From January to April 2020, UNICEF conducted an internal assessment to support the overall objectives of the Grand Bargain workstream 7+8 on Enhanced quality funding.” In particular, the exercise aimed to address one of the Grand Bargain commitments related to the cascading of quality funding to implementing partners at the organizational level Information was collected through interviews with key informants. Additionally, the assessment was supported by the analysis of data available in VISION, UNICEF’s financial management system, and eTools.1 While this assessment was being carried out, the COVID-19 Pandemic occurred, affecting the world on an unprecedented scale. Despite the challenging circumstances, the work continued, and in addition, the assessment took into account UNICEF’s commitment to review its partnership management procedures to ensure more flexibility for partners in the context of COVID-19.
In 2019, UNICEF received a total of US$ 493.9 million in multi-year Other Resources-Emergency (OR-E) contributions, which is US$ 24.1 million less than in 2018. The multi-year OR-E represented 24.2 per cent of the overall envelope received in OR-E. This has allowed the organization to cascade US$ 232.6 million (48 per cent of all the multi-year humanitarian funding spent in 2019) to government and civil society partners. The rest of the multi-year humanitarian funding spent was prioritized for direct implementation by UNICEF, as a key player in supporting predictable, high-quality humanitarian responses on the ground. A small proportion of this multiyear funding (less than 5 per cent) was set aside to ensure that a minimum amount of funds would be available to immediately respond to unforeseen crisis developments over the start of the coming year. Furthermore, in 2019 UNICEF has transferred 34 per cent of all its humanitarian funding to local and national responders, exceeding its commitment to the global aggregated target of at least 25% of humanitarian funding to local and national responders as directly as possible to improve outcomes for affected people and reduce transaction costs.2 The review of UNICEF’s internal policies and systems has confirmed that they are overall conducive to the transfer of multi-year funding to implementing partners.
It should be also noted that UNICEF procedures for country and regional office Civil Society Organizations (CSOs) implementing partnerships3 require activity-level planning in programme and budget design. This is required in order to keep all financial resources focused on the agreed results. This procedure is driven by UNICEF’s results-based management approach, which links outcomes to outputs and activities, according to a vertical logic, and requires the tracking of funds along this continuum.
The main barriers identified within UNICEF to passing on greater volumes of flexible and predictable funding to implementing partners include:
• The relatively small proportions of multi-year OR-E (24.2 per cent in 2019) and flexible (7 per cent in 2019)4 and global humanitarian thematic funding(the most flexible funding after Regular Resources (ORR), made up 1.5 per cent of the total OR-E contributions received) humanitarian funding (OR-E) received by UNICEF from donors, out of the overall volume of humanitarian funding received by the organization (US$ 2.04 billion), is not an incentive to change existing practices and systems, but is a disincentive in the current situation;
• The limited availability and/or publicity around the availability of multi-year OR-E at the time of concluding the agreements with implementing partners, preventing UNICEF COs from entering into longer-term (≥ two years) financial commitments with downstream partners;
• The restrictive conditions included in several donor agreements (detailed logical frameworks, high requirements for risk management and due diligence), and earmarked nature of most multi-year OR-E grants received, which do not allow UNICEF to cascade much flexibility to implementing partners;
• The UNICEF CSO Procedure, 5 and related Programme Document format, which requires the development of an activity-level workplan and budget for planning purposes, in order to keep all financial resources focused on the agreed results. In some UNICEF Country Offices, workplans and budgets are planned with partners at input-level;
• The flexibility to adjust budgets up to 20 per cent at activity-level in Programme Documents (whether multi-year or not) signed with implementing partners, alongside a relatively higher administrative burden to adjust outputs, which is a disincentive to signing multi-year agreements in volatile contexts where programme strategies evolve from one year to the other;
• The common practice of UNICEF to manage relationships with implementing partners through yearly negotiations of programme documents and related budgets, to allow for cost-efficiencies and programme effectiveness gains along the years.
Key recommendations formulated as a result of this assessment are grouped under two objectives: 1. Maximizing the impact of multi-year humanitarian funding, and 2 Enhancing UNICEF’s systems to support the cascading of quality funding.
Once the recommendations have been agreed upon, a guidance note should be developed to support UNICEF Regional and Country Offices in utilizing multi-year funds in ways that will maximize the impact of these funds for more efficient humanitarian responses, including (but not limited to) the cascading of multi-year funding to implementing partners.