The establishment of the One UN Fund has proven to be critical to the Delivering as One architecture, as it has been an effective catalyst for change, accelerating compliance with the Paris Declaration on Aid Effectiveness principles.

In Tanzania, some main benefits of the One UN Fund for programme

The establishment of the One UN Fund has proven to be critical to the Delivering as One architecture, as it has been an effective catalyst for change, accelerating compliance with the Paris Declaration on Aid Effectiveness principles.

In Tanzania, some main benefits of the One UN Fund for programme beneficiaries, the government, the family of UN organizations are:

 

1. Improved strategic focus and manage­ment for results

The un-earmarked nature of the funding to the One UN Fund is probably the biggest change with respect to traditional funding patterns. It has allowed Government and UN Country Teams (UNCT) to prioritize pro­gramming on the basis of national needs, re­ducing competition among agencies for resources and allowing greater programmatic coherence.

Eligibility and performance-based funding criteria have en­abled the UNCT to sharpen the focus of the One UN Programme. Criteria include a clear divi­sion of labor based on parameters such as capacity, comparative advantage and mandates, thus reducing fragmentation and duplication.

Also, by linking funding criteria to objective principles of
results-based manage­ment, it has proved possible to improve the strategic focus and performance of pro­grammes.

2. Ensured Government ownership

The One UN Fund has ensured that decisions on allocations of funds are driven by a prioritization process that is guided by the Gov­ernment. To a certain extent this shifts to the Government the burden of having to call the difficult decisions, especially on funding alloca­tions.

3. Greater use of national systems.

An increased volume of resources has been transferred for national execution in a growing number of instances through the exchequer system, making a much greater use of the Harmonized Approach to Cash Transfer now being rolled out by three UN Specialized Agencies. This ensures that UN invest­ments are increasingly on plan and on budget and re­duces transaction costs to the Government.

Building on the ex­perience of the United Nations Population Fund (UNFPA) and UNICEF, UN agencies have started using Government-managed basket funds and are experimenting with pooling core resources. Basket funds use far fewer man­agement and operation resources both in the UN and Govern­ment, reducing transaction costs substantially and allowing the UN to focus more on up­stream policy assistance.

4. Lower transac­tion costs for donors and Government and reduced competition for funding at the local level.

Mobilizing un-earmarked resources for the purposes of the One UN Programme has dramatically reduced com­petition for resources between UN agencies, and at the same time has reduced the burden on donors in terms of negotiating funding with a multitude of agencies.

Nevertheless, in situations where not enough funding is mobi­lized via the One UN Fund, there could be a tendency to revert to “business as usual” practices, with individual agencies approaching donors on a bilateral basis. Miti­gating these risks requires discipline among donors to ensure that only limited or exceptional funding is pro­vided parallel to the One UN Fund, as well as rigorous priority allocation criteria.

5. Better long-term planning, funding predic­tability and accountability.

Establishing a single Budgetary Framework provides an overview of consolidated UN in­vestments and outlines the aggregate budgets and funding gaps for the One UN Programme. Experience in Tanzania shows that developing such a framework is challenging—differ­ences in UN financial systems, nomenclatures and calendars hinder the process, requiring labor-intensive reconciliation work at the country level. There is a great opportunity and need for HQ to facilitate the process by harmonizing systems, definitions and cycles.

A key change that needs to take place is the realignment of the One UN Programme cycle at country level to the Gov­ernment planning, budgeting and fiscal cycle. This will allow the UN to ensure that: 1) activities are captured and reflected in the national plans and budget; 2) im­plementation and

reporting takes place in sync with na­tional calendars, reducing transaction costs on govern­ment partners; and 3) delivery rate and government ab­sorption capacity are increased.  

6. Har­monization of the business practices agenda.

Harmonizing business practices is an important com­ponent of the System Wide Coherence agenda. Linking the harmonization of business plans to the One UN Programme and using One UN Fund mechanisms to finance the plan has proved effective in ensuring that enough resources are allocated for capital investments into operations change.  

7. Harmonization of administration and reporting.

Operating through the Administrative Agent (MDTF Office) has proved highly effective, as the MDTF Office has been able to systematically ensure a progressive harmonization of administrative procedures in handling the One UN Fund and also has promoted a systematic harmoniza­tion, standardization and simplification of reporting requirements.

The benefits of the One UN Fund mechanism are many, but as shown in Tanzania, it is not without challenges:

 

• Improving longer term predictability.

The One UN Fund has improved the predictability of funding from donors to the UN and, in turn, has increased UN’s predictability to the Gov­ernment, but only in the very short term. Com­mitments to the One UN Fund have been signed on an annual basis, limiting the capacity of the UN to do long-term planning or provide accurate inputs in the Medium Term Expenditure Framework (MTEF) process.

To increase predictability and improve planning, UN agencies to­gether with the Government will develop multi-year programme work plans; in return, the expectation is that donors will be able to provide multi-year funding commitments.

 

• Sustaining local funding levels.

The challenge in the longer term is to ensure the sustai­n­ability of current funding patterns. The Government of Tanzania is concerned that most re­sources mobilized for Delivering as One in the 2007–2008 biennium were ad hoc resources allocated by do­nors for “political/visibility” purposes.

The biggest concern of the Government and the UNCT is that if the funding requirements of the UN country operation are not met this year, the whole change/reform process could be jeopardized, with neg­ative impacts on the Government itself, the UN at country level and also the reform process globally.

 

• Allowing greater engagement in Programme Based Approaches and “real” use of national systems.

Evidence gathered and analyzed in Tanzania clearly provides the case for the UN to increasingly, in com­pliance with the Paris principles, engage in Programme Based Approaches (PBAs)—i.e., sector-wide approaches (SWAps) and basket funding. This would allow the UN to reduce the burden on programme management and reallocate human resources to more critical technical and policy advisory services.

For the UN to become an even better part­ner to developing countries, it needs to be able to make greater use of national systems, including national procurement, accounting and reporting, according to national planning and reporting calendars and instru­ments. The UN needs to increasingly do real national implementation, while fully supporting the strengthen­ing of national capacities, and not substituting such ca­pacity instead.

In support of this effort, we call on the governing bodies of UN agencies to review regulations to allow, where conditions are favorable, making use of PBA and national systems.

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By Gianluca Rampolla del Tindaro, Senior Advisor and Head of Office, Office of the UN Resident Coordinator, UN System in
Tanzania (www.untanzania.org)