United Nations

Office for the Coordination of Humanitarian Affairs

Ref. 2012/7

Guidelines

Emergency Response Funds

Approved by: Ms. Valerie Amos, Emergency Relief Coordinator and Under-Secretary-General for Humanitarian Affairs Approval date: 09 October 2012 Contact: Chief, Funding Coordination Section (FCS) Review date: 01 July 2013

This and other official OCHA Guidance is available on

the Policy Guidance Page of OCHANet

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Guidelines Emergency Response Funds

Contents:

A.  PURPOSE ..................................................................................................... 3 B.  SCOPE .......................................................................................................... 4 C.  RATIONALE .................................................................................................. 4 D.  GUIDELINES ................................................................................................. 4 1.  General Objectives of ERFs.......................................................................... 4 2.  Eligibility for ERF ........................................................................................... 6 3.  Roles and Responsibilities ........................................................................... 6 

3.1. Humanitarian Coordinator (HC) .............................................................. 6 3.2. OCHA Head of Office (HoO) ................................................................... 7 3.3. ERF Manager/ERF Unit .......................................................................... 8 3.4. Advisory Board (AB) ............................................................................... 8 3.5. Review Board (RB) ................................................................................. 9 3.6. OCHA Headquarters (HQ) .................................................................... 11 3.7. Recipient Organizations ........................................................................ 14

4.  Workflow ...................................................................................................... 15 5.  Finance and Administration ....................................................................... 16 

5.1. Clearance of Agreements ..................................................................... 16 5.2. Eligible Expenditures ............................................................................ 16 5.3. Ineligible Expenditures.......................................................................... 18 5.4. Modifications of Project Activities ......................................................... 18 5.5. Audits and Fees .................................................................................... 19 5.6. Managing the Audit Process ................................................................. 20 5.7. Transfers of Equipment and Property ................................................... 21

6.  Mainstreaming Gender ................................................................................ 21 7.  Accountability .............................................................................................. 22 

7.1. M&R Plan ............................................................................................. 22 7.2. Evaluations and Reviews ...................................................................... 24

E.  REFERENCES ............................................................................................ 25 F.  MONITORING AND COMPLIANCE ............................................................ 25 G.  DATES ........................................................................................................ 25 H.  CONTACT ................................................................................................... 26 I.  HISTORY ..................................................................................................... 26 

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ANNEXES

I. List of Acronyms II. Guidance Note on Opening of Emergency Response Funds III. Guidance Note on Closure of Emergency Response Funds IV. Partner Capacity Assessment Form V. ToR Pooled Fund Manager

VI. MoU with UN Agencies VII. Agreement with NGOs

VIII. Project Appraisal Template IX. Step-by-Step Guide for the Project Application and Approval Process X. Memo for HC Endorsement

XI. Memo for the First and the Last Disbursement Request XII. ToR for Advisory Board Template

XIII. ToR for Review Board Template XIV. FTS reporting template XV. ERF Workflow

XVI. Checklists for Project Submissions to ASB Geneva XVII. Project Proposal (narrative) Template

XVIII. ERF Budget Tool XIX. Third Party Request Form XX. Bank Information Form

XXI. Amendments A. Letter of Acceptance of Amendments within Budget Categories B. ERF Budget Tool for Amendments

XXII. No-Cost Extension A. Letter of Acceptance of No-Cost Extension for NGOs B. Letter of Acceptance of No-Cost Extension for UN Agencies

XXIII. Standard Terms of Reference for ERF Audit XXIV. Audit Template XXV. IASC Gender Marker FAQ XXVI. Project Monitoring Report Template

XXVII. Reporting Template A. Interim Narrative Reporting Template B. Final Narrative Reporting Template

XXVIII. ERF Annual Report: A. ERF Annual Report Template B. ERF Annual Report Guidelines

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A. PURPOSE The purpose of these guidelines is to provide OCHA Country Offices (COs) with the appropriate tools to support Humanitarian Coordinators (HCs) in managing an Emergency Response Fund (ERF). The guidelines also strive to ensure coherence in the management of all ERFs. B. SCOPE The primary audiences for these guidelines are Humanitarian Coordinators (HCs), OCHA Heads of Office (HoOs) and OCHA fund-management staff. The secondary audience is OCHA Headquarters (HQ) staff. The specific country context must always be kept in mind when creating, managing and closing an ERF, but all Funds should comply with and operate within these guidelines. C. RATIONALE Since 1997, OCHA has managed ERFs in a number of countries. These Funds were established with little guidance from HQ, and frequently required HCs and OCHA COs to recreate existing systems without adequate support.1 In 2009, OCHA’s Funding Coordination Section (FCS) was established in New York to address this gap and oversee country-based pooled funds. Subsequently, with the creation of FCS, there was a rapid growth with eight new ERFs. However, independent reviews have shown that these country-based pooled funds have proven to be valuable tools in ensuring timely, appropriate and flexible funding for urgent and life-saving activities addressing unforeseen or new humanitarian needs. They have also reinforced the strategic value of a Humanitarian Country Team (HCT) through prioritization of needs.2 This guidance aims to standardize the process and tools of managing ERFs, ensuring that all Funds build on the lessons learned, evaluations and good practice accumulated during OCHA’s years of managing similar mechanisms.

D. GUIDELINES 1. General Objectives of ERFs “Emergency Response Fund” is an umbrella term that covers a range of country-based pooled funds sharing general characteristics. The following features are typical of an ERF:

1 There is no dedicated General Assembly resolution with a governing mandate for ERFs, unlike for the Central Emergency Response Fund (CERF). 2 Guidance on opening and closing ERFs are included in annexes II and III of these guidelines.

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Operates under the HC’s overall management and oversight.

Provides recipient organizations with a rapid and flexible in-country funding mechanism.

Provides funding to unforeseen or new developments.

May provide funding to life-saving activities with critical gaps in the Consolidated Appeal Process (CAP) and bridge funding to meet short-term emergency needs.

Is relatively small in size.

ERFs operate under different names in different countries, including Humanitarian Response Funds (HRFs). However, since the FCS was created, all new funds follow the standard name: Emergency Response Fund. An ERF is a tool at the HC’s disposal. It enables rapid and flexible funding to urgent humanitarian needs, and it facilitates coordination of emergency response activities. ERFs provide additional funding to fill critical gaps, enabling humanitarian partners to meet the short-term emergency needs of vulnerable communities without delay. ERFs are not intended to support activities that are outside the scope of the humanitarian response or could be better addressed through development channels. Nor are these funds intended as the primary funding source for core programmed humanitarian action in a country. Where a Common Humanitarian Action Plan (CHAP) or similar planning or prioritization framework exists, ERFs work within the established objectives of the framework. ERFs work according to the priorities defined by the HC and the HCT. ERFs could also focus on new or unforeseen needs and emergency projects that were not part of the annual planning process. ERFs facilitate the coordination of response activities through consultation with humanitarian partners at different levels in-country to avoid duplication of efforts. These funding mechanisms also serve to strengthen partnerships between United Nations (UN) and non-UN actors through equitable access to funds, representation on an Advisory Board (AB) and Review Board (RB), as well as transparent decision-making mechanisms.3 ERFs complement existing funding channels such as CERF. To improve consistency, coherence and complementarity, the CERF secretariat and FCS are harmonizing the processes and mechanisms for grant management and allocations for CERF and ERFs. In countries where an ERF is in place, HCs are encouraged to use the existing ERF structure and consultation framework as a basis for identifying and prioritizing projects for CERF funding. This will enhance the coordination and complementarity between ERF and CERF allocations. This will also help ensure that CERF processes build on well-established structures

3 For additional information, the Principles of Partnership can be downloaded from http://ochanet.unocha.org/PG/Policy%20Guidance/Principles%20of%20Partnership.pdf

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and systems, and that NGO partners actively participate in CERF discussions and decisions. 2. Eligibility for ERF

ERF funds are intended predominantly for facilitating NGO (international, national and local) response in an emergency. However, allocations may also support humanitarian action by UN agencies, IOM and the Red Cross/Red Crescent Movement. The preference for NGOs takes into account the fact that only UN agencies and IOM can be direct recipients of CERF funding. The ERF inclination to NGOs is also in line with Good Humanitarian Donorship (GHD) principles to build partnership.

To be eligible for ERF funding, applicants must complete a capacity-assessment4 form, which highlights the following:

Proven ability to implement proposed activities.

Appropriate accreditation and registration with the Government.

Comparative advantage over other potential implementers, such as access, networks, capacities and resources.

In addition to the aforementioned programmatic requirements, applicants must also demonstrate:

A verifiable office address.

A valid US$ bank account in the organization’s name that can be used to receive funds through wire transfers from the UN and other donors, and to make remittances when required.

An ability to keep financial records in accordance with international accounting standards, with the accounts being audited at least once a year and published in an annual report.

3. Roles and Responsibilities

The following passages define the key ERF duties of the HC; the OCHA HoO and the ERF Unit; AB; RB; different key sections in OCHA HQ; and recipient organizations. 3.1. Humanitarian Coordinator (HC)

The UN Under-Secretary-General (USG) for Humanitarian Affairs, on behalf of the office, and as the Emergency Relief Coordinator (ERC) of the humanitarian

4 A capacity assessment form is included in annex IV of these guidelines.

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community, holds the ultimate decision-making power at HQ to open a Fund,5 and to ensure that OCHA has the necessary capacity to manage the Fund. The HC reports to the ERC, as stated in the respective HC Compacts, with the overall responsibility for oversight and management of the Fund, and endorses the establishment at country level. The HC is responsible for funding decisions, and for ensuring adequate strategic and programmatic oversight and the appropriateness of funded activities. Although HCs are normally advised by the ERF RB on project selection, they may opt to make funding decisions outside of this body when the need arises (e.g. in time-critical situations or for common services). The HC gives final approval on proposed projects, and signs grant agreements with NGOs and a memorandum of understanding (MoU) with UN agencies. HCs are accountable for ensuring activity/programme reporting and monitoring, and for reporting on the use of contributions to stakeholders, including donors. HCs also lead the efforts to raise funds for the ERF. The HC is supported by the OCHA CO on daily strategic and operational issues. HCs may choose to delegate some of their responsibilities (except financial responsibilities) to the OCHA HoO as necessary. Such delegation must be done in writing from the HC to the OCHA HoO.

The HC should also emphasise and ensure leadership at the country level on enhancing accountability of ERF projects to women, girls, boys and men, particularly by using the Inter-Agency Standing Committee (IASC) gender tools and the Gender Marker (GM).

3.2. OCHA Head of Office (HoO)

The OCHA HoO oversees the daily management of the core functions of the OCHA CO, which includes the ERF. The OCHA HoO:

Acts as the primary focal point within the OCHA CO for the HC on ERF issues.

Advises the HC and interfaces with HQ on strategic and policy issues related to the ERF.

Obtains expert inputs from the ERF Manager and other parts of the OCHA CO, such as field or sub-offices where the humanitarian situation and needs are best known.

Ensures the submission of timely expenditure reports by ERF-recipient organizations at the country level.

Supports the HC in fundraising and keeps donors abreast of developments with the Fund.

5 Criteria and process are described in annex II.

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3.3. ERF Manager/ERF Unit

Under the OCHA HoO’s direct supervision, the ERF Manager is responsible for the daily management of the Fund. The ERF Manager will ensure the overall administration of the Fund, manage and supervise staff who are part of the ERF Unit, and liaise with relevant OCHA CO and HQ sections on matters concerning the Fund as necessary. The ERF Manager will be primarily responsible for facilitating and managing the entire project cycle: proposal review, allocation process, including No-Cost Extension (NCE) and audit process, as well as meeting monitoring, reporting and evaluation requirements according to these guidelines and the Fund Manager Terms of Reference (ToR).6

The ERF Manager serves as the secretariat for the RB and AB, and is the primary interface between these boards and the applicants. The ERF Manager will be responsible for consolidating recommendations, technical comments and review results, and informing respective parties accordingly. ERF managers also monitor closely the review and approval process of proposals submitted to the ERF. They also ensure timely follow-up by respective parties to maintain the agreed timetable for processing incoming proposals. In the case of a critical or urgent need, this agreed time frame can be shortened at the HC’s discretion.

For projects that the HC has approved, the ERF Manager/ERF Unit prepares an official agreement (MoU or grant agreement)7 in cooperation with the applicant, and requests a transfer of funds from the OCHA Administrative Services Branch- (ASB), in OCHA Geneva, to an accredited international bank. The Fund Manager follows up and monitors the clearance and the disbursement with OCHA ASB. He or she also continuously monitors the projects through reports produced by the recipient organizations and monitoring missions.8

In cooperation with recipient organizations, the Fund Manager prepares and submits final narrative and financial reports to ASB on the use of the funds at the end of the implementation period. The Fund Manager also regularly shares information on funding decisions as necessary to stakeholders. When the ERF has funded a new project not originally included in the CAP, the project and its ERF funding amount are added to the CAP retroactively.9

3.4. Advisory Board (AB)

An AB shall be formed to advise the HC on strategic and policy issues related to the ERF. It will: 6 The Fund Manager ToR is included in annex V of these guidelines. 7 The MoU for UN agencies and the NGO grant agreement are included in annexes VI and VII of these guidelines. 8 Tools and templates for the Fund Manager are included in annexes VIII-XI of these guidelines. 9 This retroactive exercise does not apply to those projects already in the CAP that are funded by the ERF.

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Be chaired by the HC.

Have OCHA as the secretariat, with all meetings recorded in writing.

Be composed of representatives of UN humanitarian agencies, IOM, NGOs and the Red Cross/Crescent Movement.

The AB can serve as a forum for donor coordination, and the HC may consider inviting key humanitarian donors that do not contribute to the ERF to participate as observers. Depending on the situation, Government representation may be appropriate. In certain circumstances, as outlined in the AB ToR,10 nominations of members can be discussed at the HCT and presented to the HC. AB members should be at the head-of-agency level.

The AB’s main functions are to:

Discuss progress of ERF projects.

Review policy issues.

Keep track of the funding levels, and assess the funding targets and time frame for replenishing the Fund.

Evaluate the effectiveness, relevance and added value of the Fund in meeting its objectives and in relation to the overall humanitarian response.

Ensure progress on GM implementation and full compliance.

End-of-project reports, evaluation reports and audit findings should be periodically summarized and presented to the AB by the HC, supported by the OCHA HoO.

The AB should meet at least every six months. As part of its oversight function, the AB should periodically review the level of participation and representation of the different partners and sectors.

3.5. Review Board (RB)

The RB will:

Be chaired by the HC, who may delegate this responsibility to the OCHA HoO.

Be composed of representatives of UN humanitarian agencies, IOM and NGOs.

Include a Gender Adviser as a member, if one is available.

Have the ERF Manager perform a secretariat role, with all key RB meetings recorded in writing.

10 ToR for the Advisory Board is included in annex XII of these guidelines.

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Outline the membership period of RB representatives in the RB ToR.11 The HCT or AB may nominate RB representatives. NGO consortiums or forums are also welcome to present their nominations of RB representatives. The HC ultimately approves the RB members.

The RB assists the HC in the review of ERF proposals against set priorities in the Fund’s ToR and the overall humanitarian response framework. Proposals should be developed in consultation with relevant clusters before the applicant sends them to the ERF Manager. ERF project proposals are submitted by the ERF Manager to the RB once a general screening has been completed to ensure they meet minimum requirements. The RB is responsible for reviewing, vetting and recommending projects to the HC for his or her final decision. More specifically, the RB should:

Agree on a set of technical criteria, consulted with respective clusters, to assess project proposals. These criteria should include the GM.

Agree on a quorum to determine when a project can be considered for approval in case an RB member is unable to attend a meeting or provide their input within the required time frame.

To ensure impartiality, excuse members if a project submitted by their agency is being discussed, and abstain from providing inputs unless explicitly requested to do so by the HC or the RB Chair.

Conduct proposal reviews in person, although virtual reviews may be allowed.

The review process

1. RB members complete their assessment RB members will provide their assessment of proposals within a few days of submission by the ERF Manager, indicating whether the proposals are approved, approved subject to modifications or rejected. The Fund Manager collects and collates inputs from RB members into a recommendation to the HC. This recommendation should take into account the recipient organizations’ performance with previous grants from the Fund, timeliness of implementation, any audit report findings and the GM code. RB members need to take these points into account. Therefore, the ERF Manager should make these points—and any other relevant information—available to RB members in an easily accessible manner.

2. RB members may consult with relevant clusters/sectoral groups Project proposals should be developed in consultation with clusters before they are submitted to the ERF. However, when necessary and if time allows, RB 11 ToR for the Review Board is included in annex XIII of these guidelines.

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members are encouraged to quickly corroborate any technical or operational content of the proposal with relevant clusters/sectoral groups, as well as with relevant staff and stakeholders on the ground.

3. ERF Manager collates assessment The ERF Manager will collect and consolidate the assessment from each RB member, and inform the RB, the OCHA HoO and the HC of the review’s outcome. The RB’s recommendations will be provided to the HC for his or her consideration.

4. HC reviews the RB members’ recommendations Final authority lies with the HC, and he or she may decide to seek additional advice. Exceptionally, he or she may decide not to follow the recommendations of the RB. In such cases the rationale for the decision will be recorded for the file and communicated to the RB.

5. HC convenes a meeting with RB, if necessary The HC should convene a meeting any time it is considered necessary. One instance is when a proposal is not approved by all members of the RB. In this case, the HC or the OCHA HoO acting on his or her behalf must convene a meeting of the RB within a reasonable time frame to address disagreements and reach consensus.

6. HC makes a final decision on projects for ERF funding If the RB cannot reach a consensus, the HC has the final say. In such cases the rationale for the decision will be documented.

7. ERF Manager synthesizes main findings of the RB A synthesis on the main findings of the RB (i.e. recurrent causes for proposal rejection or most-compliant proposals) will be produced by the ERF Manager to be presented to the AB every six months. The report will be drafted by the ERF Manager, then reviewed and endorsed by the RB and the HC before being presented to the AB. This narrative report should be supplemented by a tracking matrix of projects maintained by the ERF Manager.

3.6. OCHA Headquarters (HQ)

Numerous sections within OCHA HQ provide resources and support to ERFs at various stages. The main points of contact with HQ support are the following sections:

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FCS: FCS takes the lead in establishing policies, procedures and standardization to guide the global performance, effectiveness and accountability of country-based pooled funds. More specifically:

FCS acts as the primary HQ focal point ensuring timely and effective daily support to ERF Managers and COs establishing, managing or closing ERFs.

This includes providing appropriate guidance and tools (e.g. training, country-based pooled fund project cycle management tool), arranging surge capacity when needed, reviewing ERF policies and guidelines, and developing monitoring, reporting and accountability frameworks.

FCS provides support to the USG/ERC and OCHA senior managers on any decision-making at HQ level regarding a specific, several or all ERFs.

FCS leads the discussion on strategic, policy, programmatic and technical humanitarian financing issues in close coordination with other relevant HQ sections and branches, and when interacting with UN agencies, donors and NGOs through IASC bodies and other relevant forums.

FCS also identifies and analyses global trends and developments for country-based pooled funds, provides key policy formulation, leads on consolidation and dissemination of lessons learned and best practice, facilitates communication and interaction across all pooled funds, oversees the global evaluation of the funds, and provides general and consolidated information to internal and external stakeholders.

Coordination and Response Division (CRD): The Director of CRD has overall responsibility for managing OCHA’s field operations. On the ERC’s behalf, the Director ensures the accountability of HoOs for the effective management of COs, which includes the management of ERFs.12

For the Director to oversee the engagement of CRD in ERF management, the CRD section chiefs are responsible for keeping the Director apprised of any programmatic and/or policy decisions related to the ERFs.

As the main entry point for OCHA COs, desk officers should be informed of, and engaged in, any developments and the effectiveness of ERFs in a given country. They should partake in the planning and decision-making on the opening, closing or modifying of ERFs together with FCS.

CRD is primarily responsible for workplans, cost plans and recruiting ERF staff and surge deployments, supported by FCS.

ASB: ASB Geneva is accountable to the UN Controller’s Office for the appropriate management and use of ERF funds in accordance with the relevant 12 Refer to OCHA’s Policy Instruction on The Roles and Responsibilities of Country Offices

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UN financial rules and regulations. The dedicated Pooled Fund Unit in ASB undertakes the financial support functions outlined below.

All MoUs with UN agencies and grant agreements with NGOs relating to ERFs prepared by the ERF Manager must be cleared by ASB prior to signature by the parties. ASB reviews the provisions of the agreement in general, and the cost plan in particular, to ensure funds are used for eligible activities (described in section 5.2), and to ensure that the portion allocated to administrative and other non-programme costs is according to the ERF Guidelines. ASB should receive agreements for clearance at least one week prior to the start date of the project. No commitments can be entered into by the parties until the agreements/MoUs have been duly cleared and signed by the ASB signatory, who is the holder of the delegation of authority from the UN Controller.13 Once ASB has cleared and signed the agreements/MoUs, a copy will be sent to the OCHA CO for counter-signing by the HC and the implementing partner. Following signature of agreements/MoUs at the country level, a copy will be sent to ASB to disburse the funds. The OCHA CO keeps one original on file locally for reference, the other original is kept by the implementing partner. Upon receipt of the signed agreements/MoUs, ASB will disburse funds in accordance with the terms outlined in the signed agreement, and within 10 working days of receipt, with the assistance of the United Nations Office at Geneva (UNOG). ASB will provide an annual financial statement to all ERF donors via the Resource Mobilization Section (RMS). ASB will also clear all financial information included in the annual report prepared by each ERF Manager for each Fund before the report is submitted to RMS for official submission to donors. The same applies to any other formal or informal financial report submitted to donors. UNOG provides OCHA with treasury services for the fund transfers. UNOG will assist ASB in processing electronic funds transfers to third parties (e.g. NGOs).

RMS: RMS is responsible for negotiating financial contributions to OCHA and ERFs by donors and related grant agreements, including donor agreements for ERFs. RMS is not involved in the negotiations between an ERF and its recipients. Donors may approach RMS or an OCHA CO to express an interest in funding a particular ERF. In cases where the donor communicates directly with the OCHA CO, the OCHA HoO or responsible ERF Manager shall immediately refer the donor to RMS. RMS will ensure, where necessary in consultation with FCS, ASB and the OCHA HoO, that OCHA can comply with the donors’ grant terms and conditions. RMS also ensures that OCHA complies with all its legally binding obligations.

13 Refer to the United Nations Secretary-General’s bulletin on Financial Rules and Regulations of the United Nations of 9 May 2003.

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Prior to signature by ASB, all donor agreements must be channelled through RMS to ensure consistency with precedence, clear terms and conditions, negotiation of alternative wording, if required, and that the information is properly recorded in the OCHA Contribution Tracking System (OCT).

RMS shall also keep the OCHA CO informed of ongoing negotiations and ensure that all donor grant agreements are shared with COs in a timely manner. RMS also alerts responsible OCHA HoOs/ERF managers of the donor reporting requirements and the grant’s expiration date.

As focal point for donor agreement compliance, RMS shall be responsible for the formal submission of reports, NCE requests, financial statements and other grant-related correspondence with donors. All ERF reports shall be cleared by FCS and ASB before submission to RMS.

All contributions to ERFs are tracked in the OCT. ERF managers are therefore encouraged to consult the OCT for the most up-to-date information about the status of pledges to the ERFs.

Financial Tracking Service (FTS): FTS will capture donor contributions and pledges made to ERFs based on reporting from RMS. ERF allocations to recipient organizations and corresponding data—including implementing partner, approval date, project title, CAP project code, GM code and sector—will be reported to FTS by the ERF Manager. Additionally, the ERF Manager provides FTS with updated data on cleared ERF grant agreements on a monthly basis.14 This reporting will allow FTS to present real-time funding information for each ERF.

Partnership and Resource Mobilization Branch in NY and GVA (PRMB): PRMB will support the development and implementation of a resource mobilization strategy at the global level for ERFs in close consultation and coordination with OCHA COs and FCS.

3.7. Recipient Organizations

The recipient organization submits applications to the ERF Manager with supporting documents as per the proposal template.

Recipient organizations sign a written agreement with OCHA specifying the terms and conditions applicable to the approved project. Recipient organizations are also responsible for understanding and implementing all the requirements in the signed agreements. During the implementation phase, recipient organizations facilitate the monitoring of the projects in collaboration with the HC, OCHA CO, cluster leads and other relevant parties. They also submit narrative and financial reports as described in paragraph 7.1. below, and the agreement/MoU.

14 FTS reporting template is included in annex XIV of these guidelines.

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Recipient NGOs will facilitate the project audit by an audit firm appointed or approved by the OCHA CO at the end of each project. The procurement of audit services will be performed by the local service provider.15 Throughout the audit process, recipient NGOs are responsible for responding to all necessary follow-ups by the auditor and/or ERF Manager, and for providing any requested documents.

UN agencies have their own standard procedures for financial audit. They are required to produce narrative and financial reports according to the MoU.

4. Workflow16

The workflow below illustrates the entire project management cycle of an ERF. It shows where various OCHA sections have responsibilities, and it provides indicative benchmarks17 for processing the projects at different stages of the management cycle. It is also annexed to this document.

15 The service provider differs in each case. The United Nations Development Programme (UNDP) serves as the main service provider for OCHA COs, while the World Food Programme (WFP) is the service provider in some locations. 16 The ERF workflow is included in annex XV of these guidelines. 17 This particular timeline may be applicable only for particular emergencies and humanitarian situations.

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5. Finance and Administration

The OCHA CO is responsible for the daily management of the financial and administrative activities of the ERF. The OCHA CO must maintain complete records of all grant-related documents. The OCHA CO must also ensure that all documents received from recipient organizations are thoroughly reviewed before submitting them to ASB for action. Incomplete documents will be referred to the OCHA CO for verification and revision if necessary. All ERF agreements/MoUs will be cleared by OCHA ASB to ensure they conform to UN rules and regulations.

When correct and complete documentation18 is submitted to OCHA ASB by the OCHA CO on behalf of the HC, disbursement of the initial tranche of funds will occur within 10 working days. Upon signature of the MoU, OCHA ASB will transfer 100 per cent of the funds through one disbursement to UN agencies. For UN agency grants amounting to US$5 million and above, funds will be disbursed through more than one disbursement. In these circumstances an interim financial statement will be required for the latter disbursements.

For NGO projects, OCHA ASB will transfer 80 per cent of the total project amount in the first of two disbursements, and it will disburse the remaining funds only after the final narrative and audited financial report are submitted and approved. Once approved by OCHA ASB, disbursement of the final payment will occur within 10 days. The OCHA CO will hire or stipulate a reputable audit firm to conduct all audits for implementing NGOs.

5.1. Clearance of Agreements

All agreements and supporting documents must be cleared by ASB prior to final signature by the HC and recipient organization. An agreement is typically cleared when the holder of the delegation of authority from the UN Controller signs the agreement indicating his or her clearance of the document.

The start date of the project is the date on which the last signatory (HC or recipient organization) signs the agreement. The start date of a project cannot be changed retroactively. The HC and/or the OCHA CO must not agree to formally or informally allow a project to start before an agreement has been cleared and signed.19

5.2. Eligible Expenditures

Sections 5.2 and 5.3 of these guidelines provide an overview of what is typically considered to be eligible and ineligible expenditure for ERFs. This guidance can serve as a reference for defining these categories in more detail for individual Funds.

18 Checklists for project submissions to ASB Geneva and templates are included in annexes XVI to XX of these guidelines. 19 Backdating of projects is not allowed by the United Nations Office of the Controller.

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Eligible expenditures are expenditures that have been documented in the project budget and incurred in accordance with the approved project proposal. There are two categories of eligible expenditures: direct costs and indirect costs.20

Direct costs are project costs that have a direct impact on beneficiaries, such as food, water pumps, shelter, direct transportation, nurses, doctors and programme coordinators.

Indirect costs are costs that cannot be traced unequivocally to specific services, projects or programmes. They include costs incurred by providing administrative and other support functions to a range of operations, programmes and projects.

Indirect costs may be incurred when performing the following functions: recruiting and servicing staff and consultants; procuring and contracting; evaluations; budget preparation and control; financial operations; and accounting and reporting. Indirect costs must not exceed 7 per cent of the total actual project expenditure. Below are some examples of direct and indirect costs:

Type of Costs Examples Direct Costs Project personnel salaries and benefits

Material, equipment and supplies used for the project Travel and transportation costs related to the project Training, seminars and meeting costs related to the project Utility costs for projects within their own facilities Communication charges related to the project (phone, fax, postal) Any cost associated with project premises such as rental costs Any other expenses necessary to achieve the project objectives21

Indirect Costs Procurement services Preparation and monitoring of budgets Maintenance of project accounts Control of project expenditures Receipt and disbursement of funds Financial reporting Recruitment and human resources services Legal services Other administrative costs

20 The classification of any item will depend on the context. ASB will advise where the situation is not clear. 21 Security costs may be considered as direct cost on a case-by-case basis

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Indirect costs are referred to as Programme Support Costs (PSC) in agreements with UN agencies, and as Administrative Costs in agreements with NGOs. PSC is charged as a percentage of the approved expenditures incurred by the recipient organization for each project. OCHA charges a 3 per cent flat rate as PSC from expenditures by all recipient organizations.

The OCHA CO should consult ASB for additional guidance if there is any concern about the classification of direct and indirect costs. Any exceptions to the above guidance should be referred to ASB before including such items in a project budget.

5.3. Ineligible Expenditures

Funding is typically not to be used to purchase capital assets, such as vehicles, IT, and communication and office equipment, unless exceptionally authorized by the HC.22

Payments for project personnel and rental expenses should be limited to the cost arising directly as a result of implementing the project. These payments must also be limited to the duration of the project.23 Costs related to NGO governance structures (i.e. salaries and travel expenses for board members) and other general management related or non-operational staff are not considered to be direct costs. Funding can only be used for international travel expenses for those staff members who are 100 per cent dedicated to the project. International travel will only be reimbursed when it is clearly itemized in the project proposal and budget.

Grants are provided to implementing partners for humanitarian life-saving activities approved in the project agreement. Thus, activities such as ERF evaluations, audits and implementing partners’ consultancies are not eligible for ERF grants and must not be included in the project budget.

Expenditures that have not been documented in the approved project budget will not be eligible for reimbursement by OCHA. 5.4. Modifications of Project Activities

Expenditure variation within a budget category24 should not exceed a maximum of 15 per cent of the amount approved by the HC, as stated in the signed agreement. Adjustments or modifications of less than 15 per cent in project activities are acceptable as long as the new activities retain the same scope and nature of the

22 Security concerns or logistical challenges may necessitate revision of this clause based on country contexts. �23 In general, cost-sharing will be reviewed on a case-by-case and specific-context basis. 24 Relevant budget categories are included in the ERF budget tool in annex XVIII of these guidelines.�

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original grant. Variations in one category should be matched by a proportional change in other categories. Recipient organizations do not need to seek the HC’s approval for variations of less than 15 per cent. Any variation in excess of 15 per cent within the budget category shall be subject to prior consultations with OCHA and approval in writing from the HC.25 Major changes in the scope of project activities or any increase in the total funding amount require a new grant agreement. Requests for modifications of agreements must be submitted to the HC in writing by the recipient organization.26 These requests should explain why the agreement needs to be amended, indicate the current operational status of the project and the expenditures incurred to date. With the submission of an NCE, an agreement can be modified to extend the duration of the project. To extend the project duration, an amendment to the original agreement must be signed by both parties. The HC will respond to the recipient organization in writing, accepting, modifying or rejecting the request.27 If accepted, this amendment becomes an integral part of the agreement and must be cleared by ASB. The number and duration of NCEs for recipient organizations has to be determined in-country by the AB based on programmatic considerations. The ERF Manager is responsible for monitoring that the requests remain within the agreed limit. While the recipient organization is responsible for what is stipulated in the agreement, the ERF Manager must review the implementation dates of all projects on a monthly basis, and remind recipient organizations of the expiration dates at least one month before an agreement expires. Recipient organizations should also be advised that expenditures incurred after the agreement has expired will not be eligible for reimbursement by OCHA. 5.5. Audits and Fees

Each project implemented by an NGO must be audited at least once during its lifetime. OCHA hires independent external auditors to review the financial activities of NGO implementing partners. To streamline the audit firm selection process, the OCHA CO should engage with the United Nations Development Programme (UNDP) to identify audit firms for long-term agreements. Projects implemented by UN agencies and IOM are not audited by OCHA since these organizations are audited independently by the appropriate UN bodies. Recipient organizations of ERF grants are responsible for the management of their grants, and they are accountable to the HC and OCHA for the entirety of the ERF resources under their management. Recipient organizations shall respond to all queries from the auditor to facilitate the audit, and to any additional 25 The Letter of Acceptance of Amendments to the budget is included in annex XXI (A) of these guidelines. 26 The ERF budget tool for amendments is included in annex XXI (B) of these guidelines. 27 The Letter of Acceptance of No-Cost Extension for NGOs and UN agencies are included in annexes XXII (A and B) of these guidelines.

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requests upon completion of the audit. If there is no response from the recipient organization to the auditor within the deadline, the auditor is authorized to submit the report to OCHA based on the information available.

Audits, corresponding costs and auditors’ fees shall be charged directly to OCHA and not included in project budgets. Banking fees associated with the use of UNDP or money dealers in lieu of an NGO bank account should also be paid directly from OCHA. They should not be included in project budgets, but should be linked with them. 5.6. Managing the Audit Process

The OCHA CO is responsible for managing the local audit process. This includes procuring audit services, monitoring audit visits, following up on audit issues and maintaining the validity of audit service contracts. If necessary, an audit focal point within the OCHA CO should be assigned to ensure the process is managed smoothly.

The procurement of audit services must be done through the OCHA CO local service provider in accordance with the prevailing procurement rules. The OCHA CO must not conduct the solicitation of bids independently, because OCHA has limited procurement delegation in the field.28 The OCHA CO should use the standard ERF audit ToR29 for reference when sending procurement requests to its local service provider.

The process of procuring audit services may take up to three months depending on the local service provider. The OCHA CO must take this into account when planning its audits. The procurement process should start as early as possible in order to avoid unnecessary delays.

Once an audit firm has been selected, the OCHA CO must meet with the auditors to review the schedule of audit visits. The OCHA CO should monitor the audit schedule, and assist the auditors as necessary in obtaining access to implementing partners and their financial records. The OCHA CO must also follow up with auditors and partners to resolve any queries or issues that arise during the audit. Financial and administrative policy questions should be referred to OCHA ASB for guidance.

It is very important for COs to maintain the validity of audit service contracts. The duration of the contract must be monitored to ensure that it does not expire before a new contract has been obtained, or the existing contract has been extended. The terms of the audit contract should also be reviewed to ensure that newly signed grant agreements can be covered by the contract. The terms and duration of audit contracts must be modified in accordance with the prevailing procurement rules of the OCHA CO’s local service provider.

28 Procurement activities in the COs are processed through the relevant service providers. 29 The standard ERF audit TOR and template are included in annexes XXIII and XXIV of these guidelines.

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5.7. Transfers of Equipment and Property

Non-expendable equipment or property financed by OCHA as part of an ERF grant is the property of OCHA. Non-expendable equipment is defined as an item that has a purchase price of $1,500 or more, or the equivalent in local currency at the United Nations official rate of exchange on the date of purchase, and has an anticipated service life of at least five years.30

Upon completion of the project, such assets shall continue to be used for the purposes of the grant. These items may therefore be contributed free of charge to the direct beneficiaries of the grant, or donated to support a similarly appropriate activity in the beneficiary country. In the event these assets are not donated to the beneficiaries or used for a similar activity, they must be returned to OCHA within 30 days of the completion of the project. The OCHA CO should decide with the recipient organization how to dispose of these items. 6. Mainstreaming Gender31

All applicant organizations shall ensure that the IASC GM is applied to all proposals using the templates provided by the OCHA CO. The AB and OCHA CO shall ensure that the resultant GM codes are tracked and included in CAP projects funded by ERF. The IASC GM is designed to assist the HC, the HCTs and the recipient organizations to mainstream gender during design and funding, and throughout the project implementation. GM Codes The GM codes, on a 0-2 scale, whether projects are designed to effectively meet the differing needs of women, girls, men and boys: Gender Code Description

0 Gender is not reflected anywhere in the project sheet The project design does not consider gender

1

The project’s needs assessment includes a gender analysis and/or one or more activities or outcomes respond to the distinct needs of women, girls, boys or men* Contributes in a limited way to gender equality

If the gender issue is addressed for the first and only time in the outcomes section, the project is still considered to be gender unaware and coded 0

30 Please refer to the Property Management Manual 31 The GM is a tool developed in 2009/10 by the Sub-Working Group on Gender and Humanitarian Action and CAP to facilitate tracking of gender allocations in humanitarian projects, and to improve accountability to the integration of gender perspectives in humanitarian projects. For specific guidance on application of the IASC GM for each sector/cluster, refer to the One Response website: http://oneresponse.info/crosscutting/gender/Pages/The%20IASC%20Gender%20Marker.aspx The IASC GM FAQs are included in annex XXV of these guidelines.

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GM Codes The GM codes, on a 0-2 scale, whether projects are designed to effectively meet the differing needs of women, girls, men and boys: Gender Code Description

2a Gender

Mainstreaming

The project’s needs assessment includes a gender analysis, and the gender analysis is reflected in the project’s activities and outcomes Contributes significantly to gender equality

2b Targeted

Action

As a result of the gender analysis, the project is targeted to one particular group – women, girls, boys or men – who are disadvantaged or discriminated against because of their gender roles* The principal purpose is to advance gender equality * Please note that stand-alone Gender-Based Violence response and prevention projects, as well as nutrition projects being implemented in the first phases of a crisis, are always coded on the 0-1-2b scale.

7. Accountability In consultation with the HC, OCHA HoO, AB and the HCT, the ERF Manager shall develop and formulate a detailed monitoring and reporting (M&R) plan for the ERF that outlines the strategy for monitoring performance and results. In addition, the ERF Manager shall develop a risk analysis, management and mitigating system. This work will be based on a standard M&R framework and risk management tool developed and supported by FCS.

7.1. M&R Plan

In the context of the M&R plan for ERF-funded projects, the following definitions shape the framework:

Monitoring: refers to periodic site visits of projects that have received funds from an ERF. The purpose of monitoring is to track and verify reported information, and to provide an element of oversight to the project.

Reporting: refers to periodic collection of programmatic and financial reports of all recipient organizations that receive funding from an ERF.

The M&R plan shall, as a minimum, provide details on:

Strategy for monitoring of ERF-funded projects through site visits: How many projects will be visited and how often? If not all projects are to be visited, the plan shall outline the criteria and process for selecting a targeted sample of projects. Define format32 of monitoring visits and describe who will undertake these (e.g. ERF Unit, cluster leads, a designated inter-agency review group, independent evaluators).

ERF reporting requirements for recipient organizations and for the Fund itself: The plan shall provide information on type, format and frequency of

32 The Project Monitoring Report Template is included in annex XXVI of these guidelines.

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ERF reporting and outline how reports will be disseminated.

7.1.1 Project Reporting by Recipient Organizations: As stipulated in the agreement, a brief progress report33 on project activities and financial implementation shall be submitted midway through any project longer than six months. Any constraints (e.g. financial, logistical, security) affecting the project shall be included in the report or reported directly to the OCHA CO. For projects of less than six months duration, only a final report is required.

Within three months of the project’s completion, a final narrative and financial report34 shall be submitted. Should the project require an extension, a request explaining the circumstances shall be submitted no later than two weeks prior to the planned project end date. The final narrative report shall compare the project achievements against its objectives and describe the activities, outcomes and the background. The report shall include lessons learned and an explanation of any variance between planned and actual outcomes, including whether the GM code varied between project proposal and actual implementation.

The financial report shall be presented according to the budget proposal format categories. For NGOs, the final report shall be accompanied by an audited account of project spending, as well as supporting documentation if necessary. Any unspent money has to be returned to OCHA within 30 days after the submission of the final report. The OCHA CO must follow up with recipient organizations in writing to ensure that overdue financial reports and refunds are received in a timely manner. The OCHA CO and HQ reserve the right to organize visits with partners, external experts or donors to review completed or ongoing project activities. 7.1.2 Stakeholder (including donors) Reporting by the Fund:

The HC will issue a consolidated annual report for the Fund as a whole. The annual report shall report to stakeholders on the use of funds and shall, as a minimum, provide the level and type of information outlined in the guidance note and template provided by FCS.35 Individual reporting against donor contributions should be avoided.

The annual report is prepared by the ERF Manager and finalized in-country with the OCHA HoO’s review. Thereafter, the OCHA CO shall send the draft

33 The format for the progress report is the same as in the final reporting template and as in the ERF Budget tool. 34 Report templates (narrative and financial) are included in annexes XXVII and XVIII of these guidelines. 35 The annual report guidance note and template are included in annex XXVIII (A and B) of these guidelines.

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report to FCS for programmatic review by April as a first draft. FCS will be responsible for reviewing the document and sharing it with ASB for financial review. Any changes arising during the review process will be shared by FCS with the ERF Manager, who will be responsible for obtaining final acceptance of the changes by the OCHA HoO and sign-off from the HC. The final due date for the ERF Manager to send the OCHA HoO- and HC-approved report to FCS and RMS is 30 June. RMS is responsible for the final submission of the report to donors. Only after the report has been formally shared with donors are all parties permitted to share the document externally.

To maximize transparency, final project narrative and financial reports, evaluation reports and the HC’s consolidated annual report will be made available on the OCHA external website.36

FCS will produce a global annual report to provide a comprehensive and consolidated update on country-based pooled funds. The yearly report will include information on all active ERFs and Common Humanitarian Funds (CHFs). It will feature trends, best practices, lessons learned and challenges, and showcase success stories and achievements of the pooled funds.

7.2. Evaluations and Reviews

All organizations receiving funding from the ERF should be committed to sharing all evaluation results with the HC, RB, AB and OCHA upon request. In addition to the monitoring plans of the recipient organizations, the HC may also commission periodic reviews of activities funded through the ERF in order to encourage lessons learned, and to identify clear opportunities for experience sharing and practices with the potential to be replicated across various comparable projects supported by the Fund. The AB may also suggest and participate in joint assessments with partners, solicit inputs from experts, or commission external evaluations to enhance organizations’ work. Cluster leads may also review and evaluate ongoing or completed activities supported with resources from the Fund as part of their broader mandate. Cluster priorities and indicators should inform these reviews and evaluations.

As an additional measure of accountability, auditors of organization and/or system-wide operations (i.e. Office of Internal Oversight Services, Board of Auditors, etc.) will conduct operational and financial audits of individual projects as part of broader audit purposes.

External evaluations will be triennial and will be supported by OCHA’s Evaluation Guidance Section and FCS. This will help assess the Fund’s performance and establish recommendations for improvement. Any request for evaluations by donors at the country level must be directed to FCS. Such evaluations should be

36 Refer to http://www.unocha.org/what-we-do/humanitarian-financing/pooled-funds

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funded bilaterally by ERF donors.

OCHA HQ-led internal evaluation missions to learn lessons and review ERFs will be undertaken. These internal evaluations could include assessing performance, compliance with guidance, effectiveness and/or relevance of the ERF to the context, etc. This could be requested by the HC, OCHA COs and/or OCHA HQ (i.e. FCS/CRD).

Each ERF shall also undertake an annual stakeholder user survey to gauge user satisfaction and to identify areas that need improvement. FCS can provide the ERF Unit with tools and good practices for surveys.

E. REFERENCES Normative or superior references Secretary-General’s bulletin on Financial Rules and Regulations of the United Nations of 9 May 2003 Related guidance CHF Standardization Guidelines CERF Life-Saving Criteria (other CERF documents: http://ochaonline.un.org/cerf/) Policy Instruction on Resource Mobilization Policy Instruction on the Roles and Responsibilities of Country Offices F. MONITORING AND COMPLIANCE FCS in the Corporate Programmes Division, OCHA NY, will ensure compliance with these guidelines through regular communication, field missions, compliance tracking, evaluations/reviews and reports from the field. G. DATES These guidelines are effective from 09 October 2012. The guidelines will be reviewed and updated regularly to reflect major evolutions in United Nations and humanitarian practices. The next scheduled review will be conducted no later than 01 July 2013. Per the Policy Instruction on OCHA Guidance Materials, however, the USG may at any time recall or initiate a review of any OCHA official guidance.

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H. CONTACT

The contact for these guidelines is the Chief, FCS, Corporate Programmes Division, OCHA NY. I. HISTORY These guidelines were approved on 09 October 2012. These guidelines have not been amended.

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Annex I. LIST OF ACRONYMS AB Advisory Board ASB Administrative Services Branch CAP Consolidated Appeal Process CERF Central Emergency Response Fund CHAP CHF

Common Humanitarian Action Plan Common Humanitarian Fund

CO Country Office (OCHA) CRD Coordination and Response Division ERC Emergency Relief Coordinator ERF Emergency Response Fund FCS Funding Coordination Section FTS GHD

Financial Tracking Service Good Humanitarian Donorship

GM Gender Marker HC Humanitarian Coordinator HCT Humanitarian Country Team HoO Head of Office (OCHA) HQ Headquarters HRF IASC IOM

Humanitarian Response Fund Inter-Agency Standing Committee International Organization for Migration

MoU M&R NGO

memorandum of understanding monitoring & reporting non-governmental organization

NCE No-Cost Extension OCHA Office for the Coordination of Humanitarian Affairs OCT PRMB PSC

OCHA Contribution Tracking System Partnership and Resource Mobilization Branch Programme Support Cost

RB Review Board RMS ToR UN UNDP

Resource Mobilization Section Terms of Reference United Nations United Nations Development Programme

UNOG United Nations Office at Geneva USG WFP

Under-Secretary-General World Food Programme