UNITED NATIONS COUNTRY TEAM IN MOZAMBIQUE DELIVERING AS ONE: Terms of Reference One UN Budgetary Framework and One UN Fund for Mozambique
Introduction It is widely recognized that the UN reform process needs to accelerate dramatically in line with the recommendations of the Triennial Comprehensive Policy Review (TCPR) (2004), the Ex-Com Principals Retreat (July 2005) and the Report of the Secretary-General‟s High-Level Panel (HLP) (November 2006). The HLP concluded that UN work in development is often fragmented and not properly structured to meet country needs. The report also emphasized the need to increase the impact of UN programmes by „Delivering as One‟ at the country level – a need that was immediately addressed by the Government of Mozambique by requesting to be a One UN pilot 1 country and to work towards achievement of the „Four Ones‟ . Mozambique was officially nominated as a One UN pilot country in January 2007. Following internal UNCT discussions a concept note with a road map on „Delivering as One UN‟ in Mozambique was prepared. This note identifies the key challenges of implementing UN reforms in the overall national development context with its current aid environment and the principles of the 2005 Paris Declaration on Aid Effectiveness. The ideas and visions of how the Four Ones can be achieved in Mozambique with the required HQs support to the UN Country Team is being compiled in the One UN master document entitled Delivering as One: Operational Plan for the United Nations in Mozambique, 2007-2009. The document clearly acknowledged that the One UN Plan, among four Ones, would be the driving force of One UN pilot initiative in Mozambique and that the 2 One UN Plan, consisting of number of Joint Programmes defined within the UNDAF Pillars , should be supported by a Joint Resource Mobilization Strategy for Mozambique and the One UN Budgetary Framework and One UN Fund. On 11 to 13 April 2007, a joint UN mission consisting of high level Resource Mobilization experts from UNDP, UNFPA, UNICEF, WFP, UNESCO, UNIDO and UNAIDS visited Mozambique to assist the UN Country Team in articulating the vision for One UN Budgetary Framework and One UN Fund. This document presents the key principles behind the One Budgetary Framework and the One UN Fund following the recommendations of the mission. One UN Budgetary Framework The vision for the One Budgetary Framework is of one budgetary framework bringing together all contributions to support the coherent resource mobilisation, allocation and disbursement of donor resources to the One UN Operational Plan under the direction of the Resident Coordinator. The UN Country Team has agreed that the One Budgetary Framework will be a consolidation of core and unmarked funds (RR and OR) assigned to the common set of outcomes around which UN agencies unify to deliver all results as identified in the UNDAF 2007-2009, including the focus thematic areas and joint programmes highlighted as part of the One Plan. The One Budgetary
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One Plan, One Budgetary Framework and Fund, One Office and One Leader – a fifth One is more recently added to reflect the importance of Communicating as One. 2 The 4 UNDAF pillars are: Governance, HIV and AIDS, Human Capital and Economic Development.
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Framework therefore provides an overview of the total programme resource availability and requirements for the UNDAF programming cycle, with particular focus on: the core and regular resources of partner UN agencies, funds and Organizations; available and committed/firmly pledged extra-budgetary or non-core resources from all sources – bilateral, multilateral and private; and the funding gap (to be updated regularly)
The resource requirements for the UNDAF (as of August 2007) are compiled in Annex 1. One UN Fund a) Objectives of the One UN Fund Based on the One Budgetary Framework, a One UN Fund will be established, with a two-fold objective: to support the coherent resource mobilisation, allocation and disbursement of donor resources to the joint programmes identified in the Delivering as One: Operational Plan for the United Nations in Mozambique, 2007-2009 and to provide support to the One UN Change Management initiatives necessary to operationalise the One UN including providing funding for the implementation of the Communicating as One strategy. Funding of Joint Programmes The One UN Fund will therefore be the vehicle for new resources pooled by donors to support the unfunded part of the joint programmes introduced in the Delivering as One: Operational Plan for the United Nations in Mozambique, 2007-2009 (also referred to as the One UN Plan) and additional resources needed for its overall implementation. The financial resources required for the 11 Joint Programmes under the One UN Plan are summarized in Annex 2, with a breakdown of how much of the Joint Programme is already funded, and what are the remaining financial resources required. Funding of Change Management Change cost money - efforts to harmonize operational procedures and ways of working among various UN agencies will focus on increasing the UN‟s cost effectiveness and efficiency. This will include funding of staff to empower RCO office in the transition period, support One Office and common service initiatives and fund the implementation of the One UN Communication Strategy has been developed to support the implementation of the One UN Plan, and ensure a continuous and systematic sharing of information. The total funding requirements for the Change Management is outlined in Annex 3. b) Description of the One UN Fund The One UN Fund conforms to the principles governing a pass-through arrangement as per the United Nations Development Group (UNDG) Joint Programme guidelines. Under the leadership of the UN Resident Coordinator and in consultation with the UNCT, the One Fund is intended to facilitate the realization of outcomes of the One UN Plan by strengthening the planning and coordination process, tying the funding allocation to the One UN Plan and channelling funds towards the highest priority needs. The objectives of the activities to be financed by the One UN Fund are elaborated in the One UN Plan. The One UN Fund shall be administered by UNDP as Administrative Agent, on behalf of the Participating UN Organizations and the Resident Coordinator as agreed with the Government. UNDP will administer the fund in accordance with its Regulations and Rules.
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Contributions to the One UN Fund Contributions to the One UN Fund may be accepted from governments of Member States of the United Nations, from intergovernmental or non-governmental organizations, or from private sources. Acceptance of funds from the private sector will be guided by criteria stipulated in the UN system-wide guidelines for cooperation between the UN and the business community. In support of the overarching aim of the One UN Fund, and to ensure maximum flexibility and adaptation to national priorities, a guiding principle for resource mobilization would be that donors are encouraged to contribute with multi-year, un-earmarked resources. However, if this is not possible, earmarking in the One UN Programme will be accepted when endorsed by the UN Country Team. It is expected that the percentage of earmarked resources will diminish over time. Contributions to the One UN Fund may be accepted in fully convertible currency. Such contributions shall be deposited in the bank accounts designated by UNDP. The value of a contribution-payment, if made in other than United States dollars, shall be determined by applying the United Nations operational rate of exchange in effect on the date of payment. As the Administrative Agent of the One UN Fund, UNDP will be responsible for receiving all donor contributions in the One Fund Account established for this purpose, and in turn, will make contribution/payments to the respective Participating UN Organizations as soon as possible after the donor funds and instructions from the UNCT are received. Each donor will sign a standardized Letter of Agreement with UNDP as Administrative Agent (attached as Annex 4), setting out the terms and conditions governing receipt and administration of the contributions. The Participating UN Organizations will sign a standardized Memorandum of Understanding with UNDP (attached as Annex 5), setting out the terms and conditions under which UNDP would work as Administrative Agent; the Participating UN Organizations would receive and use funds from the One Fund Account. Utilization of the One UN Fund The One UN Fund will be utilized for the purpose of meeting the unfunded costs of Joint Programmes in the One UN Plan. Details of the Joint Programmes, including the respective budgets and implementation arrangements are provided in the Delivering as One: Operational Plan for United Nations in Mozambique, 2007-2009. The Participating UN Organizations will utilise their standard governmental and non-governmental implementing partners and non-state actor cooperation modalities for this purpose and charge the corresponding direct and indirect costs to the One UN Fund on the basis of their financial regulations and rules. In conformity with the UNDG Guidelines on Joint Programming, the Administrative Agent and the Participating UN Organizations will be entitled to deduct their indirect costs on contributions received. The Administrative Agent‟s fee will be one percent (1%). The fee will be deducted from the contributions to the One UN Fund at the time they are deposited. The indirect costs of the Participating UN Organizations will be maximum seven percent (7%). Governance Arrangements The overall management of the One UN Fund will be led and coordinated by the Resident Coordinator in consultation with the UN Country Team (UNCT). The Joint Steering Committee will
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be informed of progress and results, and will provide guidance to the process. In doing so, the UNCT will Provide strategic leadership of the One UN Fund on the basis of the of Joint Programmes in the One Programme chapter of the UN Operational Plan; Make decisions on fund allocation based on the agreed criteria and a documented process that outlines the rationale for each decision.
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The Resident Coordinator The Resident Coordinator will be responsible to: Provide strategic leadership in guiding the use of One UN Fund on the basis of the One UN Plan; Decide, in consultation with the UNCT, on the allocation of funds from the One Fund, based on the criteria outlined in the section below; Lead the process for mobilisation of resources for the One UN Fund in collaboration with Participating UN Organizations; Together with the Administrative Agent (UNDP) sign of the Letters of Agreement with Donors and the Memorandum of Understanding with the Participating UN Organizations; and Be accountable for the overall efficient management of the One UN Fund and the utilization of the funds in the One UN Fund Account.
Representatives of the UN Organizations The Representatives of Participating UN Organizations will be responsible for the implementation of the Joint Programmes. The Resident Coordinator will hold UN Representatives of the Participating UN Organizations accountable for (i) utilization of resources of the One UN Fund allocated to their Organizations (ii) implementation of components of the joint work plan that their Organizations support and (iii) achievement of results of their organization‟s support components. The Administrative Agent UNDP as Administrative Agent will be responsible to: Delegate authority to the UNDP Country Director for the signature (as Administrative Agent) of Letters of Agreement with Donors and the Memorandum of Understanding with Participating UN Organizations; Receive, administer and manage the contributions from Donors; Disburse such funds to the Participating UN Organizations in accordance with the approved Annual Work Plans; Provide consolidated narrative and financial reports on the One UN Fund Account to the Resident Coordinator based on reports of the Participating UN Organizations; Provide a financial report on the sources and use of donor contributions received by the Participating UN Organizations. Consolidate key audit recommendations received from the auditors of the Participating UN Organizations as well as the audit of the Administrative Agent for submission to the UNCT.
Support Services of the Resident Coordinator’s Office The Office of the Resident Coordinator is responsible for support to the strategic leadership role of the Resident Coordinator for the One UN Fund. It will provide support in all the designated
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Delivering as One: Operational Plan for United Nations 2007-2009 for details, section on One UN Leader.
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tasks for the Resident Coordinator listed above. Drawing on the consolidated reports from the Administrative Agent, the Office of the Resident Coordinator will provide strategic focus including analysis of progress and lessons to be learned for future programme implementation. It will circulate the finalised annual consolidated report on the One UN Fund to the UNCT. The Office of the Resident Coordinator will ensure that these reports are distributed to all donors contributing to the Fund and maintain an appropriate level of fund information on the UN Mozambique Website to ensure transparency. Criteria for Allocation of Resources in the One Fund The allocation of funds in the One UN will be done based on the following system: Recognizing the inherent subjective nature of any criteria which attempts to assess the “value” of a joint programme prior to implementation, the allocation of resources from the One Fund will be based on the following two overarching elements: Initial allocation: Joint Programme must meet a “readiness criteria” Performance-based additional allocations: Performance of the implementation of the programme must be assessed as satisfactory
The two elements of the system are described below: A) Initial Allocation to the Joint Programme In order to be considered for an initial allocation from the One Fund, Joint Programmes must be endorsed by the UNCT has having met the following “readiness criteria”: Summary analysis (one pager) of the Joint Programme endorsed by the RC (including explanation of why joint programme should be supported) Finalized Joint Programme Document Results Framework Monitoring and evaluation plan Annual Workplan Annual Performance Benchmarks for the Programme (process and results) Letter of support from counterpart Ministry Two windows will be opened for Joint Programmes to receive an initial allocation: October 1, 2007 January 1, 2008 All Joint Programmes which are endorsed by the UNCT as having met the “readiness criteria” by the above deadline related to the window will receive an initial allocation from the One Fund. All of the available funds will be disbursed from each window on a pro-rata basis according proportional to the unfunded budget in the annual workplan. That is, each Joint Programme will receive a proportional share of the funds from the One Fund which corresponds to their respective proportional share of the unfunded balance which is in their annual workplan. The total amount of funds available in the One Fund will be disbursed (if unfunded balance exists). The end result from allocating funds based on the above will be that all programmes which qualify will have the same percentage of funded annual budgets.
B) Performance-Based Additional Allocation to the Joint Programme Following the initial allocation, every 6 months (July 1 and January 1) there will be PerformanceBased Additional Allocations. These will be based on a review of performance of the
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implementation of the Joint Programme in relation to progress towards the Annual Performance Benchmarks as defined in the Joint Programme Documentation. The lead agency for the Joint Programme will summarize progress towards the Annual Performance Benchmarks based on standard, simple format (one-page) in collaboration with participating agencies. This analysis will be reviewed by reviewed by the UN Monitoring and Evaluation Reference Group, and forwarded to the UNCT for endorsement. If progress is deemed “satisfactory” then the Joint Programme qualifies for an Additional Allocation. The amount of this allocation will be based on the same formula as for the initial allocation (ie proportionally based on the unfunded balance in the following year‟s annual workplan). If progress is deemed “unsatisfactory”, then the Joint Programme will not receive an additional allocation, but may again apply after an additional 6 months (at which time they then may be assessed as “satisfactory”). Allocation of Funds within a Joint Programme Once an allocation has been made to a joint programme, the amount of the allocation to each agency participating in the joint programme will be guided by the annual workplan of the programme. The decision to allocate to agencies within a joint programme decided by the Lead Agency for the Joint Programme in consultation with all participating agencies, with the Resident 4 Coordinator endorsing the decision. Monitoring and Evaluation Monitoring and Evaluation of the initiatives funded under the One UN Fund will follow Standard Monitoring and Evaluation procedures described in the One UN Programme document. Audit Auditing shall be subject exclusively to the internal and external auditing procedures provided for in the financial regulations, rules and directives of the respective Participating UN Organizations in line with harmonised procedures applicable to the Participating UN Organizations. If feasible, all Participating UN Organizations are encouraged to adopt the UNDG-approved Harmonized Approach to Cash Transfers (HACT) and to align their financial reporting requirements and assurance activities with the organizations currently implementing HACT in Mozambique. Refer to Annex 6 for the HACT guidelines. The activities of the Administrative Agent and the Resident Coordinator shall be subject exclusively to the internal and external auditing procedures provided for in the financial regulations, rules and directives of UNDP. Reporting Each Participating UN Organization shall provide the Administrative Agent with the following statements and reports prepared in accordance with harmonised accounting and reporting procedures applicable to the Participating UN Organization concerned: Annual financial reports as of 31 December each year with respect to the funds disbursed to it from the One UN Fund Account, to be provided no later than four months after the end of the applicable reporting period; Annual progress report on One UN Programme implementation will serve as the narrative part of the report on the One UN Fund to be provided no later than three months after the end of the applicable reporting period;
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The role of the Pillar Chairs will focus on coordinating review of progress in the implementation of the UNDAF as a whole. Pillar Chairs will coordinate annual planning and review processes related to the implementation of the UNDAF, which will also include review of progress in the respective Joint Programmes.
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A final financial report, after the completion of the One UN Programme and including the final year of the Programme, to be provided no later than 30 April of the year following the financial closing of the Programme; and A final certified financial statement, to be provided no later than 30 June of the year following the financial closing of the Programme.
The Participating UN Organizations will utilise for financial reporting the ten categories agreed by the UNDG Financial Policies Working Group (attached as Annex 5 – to be obtained). For narrative reporting, the Resident Coordinator‟s Office will develop an adapted format based on UND guidelines on progress reporting. The Administrative Agent shall prepare consolidated narrative progress and financial reports consisting of the above referred to reports by each Participating UN Organization, and shall provide those consolidated reports to the Resident Coordinator once these have been agreed upon by all Participating UN Organizations but no later than two months upon receipt thereof. The Administrative Agent shall also provide to the Resident Coordinator for submission to donors and articipating UN Organizations, an annual certified Financial Report on its activities as Administrative Agent (“Report on Sources and Uses of Funds”) as well as a final Financial Report and certified Financial Statement no later than 30 June of the year following the financial closing of the One UN Fund. Consolidated One UN Fund reporting and documentation, including agreements, will be posted on www.unmozambique.org. Other Matters The One UN Fund will be established upon signing of the Memorandum of Understanding amongst Participating UN Organizations and the Administrative Agent and the first Letter of Agreement with a donor. The One UN Fund will terminate upon completion of all Joint Programmes funded through the One UN Fund and after satisfaction of all commitments and liabilities. Notwithstanding the completion of the initiatives financed from the One UN Fund, any unutilized balances will continue to be held in the One UN Fund Account until all commitments and liabilities incurred in implementation of the projects/programmes have been satisfied and project activities have been brought to an orderly conclusion. Any balance remaining in the One UN Fund Account or in the individual Participating UN Organizations‟ accounts shall be used as decided by the UNCT in consultation with the contributing donors and Participating UN Organizations (for various elements). Any funds returned to donors will be in proportion to their contributions to the One UN Fund for Mozambique. Annex 1: Annex 2: Annex 3: Annex 4: Annex 5: Annex 6: UNDAF 2007-2009 Resource Requirements Resource Requirements for Joint Programmes in the One UN Programme Resource Requirements for Change Management Initiatives Standard Letter of Agreement Standard Memorandum of Understanding HACT Guidelines
Endorsed by UNCT Mozambique 2 August 2007
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