LFA Finance Training Grant Closure Procedures Key Finance Sections. October 2016 Geneva, Switzerland. November 2016 Siem Reap, Cambodia.

Transcription

1 LFA Finance Training Grant Closure Procedures Key Finance Sections October 2016 Geneva, Switzerland November 2016 Siem Reap, Cambodia Content 1) Basic principles 2) Types of closure 3) Steps to grant closure and timelines 4) Closure activities 5) LFA role description 6) Portfolio Services Team (PST), Focused countries and the LFA 7) Case Study & take aways 1

2 Welcome on-board! Grant Closure Basic principles Grant Closure The processes and activities which are needed to responsibly and effectively close a grant. Occurs when grants have to be consolidated or the implementation period ends or a decision is made by the CCM and/or the GF that the grant needs to be closed. Timing ~3-6 months before end date until ~6 months after grant end date Stages 1) Planning 2) Financial Closure 3) Administrative Closure

3 Basic principles (cont d) 4 principles governing grant closure Principle 1: Grant funds should not be left earmarked in the Global Fund Finance systems and/or with implementers for longer than necessary for the implementation of program activities. Principle 2: When they can no longer be used under the grant for which they have been purchased, grant assets should continue to be used exclusively for the purposes of the fight against the three diseases. Principle 3: Country Teams should ascertain the extent to which grants have achieved their strategic objectives, and that there is sufficient assurance over the program to confirm any such achievement. Principle 4: All activities conducted with grant funds should be discussed and agreed between the PR and the Global Fund, and are governed by the terms and conditions of the grant agreement. LFA s role: to help the CT at country level adhere to these principles Types of grant closures part of grant making To be planned as No closure plan or budget needed Must submit: Consolidation Audit Report & programmatic report, AFR (Annual Financial reporting), Inventory Report, assets go to new grant Change in PR Closure plan & budget Must submit: programmatic report, AFR, Audit Report & closure period financial report, assets go to new grant Transitioning Same as Change in PR Based on the circumstances of the grant, GF CTs may opt to pursue a differentiated closure. In such cases, full documentation may not be required.

4 Timelines for closures Type Financial Closure Administrative Closure Consolidation Change in PR Immediately, with the signature of the new grant Three months* 6 Months 3 months following the submission of the Audit Report* Transitioning 6 months 12 months* * These are indicative timeframes as these phases should be completed as soon as possible. 6 When should Country Teams differentiate? : Country Teams can follow the Standard Approach or the Differentiated Approach and should differentiate when overall materiality of grant closure does not merit or justify following full approach, (cost in terms of level of effort envisaged compared to amount of refunds / related risk involved); or documentation for full approach is unavailable, and where the CT recommends to use other evidence on cash balances, grant assets, grant or grant closure expenditures, stocks/inventories financed from the grant to facilitate grant closure

5 Steps to grant closure Principle 4 Principle 1 Principle 2 Principle Transfer / Clearing Clearing Planning & Transfer / Complete Disposal of Commitments Amounts Funds Requirements Recoverable Financing Return of Reporting Cash & Noncash Assets Service delivery or programmatic activities should typically stop by the grant end date. In limited cases, time-limited, programmatic activities after the grant end date may be allowed to facilitate the completion of discrete projects that have already been substantially started Stages of grant closure Program End Date Disbursement to PR 6 months Financial Closure Allowed to finance Financially Closed Not allowed. No financial obligation Administratively Closed remaining activities between PR and GF under grant Not allowed as per closure plan agreement. Refunds received from PR to final cash balances Expenditure Programmatic Activities Allowed for closing activities as per agreed closure plan and liquidation of open liabilities. Allowed for closing activities as per agreed closure plan Not allowed without specific settlement letter from the GF. If not, it is considered an ineligible expenditure Exceptionally allowed to complete activities already substantially started (e.g. bed net distribution, asset transfer) w/out financial implication Not allowed Not allowed All ineligible expenditures should be recovered before the closure of the grant 9

6 Closure activities Based on Circumstances but guided by the principles Clearing commitments under the closing grant Clearing recoverable amounts between the Global Fund and the PR ineligible expenditure Determining and transferring or returning cash balances and undisbursed funds Accounting & transferring/disposing non-cash assets under a closing grant PR to complete an inventory of noncash assets under the closing grant (key activity under the first 2 types of closures) Completing reporting requirements (Prog. Rep, AFR and audit report covering period from last submitted to last day before start date of new grant) 10 LFA role description Full involvement in the consolidation for making NFM grants (reviews of cash balance, commitments, budgets.) Review of transfer plan, where relevant CT to determine role of the LFA in asset verification Review of expenditure of closure activities 11

7 PST, Focused countries and the LFA The Portfolio Services Team is not involved unless the LFA notes budget triggers during its review of the plan and budget Refund will be based on the LFA s report or audit report (whichever is applicable) LFA input should extend beyond commenting and provide substantive recommendations. 12 Case study Introduction to Case Study and Instructions Group Work Each table to read case study presented in handout Each table to discuss and prepare answer to their assigned question (presentation of answer should not be more than 2 minutes) 5 min 10 min Presentation of Answers and Takeaways Each table to present their question and answers Discussion 25 min 2 min p/question 14

8 Take-aways Type of closure / Differentiation / Materiality Commitments Ineligible expenditure Cash balance (return or inclusion in NFM) Inventory 14 Thank You Questions? 15