UNDG HACT Advisory Committee

1. UNDG HACT Advisory Committee Global HACT Assessment 20 December 2011

2. UNDG HACT Advisory Committee Global HACT Assessment – Introduction • The global assessment of the HACT implementation aimed to provide an in-depth analysis of the challenges and provide recommendations • The assessment included a number of different methodologies • 1.Desk review and analysis of key documentation • 2. Qualitative and quantitative assessment • 3. Qualitative research interviews with senior management at headquarter level and staff members from selected country offices. • 4. a structured web-based survey, targeting all HACT implementing countries – including funds, programmes, specialized agencies, both resident and non-resident, and selected implementing partners. 2

3. UNDG HACT Advisory Committee Global HACT Assessment – Implementation Status HACT Implementation by Region 3

4. UNDG HACT Advisory Committee Global HACT Assessment – Implementation Status Reported Progress of HACT Implementing Countries by Region 4

5. UNDG HACT Advisory Committee Global HACT Assessment – Findings • HACT has only been in part successful. • The HACT concept has introduced a complexity to the management of cash disbursements and reporting that frequently exceeds the capacity of the UN and implementing partners at the country-level. • In many programme countries, HACT is often accompanied by the parallel continuation of financial controls. • The implementation of assurance and audit plans seems particularly challenging 5

6. UNDG HACT Advisory Committee Global HACT Assessment – Findings • HACT framework does not clarify circumstances where HACT is not applicable • For many governments, the introduction of HACT is accompanied by very high entry costs • Some countries resist capacity assessments. 6

7. UNDG HACT Advisory Committee Global HACT Assessment – Findings • Insufficient coordination and management of the micro assessments • Lack of a common HACT database in many countries, inadequate understanding on roles and responsibilities in the management of the HACT process. • Difficult for many countries to source qualified audit/consulting firms • Number and location of Implementing Partners in a number of countries exceeds the capacity of the UN to sufficiently carry out micro assessments. • Very limited number of shared Implementing Partners questions the feasibility of developing common assurance plans and coordinating all actions. 7

8. UNDG HACT Advisory Committee Global HACT Assessment – Findings • Different understanding of the implementing partner designation • The introduction of additional supporting documentation indicates that many country offices have not fully understood the principles of a risk-based financial management approach. • Limited staff and financial capacity of the UN at the country level to carry effective assurance activities for a large number of implementing partners. • HACT compliance designation represents a process rather than results orientation • The findings indicate that HACT has not been accepted and institutionalized as a mandatory process. 8

9. UNDG HACT Advisory Committee Global HACT Assessment – Recommendations • UNDG to further review HACT in light of the significant commitment and investment required to enable its full implementation at the country level. • Development and endorsement of a set of criteria that determine the applicability of HACT for programme countries. • The capacity development objective of HACT to be reviewed and clarified. • UNDG to develop and approve specific guidelines for the implementation of HACT-related assurance at the country level. • UNDG to develop and implement an accountability framework that clarifies the distribution of HACT-related roles and responsibilities at headquarter, regional, and country level for agencies and inter-agency bodies. 9

10. UNDG HACT Advisory Committee Global HACT Assessment – Recommendations • UNDG and individual agencies to review the current criteria for HACT compliance. • Development and implementation of a web-based database to support regional and country-level focal points and monitor global HACT progress. • UNDG HACT Advisory Committee to facilitate an amendment of the HACT framework to: • define the implementing partner designation • to further clarify the financial thresholds for micro assessments and HACT audits • to review the current periodicity of disbursement as per the HACT framework • to further standardize the utilization of the FACE form as the exclusive instrument to manage cash disbursement and reporting. 10

11. UNDG HACT Advisory Committee Global HACT Assessment – Recommendations • UNDG HACT Advisory Committee to review all agency-specific requirements that are not in line with the HACT framework. • UNDG HACT Advisory Committee to facilitate the development of guidelines for the joint assurance and audit plans. • UNDG HACT Advisory Committee to facilitate the development of a training package for the country level that would target UN staff in programme and operations with the aim to effectively linking programming with financial management. 11

12. UNDG HACT Advisory Committee Global HACT Assessment Thank You! 12