A Harmonized Approach to Cash Transfers to Implementing Partners (HACT) was launched in April 2005. The HACT shifts the management of cash transfers from a system of rigid controls to a risk management approach. It aims to:

• Reduce transaction costs pertaining to the country programmes of the ExCom agencies by simplifying and harmonizing rules and procedures;
• Strengthen the capacity of implementing partners to effectively manage resources;
• Help manage risks related to the management of funds and increase overall effectiveness.

The new approach uses macro and micro assessments, conducted with implementing partners during programme preparation, to determine levels of risk and capacity gaps to be addressed. It uses assurance activities such as audits and spot checks during implementation. And it introduces a new harmonized format for implementing partners to request funds and report on how they have been used. This is called the FACE: Funding Authorisation and Certificate of Expenditures Form.

The HACT is integrated into the steps for common country programming. The macro assessment is an element of the UNCT’s support for country analysis. It highlights the capacity development needs of the national public financial management system, which should be addressed in the UNDAF. The micro-assessments are conducted by the agencies with selected implementing partners, as the CPAPs are developed. On the basis of the results, assurance activities are planned with each of the implementing partners. These are described, along with the agreed cash transfer modality, in the AWP.

Tools and Training