Programme and Operations Policies and Procedures

National Implementation
1. National Implementation is the management arrangement whereby a government entity is selected as the Implementing Partner.
2. The decision for a government entity to act as the Implementing Partner for a specific UNDP project is documented and agreed in the signed project document.
3. National Implementation is considered to be the norm for UNDP projects since it is expected to contribute most effectively to:

(a) Greater national self-reliance by effective use and strengthening of the management capabilities and technical expertise of national institutions and individuals, through learning by doing;

(b) Enhanced sustainability of development projects by increasing national ownership and commitment to development activities;

(c) Reduced workload and integration with national programmes through greater use of appropriate national systems and procedures.
This does not mean that national implementation is automatically applied. The three other management arrangements may be equally or more appropriate.

4. The government entity selected as Implementing Partner must be closely concerned with project activities and results. Eligible government entities are:

(a) A ministry of the government;

(b) A department within a ministry; or

(c) A governmental institution of a semi-autonomous nature, such as the central bank, a university, a regional or local authority or a municipality.

A government entity outside these eligible options may be selected as Implementing Partner provided it comes under the authority of the coordinating agency or the ministry that signed the SBAA.

5. National Implementation is used when there is adequate capacity in the selected government entity to undertake the management of the project. The UNDP country office ascertains the capacities of the identified government entity Implementing Partner during the Defining a Project process using capacity assessment tools (LINK).

6. The Government Implementing Partner may contract other entities, defined as Responsible Parties, to undertake specific project tasks through a process of competitive bidding. However, if the Responsible Party is another government institution or a United Nations agency, competitive bidding will not be necessary. The PAC analyses and decides on the best arrangements for undertaking the project in such cases.

7. When a United Nations agency acts as a Responsible Party under national implementation, this agency and the government Implementing Partner signs a letter of agreement (LOA). See the process “Initiating a Project” to download the Standard Letter of Agreement between the Government and a United Nations Agency under National Implementation.The government Implementing Partner may also contract an NGO, inter-governmental organization (IGO) or a private company to undertake specific project tasks.

UN Agency or Multilateral Organization Implementation

1. United Nations agencies or multilateral organizations which are included in the list may be selected as the Implementing Partner for a UNDP project where:

(a) The relevant government entity lacks the required capacities to act as the
Implementing Partner, or,

(b) The relevant government entity has the required capacities to act as the Implementing Partner but, in agreement with the relevant government entity, a UN agency or multilateral organization is better positioned to successfully manage and deliver project outputs

2. The decision for a UN agency or multilateral organization to act as the Implementing Partner for a specific UNDP project is documented and agreed in the project document.

3. In selecting a UN agency or multilateral organization, the decision is guided by the organisation’s mandate in the subject matter of the project and/or by its management expertise.

4. The UN agency or multilateral organization Implementing Partner must plan and carry out project activities in close collaboration with the government institution directly responsible for the project as well as with other national institutions. All projects managed through these arrangements must include specific outcomes for the progressive transfer of management responsibilities to the national institutions. It is expected that this will lead to the application of national implementation with time.

5. The United Nations agency may contract other entities to undertake specific activities through competitive bidding. Sometimes the agency may call upon another United Nations agency to undertake some activities. In this case, competitive bidding is not needed. The designated United Nations agency issues an inter-agency letter of agreement (IALA) with the other United Nations agency in accordance with the standard organizational template.

NGO implementation

1. UNDP seeks to collaborate with national as well as international NGOs that have adequate staff and reasonably sound financial status; have experience in working with external organizations or donors; and, importantly, have the necessary capacities within their fields of expertise to carry out activities and achieve results on behalf of UNDP.

2. Management by a NGO is appropriate in the case of a project that:

(a) Involves close interaction with target groups such as the poor and vulnerable;

(b) Would benefit from established contacts with grass-roots associations; or

(c) Calls for expertise in the use of participatory methods.

NGOs are partners in many UNDP-supported activities besides managing projects. For example, NGOs may play an active role in policy dialogue.

(d) Some benefits of NGO implementation are that it provides expertise in areas where NGOs have a comparative advantage. It offers an opportunity to enhance the dialogue between the government and the civil society organization (CSO) community in the programme country; it also enlarges the range of UNDP partners. An NGO is defined as a non-profit organization, group or institution that operates independently from a Government and has humanitarian or development objectives. The designated NGO may be a national or an international NGO. In either case, the NGO must have the legal status to operate in accordance with the laws governing NGOs in the programme country. By signing the project document with UNDP, the Government authorizes UNDP to sign the Project Cooperation Agreement (PCA) with the NGO.,.

3. The UNDP country office must assess the capacity of the NGO to carry out the project using the CSO Capacity Assessment Tool (available in the UNDP and Civil Society Organizations: a Toolkit for Strengthening Partnerships)

4.The Project Document must specify any exceptional support measures required to ensure that the NGO can meet UNDP requirements for managing projects. The Project Cooperation Agreement (PCA) which is signed between UNDP and the NGO does not replace the project document which is signed by the Government and UNDP. The PCA must be annexed to the project document.

5. The parties go through a process of assessing the comparative advantage of an NGO to manage a project. The Project Appraisal Committee (PAC) reviews the proposal to designate an NGO and verifies its comparative advantage. See the Capacity Assessment for Project Implementation (LINK). The NGO is designated where one specific NGO is clearly the most suitable to manage the project or when no other NGOs are available or interested. The PAC minutes must describe the outcome of the review, the alternatives considered and the reasons why the proposed NGO was selected.

6. The designated NGO generally carries out the project activities directly but, if necessary, it may also contract other entities, including other NGOs, to undertake specific activities. This is done through a competitive process in accordance with the NGO’s rules, provided they are consistent with the principles outlined in the Financial Regulations and Rules (FRR) sections 16.05 (a) and (b) and Harmonized Approach to Cash Transfers (HACT). For more information, see the Operational Guide to Working with CSOs, which is part of UNDP and Civil Society Organizations: a Toolkit for Strengthening Partnerships, now available as a user-friendly web-based tool. Also see the Partnerships Management section of the Policies and Procedures.

UNDP direct implementation

1. Based on the financial regulations and rules (FRR), the Administrator may select UNDP as executing entity only when it can be demonstrated that such a step is essential to safeguard the full responsibility and accountability of the Administrator for the effective delivery of UNDP programme activities.

(a) UNDP shall limit its role as executing entity/implementing partner to countries in special development situations;

(b) The Associate Administrator is authorized to approve the selection of UNDP as executing entity for specific UNDP project activities and shall establish criteria according to which such designation may take place.

2. Direct implementation may be considered where:

(a) There is a situation which calls for speed of delivery and decision-making where UNDP management is necessary for mobilising resources;

(b) National authorities lack the capacity to carry out the project;

(c) The project could not be carried out by another United Nations agency;

(d) The UNDP country office has adequate capacity to manage, report and achieve the expected outputs of the project.

See EB decision 98/2 on DEX. UNDP continues to pursue national capacity development under direct implementation. As a check for capacities of country offices, the PAC may use BOM’s capacity assessment for country offices and the Checklist: Capacity Assessment for Project Implementation

3. Direct Implementation Project Approval Process

For the countries which are not yet under the harmonized operational modalities:
i. UNDP country offices or units wishing to undertake direct execution must submit a request to their respective bureau, with a copy to the Operations Support Group (OSG). They may seek authorization either (i) to approve UNDP as the executing entity for a specific project (a single decision), or (ii) to exercise DEX by UNDP approval authority for a specified period of time, not to exceed one year (an unspecified number of DEX projects by UNDP approvals may be made within the given period). In either case, the delegated authority may be exercised only in countries in special development situations, as designated by the Crisis Committee (c/o the Bureau for Crisis Prevention and Recovery). Also see the DEX Approvals Template from OSG. 

ii. In requesting direct execution by UNDP, the resident representative provides the minutes of the Project Appraisal Committee (PAC) meeting indicating that the following points have been carefully assessed:

(a) The nature of the special development situation (SDS);

(b) The comparative advantage of the country office in managing the project or projects directly. The PAC determines whether execution by UNDP is clearly preferable to the other management arrangements; and verifies that the involvement of the country office with direct execution will not detract from the efforts of the office to shift the focus of UNDP’s activities upstream.

(c) The capacity of the country office and the recovery of costs incurred in managing it. The PAC should review the expected project outputs, how these will be achieved and how they will contribute to the intended development outcomes.

iii. Following his/her review of the request, the head of the regional bureau delegates the authority to approve a DEX project to the resident representative through a formal memorandum which specifies the scope of the authority, the period of which it is valid (not to exceed 12 months) and the financial ceiling. The memorandum may also state other conditions, such as a limitation to certain types of activity or certain geographical areas within a country. The bureau also specifies: any steps that the country office must take in order to ensure it can effectively manage the project or projects, and exercise full accountability for them on behalf of the Administrator; any support to be provided by central units, including the Bureau for Crisis Prevention and Recovery (BCPR); any requirement for referral back to the bureau in case of substantive revisions; and any information that it needs in order to adequately monitor the use of direct execution, and to learn from the experience. The bureau must inform the resident representative of headquarters’ decision within five (5) business days of receiving the request. In cases where time is of the essence, the decision should be made within two (2) business days.

iv. Sudden crisis and immediate response. The resources of TRAC-3 Category II are available to enable resident representatives to respond without delay to the outbreak of an emergency (natural or man-made). Up to $100,000 may be committed in respect of a given emergency. In view of the particular need for quick action, resident representatives are authorized to use direct execution on TRAC-3 Category II projects, in addition to using the other implementation modalities.

v. Regional and global projects. The delegation of authority discussed in this section only covers country projects. Proposals for direct execution of regional or global projects, if any, must be referred to the Associate Administrator.

vi. Reporting. Since the Executive Board expects that direct execution will be used on a limited scale, the Associate Administrator closely monitors its use. To assist the Associate Administrator in doing so, the regional bureau provides the Associate Administrator with a monthly report on the direct execution projects approved in their region (the report indicates, as a minimum, the number and title of the project, the total budget, the source of funds and an updated list of time-bound delegations of authority to resident representatives). UNDP reports annually to the Executive Board on the funds provided to projects through UNDP direct execution.

vii. Roles and Responsibilities. To assist the concerned offices in implementing the above provisions, please see Section 4 - Country Office Structure for Direct Implementation.

For the countries which are under the harmonized operational modalities:

Under the new common country programming processes (CCPP), the need to remain consistent with the principles of the existing mechanism on delegation of authority to COs for project approval under direct execution; management oversight and support to CO capacity; and the need to remain consistent with the relevant principles of national ownership and capacity development must be fully recognized.

For purposes of national sustainability and capacity development, implementation by national institutions should be given first consideration. Nevertheless, when required as a last resort UNDP may implement AWPs. In selecting UNDP as an Implementing Partner, the following should be considered:

• Do other capacities to implement (national institutions, UN agencies or NGOs) exist?
• Does the AWP in response to conflict situations allow for speed of delivery and accountability over resources?
• Does the AWP respond to situations that require sensitivity and neutrality where UNDP would have more credibility in achieving results?
• Is there an exit strategy to develop national capacities for implementation?

Based on above considerations and the practicalities of the CCPP, the following procedures have been approved by the Operations Group (OG) on 10 May 2006 for the Regional Bureau to review the CPAP focusing on, and assessing CO capacity to deliver results.

(i) Review and assessment of CO capacity for implementation: At the time of finalization of the CPAP, COs are required to submit a draft CPAP to the respective Regional Bureau and indicate the level of expected CO implementation. In reviewing CO capacity, the Regional Bureau would consult with BOM and other HQ units as necessary. Assessment of CO capacity to implement can be carried out through the Balanced Scorecard, Financial Data Quality Dashboard, executive snapshot (Note1), field visits and monitoring activities by the Regional Bureau. The Regional Bureau would communicate the results of the assessment, including recommendations and support for improving CO capacity. Such assessment would take place once during the programme cycle unless there are changes in country office performance identified through the Balanced Scorecard, change management toolkit, audits, and other monitoring mechanisms.

(ii) Authority for CO to implement AWPs: Based on the review of CO capacity, the Regional Bureau can:

a. delegate to CO authority to approve all UNDP implemented AWPs

b. delegate authority to CO to approve UNDP implemented AWPs subject to conditions specified by the Bureau

c. require CO to submit all UNDP implemented AWPs for approval by the Bureau

(iii) Annual consolidated report on UNDP implemented AWPs: Country offices must provide a report on projects which are implemented by UNDP, focused on defining results achieved and compliance with audit, financial and operational regulations and rules. The report should also specify how UNDP implementation supported national ownership and capacity development needs. The Regional Bureaus will take these reports into account in review of the delegated authorities for UNDP implementation and in preparing Bureau’s annual reports to update OG on this issue.

For projects outside the CPAP, current procedures for DEX approval will continue to apply.

4. Managing Direct Implementation

Introduction

Under direct implementation the country office has to play many roles: to formulate, appraise, approve, implement, monitor and evaluate and oversee its own performance. Therefore in order for a country office to be authorized to use this direct implementation modality, its capacity to perform these functions should be assessed when seeking the approval from the Regional Bureau.

The country office should carefully plan how it will organize itself to play all these roles. In particular, the country office needs to define responsibilities for a) planning and supervising project activities and taking decisions; b) technical and operational implementation of activities; c) monitoring progress and d) evaluation and audit. In addition to these functions, administrative support services are required, as well as other items such as additional office space, supplies and equipment.

Project Management Arrangements

To ensure transparency and efficiency in executing DIM projects, UNDP country offices should make full use of existing mechanisms for project management and accountability. The establishment of coordination and consultation mechanisms with the participation of stakeholders in the different roles is a vital aid to transparent decision-making.
Project management responsibilities should be distributed according to the following division of work: Project Board, Project Assurance, Project Manager, and Administrative Support Services.

a. Project Board which includes three roles (Executive, Senior Supplier, and Senior Beneficiary) and has the following responsibilities:

i. Ensure that adequate mechanisms are in place to guarantee the transparency and accountability as well as the efficiency of project operations.
ii. Participate in all stages of project process (design and formulation, LPAC and appraisal, implementation, evaluation, etc.);
iii. Build consensus around the project’s strategies and planned results, including the links between its outputs and the intended outcomes;
iv. Provide advice when substantive changes are needed in the project’s planned outputs, strategies or implementation arrangements;
v. Oversee progress, participate in field visits to project sites, consult with beneficiaries, and ensure that potential opportunities and risks, including lessons learned from experience, are taken into account by the project management;
vi. Assess performance and approve project work-plan and budget revisions;
vii. Provide guidance to the project manager (see para b. below).

The Project Board may include representatives of the government, NGOs, donors, UN Agencies, project beneficiaries and UNDP. The Project Board should meet regularly, at least every three months, and extraordinarily whenever circumstances require. The proceedings of meetings are recorded. The project manager should act as secretariat of the Project Board with the responsibility to call meetings, distribute information and follow up on their recommendations. Under DIM project, the Executive role in the Project Board should be played by a senior UNDP official (RR, DRR) who deals with policy issues and has the overall responsibility for the achievement of results and performs the supervisory function. UNDP in consultation with the Project Board may delegate the project assurance responsibilities to another UNDP programme officer and this must be done in writing.

b. Project Manager: The Resident Representative delegates the day-to-day project operations to a project manager. The project manager is responsible, among other things, for preparing and revising work-plans; planning and organising project review meetings; providing technical feedback to the Project Board; ensuring that project activities are carried out within the financial limitations of the budget; supervising the technical and administrative support personnel and coordinating project activities with stakeholders.

Depending on the size or complexity of the project, the function of project manager may be entrusted to a UNDP Staff Member in the country office or to a person recruited externally by UNDP. (Note: Someone on a Special Services Agreement (SSA) contract can not commit funds.) If a country office staff member is designated project manager, another more senior official within the country office (the Deputy Resident Representative or the Assistant Resident Representative) should perform the assurance role (oversight function). In the other case, where a project manager is recruited externally, a programme officer may perform the assurance role.

The main advantages of delegating managerial responsibilities to a country office staff member are in the lower cost and in the efficiency of having as project manager someone who already knows UNDP rules, regulations, policies and procedures. The disadvantages are that country office staff may not be sufficiently active in managing the project, because the management function is additional to his/her regular functions, and they may not be able to provide adequate technical backstopping. Project managers should always be hired externally for large-scale or complex projects, or where project sites are not co-located with the country office.

c. Project assurance role includes following up on management actions, keeping track of progress benchmarks, visiting project sites to contact beneficiaries and contractors, interpreting progress and technical reports, processing budget revisions, and making arrangements for evaluation and audit.

The project assurance and implementing functions are complementary but different in nature. The project assurance role is the responsibility of each Project Board member; however as mentioned above the role can be delegated to a Staff Member by UNDP in consultation with the Project Board. To ensure transparency and objectivity, the same person cannot perform both roles; that is: a) to take charge of day-to-day project operations and b) to monitor the project’s progress. As mentioned above, a programme officer performs the project assurance role if a project manager is hired from outside. If the programme officer manages the project, another senior official within the country office should perform the project assurance role.

d. Administrative support services are provided by the different administrative sections of the country office. The project manager does not have direct supervision over country office administrative staff in order to avoid the creation of parallel structures. The project manager coordinates project support activities with the heads of the administrative, finance and programme support sections. Since under the direct implementation modality UNDP regulations and rules are followed, experienced UNDP staff should train and supervise any additional administrative and financial support personnel who may need to be hired. The new personnel carry out their duties within the country office’s administrative and financial sections if the project site is located within the country office.

If the project site is located outside the country office, a different organizational structure may be required. The Resident Representative (playing the Executive role in the Project Board) still has the overall responsibility for the achievement of project results. He/she may delegate to the project manager all technical and operational supervisory responsibilities. In this case, the project manager supervises the project’s technical and administrative support personnel. The duties and responsibilities of these personnel are directly related to project activities. The duties are not mixed with regular functions of UNDP country office staff. If necessary, the resident representative may also authorize the project manager to administer funds, as petty cash or through an imprest account.

For further details, please see Programme & Project Management Organization Structure

Cost recovery

The country office budget covers the costs related to its regular (core) programme activities only. If the country office manages projects itself, the additional workload will entail new administrative costs (administrative support services, utilities, communications, etc.). The country office should calculate the costs attributable to executing a DIM project at the formulation stage and include all such costs in the project budget. The nature and amount of additional administrative support and costs must be described in an annex to the project document.

There are two ways of meeting costs related to DIM administrative support services and they depend upon the source of funding. Costs arising from TRAC funded projects should be reflected in the appropriate line of the project budget.

Additional costs arising on trust funds or cost-shared projects are also charged to the appropriate budget line. When the project has a combination of funding sources (i.e. TRAC and cost sharing) the amount to be calculated as country office administration line should be prorated based on funding sources.

It is recommended that a minimum of three per cent of direct programme inputs be allocated to cover additional country office costs, with a higher allocation subject to determination of actual costs.

For more details, see the cost recovery policy (link).

5. Monitoring and Evaluation

To achieve both effectiveness and accountability, country offices should distribute monitoring and evaluation responsibilities among its staff. See section 4 above.

a. Project Reports and Review Meetings

i. Field visits and quarterly reports. The project managers should prepare quarterly reports for the Project Board, accompanied by the quarterly financial reports. The quarterly progress report may consist of a brief summary of progress in relation to the work plan and an update on the financial situation. This summary can also be used for feedback to the Project Board for making decisions and introducing corrective actions. If necessary, the Regional Bureau would obtain and use the information contained in these reports for data collection on experience with DIM and for discharging their monitoring responsibility. The project manager follows up on the corrective actions recommended by UNDP, the Project Board and other recipients of the reports.

ii. Review Meetings. In DIM projects, review meetings may need to take place more frequently as appropriate. Quarterly Progress Reports may need to be assessed in review meetings with the members of the Project Board. The project manager or programme officer is responsible for organizing these meetings and for following up on the recommendations and decisions taken in the meetings. In DIM projects the project manager should promptly prepare a brief action-oriented report on the review meeting, in coordination with the programme officer, and send it to participants in the meetings for their approval or comments. The country office should submit these reports to the Regional Bureau for information and comments.

iii. Annual Project Report. The project manager ensures the preparation of the Annual Project Report (APR), in consultation with the stakeholders. For non-harmonized countries, the country office sends a copy of the APR to the RB as an input for the Administrator’s Report on DIM projects to the Executive Board. Special attention should be given to examples of best practices or recommendations regarding problems encountered. The APR serves as an input to the project evaluations, the preparation of annual and country reviews, and the Results Oriented Annual Report (ROAR). For harmonized countries, as mentioned above, the country office must send to the RB an annual consolidated report on UNDP implemented projects (AWPs) under the CPAP.

Country offices should ensure that, while serving the purposes of monitoring performance, progress reports on DIM projects cover lessons from experience to help in assessing this implementation modality, including its implications in terms of capacity building and ownership.

b. Evaluation

Project evaluations are no longer mandatory. However, Country offices will be expected to conduct a limited number of outcome evaluations, depending on total resources estimated to be available to the country during the programme cycle.

c. Audit

The audit of DIM projects is made through the regular external (UN Board of Auditors) or internal audits (audits managed by UNDP’s Office of Audit and Performance Review). Resident Representatives may request OAPR to exceptionally undertake audits of DIM projects. See the Audit website for more information.

6. Financial Management in Direct Implementation Projects

Please see the Financial Management Section of the Policies and Procedures