The Framework Agreement (FA) between UNDP and the Global Fund was amended in September 2023. The amended FA., effective as of December 2024, includes the Grant Regulations tailored to UNDP. The Grant Regulations cover all the fundamental aspects of grant implementation and include the following key provisions:
- UNDP implements grants “in accordance with UNDP regulations, rules, policies and procedures and decisions of the UNDP Governing Bodies, as well as the terms and conditions of the relevant Grant Agreement.” See 2(a) of the Grant Regulations. Under no circumstances should the Global Fund’s policies govern, or in any way apply to, grant implementation.
- UNDP selects and manages Sub-recipients (SRs) in accordance with its rules and procedures. However, it must ensure that SR agreements comply with the terms of the Grant Agreement, including an anti-terrorism clause in Art. 3(f) of the Grant Regulations. In addition, UNDP must have systems in place to assess SR capacity and, in the case of insufficient capacity, it must consult with the Country Coordinating Mechanism (CCM), the Regional Coordinating Mechanism (RCM) or the Regional Organization (as the case may be), as well as the Global Fund on how such shortfalls can be addressed. (See Art. 10(b) of the Grant Regulations.)
- UNDP is fully responsible for the results to be achieved by SRs and is accountable for all funds disbursed to them, as well as for the SRs’ activities. (See Art. 10(b) of the Grant Regulations.) The Global Fund can request a refund from UNDP if goods or services financed or supported under the Grant Agreement are not used in accordance with the agreement. (See Art. 8(b) of the Grant Regulations.) If the Global Fund believes that a refund is warranted, it must write to UNDP Headquarters. If the matter is not resolved within 30 days, then GF can ask for a refund within 60 days. This formal consultation mechanism ensures that the UNDP senior management is aware of a request for refund and can address it expeditiously and appropriately.
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The Grant Regulations recognize the special status of UN SRs. More
specifically, they clarify that UN SRs (i) are subject to their own
oversight and control systems (Art. 10(b)(iv)); (ii) can maintain title to
the fixed assets and manage them according to their rules (Art. 17(c)),
and (iii) are not audited by UNDP (Art. 7(d)(ii)).
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The Grant Regulations recognize the special status of UN SRs. More
specifically, they clarify that UN SRs (i) are subject to their own
oversight and control systems (Art. 10(b)(iv)); (ii) can maintain title to
the fixed assets and manage them according to their rules (Art. 17(c)),
and (iii) are not audited by UNDP (Art. 7(d)(ii)).
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UNDP has a number of reporting obligations towards the Global Fund.
Among other things, it has a duty to provide (i) periodic progress reports
(Art. 13); (ii) quarterly cash balance reports (Art. 13); (iii) a copy of
its externally audited financial statements covering each year in which
Grant Funds are expended, together with the opinion of its external
auditors on such statements, not later than thirty (30) days after such
audited financial statements and opinion are published (Art. 7(b)(iv));
(iv), a certified financial statement of income and expenditure of the
Program during the preceding year, which is due no later than June 30 of
each year; and (v) financial expenditure reports on the use of funds by UN
SRs, prepared in accordance with the financial regulations and rules
applicable to such Sub-recipients. Further guidance on financial reporting
can be found in the
financial management section
of the Manual.
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Article 21 of the Grant Regulations sets forth a number of deliverables
due from UNDP in connection with grant closure. Further guidance on
closure can be found in the
financial management section
of the Manual.
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Pursuant to Art. 7 of the Grant Regulations,
UNDP audits its programme expenditures “in accordance with its internal
and external auditing practices”. Audits are conducted by the UNDP Office of Audits and Investigations
(OAI). With regard to SRs, UNDP must consult with the Global Fund on an SR
audit plan and, upon the Global Fund’s request, furnish it with a copy of
the SR audit reports. More information on PR and SR audits can be found in
the audit section of the Manual.
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In countries falling under the Global Fund’s Additional Safeguards
Policy, the Global Fund may request a special purpose audit, the cost of
which shall also be borne by the programme.
Should such an audit be requested, UNDP must (i) secure the appointment of
a mutually agreed independent auditor and (ii) prepare the terms of
reference for the audit, which must be mutually agreed with the Global
Fund. The Global Fund’s request for a special purpose audit must be
handled in conformity with the working arrangements agreed between the
independent oversight offices of the Principal Recipient (PR) and the
Global Fund. (See Art. 7(b) of the Grant Regulations.) Further guidance on
ASP audit is available in the
audit section
of the Manual.
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UNDP has an obligation to cooperate with the Global Fund’s Local Fund
Agents (LFA)
(See Art. 10(d)). This includes ensuring access to non-UN SR documents,
including any supporting documents provided by non-UN Sub-recipients to
UNDP, in line with UNDP guidance notes.
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UNDP retains title to goods and other property financed under the Grant
Agreement,
which it can also pass on to a third party such as an SR (see Art. 17 of
the Grant Regulations) and ensures that such property is devoted to the
programme financed by the Global Fund. At the end of the programme, UNDP
transfers and/or disposes of the remaining property according to its rules
and in consultation with the Global Fund (see 19 of the Grant
Regulations). Although the Global Fund’s approval is not required for such
transfer and/or disposal, it is considered best practice to seek its
agreement, as well as the endorsement of the CCM, RCM or RO (as the case
may be), on the transfer of assets to the national SRs at the end of the
programme. Further guidance is available in the
financial management section
of the Manual.
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UNDP commits to comply with certain human rights standards, including
non-discriminatory access to services for all, including people in
detention; employing only scientifically sound and approved medicines or
medical practices; not employing methods that constitute torture or that
are cruel, inhuman or degrading; respecting and protecting informed
consent, confidentiality and the right to privacy concerning medical
testing, treatment or health services rendered; and avoiding medical
detention and involuntary isolation, which, consistent with the relevant
guidance published by the World Health Organization, are to be used only
as a last resort. UNDP is under an obligation to communicate such
standards to its SRs and suppliers, as well as to inform the Global Fund
of any cases of incompliance. See Art. 29 of the Grant Regulations.
EXPAND
The Framework Agreement, including the Grant Regulations, have been agreed corporately between UNDP and the Global Fund; they are not negotiable and cannot be modified. They are to be used without deviations in all countries where UNDP acts as PR, to ensure a consistent legal regime for all UNDP Country Offices (COs).
Practice
Pointer
Due to the legal and financial exposure, all Global Fund requests for
refund, which are addressed to the UNDP Country Office (PR), must be
immediately referred to respective Regional Bureau (RB), the UNDP Global
Fund Partnership and Health Systems Team (GFPHST). The UNDP Office of Legal
Services (OLS) should be consulted as required.
