Revenue Recognition - UNDP :: POPP · Web viewKey Information On Revenue Management Processes The Global Shared Service Centre (GSSU) The Global Shared Service Centre (GSSU) will

Non-core contributions

1. The policies in this section focus on the following types of agreements:

a) Programme Country Government Cost Sharing

b) Third Party Cost Sharing

c) European Union (EU) Agreements

d) Trust Funds

Revenue Recognition

2. Revenue recognition is the process of recording revenue in the General Ledger (GL) accounts for eventual reporting in the financial statements of UNDP. While under the International Public Sector Account Standards (IPSAS) revenue may be recorded before cash is received; spending can only take place after cash is deposited into the UNDP bank accounts.

Programme Country Government Cost Sharing

3. This is the modality by which a programme country government allocates some of its own resources (which may include the proceeds of a loan from an International Financial Institution and from other sources channeled through the government's budget) towards a UNDP programme or project. In this context, "the Government" can be the national government as well as any of its branches at the central or local level duly authorized to enter into agreements with UNDP.

4. The signed Project Document [or the Country Programme Action Plan (CPAP) and Annual Work Plan], together with a schedule of payments and a budget reflecting the cost-sharing elements, constitutes the legal agreement between UNDP and the programme country government. However, at the government’s request, an additional financing agreement may be concluded, using the standard text in the Model UNDP Programme Country Government Cost-Sharing Agreement.

5. The signed project document, or the CPAP and AWP, together with a schedule of payments and a budget reflecting the cost-sharing elements, constitutes the binding agreement between UNDP and the programme country government. The standard agreement for financial contributions from programme country governments (government cost-sharing) should also be signed with the programme country government.

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Recognition of revenue on government cost sharing

6. Government cost sharing revenue will only be recorded in the general ledger after funds are

received in UNDP’s bank account and NOT upon signature of the project documents. Third Party

Cost Sharing

7. Donor governments and other donors contribute funds to UNDP programmes and projects. While those funds are usually co-mingled with UNDP regular resources, there are many instances where a donor or a group of donors cover the full costs of a programme or project, without UNDP having to contribute any of its own resources, as 100% cost-sharing.

8. A contribution agreement is a requirement. Different standard UNDP agreements apply and must be used depending on the category of donors: donor governments, UN agencies, private sector entities, foundations etc. In addition, donor-specific third-party cost-sharing agreements have been negotiated with a number of donors.

9. Standard UNDP agreements apply except when donor-specific third-party cost-sharing agreements have been negotiated and approved by the Legal Office, Bureau for Management Services.

Recognition of revenue on standard third party cost sharing

10. A standard third party cost sharing agreement enters into force upon signature of the donor and UNDP. Revenue will be recognized only upon the signature of agreement by both parties. All instalments will be recognized as revenue based on dates in the schedule of payments of the agreement. Where the agreement’s entry into force is upon signature and first deposit (i.e. the first payment from the donor), revenue will only be recognized after signature and first deposit.

11. For multi-year contributions, revenue is recognised based on the dates in the schedule of payments in the agreement. The schedule of payments is an indication of the intended period to which the funds relate.

12. Funds received prior to signature and entry into force of an agreement must be recognized as a liability (deferred income) and recognized as revenue in accordance with the revenue recognition policy when the donor agreement is signed.

13. In order to accommodate particular financial and legal requirements, some donor-specific contribution/grant agreements have been negotiated. Any deviation from the standard agreements must be cleared with headquarters.

14. Recognition of the revenue depends on the clause in the signed agreement. “Entry into effect” clauses of such non-standard cost sharing agreements could be that, in certain cases, the agreement is conditional upon prior parliamentary approval. In such instances, revenue must


only be recognized after parliamentary approval is obtained. Non-standard clauses that are included in an agreement can have an impact on revenue recognition under IPSAS and these should be reviewed and cleared by the Legal Office, Bureau for Management Services before creating any non-standard agreement.

EU Agreements

15. Please refer to Resource Mobilization Toolkit for detailed guidance on EU funding.

16. These procedures refer to “EU”, as funds may originate from the EU but the remittances, contracts, monitoring and reporting may rest with the EU.

17. The EU does not fully release its final contributions for a project before it officially approves the final report. This arrangement requires UNDP to pre-finance a maximum of 20%, or the final agreed percentage, from other funding sources. It is important to note that according to the Financial and Administrative Framework Agreement (FAFA) points 7.1.1 and 7.1.2, the EU could pre-finance from 80% to 95%.

18. Taking into account FAFA special and general conditions governing EU funding, revenue will be recognised for pre-financing part of the agreed contract on signature and based on the dates of the schedule of payments. The balance of the payment will be recognized when approval of final report is obtained from the donor. Any report will be deemed approved 45 days after receipt, accompanied by a request for payment, if the Commission has not reacted.

19. Interest refunded to the EU

20. There are instances where interest is due to be refunded to the EU according the signed donor agreement and the EU deducts such interest from the final installment. Refer to the procedures below under the EU section for the steps to follow.

Trust Funds

21. Trust Funds partnership are formalized through standard co-financing agreements applicable to Open, Thematic and Closed trust funds, available at:

https://popp.undp.org/SitePages/POPPSubject.aspx?SBJID=177&Menu=BusinessUni t

a) Standard agreements formalizing working arrangements of trust funds enter into force upon signature, or signature and first deposit made by the donor to UNDP.

b) Revenue will be recognised upon signature of the agreement between the donor and UNDP, or signature and first deposit, depending on the “entry into force” provision of the


agreement. Subsequent installments will be recognised as revenue in accordance with dates in the schedule of payments of the agreement.

c) For multi-year contributions, revenue is recognised in the relevant financial period based on the dates in the schedule of payments in the agreement. The schedule of payments is an indication of the intended period to which the funds relate.

d) Funds received prior to an agreement entering into force must be recognized as a liability (deferred income) and subsequently recognized as revenue in accordance with the revenue recognition policy after the donor agreement enters into force.

United Nations Volunteers (UNV)

22. UNV receives non-core contributions via Trust Fund and Cost Sharing agreements. Policies and Procedures for such non- core contributions are described under the sections on Trust Funds and Cost Sharing and fully apply to these contributions.

23. Listed below are other types of contributions received by UNV and their treatment under IPSAS:

UNV’s Special Voluntary Fund:

24. The Special Voluntary Fund (SVF) is a special purpose fund made up of voluntary contributions, contributions from other governmental, intergovernmental or non-governmental sources and related interest earnings and miscellaneous income. The resources are co-mingled, are untied, and are treated as core resources. As a result, SVF contributions will be recorded as revenue upon receipt of cash.

Full Funding:

25. Under Full Funding, donors provide the total costs required to support individual UN Volunteer assignments. While a few donors guarantee long-term support for full funding, contributions usually have to be negotiated on an annual basis. Contributions may sometimes be received based on a set schedule but are often tied to specific recruitment of volunteers. In order to formalize these arrangements, UNV has been using a modified cost sharing agreement template containing all mandatory clauses. Revenue will be recorded based on the schedule of payments in each agreement which is tied to the timing of volunteer recruitment.


Key Information On Revenue Management Processes

26. The Global Shared Service Centre (GSSU) The Global Shared Service Centre (GSSU) will be responsible for recording the revenue for the following non-core contributions:

- Programme country government cost sharing

- Third party cost sharing agreements

- EU Agreements

- Trust funds

27. The Contracts Module:The Contracts Module in Atlas will be used for the recording of contributions. Information will be entered relating to the agreement and the necessary accounting information to ensure that revenue is recorded in the General Ledger and reflected correctly in UNDP accounts. The Contracts Module is set up to ensure all IPSAS conditions relating to agreements have been identified by the GSSU and appropriately entered.


The GSSU will also flag all non-standard agreements for follow-up by Partnerships Bureau. Key information to be entered by the GSSU will be as follows:

General information Includes all the general information relating to the agreement

Accounting distribution

Includes all the chart of account information relating to the revenue and accounts receivable

Milestones Milestones are the triggers that are set-up in the Contracts Module for revenue recognition and are dependent on type of agreement and interpretation of relevant IPSAS policy

Billing plan Billing plan includes the milestones that need to be achieved to create the billing and create the Accounts Receivable entries in the General Ledger

Revenue plan Revenue plan includes the milestones that must be achieved to create the revenue entries

Amendments Amendments can be made to original contracts that have already been entered in the Contracts Module using the amendment function

28. The Document Management System (DMS): The Document Management System is a system which provides COs/Business Units the ability to upload all agreements and any necessary supporting documents.

Negotiating and Signing Agreements

29. Each Country Office (CO) and Business Unit (BU) will negotiate and sign agreements with donors

30. When agreements are negotiated; the following points should be noted


• All agreements should include a schedule of payments with specific dates and amount

• The UNDP bank account provided in the agreement should be of the same currency as the contributions in the donor agreement (Contact the HQ Treasury Contributions Unit for bank account information)

• The agreement should include UNDP references to facilitate timely identification of the purpose of the funds. These references include operating unit, project name or code (if available), deposit number (e.g. 1st deposit, 2nd deposit, last deposit etc.), and donor name. Donors should be requested to include this information in the remittance advice for easier identification of deposits in UNDP bank accounts. This information should be abbreviated to fall within the character limit imposed by banks for information provided in remittance advices.

• Include donor references for donor reporting purposes. Where donors would like a donor reference indicated in the donor reports, they should include the reference in the donor agreement and then the information will be entered from the cover sheet by the GSSU into Atlas under “Customer General Information for donor reporting purposes”. Donors should also provide an email address to be used by UNDP to submit Cash Receipt Vouchers (CRVs) upon receipt of funds.

• COs/Business Units should request donors to send an email to Treasury Contributions Unit ([email protected]) upon remittance of contributions, notifying UNDP of the amount, remittance date, operating unit, project name or code (if available), deposit number (e.g. 1st deposit, 2nd deposit, last deposit etc.) and donor name and donor reference

31. After the agreement has been signed, the respective program officer should set up the project and the budget In Atlas on a timely basis. The project information should be available before any information is submitted to the GSSU, as the information is required for entry into the Contracts Module. Note that this is not applicable to Open Trust Funds and Thematic Trust Funds, with the exception of any cost sharing and country window component, as revenue to these funds are recorded at the fund level

Upload Of Agreements To The Document Management System (Dms)

32. The signed agreement must be scanned and uploaded to the DMS by HQ or country office finance staff for submission to the GSSU within a week of the agreement being signed. Management should assign responsibilities to relevant finance staff for submission of agreements to GSSU. Approval of the agreements on the DMS should be done by staff with an Approver Function on Atlas.

33. An electronic cover sheet with the following information must be uploaded to the DMS together with the signed agreement:

Donor Name: Name of the donor in the agreement


Donor Code: Atlas donor code for each donor

Donor Reference: In certain cases agreements may include a donor reference; if this does exist, it should be included in this field

Currency: This is the currency in which payments are to be made as stated in the schedule of payments in the agreement

Atlas Contract Reference:

This field can be IGNORED by business units. The information on this field will be entered by GSSU.

Operating Unit: The respective Operating Unit to which the agreement relates.

Add or Amend Contract Agreements

This is where the scanned PDF file should be uploaded. Please ensure that documents are clear and legible and include all pages of the signed agreements. Include any amendments that should accompany this agreement.

For Government Cost Sharing Agreements: Please include only the Signed Page of the Project Document which contains the project information and the page that contains the schedule of payments/budgeted amounts. DO NOT include the entire Project Document.

Where possible, donor agreements should be saved in the following format:

Example: Cost sharing agreement signed between Honduras and

Denmark on 10 July 2011

Format of file: HND_DEN_CS_0711

(Government Cost Sharing =GSC; Trust Funds =TF; Third Party Cost Sharing =CS; Joint Programming =JP; Letter of Arrangements =LOA)

Chart of Account Users should indicate the relevant Chart of Account information for each project that is included in the Agreement. Click on ‘Add additional Projects’ if there is more than one project.

Agreement type: Select the agreement type from the dropdown list


Non-standard agreements:

If changes were made to the standard templates, or this is a donorspecific agreement, this should be indicated as a non-standard agreement.

DRM Clearance: If clearance was obtained from DRM for these non-standard agreements, include the date that clearance was obtained

Agreement Start Date/End Date

Include these dates if included in the agreement

Schedule of payments:

Some agreements contain more than one project. Users should allocate the schedule of payment to all projects based on the allocation agreed with the donor for the specific schedule of payment. To add an additional project click on ‘Insert Item’. To add an additional schedule of payments, click on ‘Add additional Payments’

Schedules of payments should be revised to reflect any subsequent amendments that have been negotiated and agreed with the donor after the original agreement was signed.

Deposit information Users should enter any deposit information relating to the following:

First deposits for agreements that are binding upon signature AND first deposit

Deposits for Government Cost Sharing

Click on ‘Add Additional Deposits’ as further deposits are received.

Contact Information

Users should enter the contact information for country office staff who will be contacted if any follow-up information or clarification is required with respect to the agreement

Report submission Include the date the report was submitted. If the report is still to be approved, the estimated date of approval can be entered. Once the report has been approved, include the date and upload the report with confirmation from the EU/EC that the report has been approved.

Additional information

This page can be used where a CO/Business Unit may want to include some additional information or comments. There is also an option to upload a file if necessary.


34. The following documents should be uploaded to the DMS:

• Third party cost sharing agreements

• All agreements signed at COs and Business Units for the commitment of funds

• Relevant pages of the Project Documents for Government Cost Sharing

• Trust Fund agreements signed at HQ will be uploaded by HQ Business Units

• Trust fund agreements signed at COs should be uploaded by the CO

• Steering Committee minutes, where UNDP acts as a PUNO under Joint Programming

• Letters of agreements between UNDP and donors that are signed at country offices.

Common Service Agreements SHOULD NOT be uploaded to the DMS.

35. The majority of Trust Fund agreements are signed at HQ. These should be submitted to the GSSU by Trust Fund managers via upload to the DMS within a week of agreements being signed. When Trust Fund Country Window or Cost Sharing agreements are signed locally, the CO should, within

a week of the agreement being signed, upload the agreements into the DMS for the GSSU to enter into the Contracts Module

36. After documents are uploaded to the DMS; all hardcopy agreements should be safely and centrally filed by the business unit or CO that signed the agreements.

Entry into the Contracts Module

37. The GSSU will access the information uploaded to the DMS and enter the information in the Contracts Module.

38. The GSSU will record revenue in the General Ledger and create the accounts receivable item based on the milestones and conditions in each agreement. The contract will be recorded in the currency as indicated in the agreement.

39. After the contract is created by the GSSU, a contract reference number will be generated by the Contracts Module. The GSSU should update the information in the DMS to incorporate this and inform the CO/business unit of the contract reference number.

Government Cost Sharing

40. For Government Cost Sharing, as agreements may not be necessarily signed, information will be updated based on the Project Document (ProDoc). The signature page of the Project Document will be uploaded to the DMS with all necessary information required for Government Cost Sharing.

41. As Government Cost Sharing is recorded on the cash basis; the GSSU cannot approve the contract in the Contracts Module until the cash is received.


42. All deposits received for Government Cost Sharing should be communicated to the GSSU. Once the funds are identified as being received in the unapplied deposit account, the CO finance staff should enter the deposit information related to that specific agreement in the DMS.

43. The GSSU will then approve the contract and create the accounts receivable item and record the revenue.

44. The CO will be notified that the deposit information has been processed and, using the contract report, will identify the relevant AR against which the funds can be applied.

Application of Cash Deposits

45. Application of funds against ARs will continue to be handled by Treasury Contributions Unit or by CO finance staff, depending on the bank account into which the funds are deposited. Treasury Contributions Unit will review the unapplied deposits report and regularly check the unit’s email inbox to identify cash received that needs to be applied.

HQ Bank Accounts

46. Treasury Contributions Unit will review the unapplied deposits report and check if adequate information is provided in the remittance advice to identify the funds as “first deposit”. It is the responsibility of the respective CO or Business Unit to communicate this first deposit via the DMS. The respective CO or Business Unit should follow-up with Treasury Contributions Unit on whether the first deposit has been received. It is the responsibility of the relevant CO or Business Unit to upload the ‘first deposit’ information to the DMS even if funds are received at HQ. Treasury Contributions Unit will be notified by the DMS/ATLAS workflow following the GSSU creation of the accounts receivable so that funds can be applied by them.

47. If adequate information is not provided in the remittance advice identifying the funds as “first deposit”, Treasury Contributions Unit will liaise with programme and finance officers to confirm whether the funds received relate to the first deposit for contracts entered with milestones signature AND first deposit. Treasuries Contributions Unit will mark the “first deposit” milestone as “complete” and via the DMS/ATLAS notify the GSSU to finalize the recognition of revenue and creation of the accounts receivable. Treasury Contributions Unit will be notified by the GSSU of the creation of the accounts receivable so that funds can be applied.

48. For other agreements, (for example agreements which record revenue based upon ‘signature only’), or for the second and subsequent deposits of ‘signature and first deposit’ agreements; this deposit information does not have to be uploaded to the DMS. The accounts receivable item will be automatically created from the Contracts Module based upon due dates in the agreement’s schedule of payments. Once the funds are deposited, Treasury Contributions Unit will review the customer contract detailed report, or contact the business unit to identify the relevant accounts receivable item the funds should be applied against.


CO Bank Accounts

49. The CO finance units will review the unapplied deposit report (for CO bank accounts) and identify the first deposits for those contracts entered with milestones signature AND first deposit.

50. The CO finance units will complete a first deposit confirmation sheet to be uploaded to the DMS, to enable the GSSU to mark the milestone ‘first deposit’ in the Contracts Module as complete, thus permitting the revenue to be recognized and creation of the relevant account receivable..

51. CO finance units will be notified by the GSCC of the creation of the account receivable so that funds can be applied. It remains the responsibility of CO finance units to apply funds that are received locally.

52. Deposit confirmation sheet will include the following information:

Deposit information Users should enter any deposit information relating to the following:

First deposits for those agreements that are binding only upon signature AND first deposit

Deposits for Government Cost Sharing

Click on ‘Add Additional Deposits’ as further deposits are received.

53. For other agreements, (for example, agreements which record revenue based upon ‘signature only’) or for the second and subsequent deposits of ‘signature and first deposit’ agreements; this deposit information does not have to be uploaded to the DMS. The accounts receivable item will be automatically created from the Contracts Module based upon due dates in the schedule of payments. Once the funds are deposited, Treasury Contributions Unit will review the customer contract detailed report, or contact the Business Unit to identify the accounts receivable item ID the funds should be applied against

Foreign currency differences

54. In certain instances, payments may be received in currencies different from those specified in the agreement. When funds are being applied, this may result in a foreign exchange difference that generates an additional item line, the foreign exchange difference. These should be written off by Treasury Contributions Unit and identified with the reason “WO Curr” in Atlas.

Funds Received In Advance

55. In certain instances, donors may deposit funds in advance of establishing a formal agreement or in the financial period prior to that during which the funds should be programmed. This could be


in the case when funds are received in advance of the programming activity or in the case where the agreement has not yet been signed or a project set-up. When this occurs, revenue cannot be recognized, as the funds do not relate to the current financial period. Such funds must be recorded as “funds received in advance”. These funds are deposited in the bank account and credited to the funds received in advance account (General Ledger Account 24006) by Treasury Contributions Unit. It is the responsibility of Treasury Contributions Unit to monitor the” funds received in advance” account and subsequently to clear such funds against the accounts receivable created when the revenue is recognized and accounts receivable created.

Lump Sum Deposits

56. In the event that a donor has lumped together contributions relating to more than one agreement, the Treasury Contributions Unit or CO finance staff will request that the project/trust fund manager or Partnerships Bureau contact the donor for a breakdown of the contribution. COs/Business Units should encourage donors to remit payments according to the signed agreements or to communicate details of the breakdown to the COs/Business Units where lump sum deposits are made.

57. The Treasury Contributions Unit or CO finance staff will apply the deposit against the relevant accounts receivable that have been generated for each of the contracts entered into the Contracts Module.

Agreements with Specific Conditions

58. Certain agreements may include a clause with a condition that must be fulfilled before an agreement can become binding or before revenue can be recognized. Such agreements could include conditions requiring parliamentary approval or prior approval of reports (e.g. EU type agreements)

Parliamentary Approval

59. Agreements may include conditions relating to parliamentary approval with the result that revenue cannot be recognized until this has been received. GSSU will analyse the report of pending parliamentary approval milestones and share it with the Partnerships Bureau for follow-up with donors. The Partnerships Bureau will notify the GSSU when notifications have been received from donors that Parliamentary Approval has been given so that GSSU can approve contracts for revenue recognition. These updates will be entered in the DMS by Partnerships Bureau. Receipt of funds from the donor implies parliamentary approval has been provided and once the DMS has been updated this will trigger the workflow to notify the GSSU that it can proceed to recognize the revenue and create the relevant AR.


2) EU Agreements

60. The final tranche of contributions from the EU cannot be recognized until the final report to the EU has been submitted and approved.

61. GSSU will enter the milestone date in the Contracts Module for submission of the final report to the EU, using the estimated completion date (6 months after the end of the implementation period of the agreement).

62. COs/Business Units will notify the GSSU of the final report approval received from the EU via the DMS, and upload proof of the approved report AND the payment request. The uploaded documents should indicate the amounts that will be paid by the EU. The GSSU will then proceed to mark the “Final Report” milestone on the Contracts Module as “complete” in order to trigger recognition of revenue and creation of the relevant account receivable.

63. GSSU will follow-up with CO’s and Business Units on outstanding submission of final EU reports, as part of their periodic analysis of milestone status for EU Agreements.

64. In the event that the final report has been rejected, the CO/Business Unit should enter this information in the DMS, which will trigger an action to the GSSU and indicate where adjustments must be made in the Contracts Module.

65. The GSSU should review the request for final tranche as submitted by the CO/Business Unit via the DMS together with the final EU report and, in the event the final tranche is less than originally scheduled, the GSSU should amend the contract to reflect the correct revenue and accounts receivable amounts.

66. After reports are uploaded to the DMS, all hardcopies or electronic copies of files should be stored and filed by the originating COs/Business Units.

Interest refunded to the EU

67. There are instances in some previous EU agreements, providing for interest to be refunded to the EU, where the EU deducts such interest from the final installment.

a. The GSSU should be notified via the DMS when the final report has been approved, so that the revenue and accounts receivable can be raised for the full amount of the final installment.

b. Once the CO/ Business Unit is notified by the EU that the interest will be deducted from the final installment, the programme officer should contact Treasury Contributions Unit via email informing them of the final amount to be received and requesting that the deducted interest be credited back to the EU fund/project.

c. When funds are deposited by the EU for the final installment, Treasury Contributions Unit will adjust the accounts receivable amount based on the interest refund using the writeoff function in AR.

68. Interest will be credited back to the project by Treasury Contributions Unit using the EU donor code.


Amendments To Agreements

69. In the case when an agreement has been amended with the approval of the donor (e.g. change of agreement amount, change of period), such amendment needs to be communicated to GSSU staff via the DMS in a timely fashion. The GSSU will then reflect these amendment(s) in the Contracts Module. A copy of the amended agreement should be uploaded to the DMS for the GSSU to process the amendment. All hardcopies of amendments should be stored and centrally filed by business units.

70. COs/Business Units should update changes to the DMS to inform GSSU staff and provide relevant information on a timely basis on the following:

a) Adjustments

b) Reversals

c) Change of chart of accounts

d) Re-allocation of funds

e) Revision of schedule of payments

71. In all of these cases, the original agreement should be accessed and the amendment information entered in the DMS. All amendments uploaded to the DMS should be approved prior to entry. The addition of the details of the amendment will trigger a notification to the GSSU staff to process the update and, once completed, a notification to the requestor that the activity is complete.

Small Donations with No Signed Agreements (Usually Have No Reporting Requirements)

72. Small contributions are contributions that are:

i. under $100,000, AND ii. with no signed agreement, AND iii. not related to a development project

73. Such amounts should be recorded in the Miscellaneous Income GL Account 55090, using Donor Code 00311 and be processed in the AR module through a Direct Journal entry

74. For any arrangement that does not meet all of the above criteria, as stated in the template, [1] It is recommended that country offices negotiate the number of installments to ensure at least six months’ anticipated disbursements are funded with each installment. This will make processing of contributions and reporting more efficient for the country offices.

75. GSSU would process these arrangements with signed agreement uploaded to DMS and recorded with the donor code created for the project.


76. Upon receipt and identification of the payment, Treasury Associate will create a Direct Journal deposit which will be applied by crediting account the Miscellaneous Income account 55090 as follows:

ACCT FUND

OPER. UNIT

DEPT PC BU PROJECT ACTIVITY

IMP. AGY

DONOR

55090 00001 CO or H17 CO or 14404 BLANK BLANK BLANK BLANK 00311

If small donations are received for a specific fund and project, these should be included in the COA.

ACCT FUND

OPER. UNIT

DEPT PC BU PROJECT ACTIVITY

IMP. AGY

DONOR

55090 XXXX CO CO XXXX XXXX XXXX XXXX 00311

For Disaster Relief funds

77. Guidance and procedures are communicated by OFA. Usually a fund code and donor code are set up and used in the COA to record either staff donations/individual donations. Country offices should contact the Treasurer for guidance where disaster relief funds are mobilized.

78. For larger contributions from donors, agreements are negotiated through CRU.

Monitoring of Pending Milestones

79. COs/Business Units have access to the report of contracts with pending milestones and should regularly review this report and proactively follow up with donors on milestones with expired due dates. This, for example, would mean following up where EU reports are long overdue;


parliamentary approval has not been received; or first deposits have not been received. GSSU will also access the Report of contracts with pending milestones to review pending milestones for which the due dates have expired and, where an issue is identified, will notify the respective CO or Business Unit via the DMS/CRM workflow.

80. These common types outstanding milestones will include the following: a) First deposits

b) Approval of EU reports

c) Parliamentary approval

Financial Year Closing Requirements

81. It is important that COs/Business Units promptly update the DMS by financial year end, entering any new agreements or completion of milestones conditions, to ensure that revenue is accurately and completely recorded in financial statements. The DMS will ensure that any notification is logged and activities commence in timely fashion at the GSSU.

82. At year-end, COs/Business Units should review the report of contracts with pending milestones and, if an issue is identified, communicate to the GSSU via the DMS any milestones that have been completed.

Important year-end steps

83. Completeness of agreements - all agreements should be uploaded to the DMS and amendments processes.

84. Review of past due milestones - follow-up on milestones that should have been achieved by yearend, e.g. submission and approval of EU reports

85. Accounts receivable - follow-up with donors on outstanding amounts (see POPP content on Accounts Receivable)

86. Unapplied deposits - ensure timely application of all unapplied deposits at year-end

87. Funds received in advance - review funds received in advance account and verify accuracy and completeness

88. Reports should be generated, and signed as evidence of review.

Closure of Contracts in the Customer Contracts Module

89. Completed contracts must be closed in the Contracts Module by GSSU staff only after the projects associated with the contract have been operationally and financially completed, thus It is important for COs and Business Units to promptly close expired projects. GSSU will use the query created for closed projects in Atlas to identify and close customer contracts in the Contracts Module


Reconciliation of Accounts Receivable to the General Ledger

90. On a quarterly basis, Treasury Contributions Unit will perform a reconciliation of the Accounts Receivable for Contributions sub-module to the General Ledger and follow-up on differences with COs, Business Units and the GSSU where necessary.

ICF Roles

Entry into DMS Staff assigned Finance Function

Approval into DMS First authority (Project Manager)

Review and follow-up of accounts receivable First authority (Project Manager)

Sign off as evidence of review of accounts receivable Approving Manager or Program Manager

Recommend write-off or doubtful debts provision CO Disbursing Officer/Third authority

Approve write-off or doubtful debts provision HQ Disbursing Officer Manager

Entry into Contracts Module Revenue Specialist (GSSU Finance Function)

Approval of Contracts Module - GSSU Manager (GSSU Approving Manager)

Application of funds CO or business unit finance staff

Approval of application of funds (Project Manager or Approving manager)

Revenue Management Process CO/BU

Programme

RR/BU Approv er

DR M

BU Financ e

CO Financ e

HQ Treasury/OFA

GSSU Rev. Specialist

GSSU Manager


Negotiate agreements/amendm ents

√

√

Clear non-standard agreements/amendments

√

Sign all agreements/amendments

√

Set Up and finalize project Budget

√

√

Upload signed agreements/amendments to

√

Revenue Management Process

CO/BU Programme

RR/BU Approv er

DR M

BU Financ e

CO Financ e

HQ Treasury/OFA


GSSU Manager

GSSU


Enter Agreement in Contracts Module/process amendments & set agreement to ready

√

Set Contract to Active (contract approval)

√

Notify BUs of Contract Activation √

Record contributions received in Bank Acct.

√ √ √

Mark Milestone to complete (generate GL entries)

√

√

Apply Cash using AR Report to identify AR item ID

√ √

Review Report on outstanding receivable

√

√

√

Review report on pending/past due milestone

√

√

√

Follow up with Donor on outstanding payments

√


Follow up with donor on pending/past due milestones e.g. approval of report by EU, past due payments

√

Access reports on financially closed projects

√

Close agreements in contracts module

√

Review Ageing of receivables √ √ √

Communicate to OFA on outstanding AR for doubtful debt provision and write offs

√ √

√ √

√

Review and approve provisions and write-offs submission

√

Revenue Management Process CO/BU Programme

RR/BU Approv er

DR M

BU Financ e

CO Financ e

HQ Treasury/OFA


GSSU Manager


Reconcile GL to AR and balance accounts

√

Reports

i. Report of contracts - Listing of all contracts created, status and overview per operating unit ii. Report of amended contracts - Listing of all amendments related to a contract iii. Report of contracts with pending milestones

- Monitoring of Milestones/Conditions with past due milestones

- Monitoring of upcoming milestones (within 45 days) iv.

Customer contract overview report- Overview of contracts and

amendments

Global Shared Service Centre (GSSU)

91. The GSCU performs certain IPSAS-related functions on behalf of UNDP in the areas of Expenses, Revenue and Asset Management. It provides support on complex IPSAS functions, as well as partial support on some IPSAS functions being performed by the COs directly. These POPP Guidelines state clearly when a Procedure or part of a Procedure should be carried out at the GSSU and cover the relative roles and responsibilities. Users in COs or at Headquarters will not be able to carry out these Procedures themselves on ATLAS and should utilize the DMS to request the service of the GSSU. A high level summary of the Procedures is included in the Table below.


Document Management System (DMS)

92. All requests for Procedures to be carried out by the GSSU must be made via the Document Management System (DMS). This system is located on the Intranet and can be reached via the OFA website. Clear instructions are provided for navigation and users will find a list of Procedures, as shown in the table above, from which they can select. Once a Procedure is selected, users can navigate to a form where they provide the details of their request and to which they must attach the required documents. Following submission of the form(s), workflows associated with these tasks are automated to ensure appropriate controls, approvals and routing of documentation, as well as recording all requests received via DCM for follow up by GSCC.
