offi ce is also instrumental in the incorporation of new fraud prevention lessons into a future risk management policy (that is, consolidated learning).

POLICY5. Allegations of fraud are referred to the investigation

service of the Participating Organization by the relevant Participating Organization, staff or individual contractor, Implementing Entity, vendor or any third party related to the funded project. In the event that the investigation service of the Participating Organization determines that an allegation is credible enough to warrant an investigation, that investigation service shall promptly notify, preferably within 30 days, the Chair of the Steering Committee (ex: DSRSG/RC/HC) and the MPTF Offi ce, as long as such notifi cation does not jeopardize the conduct of the investigation. The Chair of the Steering Committee should call for an informal consultation with donors to inform them about the start of the investigation.

6. The resulting investigation report will be provided to the relevant bodies or individuals of the Participating Organization involved, following each Participating Organization’s internal procedures. Upon completion of the investigation, the Participating Organization will also inform the Steering Committee Chair and the Administrative Agent about the results of the investigation, preferably within 30 days. If an investigation report determines that fraud has occurred, donors and other relevant parties should preferably be informed via a fraud notifi cation letter. The MPTF Offi ce should review this letter and ensure its timely distribution.

7. The Steering Committee Chair should call for an informal consultation to share with donors the investigation results. In the case of confi rmation of fraud, a recovery of funds attempt will be made by the Participating Organization. In the event that funds cannot be recovered, write-off s or other measures will be considered, in line with the Participating Organization’s internal procedures. The Steering Committee Chair should call for a meeting to share with donors the measures taken to address the fraud and to recover funds, which is preferably followed by a fraud measures letter to all donors. The MPTF Offi ce reviews this fraud measures letter and ensures its timely distribution to donors.

8. Donors may request documentation regarding the manner in which the fraud was perpetrated and evidence of recovery attempts by the Participating Organization.

DOCUMENTS/TEMPLATES• Results of investigation report• Fraud notifi cation letter• Fraud measures letter

REFERENCE MATERIALS• UNRIAS agreed-upon policy for investigations in pooled

funds• United Nations agency fraud disclosure policy for

individual projects• MPTF Offi ce fraud disclosure guidance for pooled funds

PROCESS 11.3 Fraud disclosure

9898

11.3 Fraud DisclosureHC

/RC/

RRPa

rtic

ipat

ing

Org

anis

atio

nEx

ecut

ive

Coor

dina

tor

Port

folio

M

anag

erDo

nors

Version 2 May 14

Investigate allegation of wrongdoing

PUNO inform HC/RC of allegation of wrongdoing

Notify (who) when

investigation starts

Receive final report from investigators and share with MPTFO and

HC/RC/RR

Have the allegations of

fraud been confirmed?

Draft letter based on investigation results

Review report and provide comments on

letter

Finalise and submit final letter on

investigation results to financial contributors

Receive letter discuss with HC/RC/RR as

needed

Determine and communicate

disciplinary measures and /or measures to

recover funds

Draft letter to donors on measures taken

and/or financial recovery progress

Review letter and provide comments

Finalise and submit letter on measures

taken and progress to financial contributors

Receive letter on discuss with HC/RC/RR

as needed

Consult with stakeholders to

resolve issue

Provide evidence of case completion to EC and recovery of funds

Provide input into issue as needed




START

ENDInvestigation report

Fraud notification

letter

Investigation report

Fraud notification

letter

Fraud notification

letter

Fraud measures

letter

Fraud measures

letter

Fraud measures

letter

Inform donors

END

PUNO inform HC/RC of start of investigation

Informal consultation with

donors

No

Yes

99

OBJECTIVE1. The fund extension procedures stipulate transparent

decision-making regarding the strategic value of extending a Fund’s operational end date, while weighing up the programmatic and fi nancial implications.

OVERVIEW2. A Fund’s life varies; achievement of fund objectives,

extended missions/scopes/mandates, the Fund’s evolution into a permanent institution and extended opportunities to capitalize on success are among the possible infl uences on a Fund’s operational end date.

3. A rigorous and objective evaluation of pros and cons is critical in order to decide on the trade-off s between diff erent factors related to a fund extension, including the fi nancial implications and programmatic rationale associated with extensions. For example, funds characterized by under-mobilization or under-delivery may be best served by a new fund rather than an extension in order to preclude the prolongation of underlying issues.

POLICY4. About 18 months before a Fund’s operational end date,

the Technical Secretariat will commission an independent evaluation/lessons learned exercise to obtain a systemic evaluation of fund achievements and an examination of the pros and cons of fund extension, incorporating feedback from Participating Organizations, the Technical Secretariat, the MPTF Offi ce and other stakeholders. The

evaluation exercise will conclude with the publication of an evaluation report. Discussions with the PM/FM/EC to take into consideration programmatic and fi nancial viability issues will guide the drafting of a fund extension proposal by the Technical Secretariat.

5. Steering Committee approval is necessary for the extension of the fund operational end date. This decision will be informed by the evaluation report and the recommendations of the Technical Secretariat and the MPTF Offi ce. Minutes must be signed by the Steering Committee Chair and/or Co-Chairs.

6. A decision to decline extension initiates the Fund’s operational closure process. Approval of an end date extension requires the preparation and signature of various documents, including: (i) updated Fund TOR (if there was also a change in fund scope); (ii) MOU/MOA extensions; and (iii) Gateway updates.

DOCUMENTS/TEMPLATES• Fund extension proposal• Signed Steering Committee minutes• Updated Fund TOR• MOU/MOA extension• Gateway updates

REFERENCE MATERIALS• Evaluation/lessons learned report• PAC checklist• Fund TOR• MOU/MOA

PROCESS 11.4 Fund extension

100100

11.4 Fund Extension

Port

folio

Man

ager

Stee

ring

Com

mitt

eeTe

chni

cal

Secr

etar

iat

Seni

or F

inan

ce

Man

ager

Exec

utiv

e Co

ordi

nato

rPo

rtfo

lio

Asso

ciat

e

Version: 3 June 14

Request Secretariat to facilitate decision: fund extension or

fund closure, including MPTFO decision

Prepare MoU /MOA extension

and obtain PUNO /

Government signatures

Review draft Fund TOR.

Consult with DEC if needed.

Review evaluation. Extend Fund?

Fund ToR approved?

Request Steering Committee

meeting to decide on extension or

closure

No

Finalise Fund TOR and present to SC

for decision

Yes

Trigger: Fund is 18 months from Operational end date.

Yes – with a change in

Fund scope

Yes – time extension only, no scope change

Note: Establishing a new fund architecture and structure for a fund extension should be discouraged unless there are specific lessons learned and challenges with the existing structure that provides an imperative to ‘clean-up‘ the existing structure.

If a new fund architecture process is recommended, the PM should follow the process 4.1 Establishing a Fund code


Review recommendation for MPTFO financial

viability, discuss, endorse or escalate

Discuss/ rework –additional analysis

Move to project and

Fund closure processes (12.1 and

12.3)END

Revise Fund TOR to reflect extension

Signed S/C Minutes

MoU

Fund Code

Review and sign MoU or

MoA

MoA

Approved and signed

Draft updated

Fund TOR

Final updated

Fund TOR

MoU MoA

Commission evaluation of Fund

results and extension; develop extension proposal including

any conditions

Changes proposed

Fund extension evaluation

Review proposal for programmatic and financial viability

Escalate if programme rationale conflicts with

financial viability; or TS does not accept PM changes

Endorse

Comment on proposal; discuss changes if needed

with TS;

Endorse; or decline to endorse

Rework with additional analysis

Final updated

Fund TOR

Draft updated

Fund TOR

No - rework

Update GW text and documents

for extension ENDFinal

updated Fund TOR

MoU

MoA

Decide if Fund evaluation should

cover option to extend?

Yes

NoEND

START

Fund extension proposal

Complete PAC checklist section on

extension

PAC checklist for

extension

PAC checklist for

extension



No changes or TS rejects changes

PAC checklist for

extension



101

OBJECTIVE1. The fund closure process provides for accountable,

cost-eff ective and timely operational and fi nancial closure of all fund Atlas projects and of the Fund itself following the end of programmatic activities.

OVERVIEW2. Fund closure is the last of the fi ve key fund

administration tasks. Risk management policy requires that fi nancial closures be acted upon on a timely and rapid basis in order to avert unwarranted fi nancial expenditures or open liabilities. All activities fi nanced by a Fund must be operationally and fi nancially closed before the Fund itself can be closed. Delays by a single partner of even a single project closure will aff ect the entire fund closure timeline, implicitly driving up costs for all parties, including fi nancial contributors who cannot close their own books. It is not unusual for a protracted fund closure to account for over 50 percent of the Fund’s administration costs. This process is divided into four sub-processes:

(12.1) Operational project closure: ensures cost-eff ective and timely closure of and reporting on a project following the end of programmatic activities;

(12.2) Financial project closure: occurs when all fi nancial obligations have been settled and minimizes risk and cost accrual leading up to the completion of all fi nancial services;

(12.3) Fund operational and fi nancial closure: validates fund achievements, codifi es lessons learned and ensures that decisions regarding the use of the balance of funds are made in a transparent and fully informed manner;

(12.4) Transferring income to another Fund: where agreed upon by the Steering Committee and an individual donor, fund income can be transferred from a closing Fund to another Fund.

3. Fund closure builds on eff ective fund monitoring. Timely remedial actions through the fund implementation prevent the build-up of unidentifi ed liabilities and enable the rapid operational and fi nancial closure of fund activities. It is the responsibility of Participating Organizations to close projects in a timely manner, and it is the responsibility of Technical Secretariats to routinely monitor project closure.

4. To assist Technical Secretariats in this task, the MPTF Offi ce tracks all overdue fi nancial closures. This list is submitted to the MOU signatories, who are ultimately accountable for timely fi nancial closure. It is the responsibility of the MPTF Offi ce to fi nancially close the Fund, including making necessary arrangements for transferring the balance of funds to donors or a new Fund, as stipulated by the Fund’s Steering Committee.

PROCESS 12.0 PROJECT AND FUND CLOSURE

102102

Process 12.1Operational project closure

Process 12.2Financial project closure

Process 12.3Fund operational and fi nancial closure

Process 12.4Transferring income to another fund

103

OBJECTIVE1. Operational project closure provides for cost-eff ective

and timely closure of and reporting on a project following the end of programmatic activities. Delays in project closure result in increased risk, cost accrual and reduced credibility for the United Nations System as an effi cient fund manager.

OVERVIEW2. Standardized and transparent closure procedures allow

for cost-eff ective and timely closures. Delays by a single partner of even a single project closure aff ect the entire fund closure timeline, implicitly driving up costs for all parties, including fi nancial contributors who cannot close their own books. Multiple project closure delays within a fund can magnify the fi nancial liabilities.

3. Delays in project closure aff ect the accountability and credibility of the United Nations System, including that of the MPTF Offi ce, as an experienced and eff ective fund administrator. Timely closure is a key performance measure in the context of the MPTF Offi ce’s core activities and strategic objectives.

POLICY4. Operational closure refers to the project operational end

date as stipulated in the project document approved by the Steering Committee. By that date, a project must have completed all programmatic activities, including submission of the fi nal narrative project report.

5. PUNOs (stand-alone agency projects) or the lead agency (Joint Programmes) are encouraged to submit to the Technical Secretariat and the MPTF Offi ce the fi nal narrative reports on or before the operational closure date, when project personnel have not yet moved on to other assignments. This timing must be taken into account when preparing fi nal narrative reports.

6. In the case of a PUNO stand-alone project, the Technical Secretariat will review and accept the fi nal agency narrative project report.

7. The functions of the Technical Secretariat will be fulfi lled by the lead/convening agency in cases of stand-alone Joint Programmes.

8. For Joint Programmes it is possible for a Participating Organization to operationally close based on partial completion of the project where, for example, a Participating Organization is only involved in the early stages of the project. In these cases the Technical Secretariat can declare a Participating Organization to have operationally closed even if the project continues (termed a ‘partially closed project’) on receipt of the fi nal project report from the Participating Organization. This is a prerequisite to managing an effi cient and cost-eff ective fi nancial closure process.

9. On a quarterly basis, the Technical Secretariat will submit documentation to the MPTF Offi ce, including, as appropriate: (i) fi nal agency narrative project report, (ii) consolidated fi nal JP narrative report, and (iii) a list of projects (in the case of a JP, it could be ‘JP components’) that have been operationally closed by agencies.

10. Upon receipt, fi nal narrative reports will be uploaded to Gateway, and Atlas will be updated to refl ect fully closed projects. The PA will prepare a project closure checklist and a supporting documents fi le for review by the FA.

DOCUMENTS/TEMPLATES• Final agency narrative project report• Consolidated fi nal JP narrative report• List of operationally closed projects• MPTF Offi ce project closure checklist

REFERENCE MATERIALS• Template MPTF Offi ce project closure checklist

PROCESS 12.1 Operational project closure

104104

12.1 Operational Project Closure

Prog

ram

me

Asso

ciat

eTe

chni

cal S

ecre

taria

tPU

NO

Lead

Age

ncy/

Conv

enin

g Ag

ency

Version: 20 May 14


Acknowledge receipt of final reports and upload

to GATEWAY

For fully closed projects: operationally close

project in Atlas based on receipt of final report

and TS confirmation of closure

Prepare project closure checklist and pass file and

checklist to Finance Associate

Create zero line in Atlas for refund and change end date if

needed

Confirm receipt (via email) of final report

and end-of operational activities

to PUNO

Write and submit final agency project report to: Technical Secretariat for

stand alone agency projects; or Lead Agency for joint

programmes

TRIGGER: Individual PUNO has completed programmatic project activities, no extension required (for date extension, refer to Fund monitoring process)

Notify TS of agency operational completion and

update monitoring plan

Is the inter-agency joint programme at completion for all

agencies?

Proceed to project financial closure as per PUNO’s internal

financial rules/policies

Consolidate final narrative reports and submit to TS

Review and approve final narrative

report

At each quarter end, submit all final programme reports to AA with

confirmation of the projects that are considered operationally closed; and a list of on-going

projects where with agencies that have operationally closed a portion

of the programme

Approved

Yes

No

For joint programmes/projects

For agency stand-alone

projects

For partially closed projects: Update status listing for agencies that have partially closed a

project (tool to be developed)

Rework – stand-aloneagency projects

Rework –joint programmes

END

START

END

Final agency narrative

project reportEND

Closure plan

Consolidated final JP

narrative report

MPTFO project closure checklist

There will need to be explanation in the text that the functions in the TS line are fulfilled by the lead/convening agency where this

map is followed for a stand-alone JP. Can you please also define the difference between a lead agency and a convening agency.


narrative reportFinal agency

narrative project report


narrative reportFinal agency

narrative project report

List of agencies that have

operationally closed by project


narrative report

Final agency narrative

project report

105

OBJECTIVE1. Project fi nancial closure minimizes risk and cost accrual

leading up to the completion of all fi nancial services. Unnecessary expenditures can arise if fi nancial closure is delayed and the United Nations’ credibility among donors can be compromised, including that of the MPTF Offi ce.

OVERVIEW2. Financial closure occurs when all fi nancial obligations

have been settled, resulting in an absence of remaining funds or transactions. Risk management policy requires that fi nancial closures be acted upon in a timely and rapid manner in order to avert unwarranted fi nancial expenditures or open liabilities.

3. Timely fi nancial closure is critical for donor relations. Financial closure triggers the issuance of a fi nal report to donors, indicating completion of the MPTF Offi ce’s fund administration duties. Delays have implications for current donor relations and future resource mobilization. Project fi nancial closure delays prevent donors from closing their own books, thereby magnifying cost accrual for all partners.

4. Financial closure should be a relatively straightforward process provided there are no uncorrected mapping issues or actual over-expenditures (including indirect costs).

POLICY5. Financial closure takes place according to the

Participating Organizations’ internal procedures and policies following the issuance of operational closure documentation. Participating Organizations should complete fi nancial closure in line with their internal rules and regulations, but no later than two years after operational closure.

6. Upon receipt of the Participating Organization’s fi nal fi nancial report, the FA/FM/PA will record, review, submit and approve closure notifi cation within the MPTF Offi ce tracking systems and Atlas. The MPTF Offi ce project closure checklist will guide this process.

7. The MPTF Offi ce tracks all overdue fi nancial closures. This list will be submitted to the MOU signatories, who are ultimately accountable for timely fi nancial closure.

DOCUMENTS/TEMPLATES• Participating Organization fi nal fi nancial report• Project closure checklist

REFERENCE MATERIALS• MPTF Offi ce project closure checklist template

PROCESS 12.2 Financial project closure

106106

12.2 Project Financial Closure Fi

nanc

e M

anag

erFi

nanc

e As

soci

ate

Port

folio

As

soci

ate

Version: 20 May 14

TRIGGER: Receive Final or corrected Financial Report

Send email to PUNO

acknowledging receipt of batch/

report (and pending review)

Review report as per

closure checklist

Report is complete?

E-mail PUNO outlining

corrections needed and

request resubmission

Complete checklist for the

PO report reviewed

Yes

Create GLJE(s) to adjust expenses in

UNDG budget categories; and/or

residual balance write-off (where necessary)

Send Atlas notification to

FM; and submit documentation

Review and clear for approval

Approve in Atlas and notify FAapprove

Finalize checklist for relevant PO

and file in project folder

Submit project file and checklist

to FM

Review and approve checklist for PO only

Is this the only or last PUNO to submit financial report for

the project?

approved

Approve project for financial closure on

checklist and submit project

file to PA

Yes

Financially close project in Atlas

and send confirmation to

Finance

Notify PUNO that report has been

accepted

Return file to FA

No

rework

No

rework

Return project file to current

storage cabinet

Not approved

END

Procedure 12a


Wait for resubmission

Log receipt of report in tracking

system

START

Update tracking system with

review results

PO final fin. report

PO final fin. report

MPTFO project. closure checklist

Project closure file


review results


review results




review results


MPTFO fin. Proj. closure

checklist




MPTFO project. closure

checklist

Update tracking system

END

Tracking system and GW will

automatically update status to financially closed

Archive project file in accordance

with document retention policy

ENDProject closure file

107

OBJECTIVE1. The fund operational and fi nancial closure process

documents achievement of fund scope and objectives and ensures that decisions regarding the use of the balance of funds are made in a transparent and fully informed manner and that all outstanding obligations of the MPTF Offi ce are met in an expedient and cost-eff ective manner.

OVERVIEW2. With the completion of the independent evaluation

report (see process 11.4) and the operational closure of all projects (see process 12.1), the necessary conditions are in place for the Technical Secretariat, the Steering Committee and the MPTF Offi ce to work jointly on the fi nal steps in the fund’s lifecycle. Considering that in this phase the Steering Committee may meet for the last time and the fund Secretariat may be winding down, it is in the MPTF Offi ce’s interest to focus on timely execution of the fund’s closure process, working with the fund governance structures while still in place.

3. An important element in this phase is the preparation of the fi nal narrative report, which provides stakeholders with an overview of relevant high-level results against the original fund purpose as per the Fund TOR. Another key aspect is the decision-making on the use of the balance of funds and potential development of a new fund with an adjusted confi guration. In particular, an informed and consistent process regarding donor refunds is critical due to: (i) the vendor requirements for refunds; and (ii) multiple recalculations for refunds (which is not a one-time transaction).

POLICY4. Based on best practice, the strategic decision about

the use of the remaining resources takes into account a wide range of issues, including the recommendations of the independent evaluation report and the fi nancial information provided by the MPTF Offi ce in the fund closure table.

5. Standard TOR language requires that ‘any balance remaining in the fund account or in the individual Participating United Nations Organizations’ separate ledger accounts will be used for a purpose mutually agreed upon by the donors, the Steering Committee and the Administrative Agent.’ This indicates that the balance of funds will either go to new funds/initiatives (based on performance and context) or be refunded to donors (or some combination of both). Though the overall decision is the outcome of a consultative process, individual donors have the option to decide on the use of their portion of the fund balance.

6. Once the fi rst balance of funds has been transferred, subsequent transfers will consist of Participating Organization refunds (and possibly Participating Organization interest) and fund earned interest. Refl ecting the complexity and costs associated with multiple donor refunds, refunds due to donors will be calculated and paid no more than once annually.

7. The methodology used in this process should be consistent throughout the fi nancial closure process, specifi c to whether funds were earmarked or unearmarked, and clearly documented. For unearmarked funds, a percentage is determined for each donor, based on their proportion of total donor contributions to the Fund (since inception). This is applied to the fund balance

and an ‘amount per donor’ is calculated which can be transferred to another fund or refunded to the donor.

8. To promote effi ciency, the fi nal narrative report is planned and produced as an integral part of the annual reporting process. The timeline for preparation of this report as per the MOU and SAA is extended up to the end of July. The fi nal SUOF/certifi ed fi nal fi nancial statement is also produced as part of the annual SUOF preparation process.

9. The fund closure checklist guides the work of the MPTF Offi ce during the fi nal months leading up to fi nancial closure of the Fund. Only when this checklist is duly completed and certifi ed by a Finance Manager can the fi nal actions of communicating the fi nancial closure of a Fund and archiving documentation in the MPTF Offi ce systems and fi les be undertaken.

DOCUMENTS/TEMPLATES• Template fi nal narrative report• Fund closure table• Signed Steering Committee minutes on decision for use

of fund balance• Template MPTF offi ce letter requesting donor acceptance

on proposed use of fund balance• Donor letter with donor decision on use of fund balance• Completed fund closure checklist• Final SUOF

REFERENCE MATERIALS• Evaluation report• Fund MOU, SAA and TOR

PROCESS 12.3 Fund operational and fi nancial closure

108

12.3 Fund Operational and Financial ClosureFi

nanc

e As

soci

ate

Version: 20 May 2014

Trigger: Fund is operationally closing

Produce Final narrative report produced as

part of process 9. Annual reporting

Announce Fund is ‘Operationally

closed’ to stakeholders

Facilitate SC decision on: (i) how the Fund balance will be used in accordance with the TOR and SAAs; and (ii)

frequency of balance transfers to donors.

Request MPTFO to provide current fund balance by donor and designation (interest;

earmark etc.)

START

Complete financial tables for Fund

closure, highlighting donor %s, balances

and earmarking

Obtain written donor confirmation that their funds can

be transferred to [named] fund


Stee

ring

Com

mitt

ee

Decide on how remaining funds will be

used (refund or transfer) and agreed methodology

Move to process 4.4

‘Setting up a vendor’ and 7.8

‘Refund to donor‘

approved

Ask donor to submit a request for refund (email or debit note,

as per donor’s procedures)

Move to process 7.9

‘Transferring income to a new fund’

Transfers to a new Fund

Donor refunds

Move to process ‘Project

operational closure

Update GW Fund status to ‘Operationally

Closed’ END

Fina

nce

Man

ager

Review methodology and

calculations for accuracy

rework

Tech

nica

l Sec

reta

riat

Port

folio

Ass

ocia

te

Signed S/C minutes

Fund closure table

Submit operational closure

methodology and table ahead of SC

meeting

Port

folio

Man

ager

Have all projects been operationally

closed?

No

Yes

Fund closure table

Fund closure table

Receive signed donor letter/

email

Submit signed MPTFO letter

Donor letter/email/debit

note

Final narrative

report

Produce final certified SUOF during annual

reporting process

Complete and sign Fund closure

checklist

Review and certify checklist

Request Fund code to be inactivated

Complete Fund archiving process

in compliance with document retention policy

Inactive Fund code in Atlas

Are all projects financially closed

Confirm to FM and PA when final

project is financially closed

Yes

Refer to on-going process

‘Project financial closure

No

Approved

Announce Fund is ‘Financially closed’ to stakeholders and provide final SUOF

Ope

ratio

ns

Asso

ciat

e (s

yste

ms)

END

END

These processes repeat periodically until all projects have been financially closed and there is a zero balance in the Fund.

Update GW Fund status to

‘Financially Closed’

Is there any cash left in the Fund? NoYes

Rework

Has Fund operational closure been completed?

No

Yes

Fund evaluation

report

Funds can only be ‘active’ or ‘inactive’ in Atlas, so there is no

step to operationally close a fund in Atlas.

Funds can only be ‘active’ or ‘inactive’ in Atlas, so there is

no step to financially close a

fund in Atlas.

109

OBJECTIVE1. Where agreed by the Steering Committee and an

individual donor, fund income can be transferred from one fund to another fund.

OVERVIEW2. This section refers only to transfers of income from one

fund to another, not the transfer of fund resources into another fund as a result of a fund transfer request (that is, from a feeder fund where the MPTF Offi ce acts as fi scal agent, such as the Delivering Results Together Fund). A transfer of fund income deducts fund income from one fund and increases fund income in the recipient fund. This process can only be executed due to fund closure.

POLICY3. All transfers of fund income from one fund to another

fund must be executed in accordance with the legal agreement and terms covering the original contribution as outlined in the SAA (or SAA addendum/current legal agreement with the EC) and the Fund TOR.

4. Similar to the donor refund process, where funds remain after operational closure of a fund, the Steering Committee and individual donors may agree to transfer the fund balance or a portion thereof from the closing fund into a new or existing fund in lieu of returning the funds to a donor or donors. The amounts to be transferred to another fund by donor are determined by the Steering Committee as an outcome of the fund operational closure process (see process 12.3),

and the agreed-upon Steering Committee decision as documented in the signed written minutes of the meeting form one of the supporting documents to make a transfer to another fund.

5. Additionally, the donor should confi rm that its contributions can be transferred into the new fund in writing (an email, letter etc.). This forms the second supporting document to process the transfer. By using the transfer process, the Steering Committee maximizes the use of funds by minimizing refunds to donors and minimizing transaction costs for the closing fund as neither process 4.5 (Setting up a vendor code) nor process 7.8 (Refund to a donor) is required. Transfers are processed via GLJE.

6. Portfolio staff should complete the MPTF Offi ce fund income transfer checklist to request a transfer. Transfers to a new fund are recorded as a negative contribution in the original fund (under ‘transfer to new fund’), and as a regular contribution in the new fund. The 1 percent AA fee is charged on contributions transferred to a new fund. Unless otherwise agreed by the donors and the Steering Committee, the transfer will be recorded in the individual amounts attributable to each donor and recorded under each individual donor name using the associated donor codes. The fund balance of each donor’s individual contribution will be refl ected in the new fund on Gateway.

DOCUMENTS/TEMPLATES• MPTF Offi ce fund income transfer checklist• Sample fund closure donor allocation template

PROCESS 12.4 Transferring income to another fund

110110

12.4 Transfer income to new fund

Fina

nce

Asso

ciat

e

Version: 26 Jun 2014

Trigger: SC decision on use of funds upon closure; donor indication that fund bal can go to new fund – refer to process 12.3 Fund closure

Obtain written donor

confirmation

Port

folio

Ass

ocia

te

Donor letter/email

Confirm movement and

balance of funds to FM and PA

Signed S/C minutes

Review CoA; fund balance

allocation; and supporting

documentation

Provide instructions and

supporting documents for

each donor refund to FA

Prepare GL journal entry

identifying each donor in the CoA

Refer to on-going process 12.3

‘Fund closure’

END

START

Fina

nce

Man

ager

Check supporting documents

Fund closure table


Print GJ Journal. Submit to FM

with all supporting

documents for approval

Approve supporting

documents?Approve GLJEYesNo

Yes

No- rework

Signed S/C minutes

Donor letter/email

Transfer checklist

Supporting documents

from PA

Fund closure table

Supporting documents

Taking into account earmarked funds and % of donor contribution

MPTF Offi ce Manual 4. ENABLING for Fund Design ...

Documents

Transcript of MPTF Offi ce Manual 4. ENABLING for Fund Design ...