US Letter of Credit (LOC) Agreements

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US Letter of Credit (LOC) Agreements

Main navigation

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

Focal Point

Adam Phillion

Effective Date

01/01/2019

Planned Review Date

09/01/2026

Version

2.0

Latest updates

January 09, 2023 - The policy and procedures have been updated to reflect UNDP’s transition to its new cloud-based management platform Quantum in January 2023, replacing its previous ATLAS system.

January 19, 2021 - The US Letter of Credit (LOC) Agreements policy and accompanying guidelines have been updated as follows:1. For USAID, there are sometimes contributions to support GEF, Covid-19 and other activities. The policy and related guidance previously limited funds to fund codes 30000 and 16610 for LOC contribution. Therefore, the policy and related guidance were updated to include fund codes for these other activities.
2. The DUNS number: 793511262 was replaced with DUNS number: 645521498. DUNS: 645521498 is the offic

January 09, 2023 - The policy and procedures have been updated to reflect UNDP’s transition to its new cloud-based management platform Quantum in January 2023, replacing its previous ATLAS system.

January 19, 2021 - The US Letter of Credit (LOC) Agreements policy and accompanying guidelines have been updated as follows:1. For USAID, there are sometimes contributions to support GEF, Covid-19 and other activities. The policy and related guidance previously limited funds to fund codes 30000 and 16610 for LOC contribution. Therefore, the policy and related guidance were updated to include fund codes for these other activities.
2. The DUNS number: 793511262 was replaced with DUNS number: 645521498. DUNS: 645521498 is the official DUNS number for UNDP which is used by UNDP Business Units applying for a USAID Grant.

November 19, 2020 - The US Letter of Credit Agreements policy has been updated based on the previously announced accounting policy changes for contributions. Additionally, the US Government Letter of Credit Guidelines and Procedures for funding UNDP projects has been updated and linked under the main policy and in clause 3 of the policy.
The summary of the changes and their implication on UNDP Offices are:
• With a few exceptions, the announced accounting policy changes for contributions, require the full revenue, including for future periods, to be recorded in the year an agreement/or other binding document is signed and not upon the receipt of cash.
• The recording of the revenue in Atlas remains with the GSSU Revenue team. UNDP Offices are required to submit the signed agreements to the GSSU within 1 week after an agreement is signed via the Service Request Portal : https://undp.custhelp.com/app/main.
• The policy revision did not change the ability for UNDP Offices to spend or enter into commitments in Atlas which is still dependent on funds being received (except for USAID Letters of Credit where the current process of enabling the spending ability in Atlas remains unchanged). As is currently the case, UNDP Offices can only incur expenditures or enter into commitments upon receipt of funds or by following budget override procedures outlined in the UNDP’s Risk Management Guidelines.
• For UNDP Offices receiving funding from MPTF, in the past UNDP Offices have been submitting the signed disbursement notifications to GSSU but going forward, the full approved amount committed to UNDP should be provided. Therefore, UNDP Offices should provide the signed Project Document (ProDoc) and the Steering Committee minutes that reflects fully the approved amount for UNDP and not just what is being disbursed in the next tranche.
• Country Offices are required to submit signed amendment agreements/ letters/amendments within 1 week of signing the agreements/amendment to GSSU so that the revenue can be recorded or adjusted accordingly.
• At the end of every year, the Head of Office will be required to certify in the annual assertion that all signed agreements/amendments to agreements have been submitted to GSSU on a timely basis prior to the closure of the financial ledgers. This will help ensure that UNDP revenue is captured in a timely manner as any late submission of these documents poses a significant management reporting risk and audit risk as revenue will not be reported accurately in the UNDP financial statements, including quarterly financial statements.
• For the POPP on Government Contributions to Local Office Costs (GLOC) from Low and Middle Income Countries (LIC and MIC), a new GL account (i.e. GLOC – Gov contr Locl Cost Future – 51017) was created to track cases, if and when host governments settle their cash targets in advance, especially when a multi-year target is successfully negotiated.

December 01, 2015 - Content reviewed.

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Relevant Regulations and Rules

UNDP Financial Regulations and Rules

Policies

Main Policy

US Letter of Credit (LOC) Agreements

DOCX (92.09 KB)

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The US Government Letter of Credit Guidelines and Procedures for Funding UNDP Projects is available here for reference purposes.

Related Policies

IPSAS 23 Policy Paper

Procedures

Main Procedures

1

Steps

Negotiate and sign agreements at Business Unit level (sign with the local US Federal Government Agency)

Responsible Party

UNDP Office

Explanatory Notes

After submission of Final FFR-425

United Nations
Development Programme

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