Joint EU/UN training day on the FAFA How to make the relationship work

1. Joint EU/UN • training day on the FAFA • How to make the relationship work Brussels, 4 April 2014

2. SUMMARY • Introduction • Whythepartnership • EU Legal framework • IMDA • Howto present a proposal • How to prepare the SCA • How to implementan EU-fundedproject • Verification • Ten recommendations

3. 1 INTRODUCTORY REMARKS

4. EU’s commitment to multilateralism • Two EU Communications: • The European Union and the United Nations: The choice of Multilateralism (2003) • http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52003DC0526:EN:NOT • Communication on Building an effective partnership with the United Nations in the fields of Development and Humanitarian Affairs (2001) • http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52001DC0231:EN:NOT • with key aims: • Strengthenpolicy dialogue • Match with EU objectives and deliverconcrete solutions to global challenges • EU’scommitment to multilateralism as a central strand of EU external action

5. Overall Policy Framework – EU perspective • EU Policies: • The European Consensus on Development: http://ec.europa.eu/europeaid/what/development-policies/european-consensus/ • Eradication of poverty; sustained development; pursuit of MDGs • Country level assistance, based on country programming and principle of partner country ownership of development strategies • New Development Policy: http://ec.europa.eu/europeaid/news/agenda_for_change_en.htm • « An Agenda for Change » with focus on: Humanrights, democracy and good governance, Inclusive and sustainablegrowth for humandevelopment; accompanied by: differentiated approach, coordinated EU action and improved coherence • European Consensus on Humanitarian Aid: http://ec.europa.eu/echo/policies/consensus_en.htm

6. Overall Policy Framework – EU perspective • Global agenda: • MDGs/Post 2015 Agenda • EU actively engaged in the post-2015 discussion (HLP, Special event MDGs) and involved in the Rio+20 processes (SDGs, HLPF, Financing strategy expert group) • EU contribution to the Millennium Development Goals • Two related communications Convergence MDG/SDG: 'A decent life for all: ending poverty and giving the world a sustainable future' http://ec.europa.eu/europeaid/documents/2013-02-22_communication_a_decent_life_for_all_post_2015_en.pdf Financing for Development: 'Beyond 2015: towards a comprehensive and integrated approach to financing poverty eradication and sustainable development‘ ec.europa.eu/europeaid/what/development-policies/financing_for_development/documents/financing_for_dev_2013_communication_en.pdf • Aideffectiveness: From Paris to Accra to Busan

7. EU-UN strategic partnerships • Nine Strategic Partnership Agreements (SPAs) signed • (UNDP, WHO, FAO, ILO, WFP, UNHCR,UNWOMEN, UNESCO, IFAD) • Convention with UNRWA • Trend towards more informal arrangements • - Senior Official Meetings

8. 2 WHY THE PARTNERSHIP?

9. Setting the context • The EU today is: • The European Union (EU) is an economic and political union of 28 Member States all of whom are also Members of the United Nations • Leading provider of aid for development and humanitarian action (around 60% of ODA) • Influential stakeholder in helping to shape and support the UN policy agenda • Highly committed to multilateralism, and shares common values and principles with the UN

10. Financial contributions from the Commission as a percentage of total income/revenue of UN entity [for year 2013] *UNDP: data for 2012

11. Countries where EU and UNhave cooperated in 2012 More than 110 countries; regional projects not included Source: UN Office in Brussels, 2013 EU-UN Partnership Report

12. “Image” of the UN in the EC • Not as good as it could be… • Poor reporting, slow, “tricky”, costly, heavy administrative procedures, no visibility, talks a lot but does not always walk the talk • Does not always share the same priorities or agenda

13. “Image” of the UN in the EC • But... • Close to beneficiary governments • Neutral partner with capacity to deliver, also in politically sensitive situations • Comparative advantage, specific strengths & technical knowledge / expertise (see: strategic partnership agreements) • Ability to mobilize and manage significant financial resources (e.g. multi-donor set ups), added value • Long experience and convenor for donor coordination

14. “Image” of the EC by the UN • Not as good as it could be… • Bureaucratic, concerned with visibility, tendency to micro-manage, high maintenance, cumbersome, no big picture approach

15. “Image” of the EC by the UN • But... • Same values and common objectives aid effectiveness, country-ownership, reliance on comparative advantages, transparency • Serious and reliable partner • Financial means (The UN represented circa 12% in the 2012 portfolio of the EC’s EuropeAid Cooperation Office alone)

16. Independent evaluation(commissioned by EC - 2008) • Findings: • EU could act through UN in difficult context (crisis situations), thanks to UN having specific mandates, offering global solutions to global problems) • EU benefit from UN’s: • multi-donor interventions • privileged policy dialogue with governments, expertise & experience in the field, • extended presence, • neutrality & legitimacy of the UN system, • donor coordination

17. Independent evaluation(commissioned by EC - 2008) • Findings: • UN could benefit from the partnership with the EU: • deliver mandate, • increase impact thanks to substantial resources, • reach critical mass for interventions, • improve policy convergence at country level

18. The UN as seen by the EU funding-wise • The EU/UN partnership is extremely important • At Commission level, some 40% of the volume of legal commitments with International Organisations of the approved EC budget for 2012 (EDF not included) went to UN entities • The Commission accounts for +/- 6% of UN funding • The Commission + EU Member States are major partners for the UN, accounting for +/- 50% of UN funding

19. The UN as seen by the EU – one option among many • The Commission identifies the most appropriate partners to achieve the desired result – need to justify the choice and explore alternatives. • Budget/sector support (centralised management) and indirect management • Delegation to a public or private body • Multilateral channels – international organisations such as UN, World Bank, regional development banks, etc. • Other entities such as NGOs and other Non-State Actors

20. What does the EU want from the UN? Delivery Results Added value Accountability Transparency Visibility Good quality reports

21. 3 LEGAL FRAMEWORK: EU REQUIREMENTS & PROGRAMMING

22. Summary • Legal basis: Financing (funding) instruments, Financing Decisionhttp://ec.europa.eu/europeaid/how/finance/index_en.htm • Procedures • UN/EC Agreements: Framework agreement & contribution-specific agreements (standard contribution agreement, indirect management delegation agreement, grant contract, procurementcontracts...)

23. I. Legal Basis • i. Financial Regulation & Rules of Application • ii. Basic Acts:(2014-2020) • Geographicalcoverage • Pre-accession: (IPA allocation: € 11,7 bn) • Neighbourhood (ENPI: € 15,4 bn) • Development (DCI: € 19,6 bn and 11th EDF: € 31,5 bn) • General (thematic) coverage • HumanRights (EIDHR) • Stability (ISP) • NuclearSafety (INSC) • Partnership (PI) • HumanitarianAid • iii. FinancingDecisions = Annual Action Plan

24. I. Legal BasisEU programming process HQ: Programming D: Identification & design  Action fiches • DEVCO D: Evaluation HQ : Quality support, coherence of approaches HQ: Annual Action Programme Financing Decision D: Implementation HQ: Internal control systems

25. Joint Decentralised Centralised (International Organisations) Direct Indirect Head-quarters Delegations Contractsuntil 2012 Shared (Member States) (Beneficiary Countries) Grants Grants SCA

26. Joint Decentralised Centralised (International Organisations) Direct Indirect Headquarters Delegations Contracts in 2013 Shared (Member States) (Beneficiary Countries) Grantcontract Procurement SCA

27. Joint Decentralised Centralised (International Organisations) Direct Indirect Headquarters Delegations Management Modes 2014 SHARED DIRECT INDIRECT Shared (Member States) (Beneficiary Countries)

28. Joint Decentralised Centralised (International Organisations) Direct Indirect Headquarters Delegations Management Modes 2014 SHARED DIRECT INDIRECT Shared (Member States) (Beneficiary Countries) Grants Procurement IMDA

29. EU Programming process • Any ‘intervention’ needs to be covered by a decision of the College (called also: Financing Decision) => an Annual Action Programme (AAP) • The Financing Decision (AAP) contains details on the action to be implemented, such as budget, calendar, main objectives, etc. also: how will the EU implement theaction (« method of implementation » or « management mode » - this can’t be changed later) • The Commission may decide to entrust the management and implementation of certain funds directly to a UN entity – under specific conditions

30. II. Procedures“EU management modalities” • How does UN and EC cooperate in 2014? • JointManagement:for 2013 funds the Standard Contribution Agreement (SCA) can be used with the UN until August 2014; • Indirect Management:for 2014 funds and “the delegation of budget implementation tasks” • 3. Award of grants: (use with caution => Grant Contract) • calls for proposals for grants (where IOs eligible) • direct award of a grant (e.g. de jure/de facto monopoly, a specific mandate, exclusive competence in the field of activity or geographical area). Problem: does not allow a partnership relation • NB! For DG ECHO funds, no “Grant Contract” but ECHO-IMDA

31. III. UN/EC Agreements • Framework agreement • Financial and Administrative Framework Agreement (FAFA) • Applies to funds and programmes listed in FAFA: • http://ec.europa.eu/europeaid/work/procedures/implementation/international_organisations/other_documents_related_united_nations/document/un_ec_fwc_en.pdf • And UN specialised agencies listed here: http://ec.europa.eu/europeaid/work/procedures/implementation/international_organisations/other_documents_related_united_nations/index_en.htm • Applies to contributions by all Commission services (DGs) but not all types of funds (e.g. FAFA does not apply to RTD FP and ENV LIFE) • 2)contribution-specific agreements: • SCA (standard contribution agreement) • IMDAindirect management delegation agreement; • GRANT CONTRACT

32. III. UN/EC Agreements • Joint EC – UN Reporting Guidelines (revised December 2010) • Common terms of reference for Verification Missions (April 2009) • Joint Visibility Guidelines for EC-UN actions in the field (April 2008) • SCA Template for the UN’s Multi Donor Trust Funds (MDTF) and Joint Programmes(JP) All available here: http://ec.europa.eu/europeaid/work/procedures/financing/international_organisations/other_documents_related_united_nations/index_en.htm

33. III. UN/EC AgreementsComposition SCA: Special Conditions & Annexes: Annex 1: “Description of the Action” Annex 2: General Conditions (standard per type of contract) Annex 3: “Budget for the Action” Annex 4: Financial Identification Form (bank account) Annex 5: Standard Request for payment (template to request payments) For IMDA: Special Conditions & Annexes like for the SCA above + 2 new Annexes: Annex 6: Communication and Visibility Plan Annex 7: Management Declaration template SCA & IMDA templates: http://ec.europa.eu/europeaid/companion/document.do?isAnnexes=true Grant Contract: Special Conditions & Annexes 1-3 like for the SCA above Annex 4: Contract-award procedures Annex 5: Standard request for payment and financial identification form – like above Annex 6:Model narrative and financial [Annex 7: ToRsfor an expenditure verification] – does not apply to UN [Annex 8: Model financial guarantee] – does not apply to UN [Annex 9: Standard template for Transfer of Asset Ownership] – does not apply to UN GRANT CONTRACT templates: http://ec.europa.eu/europeaid/prag/

34. 4 IMDA

35. IMDA specific: • IMDA: Indirect Management Delegation Agreement • A single template replacing the Contribution Agreement and Delegation Agreement. Specificities of both IOs and National Agencies taken into consideration (UN: to some extent) in the template. • IMDA appliesonly for budget implementationtasks(tendering, contracting, paying); • not for services (for ex: EU tenders / « technical assistance ») • not for grants (for ex: EU calls for proposals) • Budget implementation tasks • BIT: "Implementation of procurement and grant award procedures, and awarding, signing and executing the resulting procurement and grant contracts, notably accepting deliverables carrying out payments and recovering the funds unduly paid"

36. IMDA specific: • Who can be your Sub-delegatees: • 1. National or international (e.g. UN) public law body • 2. Body governed by private law with a public service mission • 3. Non-profit organisation with appropriate operational capacity to the extent that they provide adequate financial guarantees • NB: Sub-delegatees CANNOT further sub-delegate • Controls: • Ex-ante and ex-post controls. (see Art. 2.7 GC IMDA)

37. IMDA specific: • Art. 3 – Sub-delegation • Nature of the sub-delegated entity. Possibility to sub-delegate to private entities without public service mission if they are non-profit and possess appropriate operational and financial capacities • Ex-ante assessment of the sub-delegatee by the Organisation or (if approved in the Pillar assessment by the EC) ex-ante controls of budget implementation tasks and imposing rules to sub-delegatees which guarantee equivalent provisions to the ones in Art. 1.3 of General Conditions • Necessary ex-post controls are in place to ensure sound financial management • No further sub-delegations (3rd degree). Special cases within Beneficiary Country • Tasksdelegated to sub-delegateesconsist in budget implementationtasks

38. IMDA specific: • Art. 4 – Information and Reporting • New formulation for Reporting contents and obligations • Every report must be accompanied by a Management Declaration, unless article 4.4 of the Special Conditions foresees an annual submission • If Organisation is an International Organisation an Audit Opinion (independent audit body or internal audit or control body) must be submitted within 6 months from submitting each report, unless article 4.4 of the Special Conditions foresees an annual submission

39. 5 HOW TO PRESENT A PROPOSAL?

40. Project proposal - format • SCA & IMDA: there is no set template to follow • (exception: Grants/calls for proposals and DG ECHO funds templates are provided/mandatory) • The EC will need: a description of activities, expected results, (SMART) indicators to measure progress and budget of the “Action”. • These will form basis for future Annex 1 “Description of the Action” (incl. e.g. logframe/RRF) and Annex 3 “Budget” of the EU-UN Agreement

41. Project proposal – some pecularities • Keep in mind: • GRANTS: • If EDF => return of interest (MDA included); • Max for sub-grant: 60,000 € or no limit if “basic purpose” is to re-grant (except for EDF: limit 10,000 € / entity) • SCA & IMDA: • - If not MDA (i.e. 100%-EU-funded or parallel co-financing):“all individual contracts must be signed within 3 years from entry into force of the SCA” • “costs incurred” – as per IPSAS “actual expenses”= equipment delivered, services rendered, etc. • Reporting of expenditure for next pre-financing: • -- SCA & IMDA: “actual expenses” + “commitments”; • -- Grant Contract: only “actual expenses”

42. Project proposal – some pecularities • Keep in mind: • GRANTS: EU contribution always as “% of eligible costs” • SCA: EU contribution might be “% of eligible costs” (if budget fully secured) • IMDA: no percentage!! • Different reporting requirements depending on contract (more requirements for IMDA and Grant Contract; • Different pre-financing schemes: SCA (80-95%/fixed per annum),IMDA (80-100%/ fixed per annum), Grant (80-95%, but 5-10% of the overall retained as final payment, interim payments: moving target) • Enhanced controls (IMDA & Grant Contract): suspension, information on controls carried out on partners

43. Project proposal – some advice • Before you start drafting... Read the General (and Special) Conditions which define standard administrative, financial and managerial conditions for the contract under which you will operate (NB: derogations for IOs under grants): • Contract templates for SCA & IMDA are available here: • http://ec.europa.eu/europeaid/companion/annexes.do?chapterId=3– Annexes to Companion • C4a Contribution Agreement - Special Conditions • C4b Contribution Agreement: General Conditions (annex II) • C4c Contribution Agreement: Financial identification form (annex IV) • C4d Contribution Agreement - Payment request (annex V) • C4e Template for One UN, Multi Partner Trust Funds (MPTF) and Joint Programming (JP) • C8a IMDA - Special conditions • C8b IMDA - General conditions • C8c IMDA - Financial Identification Form • C8d IMDA - Request for Payment • C8e IMDA - Management Declaration • GRANTS: http://ec.europa.eu/europeaid/prag/document.do – Annexes to PRAG • NB!!! ANNEX E3h11: standard derogations for international organisations

44. Project proposal - content • Keep in mind: • existing national priorities & policy frameworks • country programmes & strategies • EC’s & UN’s programming cycles, formal requirements (e.g. clearance, project documents, AAP) • technical constraints (e.g. duration of the EC’s AAP -financing decision) • Standard obligations and requirements for every EU-UN agreement (FAFA, General Conditions of the IMDA, SCA, Grant Contract)

45. Project proposal - content • Adopt a reasonable and realistic approach (better to deliver more than expected than otherwise) • Avoid UN jargon, explain acronyms • Be clear & consistent in explaining the “what, whys, therefore how” of the intended Action / expected results • Essential: show coherence of the Action with all stakeholders’ priorities, objectives, etc. • Already at the design stage think of how you will monitor it and report upon results (reporting continues to be a weak point in EC’s assessments of UN) • Present clearly the link between expected deliverables/outputs and inputs/means necessary to arrive at the former

46. Project proposal - content • Indicators – be SMART(Specific, Measurable, Achievable, Relevant, Time-bound) – you will need to report according to what you set • Timeline: you will need a workplan • Explain the division of labour among actors: IMDA: Sub-Delegatees • Explain through what mechanisms you will monitor the implementation (e.g. standard requirements set in the UN Project documents, field visits, etc.) • Explain the managerial set up (Project Board/Steering Committee, technical committees, etc); Identify the risks, mitigation measures and assumptions and show how these have been accommodated into the design of the Action

47. Project proposal - content • Make the added value (for the EU when working through the UN) apparent in your project proposal (keep in mind, you’re not the only one...) • Visibility (discuss already at early stage): IMDA – annex 6 • Evaluation (what do you foresee? Discuss in advance as to avoid duplication of efforts) • Exit strategy / Sustainability • UN: do not hesitate to mention that there are and what they are the standard policies, rules and procedures in place in your organisation

48. Couple of words on audit… • All UN activities are « covered » by the UN auditing system (external and internal) • The UN auditors decide on their own programme based on risks assessment and there should be no commitment to undertake audits or share audit reports in project proposals • The EC may not audit a UN project • New: the EC may have access to executive summaries of internal audit reports or internal reports from some UN agencies • *Verifications are not audits and they take place in a specifically defined framework (FAFA, General Conditions, Common EC-UN Terms of Reference for Verification Missions)

49. Project proposal – BudgetWhat format? • SCA & IMDA: The UN normally presents the Budget of the Action on ‘its own’ template/format. “The budget structure (Annex 3 of the Contribution Agreement) should reflect the one normally used by the Organisation in its own accounting system.  It is possible, even if not advisable, to impose models which do not reflect this structure (for instance, Annex III of the EC Grant Contract may not necessarily match).” EC’s Frequently Asked Questions about IOs (FAQ. 22) • EC’s FAQs: http://ec.europa.eu/europeaid/work/procedures/faq/international_organiszations_en.htm • GRANTS: when the UN submits a proposal under a call for proposal, it must use the format of the Budget for the action included in the documentation set for that call for proposal.

50. Project proposal – Budget • Scope: the one of the Action (i.e. If multi-donor, then the overall budget of the action should form Annex 3) • Currency: in Euro • Budgeting – as set by UN’s governing rules and regulations • e.g. Staff costs – “actual salaries plus social security charges and other remuneration-related costs” (SCA: Art. 14.2 GCs; IMDA: Art. 18) • DSA / per diem – the ones applicable to UN (FAQ 48) • Procurement – as set by governing rules and regulations