THE POPULATION CENSUS COUNCIL MONITORING & OBSERVERS COMMITTEE (MOC)

(The Monitoring and Observers Commission, of Sudan 5^th Population and Housing Census),

1. Reference is made to the Agreement of Cooperation signed by the Government Coordinating Authority Ministry of International Cooperation and UNFPA on for the overall coordination of the 2002-2006 Extended to 2008 Country Programme approved by the Executive Board of UNFPA on September 14, 2001. The purpose of the Letter of Understanding is to record the agreement of the implementing partner and UNFPA on the activities to be carried out, on the responsible partner institutions, timeframes and planned inputs from the various involved parties, on modalities to request cash disbursement, supplies or services from UNFPA, and how to adhere to the following funding, accounting, reporting and auditing procedures.

2. The implementing partner represented by Chairman, Monitoring and Observers Commission shall assume responsibility for the implementation of UNFPA assistance with respect to those services and facilities described in the AWP(s) .

4. The implementing partner recognizes that it has substantive responsibility for the conducting of all annual activities whether implemented by it directly, or by another organization on its behalf. In this regard, it assumes responsibility for ensuring the adequacy of the overall supervision and management of the activities.

5. The implementing partner recognizes that it is responsible for all funds provided to it for the activities, which are part of the AWP(s). The implementing partner is not financially responsible for funds it does not actually receive.

6. The implementing partner recognizes that it has custodial responsibilities for all equipment, vehicles, and other such commodities entrusted to it, whether purchased directly by the implementing partner from funds provided by UNFPA, or purchased directly by the UNFPA representative on its behalf.

7. The expenditure for the implementation of the activities will be in accordance with the amount of financial assistance US Dollars [440,930] stipulated in the AWP 2007, subject to availability of funds, and alterations that may be agreed upon between UNFPA and the implementing partner from time to time during the year. They can be made following three procedures, either reimbursement, or advances, or direct payment/reimbursement. In all cases, the implementing partner agrees to incur expenditures in accordance with the AWP(s).

8. Listing of Authorized Officials: In order for UNFPA to accept requests from the implementing partner for reimbursement of expenditures or for cash advances, it must receive a request signed by an authorized implementing partner official attesting to the need for the funds, the request seems reasonable in relation to the AWP, and the accuracy of the information included within that request. The following individuals are authorized by the implementing partner to incur expenditures, request reimbursement or advances of funds and certify expenditure reports of UNFPA-funded AWP(s) and related activities:

9. To request reimbursement of expenditures from UNFPA, the implementing partner should submit a Certificate of Expenditures covering the activity of the same quarter as the one covered by the reimbursement request in the format provided by UNFPA and the completed AWP monitoring tool. Requests are due as set forth in paragraph 16 of the present document. The UNFPA representative will grant the request for reimbursement provided that (a) the request is reasonable, (b) the request is within budgetary limits and authority, and (c) the certification is signed and dated by an authorized official listed above.

10. If the implementing partner is unable to use the reimbursement approach described above, it may request advances of UNFPA funds in accordance with the AWP(s), and in line with UNFPA inputs foreseen in the AWP. The initial advance is intended to meet the financial requirements of the AWP(s) for a maximum of four months. Each subsequent advance will be based on the financial requirements of the ensuing calendar quarter plus the month that immediately follows. The amount of the advance will take into consideration, inter alia, unspent balances from the previous period and progress to date under the work plan. All requests for advances should be submitted on a UNFPA Certificate of Expenditures that will include, if applicable, the activities of the quarter immediately preceding the one covered by the advance request. All requests for advances will be prepared according to the UNFPA format of the Certificate of Expenditures. Requests are due as set forth in paragraph 19 of the present document. The UNFPA representative will grant the request for advance provided that (a) activities in the previous quarter have been implemented as planned, (b) the request is within budgetary limits and authority, and (c) the certification is signed and dated by an authorized government official listed above.

11. The first instalment may be made once the AWP(s) and this Letter of Understanding have been signed by authorized officials of both UNFPA and the implementing partner. The second and subsequent instalments will not be released until the UNFPA authorized official agrees that delivery has satisfactorily taken place, as evidenced by the receipt of the certified Certificate of Expenditure and the completed AWP monitoring tool for that quarter. The implementing partner is required to submit to UNFPA its request for an advance of funds at least two weeks before the funds are needed.

12. If the implementing partner is unable to use the reimbursement or the advance procedures, it should indicate in writing that it authorizes UNFPA to proceed with direct payment/disbursement to third party vendor(s) delivering goods or services for any part of or entire activity(ies) of the AWP(s) on behalf of the implementing partner. UNFPA will then proceed with the payment as soon as it receives the original invoices of the relevant third party vendor(s) with a statement by the implementing partner certifying that activity(ies) has(ve) been performed in a satisfactory manner.

13. Where funds are advanced to the implementing partner, UNFPA encourages the implementing partner to maintain a separate bank account with a reputable bank of its choosing for all the AWP(s) it will implement as part of the 6^th Country Programme.

14. Whether for reimbursement or advances, UNFPA will transfer funds on the bank account below used for the purpose of implementation of the AWP(s).

15. Any interest earned on the funds provided by UNFPA is required to be reported and refunded back to UNFPA on an annual basis, preferably at the same time as the submission of the Annual Status of Funds Report and Annual Disbursement Report and, in any case, within 10 days of the year’s end.

16. Expenditures: Upon acceptance of the terms and conditions stipulated herein and pursuant to the budget(s) contained in the Annual Work Plan(s), the implementing partner will disburse funds in the amounts set out in the budget, subject to the following:

a. Expenditures for personnel services, as may be provided in the budget, will not exceed the rates applicable within the United Nations system in the country for comparable functions.

b. Stipends and other allowances financed by UNFPA assistance (for example, the daily subsistence allowance) should not exceed the maximum rates agreed upon by the United Nations Country Team at local level.

c. Equipment and contracts for services as may be provided in the AWP(s) are to be purchased in accordance with the procedures established by UNFPA, unless the implementing partner applies its own procedures for competitive bidding.

d. The amount of funds to be provided to an implementing partner under the terms of the AWP(s) shall be agreed to by UNFPA and the implementing partner concerned, and shall constitute a limit on that expenditure for which UNFPA shall reimburse the implementing partner. The implementing partner assumes responsibilities for the successful implementation of the activities within the scope of the budget(s) agreed to in the AWP(s).

17. The implementing partner agrees to maintain a complete set of financial files that clearly identify all funds received and disbursed by the implementing partner as part of the AWP(s). The implementing partner is required to ensure that an adequate system of internal controls exists that will enable UNFPA to rely on the integrity and transparency of the financial reports issued. The financial management of the AWP(s) will be in accordance with the financial rules and regulations of the implementing partner, if any, or otherwise in accordance with those of UNFPA. Sufficient original documentation supporting disbursements made by the implementing partner from UNFPA advances should be maintained at all times to ensure that audit verification is possible. This documentation includes purchase orders, suppliers’ invoices, contracts, leases, payment vouchers, airline tickets, gasoline coupons, payroll records, petty cash receipts and other miscellaneous supporting items.

18. The implementing partner agrees to maintain an annual non-expendable property report (Form C) for the purpose of recording the acquisition and disposition of all equipment purchased by the implementing partner as part of the AWP(s), vehicles and other such commodities, whether purchased by the implementing partner or by the UNFPA Representative on its behalf, and make these records available to the auditors of the AWP(s) for their inspection. The Form C should clearly indicate (a) the date of acquisition, (b) equipment number and description, (c) the serial number, (d) the cost, and (e) the location. Non-expendable property is defined as any item which costs USD1,000 FOB1 or more and which has a service lifetime of at least three years. In addition, items regarded as ‘attractive items’ shall also be included on the Form C. Attractive items are items which are considered valuable to individuals for private use and which could easily be removed from an office, such as laptop computers, scanners, laser printers, CD burners, CD players, DVDs, VHS, digital cameras, film/video cameras, televisions, cellular phones, satellite phones.

19. Within 30 days after the end of each calendar quarter and within 10 days of the fiscal year end (31^st December), the implementing partner will submit to the UNFPA Representative a Certificate of Expenditures that lists the disbursements made by the implementing partner during the quarter and a completed AWP monitoring tool. The report will also indicate the unexpended advance balance. All amounts shown on the report will be prepared in accordance to the format provided by UNFPA, and shall include amounts and currencies as well as the payment instructions.

20. Within 10 days after the end of the calendar year, the implementing partner will submit to the UNFPA Representative an Annual Non-expendable Property Report (Form C described in 15. above), an Annual Status of Funds Report and an Annual Disbursement Report, which will serve as a statement by the implementing partner of the actual expenditures incurred during the year, and of the outstanding advance owed to UNFPA, if any, as of the end of the calendar year. Any difference between the expenditure reported on the last Certificate of Expenditures for the year and the audited Annual Status of Funds Report and Annual Disbursement Report will be adjusted in the following year.

21. All financial reporting to UNFPA will be performed by the implementing partner in the currency in which the advances are given. The implementing partner is not required to translate transactions into US dollars or any other currency.

22. Implementing partners should submit all reports to UNFPA in English, French or Spanish. Reports issued in other languages should be accompanied by an official translation in either English, French or Spanish.

23. UNFPA will examine the financial reporting submitted by the implementing partner. Items held pending clarification of certain requirements and those suspended or disallowed will be brought to the attention of the implementing partner.

24. All materials, equipment and supplies purchased from UNFPA funds will be used exclusively for the implementation of the AWP(s). The implementing partner, as custodian, will hold the property in the name of UNFPA until the property title has been transferred. Non-expendable property purchased from UNFPA funds shall normally be marked with the insignia of UNFPA. The office of the UNFPA Representative may, if necessary, and at any reasonable time, conduct its own physical examination of all equipment purchased from UNFPA funds.

25. Prior to the completion of UNFPA assistance to the AWP(s), the implementing partner, UNFPA shall consult as to the disposition of all non-expendable property provided from UNFPA funds during the course of the AWP(s). Title to such property shall normally be transferred to the implementing partner (or an entity nominated by it) when such equipment is required for the continued operation of the AWP(s), or for activities following directly there from.

26. Funds managed by the implementing partner should be audited at least once in the lifetime of the Country Programme cycle. However, the requirement for 90 per cent of Government and NGO total expenditure to be audited on an annual basis is still in effect. AWPs with less than USD50,000 expenditure in a given year are not subject to audit, except if the activities were never audited and are in their final year. The appointment of an auditor is primarily the responsibility of the implementing partner. The audit should be carried out by legally recognized auditors. For Government implementation, usually the Auditor General of the Government. In the event that the implementing partner’s auditors are unable to provide the implementing partner and UNFPA with the service required within the timeframe, a commercial auditor, mutually acceptable to both parties, should be engaged by the implementing partner to perform the audit. The audits should be carried out to the mutual satisfaction of the implementing partner and UNFPA.

27. The implementing partner will ensure that three copies of the Audit report are forwarded to the UNFPA Representative by an agreed date allowing sufficient time for their receipt by the Audit Services Branch, UNFPA by 31 March of each year. All costs associated with the conduct of an audit shall be paid directly by the implementing partner or budgeted as direct costs in the AWP(s).

28. The audit should be performed by auditor(s) that possess the statutory professional qualifications and also a degree of independence considered beyond reproach by either party, or by any external individual or entity. In addition to the above provisions, the financial records pertaining to the activities financed by UNFPA may also be subject to audit by the UNFPA Audit Services Branch and the United Nations Board of Auditors.

29. If the implementing partner has a financial reporting period that does not correspond with that of the calendar year, and is thus unable to comply with this timetable, an alternative submission date shall be agreed upon between the implementing partner and UNFPA’s Audit Services Branch.

30. The implementing partner is responsible for notifying the UNFPA Representative when it considers all operational activity of the final AWP(s) to be complete and recommends that it/they be closed. Notification to the UNFPA Representative should be in the form of a letter that includes a final Status of Funds Report and Expenditure Report, certified by the implementing partner’s auditors, concerning any UNFPA advances and expenditure not previously reported. All financial reports should be issued as of and through the date of closure. ).

31. Financial reports should be clearly marked ‘FINAL’, and a refund of any outstanding UNFPA advance indicated on the reports should be attached (or transmitted in an otherwise mutually acceptable manner), with interest, if any, stated separately. If the implementing partner maintained a separate bank account for UNFPA funds, the account should be closed and a copy of the final bank statement attached to the reports, unless there is a mutual agreement that the bank account can be used for the next programme cycle of assistance.

32. Any funds previously advanced to the implementing partner during the course of the AWP(s) that remain unused upon its/their completion should be returned to UNFPA on or before the presentation of the final report.

33. Any changes to the budget contained in the AWP that would affect the work performed by the implementing partner and in particular the financial aspects of the AWP, will be permissible only after consultation with the UNFPA Representative or his or her designated official. AWP budget amendments should be agreed upon between the implementing partner and UNFPA.

34. Any amendments to these arrangements will be made by mutual agreement through an appropriate supplementary Letter of Understanding. For any matters not covered specifically by this Letter of Understanding or the AWP(s) and revisions thereof, then the appropriate provisions of the financial regulations and rules of UNFPA shall, mutatis mutandis, apply. All further correspondence regarding the accounting, financial reporting and auditing arrangements referred to in this agreement, including the AWP and Letter of Understanding or amendments thereto, should be addressed to UNFPA.

35. In the event that the implementing partner fails to perform its obligations under this Letter of Understanding, UNFPA reserves the right to terminate the agreement forthwith. In such a case, the UNFPA Representative shall notify the implementing partner in writing that the agreement is being terminated and shall request it to refund to UNFPA all funds that have been received by the implementing partner but not yet disbursed for purposes stated in the AWP(s). The authorized certifying official shall be responsible for ensuring that all funds forwarded to the implementing partner have either been spent on the AWP(s), or have been returned to the UNFPA Representative.

IN WITNESS THEREOF the undersigned, being duly authorized, have signed this Letter of Understanding in Khartoum, Sudan.

1 FOB stands for Free on Board which means that the cost shall not include the freight element. For items bought locally, the entire price paid in the store shall constitute the value of the property.

[1] Please note that this may be changing shortly subject to the deliberations of a UN inter-agency group on audit.