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Sub-recipient Minimum Capacity Requirements

In relation to each existing and new grant, UNDP requires a detailed mapping and analysis of its responsibilities and the corresponding capacities of each Country Office (CO) to effectively manage the associated accountabilities and risks. UNDP is included under the UN policy for the Harmonized Approach to Cash Transfers which requires, inter alia, that UN agencies adopt a risk management approach and select specific procedures for transferring cash on the basis of the joint assessment of the financial management capacity of implementing partners (IPs).  

UNDP has determined that Sub-recipients (SRs) should meet minimum institutional and technical capacity requirements to sign an SR agreement with UNDP. The UNDP CO should assess whether the potential SRs meet the minimum requirements detailed in Box 1 below. 

Box 1. Minimum requirements for Sub-recipients

  1. Financial management systems that:
    1. correctly record all transactions and balances, including those to be supported by the Global Fund;
    2. allow for disbursing funds to Sub-sub-recipients (SSRs) (where applicable) and suppliers in a timely, transparent and accountable manner;
    3. support the preparation of regular, reliable financial statements;
    4. safeguard, record and account for all Global Fund-financed assets and resources.
  2. Institutional and programmatic:
    1. legal status to enter into the SR agreement with the UNDP CO;
    2. effective organizational leadership, management, transparent decision-making and accountability systems;
    3. adequate infrastructure, transportation and technical information systems to support proposal implementation, including the monitoring of performance of SSRs and outsourced entities in a timely and accountable manner;
    4. adequate health care expertise (relating to HIV and AIDS, tuberculosis and/or malaria) and cross-functional expertise (finance, procurement, legal, monitoring and evaluation (M&E)).
  3. Monitoring and evaluation systems that:
    1. collect, record and validate programmatic data with appropriate quality control measures;
    2. support the preparation of regular reliable programmatic reports;
    3. make data available for the purpose of evaluation and other studies.
  4. Supply chain management system that ensures:
    1. adequate storage conditions;
    2. good inventory management, including:
      1. collect and record data on stock (including quantity, storage condition and shelf-life), with appropriate quality control measures;
      2. support the preparation of regular reliable stock reports;
    3. reliable distribution system (if SR will be distributing health products to service delivery points or SSRs).

In addition to the minimum requirements, capacity assessments can also include a review of:  

  • experience and expertise of the civil society organizations (CSOs) in implementing Global Fund activities or similar projects; and 
  • experience in managing SSRs carrying out Global Fund activities or contractors providing goods and services (10 percent of SR budget maximum); and technical assistance to other organizations where applicable. 
Practice Pointer
The capacity of SRs, particularly CSOs, often hinges on the competence of key individuals. It is therefore important to assess the qualifications and experience of those individuals and the implications of future staff movements or changes on the overall capacity of the organization.

Note on UNDP accountability for SSR capacity: While UNDP does not enter into a contractual agreement with an SSR, it is nevertheless indirectly accountable for the capacity of SSRs, where applicable, to effectively implement, monitor and report on programme activities.  The reason being that UNDP accepts liability for all activities financed with Global Fund grant funds, including activities implemented by SRs and SSRs. Therefore, UNDP must assess and seek to ensure that the SR has the requisite capacity to adequately assess its SRs (the SSRs of the PR), following the detailed process outlined in this manual and to ensure that risks are identified and a plan to address them is developed. The UNDP guidance in this manual can be provided to the SR. 



Resources

UNDP POPP - Harmonized Approach to Cash Transfers -HACT   

Functional Area: Sub-recipient Management      Project Stage: PR Start-up      Author: UNDP      Language: English      Type: Policies, Procedures and guidance      Topic: Managing sub-recipients      Resource File Format: Link      Resource Accessibility: Publicly accessible