Harmonized Approach to Cash Transfers (HACT)

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Home
Financial Resources Management
Financial Management and Implementation Modalities
Harmonized Approach to Cash Transfers (HACT)
Harmonized Approach to Cash Transfers (HACT)

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Inventory Management
- Inventory Management
Cash Banking and Investment
Financial Closure of Development Projects and Trust Funds
Financial Management and Implementation Modalities
Financial Operations Management
- Corporate Operations and Information Management
- Statutory Financial Reporting
Pipeline and Revenue Management
Expense Management
Resource Planning and Cost Recovery
Working with External Auditors
- Working with External Auditors

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POLICY

Harmonized Approach to Cash Transfers (HACT)

Direct Payments

Direct Cash Transfers and Reimbursements

Policy updates

Harmonized Approach to Cash Transfers (HACT) 28 September 2021 Harmonized Approach to Cash Transfers (HACT)	The updated HACT POPP is now available. The summary of the key changes and their implication on UNDP Offices are:1- Clarity has been added in para 23 (h) for macro assessment where UNDP is the sole agency that requires the assessment;2- Guidance has been added for micro assessment that expires mid-programme cycle where discretion of the Office is required in the case if the project is expected to end in a short period of time. This is indicated in para 27 (n);3- Standardized templates have been made available to document the significant issues and action plan arising from micro assessment ... The updated HACT POPP is now available. The summary of the key changes and their implication on UNDP Offices are: 1- Clarity has been added in para 23 (h) for macro assessment where UNDP is the sole agency that requires the assessment; 2- Guidance has been added for micro assessment that expires mid-programme cycle where discretion of the Office is required in the case if the project is expected to end in a short period of time. This is indicated in para 27 (n); 3- Standardized templates have been made available to document the significant issues and action plan arising from micro assessment and assurance activities. Regional bureaus are required to review the documentation of the significant issues and action plan arising from micro assessment and assurance activities for Partners with expected cash transfers of greater than or equal to $1 million per annum, and in the case of central bureaus and independent units implementing developing project, the review shall be performed by the Head of Office or his/her designate. This is indicated in para 27 (t) and para 40 (l); 4- Additional guidance have been added for downward revision of Partner adjusted risk rating in para 7; 5- A standardized template has been made available to document the High Risk Partner Approval Template in para 6 (f); EXPAND
Direct Payments 29 January 2021 Harmonized Approach to Cash Transfers (HACT)	The updated Direct Payments policy is now available. The summary of the major changes and their implication on UNDP Offices are as follows:Clarification has been made in para 2 that direct payments must be performed through an approved FACE form, requesting UNDP to make payment directly to the vendor on behalf of the Partner, and the Implementing Agent code must be the Partner’s code;Clarity has been added for non-local currency denominated payments to national implementation projects in para 8 which should be submitted to UNDP HQ Treasury for appropriate approval in accordance with UNDP ... The updated Direct Payments policy is now available. The summary of the major changes and their implication on UNDP Offices are as follows:Clarification has been made in para 2 that direct payments must be performed through an approved FACE form, requesting UNDP to make payment directly to the vendor on behalf of the Partner, and the Implementing Agent code must be the Partner’s code;Clarity has been added for non-local currency denominated payments to national implementation projects in para 8 which should be submitted to UNDP HQ Treasury for appropriate approval in accordance with UNDP Financial Regulations and Rule 125.06;Clarification has been added on reviews of FACE form, including the list of red flags in para 12 and 13 that potential signs of fraud or misuse of funds shall be observed, reviewed, investigated and documented. Direct payment should not be processed until the potential red flags are fully investigated and confirmed to be valid;Procedures offices should take to address unsupported payments reflected in assurance reports, including audits and spot checks, has been added in para 14. EXPAND
Direct Payments 29 January 2021 Harmonized Approach to Cash Transfers (HACT)	The Direct Payments policy and procedures have been further updated as follows: Guidance has been added to Para 2 on the ICE template. ICE template guidance has been added to procedure step 1. Fraud red-flags guidance have been added to procedure step 9.
Harmonized Approach to Cash Transfers (HACT) 1 January 2021 Harmonized Approach to Cash Transfers (HACT)	The updated HACT POPP is now available. The summary of the major changes and their implication on UNDP Offices are: Revision of the micro assessment threshold from $300k per programme cycle to $150k per annum (for partners already engaged in 2021 where the assessment cannot be performed because implementation is already underway, offices should upload a Note to File confirming the experience so far with the partner has not highlighted any risks that warrant a change in the implementation or cash transfer modality) and follow the prescriptive guidelines for non-assessed partners;The approv ... The updated HACT POPP is now available. The summary of the major changes and their implication on UNDP Offices are: Revision of the micro assessment threshold from $300k per programme cycle to $150k per annum (for partners already engaged in 2021 where the assessment cannot be performed because implementation is already underway, offices should upload a Note to File confirming the experience so far with the partner has not highlighted any risks that warrant a change in the implementation or cash transfer modality) and follow the prescriptive guidelines for non-assessed partners; The approved micro assessment and assurance activity plans (generated from the HACT SharePoint site) should be uploaded to the site semi-annually no later than end of February and end of July every year have been added in para 27 (m); Written approval of the Head of Office for cash transfers up to $150k issued to non-assessed partners who meet the threshold; written approval of the respective bureau for cash transfers exceeding $150k to none-assessed partners who meet the threshold have been added in para 27 (e); The frequency of submitting Assurance plans has been changed from annually to semi-annually, being no later than the end of February and July of every year, has been added in para 40 (a). This will ensure continuous monitoring and revision of assurance plans; Regarding spot checks, offices are now required to conduct the spot checks for Partners with actual expenditures incurred and reported exceeding $50,000 per year. This is indicated in para 6 and 40; Spot checks may be performed by qualified, experienced UNDP staff who are independent of the project for Partners below the micro assessment threshold ($150,000 per annum). However, the staff would need to obtain clearance in writing by their respective bureaus after confirmation of their experience, qualification and independence to the project; A revision to the frequency of audits has been added in para 6 and Table 2 where Partners that are risk rated “Low” and “Medium”, an internal control audit should be conducted at least once every other year if annual expenditure exceeds $200,000 per year. For Partners that are risk rated “Significant” and Unassessed Partners, financial audits should be conducted every year when expenditures exceed $200,000 per year. For Partners that are “High” risk rated, OFM’s written clearance is required to engage and issue cash transfers to the partner; otherwise DIM audit guidelines apply if Direct Implementation or Full Country Office Support to NIM is selected. EXPAND
Direct Cash Transfers and Reimbursements 1 December 2020 Harmonized Approach to Cash Transfers (HACT)	The updated Direct Cash Transfers and Reimbursements policy and procedures are now available. The summary of major changes and their implication on UNDP Offices are:Clarification has been made that NEX Advances can only be made to Partners, and not to responsible parties in full NIM projects.Clarity has been added for non-local advances to national implementation projects in paragraph 9, which should be submitted to UNDP HQ Treasury for appropriate approval in accordance with UNDP Financial Regulations and Rule 125.06.r.Added clarification that Partners may open a separate bank account for re ... The updated Direct Cash Transfers and Reimbursements policy and procedures are now available. The summary of major changes and their implication on UNDP Offices are:Clarification has been made that NEX Advances can only be made to Partners, and not to responsible parties in full NIM projects.Clarity has been added for non-local advances to national implementation projects in paragraph 9, which should be submitted to UNDP HQ Treasury for appropriate approval in accordance with UNDP Financial Regulations and Rule 125.06.r.Added clarification that Partners may open a separate bank account for receiving and managing UNDP advances where deemed necessary.Procedures which offices should take to address unsupported payments reflected in assurance reports, including audits and spot checks, have been added. EXPAND

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