i. Grant Regulations
The UNDP–Global Fund partnership is defined through agreed Grant Regulations (Annex A to the Framework Agreement between the Global Fund and UNDP). Except for matters specifically agreed to in the Grant Agreement or the Exchange of Letters, UNDP uses its normal operating framework for implementation of Global Fund-financed projects. Article 2 (a) of the Grant Regulations to the Grant Agreement recognizes that UNDP will administer the programme in accordance with its regulations, rules and procedures.
ii. Implementation modalities
When acting as Principal Recipient (PR), UNDP is acting as an ‘Executing Agent/Implementing Partner’ and, therefore, uses the Direct Implementation (DIM) modality. At the country level, DIM can only apply in non-harmonized countries or for projects outside a signed Country Programme Action Plan (CPAP) in harmonized countries. For projects under a signed CPAP, DIM replaces the Direct Execution (DEX) terminology that was used in the past.
UNDP’s role as PR to Global Fund grants requires it to have the technical and administrative capacity to assume the responsibility for mobilizing and applying effectively the required inputs to reach the expected outputs. On the other hand, it is expected that the implementation of the DIM modality contributes to building national capacities. The UNDP CO ascertains the national capacities during the project formulation stage (through an SR assessment), determining where the strengths and weaknesses are, how UNDP can assist in building new capacities, and the exit strategy of the project, ensuring that UNDP’s intervention has contributed to the development of new capacities.
As Executing Agent/Implementing Partner, UNDP assumes overall management responsibility and accountability for project implementation, while as a funding agency it is accountable to the UNDP Executive Board for all aspects of its operations. UNDP must follow UNDP Programme and Operations Policies and Procedures (POPP).
UNDP may identify a ‘Responsible Party’, such as a Sub-recipient (SR), to carry out activities within a DIM project. This may be the government, non-governmental organization (NGO), community-based organizations (CBO), community groups, academic organizations or a United Nations agency. UNDP’s relationship with this SR must be agreed and defined in an SR agreement.
The main requirements for DIM are:
- to identify partners and define their roles and responsibilities in the project, ensuring broad participation by stakeholders;
- to adapt the CO structure and to assign the technical, managerial and administrative tasks to carry out DIM projects; and
- to establish administrative procedures and operational systems to ensure the management of project inputs in an effective, efficient and transparent manner.
iii. Project Document
UNDP operates Global Fund-financed programmes under the framework set forth in the Country Office’s Standard Basic Assistance Agreement (SBAA) with the host country. A Project Document must be formulated and approved by all parties involved. This Project Document constitutes the legal framework for the project. Please refer to UNDP POPP on defining a project and initiating a project.
Audits of UNDP are guided by the ‘single audit’ principle, under which any review by any external authority, including any governmental authority, is precluded under the United Nations Legal Framework. This framework reaffirms the role of the Board of Auditors and the Joint Inspection Unit as external oversight bodies, and, in this regard, affirms that any external review, audit, inspection or investigation of a CO can be undertaken only by such bodies or those mandated to do so by the General Assembly. Internal audits are conducted by the Office of Audit and Investigation (OAI). OAI audits all sources of funds that are administered by UNDP, including UNDP-managed Global Fund projects. Please refer to the audit section of the Manual for further information and guidance on types of audit.