Annex IV: Simplified Financial Management Checklist
Implementing Partner: ______Date: ______
Checklist completed by:
(UNICEF staff name & title)______Signature: ______
Instructions: The simplified financial management checklist is an optional checklist completed by an internal qualified staff before the onset of the partnership where the implementing partner (IP) is expected to receive less than $100,000 per year from UNICEF.
The checklist contains questions related to six subject matters. To determine the overall risk assessment for a subject matter section (e.g., Section 1. Implementing Partner), answer each question by indicating the response as ‘Yes’, ‘No’ or ‘N/A’. Assign one point for each question answered ‘Yes’ and four points for each question answered ‘No”. Questions that are not applicable to the IP (marked as ‘N/A’) are not be assigned a risk rating and are removed from the total number of questions for the calculation. Use the ‘Comments’ section next to each question to provide details of the assessment or to highlight any important matters.
For each subject matter section, the total number of risk points is divided by the total number of applicable questions to obtain the average number of points calculated and is then compared to the points rating below and assigned a corresponding risk (i.e., an average of 2.0 would indicate a moderate risk rating for the subject matter section). Numbers are be rounded as follows:
· 0.1 to 0.49: Round down to the closest whole number (i.e., an average of 3.3 would be rounded down to 3.0. indicating a ‘significant’ risk rating);
· 0.5 to 0.99: Round up to the closest whole number (i.e., an average of 1.99 would be rounded up to a 2.0, indicating a ‘moderate’ risk rating).
The same process is followed for determining the overall risk assessment for the IP once all subject matter sections have been completed.
The overall risk ratings is to be determined based on the following matrix:
Average Number of Points / Risk Rating4 / High
3 / Significant
2 / Moderate
1 / Low
Summary of Risks Related to the Financial Management Capacity of the Implementing Partner /
Tested subject area (see subsequent pages for details of each subject area summarized below) /
Subject area / Total number of risk points / Total number of applicable questions / Overall risk assessment / Comments /
1. Implementing partner
2. Funds flow
3. Organizational structure and staffing
4. Accounting policies and procedures
5. Audit
6. Procurement
Total: / Divide the total number of risk points by the total number of applicable questions in the subject matter section.
This amount should be rounded as detailed on page1 of this checklist and assigned an overall risk rating.
Subject area / Yes / No / N/A / Points Allocation / Risk Points / Remarks/comments /
1. Implementing Partner
1.1 Is the IP legally registered? / Yes = Low Risk (1 point)
No = High Risk (4 points)
1.2 Is the registration valid in the country where the programme operates?
1.3 Is the registration valid for the duration of the PCA?
2. Funds Flow
2.1 Can the IP easily receive and transfer funds? / Yes = Low Risk (1 point)
No = High Risk (4 points)
2.2 Receipt of funds by the IP in the past has been swift and without delays/major problems?
2.3 Management or utilization of UN funds received in the past (if applicable) was positive and without major problems?
3. Organizational Structure
3.1 Does the IP have an organizational structure? / Yes = Low Risk (1 point)
No = High Risk (4 points)
3.2 If yes, is there a dedicated accounting or financial staff / department?
3.3 Are accounting/finance staff familiar with United Nations procedures related to cash transfers (specifically the HACT framework)?
3.4 Does the accounting or financial staff have educational background and professional experience in accounting or finance?
4. Accounting Policies and Procedures
4.1 Does the IP have an accounting system in place which allows for proper recording of financial transactions and generating reports? / Yes = Low Risk (1 point)
No = High Risk (4 points)
4.2 Can the IP and its accounting system record expenditures under budget categories and funds, which will allow for reporting on a FACE from?
4.3 Is the approval authority for authorizing purchases and approving payments different from the staff preparing and recording the transaction?
4.4 Are there bank reconciliations prepared and reviewed periodically by individuals other than those who make or approve payments?
4.5 Are all invoices stamped ‘PAID’, dated, reviewed and approved, and clearly marked for account code assignment?
4.6 Are cash and checks maintained in a secure location? Has access been properly designated and maintained?
4.7 Are inventories and assets properly safeguarded, such as stored in a secure warehouse, garage, or safe?
4.8 Do any other offices/entities participate in implementation? If yes, does the IP have the capacity, experience and resources to ensure expenditures of other offices/entities are in compliance with the work plan and/or contractual agreement?
4.9 Has the IP advised employees, beneficiaries and other recipients to whom they should report if they suspect fraud, waste or misuse of agency resources or property?
5. Audit
5.1 Are the IP’s annual financial statements audited by an independent auditor? / Yes = Low Risk (1 point)
No = High Risk (4 points)
5.2 Past audit reports conclude that the controls and processes of the institution are generally established and functioning?
5.3 High priority recommendations made by auditors in the prior three audit reports and/or management letters have been implemented?
6. Procurement
6.1 Has the IP been assessed/audited on procurement by the United Nations/ ECHO / World Bank with overall positive results? / Yes = Low Risk (1 point)
No = High Risk (4 points)
6.2 Does the IP have a well-defined process in place to ensure a transparent and competitive bids (invitation to bid and request for proposal)?
6.3 Does the IP have a well-defined process in place for evaluation (pre-defined evaluation criteria) and transparent contracting (all steps documented)?
6.4 Are purchases authorized by the appropriate personnel?