The Harmonized Approach for Cash Transfer (HACT) has introduced a new way of managing the process of transferring cash to our implementing partners. As a result of the cumbersome money transaction between the various UN agencies and their respective partners which in some cases resulted in high transaction burden on partners, the UN has decided to change the way it does business in both programs and operations.

The UN will give to national partners the ability to determine and manage their development processes. Unlike the current trend in which agencies rely on a system of controls for managing cash transfers, the new system relies on what is called a risk management approach which recognizes that there is a risk involved with cash transfers. With this approach, agencies will adjust their cash transfer method and assurance activities according to the level of risk.

The new approach uses macro assessment (which is a desk review of the existing assessments of the national public finance management system that takes place once per programming cycle) and micro assessment (which looks at the soundness of the implementing partner's financial management system that is also being carried out once per programming cycle) to determine risk, as well as assurance activities such as audits and spot checks. It also utilizes a harmonized format for implementing partners to request funds and report on how they have been used. This format is called Funding Authorization and Certification of Expenditures Form (FACE).

The RC Office together with the HACT Committee comprising of deputies of Heads of Agency, and Senior Operations Staff will advocate with international partners for macro and micro assessment of harmonized cash transfers in order to feel into the CCA/UNDAF process as recommended.

UNCT Common Processes

• The Harmonized Approach for Cash Transfer (HACT)
• The United Nations Development Assistance Framework (UNDAF)