10 Direct Financial Cooperation (DFC) must be the subject of a formal agreement for an activity at country level that is linked to an approved work plan of the WHO office of the implementing country through the Country Cooperation Strategy (CCS). The agreement should show the relationship of the activity to the national health plan, health development and CCS. The agreement must include a proposed budget, using the WHO standard budget categories, and the period over which the expenditures are to be incurred. An agreement must be in place prior to committing any funds.
20 If another WHO budget centre provides financial support to an activity to be implemented through DFC, the funding must be distributed to the implementing Country Office (CO) and award budgeted to the relevant CO workplan before implementation can begin. Any exception to using the CO workplan must be approved by the Director of Administration (DAF) in advance and documentation uploaded to support that prior approval.
30 Implementing partner capacity assessments (IPCAs) are required if the implementing partner (IP) is expected to receive over USD 150,000 per year (cumulative for all WHO grants to an IP for that budget centre). IPCAs are to be undertaken by 3rd party professional assessors, following the UN system standard for IPCAs. The IPCA is a key tool used to determine whether and how WHO financing can be provided to an entity and to help determine the assurance activities to be conducted on the recipient. Once an IP has been assessed following this standard, the assessment is valid for 5 years, unless a significant change takes place in the management or performance of the IP.
40. A justification memorandum is prepared by the responsible officer and approved by the WHO Representative (WR)/Head of Country Office (HCO) and is composed of four sections:
- Proposal assessment: The responsible officer is required to justify that the planned activities are in line with WHO budgeted priorities, including the CCS, that appropriate and sufficient funding is available to cover the request, that planned activities correspond to DFC eligible expenditures, and that the proposed activity demonstrates good Value for Money.
- Implementing partner capacity assessment (IPCA): The results of any IPCA should confirm that the implementing partner has the required financial and administrative capabilities to justify the cash transfers
- Risks factors: The main risks identified are summarized - refer to FIN.SOP.XVI.004
- Assurance activities: Includes a description of the verifications and controls that the CO will conduct during or immediately after the DFC funded activities implementation to confirm that the funds were spent on the purposes for which they were given, and results achieved. Refer to eManual section XVI.2.4 – Accountability and Assurance and FIN.SOP.XVI.004.
50 The DFC contract generated through GSM requires WR/HCO signature and is then sent to the government for countersignature. The contract sets out the respective responsibilities of WHO and the implementing partner, including the expectations on the implementing partner for achieving results and sound financial management. The DFC contract is available on the LEG intranet:
Library & Resources (who.int)
60 For DFC purchase requisitions (PR) over $300,000, quality assurance compliance pre-checks of DFC PRs are performed by the second line of defense before submission to Project Approvers.
70 The activity described in the agreement must commence within three months from the date of the agreement and must be completed (activities delivered) before the award end date, or before the end of the biennium, whichever comes first. Where the funded activities will be implemented in more than one calendar year, an interim financial implementation report shall be provided within fifteen (15) days after end of each calendar year (i.e. by 15 January of the following year). In all cases it must be ensured that DFC activities are in compliance with donor requirements. The cost estimates must be reviewed for reasonableness by the responsible officer. A Funding Authorization and Certification of Expenditure (FACE) form is the key tool for both requesting advances and reporting on DFC activities and expenditure - UNSDG | Funding Authorization and Certificate of Expenditures Form
80 The final deliverable, the "DFC Report" has two parts, which are due within 90 days of the completion of the activity:
- a technical report whose level of detail is commensurate with the value of the DFC contract; and
- a FACE report on DFC expenditure. The FACE report must include a detailed expenditure breakdown, using the WHO standard budget categories, following the original approved budget. FACE reports are deemed acceptable if certified by the responsible officer, after submission and signature by the implementing partner. Both the technical report and the FACE report are uploaded into ECM when recording the receipt of the final deliverable "DFC Report" in GSM.
90 Further
payments will be withheld from a Partner who has not spent previous payments
made in accordance with the Agreement or who has not submitted DFC reports on a
timely basis. Any unutilized or unspent funds must be repaid immediately
or recorded as refunds receivable. Any refunds receivable will be
deducted from further payments.
100 Any misuse of DFC
funds, including through fraud or corruption, constitutes a material breach of
the DFC, and gives rise to the right on the part of WHO (in addition to other
remedies that may be available to it) to terminate the DFC and demand reimbursement
of any payments made under the DFC to date. The DFC contract is available on
the LEG intranet: Library
& Resources (sharepoint.com) - the template can be found in section VI.
LEG resources - VI.g.7.
