UNDP-Global Fund Grant Regulations

The Framework Agreement (FA) between UNDP and the Global Fund was amended in September 2023. The amended FA., effective as of 29 September 2023, includes the Grant Regulations tailored to UNDP. The Grant Regulations cover all the fundamental aspects of grant implementation and include the following key provisions:

• UNDP implements grants “in accordance with UNDP regulations, rules, policies and procedures and decisions of the UNDP Governing Bodies, as well as the terms and conditions of the relevant Grant Agreement.” See 2(a) of the Grant Regulations. Under no circumstances should the Global Fund’s policies govern, or in any way apply to, grant implementation.
• UNDP selects and manages Sub-recipients (SRs) in accordance with its rules and procedures. However, it must ensure that SR agreements comply with the terms of the Grant Agreement, including an anti-terrorism clause in Art. 3(f) of the Grant Regulations. In addition, UNDP must have systems in place to assess SR capacity and, in the case of insufficient capacity, it must consult with the Country Coordinating Mechanism (CCM), the Regional Coordinating Mechanism (RCM) or the Regional Organization (as the case may be), as well as the Global Fund on how such shortfalls can be addressed. (See Art. 10(b) of the Grant Regulations.)
• UNDP is fully responsible for the results to be achieved by SRs and is accountable for all funds disbursed to them, as well as for the SRs’ activities. (See Art. 10(b) of the Grant Regulations.) The Global Fund can request a refund from UNDP if goods or services financed or supported under the Grant Agreement are not used in accordance with the agreement. (See Art. 8(b) of the Grant Regulations.) If the Global Fund believes that a refund is warranted, it must write to UNDP Headquarters. If the matter is not resolved within 30 days, then GF can ask for a refund within 60 days. This formal consultation mechanism ensures that the UNDP senior management is aware of a request for refund and can address it expeditiously and appropriately.
• The Grant Regulations recognize the special status of UN SRs. More specifically, they clarify that UN SRs (i) are subject to their own oversight and control systems (Art. 10(b)(iv)); (ii) can maintain title to the fixed assets and manage them according to their rules (Art. 17(c)), and (iii) are not audited by UNDP (Art. 7(d)(ii)).
• UNDP has a number of reporting obligations towards the Global Fund. Among other things, it has a duty to provide (i) periodic progress reports (Art. 13); (ii) quarterly cash balance reports (Art. 13); (iii) a copy of its externally audited financial statements covering each year in which Grant Funds are expended, together with the opinion of its external auditors on such statements, not later than thirty (30) days after such audited financial statements and opinion are published (Art. 7(b)(iv)); (iv), a certified financial statement of income and expenditure of the Program during the preceding year, which is due no later than June 30 of each year; and (v) financial expenditure reports on the use of funds by UN SRs, prepared in accordance with the financial regulations and rules applicable to such Sub-recipients. Further guidance on financial reporting can be found in the financial management section of the Manual.
• 21 of the Grant Regulations sets forth a number of deliverables due from UNDP in connection with grant closure. Further guidance on closure can be found in the financial management section of the Manual.
• Pursuant to Art. 7 of the Grant Regulations, UNDP audits its programme expenditures “in accordance with its internal and external auditing practices”. Audits are conducted by the UNDP Office of Audits and Investigations (OAI). With regard to SRs, UNDP must consult with the Global Fund on an SR audit plan and, upon the Global Fund’s request, furnish it with a copy of the SR audit reports. More information on PR and SR audits can be found in the audit section of the Manual.
• In countries falling under the Global Fund’s Additional Safeguards Policy, the Global Fund may request a special purpose audit, the cost of which shall also be borne by the programme. Should such an audit be requested, UNDP must (i) secure the appointment of a mutually agreed independent auditor and (ii) prepare the terms of reference for the audit, which must be mutually agreed with the Global Fund. The Global Fund’s request for a special purpose audit must be handled in conformity with the working arrangements agreed between the independent oversight offices of the Principal Recipient (PR) and the Global Fund. (See Art. 7(b) of the Grant Regulations.) Further guidance on ASP audit is available in the audit section of the Manual.
• UNDP has an obligation to cooperate with the Global Fund’s Local Fund Agents (LFA) (See Art. 10(d)). This includes ensuring access to non-UN SR documents, including any supporting documents provided by non-UN Sub-recipients to UNDP, in line with UNDP guidance notes.
• UNDP retains title to goods and other property financed under the Grant Agreement, which it can also pass on to a third party such as an SR (see Art. 17 of the Grant Regulations) and ensures that such property is devoted to the programme financed by the Global Fund. At the end of the programme, UNDP transfers and/or disposes of the remaining property according to its rules and in consultation with the Global Fund (see 19 of the Grant Regulations). Although the Global Fund’s approval is not required for such transfer and/or disposal, it is considered best practice to seek its agreement, as well as the endorsement of the CCM, RCM or RO (as the case may be), on the transfer of assets to the national SRs at the end of the programme. Further guidance is available in the financial management section of the Manual.
• UNDP commits to comply with certain human rights standards, including non-discriminatory access to services for all, including people in detention; employing only scientifically sound and approved medicines or medical practices; not employing methods that constitute torture or that are cruel, inhuman or degrading; respecting and protecting informed consent, confidentiality and the right to privacy concerning medical testing, treatment or health services rendered; and avoiding medical detention and involuntary isolation, which, consistent with the relevant guidance published by the World Health Organization, are to be used only as a last resort. UNDP is under an obligation to communicate such standards to its SRs and suppliers, as well as to inform the Global Fund of any cases of incompliance. See Art. 29 of the Grant Regulations.
• The Framework Agreement recognizes a voluminous body of corporate agreements and tailored instruments developed by UNDP and the Global Fund over the many years of the partnership. It provides that such practice will be codified through the joint Operational Guidelines, which will substantially reduce transaction costs and allow the two organizations to record institutional memory. The Operational Guidelines are currently under development.

Practice Pointer

The Framework Agreement (FA) between UNDP and the Global Fund was amended in September 2023. The amended FA, effective as of 29 September 2023, introduces three key changes aimed at reflecting our ongoing efforts to align with best practices and uphold the highest standards of integrity and accountability in our partnership with the Global Fund.

1. Section 4.2 on Global Fund reviews: Section 4.2 has been amended to clarify that without prejudice to Articles 14 and 15 of the UNDP-Global Fund Grant Regulations, the Global Fund may directly conduct any reviews of suppliers and of Sub-recipients which are not part of the United Nations System. Please find the detailed section on page 3 of the amended copy of the FA.

2. Section 4.3 on Audits and investigations: Section 4.3 has been clarified to emphasize that consultation and coordination on audits and investigations are separately agreed through working arrangements between the independent oversight offices of UNDP and the Global Fund and Section 30.7 of the UNDP-Global Fund Grant Regulations and reflect the Global Fund’s right to conduct audits and investigations of suppliers and of Sub-recipients which are not part of the United Nations System. UNDP’s Office of Audit and Investigations (OAI) will work closely with the Global Fund’s Office of the Inspector General (OIG) to ensure that there is a proportionate and robust response to allegations of wrongdoing across Global Fund grants administered by the UNDP. Please find the detailed section on page 3 of the amended copy of the FA.

3. Article 30 on Sexual Exploitation, Abuse and Harassment has been included under Annex A: This robust clause establishes a solid foundation for fulfilling UNDP’s mandate while protecting staff, stakeholders, and beneficiaries from SEAH. Please find the detailed article page 20 onwards of the amended FA.

For further details please access the courtesy compilation which reflects the changes made to the 2016 FA based on the agreement reached on 29 September 2023: Courtesy compilation of UNDP-Global Fund Framework Agreement signed version 2023.

The Framework Agreement, including the Grant Regulations, have been agreed corporately between UNDP and the Global Fund; they are not negotiable and cannot be modified. They are to be used without deviations in all countries where UNDP acts as PR, to ensure a consistent legal regime for all UNDP Country Offices (COs).

Practice Pointer

Due to the legal and financial exposure, all Global Fund requests for refund must be immediately referred to the UNDP Office of Legal Services (OLS) and the UNDP Global Fund Partnership and Health Systems Team (GFPHST).