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UNDP-Global Fund and Health Implementation

Guidance Manual

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Financial Sections of the Progress Update

The financial section of the Progress Update/Disbursement Request (PU/DR) consists of six sub-sections/tabs:

  1. Principal Recipient financial information
    • Principal Recipient (PR) Cash Reconciliation, provides information on:
    • PR’s cash position based on:
      • Grant Income – All income received under the grant
      • Grant Cash Outflows – Expenditure on cash basis. PR expenditure for purposes of the Cash Reconciliation should include only payments (cash outflow including prepayments) regardless of when goods or services are received/ delivered.
      • Reconciling Adjustments;
    • Total cash balances – at the beginning and at the end of reporting period. Cash balances should include amounts held by the PR (or on behalf of the PR), including any grant funds held with fiduciary agents.
    • Principal Recipient and Sub-recipients’ Commitments and Other Obligations.
    • Reconciliation of open advances held by Sub-Recipients and by vendors due to prepayments.
    • Triangulation of closing cash balance against AFR expenditures
    • Principal Recipient Bank Statement Balance (UNDP provides the Global Fund CPFR report in place of the bank statement) and Cash in Transit.
    • Principal Recipient Ineligible Transactions, obtained from: * PR review and verifications of Sub-recipient (SR) reports; * Global Fund Performance Letters; and * PR and SR Audits.
  2. Sub-recipient cash reconciliation
    Sub-recipient cash reconciliation The SR cash reconciliation statement provides the reconciliation of funds provided to SRs at a given progress update period end date. SR open advances are defined as disbursements made to SRs and other SR income less SR expenditures validated and recorded by the PR in its records as fully liquidated amounts (i.e. recognized officially as SR expenditure by the PR in its own records).

3 Annual Financial Reporting
Annual Financial Reporting (AFR) covers in-country expenditures and variance analysis against the approved activity plan and funding for the PR and SR, reported for the current grant cycle year and cumulatively from the beginning of the implementation period. The financial information reported should include the approved budgets, expenditures and variance analysis by: (a) cost grouping (Focused portfolio countries) or cost inputs (Core and High Impact portfolio countries), (b) modules and interventions, and (c) implementers (PRs and SRs). For detailed guidance please refer to the Information Note on Budget and Expenditure Variance Analysis developed by the UNDP Global Fund Partnership and Health Systems Team (GFPHST). For AFR preparation, PRs should use the Modified Cash Basis of accounting (limited to the following):

  • Expenses are recorded and included when obligations are settled (includes expenses as per General Ledger (GL) /CPFR Annual depreciation expenses should be excluded since equipment acquired during the year should be fully reported to the Global Fund as expenditures in the year of acquisition;
  • Full cost of equipment is included in the year of acquisition; and
  • SR advances and prepayments are not included in the AFR. The following exchange gain/losses are included in the AFR:
  • Realized exchange gain/loss –due to difference in UN Operational Rates of Exchange (UNORE) between the dates of the voucher and date of payment
  • The realized gains/losses exchange gains/losses are reported in the AFR as follows:
    • Cost Grouping – 11.0 Indirect and Overhead Costs;
    • Module – Intervention: Programme Management – Grant Management; and
    • Implementing Entity – UNDP.

Please note that Unrealized exchange gain/loss – translation of USD cash balances into Euro grant currency should not be included as part of AFR expenditures.

4. Annual Cash Forecast
The Annual Cash Forecast provides the annual cash expenditure forecast for the period immediately following the period covered by the PU (as well as for an extra cash “buffer” period of up to six months). The forecast information reported should include activities in the approved budgets required for the payment of goods and services for the next 12 months including the buffer period. The forecast should include new activities to be implemented (new contracts/procurement for goods and services), open existing contracts (commitment and payables) from which payments will be made during the period covered by the forecast. The UNDP GFPHST has developed a Cash Forecasting tool to support the annual cash forecasting exercise.

5 Funding Request
The Funding Request provides the disbursement amount requested by the PR based on the cash balance, the forecasted expenditure for the period immediately following the period covered by the progress update (as well as for an extra cash “buffer” period of up to six months) and cash “in transit” (if any). For more information and detailed guidance on PU/DR, please refer to :

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