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Harmonized Approach to Cash Transfers (HACT)

10 February 2025

Harmonized Approach to Cash Transfers (HACT)

The Harmonized Approach to Cash Transfers (HACT) policy has been updated to harmonize the Terms of Reference (TORs) for HACT Assurance Activities (audits and spot checks) with the HACT agencies also in alignment with the related Long-Term Agreements for Services (LTAS) for HACT services. As a result, Internal Control Audits for partners with “Low” or “Moderate” risk ratings will cease to be an option and only Financial Audits (in accordance with the International Standard on Auditing (ISA) 800 and ISA 805 (Revised)) are to be conducted for all partners. The scope of the revised TOR for financi ...

The Harmonized Approach to Cash Transfers (HACT) policy has been updated to harmonize the Terms of Reference (TORs) for HACT Assurance Activities (audits and spot checks) with the HACT agencies also in alignment with the related Long-Term Agreements for Services (LTAS) for HACT services. As a result, Internal Control Audits for partners with “Low” or “Moderate” risk ratings will cease to be an option and only Financial Audits (in accordance with the International Standard on Auditing (ISA) 800 and ISA 805 (Revised)) are to be conducted for all partners. The scope of the revised TOR for financial audits includes a review of the partner's internal controls. The TOR for spot checks has been revised to incorporate the changes in the accounting standards and is in line with the International Standard on Related Services (ISRS) 4400 (Revised).

The HACT Tables, the HACT Annexes A-D and the Assurance activities planning and implementation procedure have also been updated to reflect these changes.

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Accounts Payable

20 January 2025

Expense Management

The Accounts Payable procedure has been updated to reflect that procedures for accounts payable (AP) invoice processing in Quantum have been revised to ensure accurate accounting, budget management, and programmatic reporting. Users will now populate only the invoice date field, while Quantum will automatically derive other dates. These changes will apply to invoices with an accounting date of 1 January 2025 or later.  
Direct Payments

3 January 2025

Harmonized Approach to Cash Transfers (HACT)

The Direct Payments policy has been updated in paragraphs 2, 4 and 6 to clarify the funding requirements for the full costs of processing direct payments and providing support services.
Cost Recovery from Other Resources - GMS

19 December 2024

Cost Recovery from Programmes funded by Regular and Other Resources

The Guidance Note on GMS (Indirect Costs) for International Financial Institutions (IFIs) has been revised to reflect that the GMS cost recovery rate applied for IFIs is based on the configuration of parties that enter into financing agreements with UNDP (and not on the ‘form’ or agreement template used). The revised guidance note further details that IFI preferential rates (5%) are applicable to financing agreements signed between UNDP and an IFI (or a tripartite agreement concluded by UNDP, IFI and the Government), where both of the following criteria apply:- UNDP anticipates signing fi ...

The Guidance Note on GMS (Indirect Costs) for International Financial Institutions (IFIs) has been revised to reflect that the GMS cost recovery rate applied for IFIs is based on the configuration of parties that enter into financing agreements with UNDP (and not on the ‘form’ or agreement template used). The revised guidance note further details that IFI preferential rates (5%) are applicable to financing agreements signed between UNDP and an IFI (or a tripartite agreement concluded by UNDP, IFI and the Government), where both of the following criteria apply:

- UNDP anticipates signing financing agreements of $50m or more in a calendar year with funding provided by the respective IFI, including through respective national governments; and

- The financing agreement is mainly to support the government’s implementation of sovereign loan or credit guarantees.

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Management of Cash Planning/Forecasting of Cash Flows

2 December 2024

Cash Management

The policy has been updated with the following changes: Introduction of a new rule of 5% of imprest level added to the current threshold of $50,000 for acceptance of local receipts with the following revised wording: “Country offices (COs) may accept the cumulative of all receipts, up to equivalent USD 50,000 monthly or 5% of their established imprest level, whichever is higher, without prior authority from Treasury, provided the receipt of funds locally will not create or add to an accumulation of non-convertible or convertible bank balances in their local bank accounts.”  The ...

The policy has been updated with the following changes: 

  • Introduction of a new rule of 5% of imprest level added to the current threshold of $50,000 for acceptance of local receipts with the following revised wording: “Country offices (COs) may accept the cumulative of all receipts, up to equivalent USD 50,000 monthly or 5% of their established imprest level, whichever is higher, without prior authority from Treasury, provided the receipt of funds locally will not create or add to an accumulation of non-convertible or convertible bank balances in their local bank accounts.”  The higher of the two figures will be the threshold of reporting to Treasury if an exceptional approval from Treasury is required from the CO for accepting local receipts. 
  • Expansion of the scope of currencies to USD and EUR, as long as these are received locally in the country office bank accounts.
  • Clarification to apply the cost of currency conversion to the respective projects. 
  • Other minor editorial changes. 
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Pipeline Management

2 October 2024

Pipeline and Revenue Management

The policy has been updated to incorporate references to portfolio in alignment with the Portfolio Policy as a new delivery instrument.
UN Agency Services

30 September 2024

UN Agency Services

The UNDP Service Level Agreement (SLA) template has been updated as follows:  Paragraph 3 has been expanded to state that services provided under the SLA do not include the conducting of investigations related to the contractors, personnel or staff under a UNDP Letter of Agreement (LoA) with services limited to the Client related to or arising from any of the services provided.  The paragraph further indicates that if the client requests incidental legal and or investigations services, and UNDP agrees to provide them, these services will be subject to full cost recovery plu ...

The UNDP Service Level Agreement (SLA) template has been updated as follows:  

  • Paragraph 3 has been expanded to state that services provided under the SLA do not include the conducting of investigations related to the contractors, personnel or staff under a UNDP Letter of Agreement (LoA) with services limited to the Client related to or arising from any of the services provided.  The paragraph further indicates that if the client requests incidental legal and or investigations services, and UNDP agrees to provide them, these services will be subject to full cost recovery plus reimbursement of all actual costs and expenses incurred by UNDP, without the need for a separate agreement.
  • Paragraph 4 has been expanded to specify: 1) Appendix I to the SLA template shall apply to Partner Personnel Services Agreement (PPSA) services only; 2) In the event of a conflict between any term of Appendix I and the main body of the SLA, Appendix I shall prevail with respect to such PPSA services only.  
  • Paragraph 5 has been updated to clarify that a request or requests for PPSA services shall be processed in accordance with Appendix I.
  • Paragraph 6 has noted options for the calculation of direct cost recovery: UPL/LPL, GSSC Cost Recovery List, or the cost recovery rates for PPSA services as indicated in Appendix I.
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Handling of Cash and Receipts Treasury

30 September 2024

Cash Management

The policy has been updated in para. 5 to clarify the link with the Management of Cash Planning/Forecasting of Cash Flows policy which specifies the amounts of payments that offices can receive locally directly from the agencies.
Direct Cash Transfers and Reimbursements

9 July 2024

Harmonized Approach to Cash Transfers (HACT)

The following clarification and editorial updates have been implemented:
Direct Payments

9 July 2024

Harmonized Approach to Cash Transfers (HACT)

The following clarification and editorial updates have been implemented: