Intervention Summary
Title: United Nations Population Fund (UNFPA) Voluntary Core Funding
What support will the UK provide?
In 2011 DFID completed the Multilateral Aid Review (MAR) that assessed the effectiveness of
43 multilateral agencies that receive funding from the UK, including UNFPA. The MAR found
that UNFPA was having a critical role in meeting international and UK development objectives
but also that a number of organisational reforms needed to take place to further strengthen the
organisation. Overall the review found that UNFPA offered adequate value for money for
DFID funds. The Secretary of State agreed that DFID’s annual voluntary core funding to
UNFPA should remain static for a period of 2 years at £20 million per year.
The provision of voluntary core funding allows UNFPA to operate globally and will cover the
cost of administering its work as well as investing in specific programmes and projects at
country level that improve maternal and reproductive health. Providing voluntary core funds
will allow the UK to influence organisational-wide reforms that need to occur but also deliver
UK development objectives on the ground.
This business case provisionally allocates up to £80 million of voluntary core funding support
over the period of 2011- 2015 to UNFPA. For financial years (FYs) 2011/12 and 2012/13
voluntary core funding will be paid at £20m each year. In FY 2013/14 a mid-point review will
be undertaken to assess progress against key reforms in areas identified as weak by the
MAR. These include weak reporting on results, poor financial management and inconsistent
delivery of programmes in country. As a result of the outcome of the mid-point review, DFID
will decide if voluntary core funding should be maintained at £20 million per year, increased,
decreased or restricted to specific programmes. In the meantime, indicative funding levels for
FYs 2013/14 and 2014/15 remain at £20 million per year.
In addition to the voluntary core funding support that is covered in this business case DFID
country offices will provide targeted funding for specific projects in-country. Country offices
will prepare separate business cases but will take in to account the organisational weaknesses
that were found in the MAR. DFID is also providing voluntary non-core support to UNFPA’s
Global Programme for Reproductive Health Commodity Security. In 2010 the UK provided a
total of $93 million of voluntary non-core support through thematic or country level projects.
Why is UK support required?
Multilateral organisations are an essential part of the international system for humanitarian and
development aid. They have a global presence and the legitimacy to work even in politically
sensitive contexts where national governments are not welcome. This is particularly true for
UNFPA. It is the only UN agency which is mandated to help improve maternal and
reproductive health which is a top priority for the UK. While the world is on track to achieve a
reduction in extreme poverty by 2015, MDG 5 (improving maternal health and achieving
universal access to reproductive health and family planning) remains the most off track of all
the Millennium Development Goals (MDGs). Globally, 215 million women who want to delay
or avoid a pregnancy are not using an effective method of family planning. Each year there
are 75 million unintended pregnancies and an estimated 21.6 million of these, nearly all in
developing countries, end in unsafe abortion causing the deaths of 47,000 women and
adolescent girls – 13% of all maternal mortality. Adolescent girls are particularly at risk. They
are less likely to be able to choose whether and when to have a child than older women and
have a much higher unmet need for family planning. Globally, there are 6.1 million unintended
pregnancies each year among 15-19 year olds and in Africa half of all maternal deaths from
unsafe abortion are in women under the age of 25. UNFPA works to tackle these issues that
are of critical importance to the UK by advocating for laws to be passed to improve women
and girls reproductive rights, supporting the provision of family planning services and by
monitoring population trends.
The UK will maintain voluntary core funding to UNFPA as its objectives have a direct link to
Millennium Development Goals, in particular making progress on MDG 3 (reduce child
mortality), MDG 5 (improve maternal health and achieve universal access to reproductive
health and family planning) and MDG 6 (combat HIV and AIDS, malaria and other diseases).
What are the expected results?
Through this voluntary core contribution DFID expects to see UNFPA make progress against
the key reform priorities identified through the MAR. In particular the provision of this funding
will support UNFPA to:





further develop its managing, monitoring and reporting on results, so it can demonstrate
the difference it is making on the ground;
demonstrate how it is driving down costs and achieving better value for money;
strengthen its delivery in country to improve access to family planning, increase
recourse to address unsafe abortion and to enable the collection, analysis and use of
population data for progressive policy development;
improve its financial management compliance and address all outstanding audit issues;
increase transparency, so that it meets the International Aid Transparency Initiative’s
(IATI) transparency standards.
In terms of development results, at the end of the 4 year funding period, DFID expects UNFPA
to be able to show evidence of progress being made against MDG 5, particularly in terms of
improving access to sexual and reproductive health and rights (SRHR); a reduction in the
number of women dying either while pregnant or during child birth; and, an increase in the
availability of modern contraceptives to more women.
UNFPA’s results reporting framework is currently weak. Therefore, it is not possible to use
UNFPA’s own targets to illustrate how UNFPA is delivering on the ground. Addressing this
issue is one of DFID’s top reform priorities. After the mid-point review has been undertaken in
FY 2013/14 DFID will revisit the project’s log-frame and, where possible, update this to include
UNFPA’s own indicators to illustrate the in-country results that DFID’s voluntary core funds
support. In the interim the log-frame will principally track progress against MAR reform
priorities.
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Business Case for: United Nations Population Fund (UNFPA)
Strategic Case
A. Context
Summary
The MAR found that UNFPA has a critical role in making progress on maternal health, family
planning, safe abortion and sexual reproductive health and rights – all UK priorities. UNFPA
has a unique role in taking these issues forward due to its global presence and unique
legitimacy that other actors can not replicate. There are a number of organisational reforms
that need to be addressed in the short term. DFID will need to work closely with UNFPA to
ensure our reform agenda is taken forward leading to improved delivery on the ground.
DFID will need to increase its engagment and influence with UNFPA and ensure that all of its
funding supports the reforms agenda to see real change.
Background
Multilateral organisations are an essential part of the international system for humanitarian
and development aid. They have a global presence and the legitimacy to work even in
politically sensitive contexts where national governments are not welcome. They provide
specialist technical expertise, and deliver aid on a large scale. They offer a wide-range of
aid instruments to meet the needs of all countries. They have a legitimacy to lead and coordinate development and humanitarian assistance. They broker international agreements
and monitor adherence to them. They develop and share knowledge about what works, and
why.
UNFPA has a critical role within the multilateral system. Improving sexual and reproductive
health and rights (SRHR) is critical to the achievement of the MDGs overall and is a priority
area for the UK government. A commitment to reducing maternal mortality is set out in the
coalition agreement and, in December 2010, the UK set out two strategic priorities to achieve
this in the Framework for Results for Improving Reproductive, Maternal and Newborn Health
in the Developing World: reducing unintended pregnancies and ensuring that pregnancy and
childbirth are safe for mothers and babies.
Improving access to family planning is very important to the UK due to the difference this
would make to women’s lives. UNFPA is a key partner in delivering this agenda as it is a
trusted partner of many governments in developing countries. The benefits of investing in
SRHR are far reaching. Globally, meeting the unmet need for family planning alone could
avoid around a third of maternal deaths and a fifth of newborn deaths. A woman’s social,
economic and other opportunities in life are enhanced by being able to make fertility and
other health choices. Preventing pregnancy in young adolescents makes a particularly
significant difference to girls’ life chances. Household poverty can be mitigated by improving
women’s health and survival. Services and programmes that remove or reduce costs of
commodities, care or referrals to poor women can prevent families spiralling into debt. In
addition improving access to family planning, together with wider investment in girls’
education and empowerment will, through reduced fertility, slow population growth. Most
rapid population growth takes place in the poorest countries, where current fertility rates
mean that populations are expected to double or triple by 2050 – increasing vulnerability to
climate change and increasing the need for health and education services.
UNFPA is the UN agency mandated to lead on SRHR and to support countries in generating
and using population data for policies and programmes to reduce poverty. UNFPA is
mandated to ensure that every pregnancy is wanted, every birth is safe, every young person
is free of HIV/AIDS, and every girl and woman is treated with dignity and respect. UNFPA
works within the internationally agreed framework for population and development to take
this agenda forward.
UNFPA is managed by the Executive Director (Dr Babatunde Osotimehin) and his senior
management team. It has 2,000 staff worldwide, 83% of them are field-based within
regional or country offices. Staff costs account for 31% of UNFPA’s total expenditure in
2010.
UNFPA is governed by 36 member states of the UN. Member states’ membership of the
Executive Board is rotational. The Executive Board meets three times per year to set policy
direction and provide oversight. The UK is a member of the governing board for 2011.
UNFPA carries out a number of critical roles which other multilateral organisations do not
replicate:
 It works with national governments to ensure that reproductive and maternal health
issues are included in public health plans and that budget lines are made available to
ensure there is a supply of contraceptive commodities.
 As a UN agency it is politically neutral and develops close relationships with national
governments. This allows UNFPA to undertake work that other bilateral or civil
society partners can not. UNFPA works across the maternal and reproductive health
agenda and joins up work on the delivery of MDGs 3 (gender equality), 5 (maternal
and reproductive health) and 6 (HIV/AIDS).
 It is the lead agency in the UN system for procurement of reproductive health
commodities. It supplies commodities to governments, non-government organisations
(NGOs), UNFPA country offices as well as other UN organisations at a significant
scale. For example UNFPA is the largest supplier of male condoms to low-income
countries and the second largest supplier of female condoms (14m in 2009). Given
the large amount of procurement it carries out it is able to supply the commodities at
competitive prices.
 It has a key role in assisting countries to collect data on population dynamics and to
analyse and use this for policy development e.g. on climate change and service
delivery needs. This is particularly critical given the impact of rapid population growth,
especially in urban areas, changing age patterns and migration. The world population
will reach 7 billion people in 2011. For every 100 people added to this, 97 are in a
less-developed countries. In 2011 UNFPA will help 76 countries conduct censuses.
By using the information which is generated by UNFPA-assisted censuses and
surveys governments, with UNFPA support, can plan for better education, social and
health services among other issues.
In carrying out this critical work UNFPA helps to meet the UK priority of giving women and
girls more choice, better access to family planning and sexual and reproductive health which
will lead to a reduction in maternal mortality and morbidity.
UNFPA has a global presence. It has offices in 129 countries and works in about 150, in
many of which DFID has no presence on the ground, including some fragile states. UNFPA
spends almost 50% of its resources in countries with high absolute poverty such as India,
Nigeria and Pakistan. But it also targets resources where there is the highest need and
where bilateral donors’ reach is limited (such as Mali or Niger).
The UK’s Framework for Results for Improving Reproductive, Maternal and Newborn Health
in the Developing World identifies UNFPA as an important partner in delivering improved
maternal and reproductive health world-wide. Its work on sexual and reproductive health
and rights is critical and no other UN actors are well-equipped to tackle this issue. Given
the critical importance of UNFPA in improving maternal and reproductive health, a UK
priority, the global nature of reproductive health needs and the MAR result, the UK needs a
strong and effective UNFPA that can deliver results on the ground.
Multilateral Aid Review Findings
The Multilateral Aid Review (MAR) was commissioned by the DFID Secretary of State to
assess the value for money and impact provided by multilateral agencies that receive
funding from the UK. The MAR found that UNFPA is critical in meeting both international
and key UK objectives set out by the coalition government, but also that UNFPA’s
performance needs to improve in a number of areas. Overall UNFPA was judged to offer
adequate value for money for DFID aid funds.
UNFPA’s strengths are:
 its strong partnerships with national governments, civil society organisations and other
multilateral organisations;
 its leadership role in taking forward better joint UN working such as “Delivering as
One”, the “Health 4 initiative” (a partnership between UNFPA, UNICEF, WHO and
World Bank) and the “Health 8 initiative” (the Health 4 plus UNAIDS, the Gates
Foundation, and the GAVI Alliance and the Global Fund to fight AIDS, Tuberculosis,
and Malaria).
Areas were UNFPA’s performance needs to improve are:
 Better delivery in-country. UNFPA’s performance in-country is mixed. It needs to
strengthen this by ensuring it has the right staff in place with the necessary skills and
competences. Country office staff must also provide stronger and more strategic
leadership, including a willingness to engage on contentious issues such as high
mortality and morbidity due to unsafe abortion;
 Focus on key SRHR issues. UNFPA should focus on its comparative advantage
such as family planning, commodity security, safe abortion and access for
adolescents to contraceptives rather than on areas where other actors are better
placed e.g. skilled birth attendance;
 Improve its financial management. Its last two audits for 2006/7 and 2008/9 have
identified specific weaknesses in UNFPA projects that are delivered through national
partners. UNFPA has instigated a number of actions to improve this.
 Improve its reporting on results so UNFPA can better manage its programmes and
also demonstrate the results it directly delivers and how these contribute to wider
development outcomes. It is actively working with member states to look for ways to
improve in this area.
UNFPA’s senior management has indicated a clear willingness to reform and improve its
performance in the above areas. It has delivered organisational improvements over the last
10 years such as a new human resource strategy to improve staff performance and
establishing 3 regional offices to provide better support to country offices. It is expected that
UNFPA will continue make progress on reforms. The new Executive Director (Dr Babatunde
Osotimehin - who took up post on 1 January 2011) has already indicated that he will take
forward necessary reforms. His reform agenda is closely aligned with the issues identified
by the MAR. Continued support and engagement by the UK is critical to ensure UNFPA
implements these reforms and delivers a stronger performance overall.
UNFPA is a relatively small multilateral organisation. The Table 1 shows UNFPA’s income
for the period 2007 – 2010. Table 2 illustrates the UK’s voluntary core funding in US dollar
terms compared to other donors.
Table 1: Income (millions of US$)
Voluntary core
income
Voluntary noncore income
Total
2007
419
2008
428.8
2009
469.4
2010
491.2
286.2
705.2
366.1
794.9
289.6
759
359.3
850.5
Table 2: Top 7 donors in 2010 (voluntary core funding, millions of US$)
1
The
Netherlands
2
Sweden
3
Norway
4
USA
5
Denmark
6
Finland
7
UK
$73
$60
$54
$51
$37
$33
$30
Voluntary core resources are used to cover administrative costs as well as programme
costs. In 2010 total expenditure was $801.4 m of which $683m was used for programme
activities and $106.9m was used to cover administrative costs.
B. Impact and Outcome
Theory of Change
Unlike targeted funding voluntary core funding is not tied to a specific project or programme.
It supports all of the work of the organisation. The underpinning theory of change is as
follows.
To deliver better results for women and girls on the ground UNFPA needs to improve its
organisational effectiveness, through making the necessary reforms identified in the MAR.
We recognise that UN reform can be slow and difficult but this will only succeed through
strong engagement with key stakeholders. Implementing real reform will require strong
leadership from UNFPA that has the support of the executive board’s membership.
DFID is not prepared to accept lower levels of performance from the UN than other
multilaterals. DFID will need to do more to ensure we maximise our influence and create
new partnerships to support change. We be explicit and clear with UNFPA on the reforms
we need to see and use our funding and influence to encourage performance improvements
against these organisational-wide reforms. The UK is well-placed to support UNFPA on this
reform agenda due to our strong technical focus on results and improved value for money.
As a result of stronger engagement and strengthened support leading to reforms being
achieved UNFPA’s overall efficiency and effectiveness in-country is expected to improve.
This will allow it to deliver better results in the areas of its mandate which are important to
the UK (reducing unintended pregnancies, decreasing maternal deaths through averting
recourse to unsafe abortion and the generation and use of population data). While much of
DFID’s voluntary core funding supports programme delivery, specific country-level results
can not be attributed to DFID’s voluntary core funds due to UNFPA’s results reporting
system that is currently weak.
Impact
At the impact level, DFID expects to see progress towards MDG 5, particularly MDG 5b,
better access to SRHR. For example, we would want to see an increase in the contraceptive
prevalence rate (modern methods) which was 56% in 2003. UNFPA has set a target of 66%
for this for 2013 and has also committed to increasing contraceptive prevalence rate (CPR)
by 2% per year in 45 countries (those supported by the Global Programme for Reproductive
Health Supplies). Other key impact indicators are set out in the log frame for this
programme.
Outcome
To achieve this impact we would expect, at the outcome level, to see improvements in
UNFPA’s organisational efficiency and effectiveness particularly against the MAR criteria in
the areas where UNFPA’s performance was found to be weak. By 2015, UNFPA should be
performing satisfactorily in all of these areas.
Specific Deliverables and DFID Activities
In order to deliver on the above DFID will:
 Link all of our voluntary core funding set out in this business case to progress against key
MAR reforms and be prepared to make cuts if reforms stall.
 Maintain an in-depth institutional analysis of UNFPA to ensure DFID understands how the
organisation operates, how decisions are made, how it is affected by external factors and
the progress it is making against key reforms.
 Develop a comprehensive stakeholder analysis, so that the UK is able to apply our staff
resources towards the levers and partners which will help leverage the maximum change.
A first stage of this analytical work will be completed by October 2011. Additional follow
up work is likely to be required.
UNFPA needs to:
 improve its monitoring and reporting of results. We would expect to see its next Strategic
Plan (covering the period 2014 onwards) monitored by a results framework with a clear
results chain. This should contain results at all levels, including output (what it delivers)
and outcomes (what its outputs contribute to) as well as clear indicators (used to
measure these results) and targets (that show the expected level of change). UNFPA
annual reports should then systematically report against the indicators and targets
included. DFID will work with UNFPA to take substantial steps in this direction through
the Mid-Term Review of their current Strategic Plan, taking place during 2011. These
improvements would allow UNFPA to better manage their own programme and make
evidence based decisions. It would also allow DFID to better attribute areas of success
to UNFPA and show the UK taxpayer how their money is being used to deliver real
results on the ground.
 improve its delivery of priority programmes in country, specifically in its key focus areas of
population and development, sexual and reproductive health and rights. We want to see
UNFPA more focussed on these areas of its strategic and comparative advantage. We
will want to see UNFPA providing strong technical and policy leadership on these issues
– including using its influence to improve access to safe abortion in line with international
agreements. UNFPA should also work in-country to increase contraceptive use,
especially for adolescents, reduce the number of stockouts of key contraceptives and
improve supply chains. We will also want to ensure that UNFPA does not use its
resources disproportionately in areas where others are better placed to deliver or have
greater expertise (e.g. skilled birth attendance). These improvements would ensure that
UNFPA can better deliver services in-country, through better more strategic dialogue with
governments so ensuring that more women and adolescents have access to modern
contraceptives and better maternal health services, which in turn would reduce maternal
mortality.
 improve its financial management to ensure UNFPA can account for all of its expenditure.
Most importantly UNFPA must implement all outstanding recommendations from the last
audit report and put in place mechanisms and strategies to ensure that projects that are
delivered through national partners are appropriately audited on time.
 demonstrate how it is driving down costs and achieving value for money through its
results frameworks and reports to the Board. By having a robust results framework
UNFPA will be better able to demonstrate how it is achieving value for money – what it is
actually achieving with its voluntary core funding. By reducing costs UNFPA will be able
to move funding away from administrative areas and concentrate more resources on
UNFPA’s programme delivery.
 increase the transparency of its programme and on how voluntary core and non-core
funds are spent. DFID will encourage UNFPA to sign up to the International Aid
Transparency Initiative and publish all information on the quality of the projects it funds.
These steps will ensure that DFID can show the UK public where their money is being
spent, how effectively it is being used and what results it delivers but also most critically
reduce the number of women and girls that die during child birth, increase access the family
planning and improve the sexual rights of women girls.
Consequences of Decreasing or Not Funding
If DFID stopped providing, or significantly reduced, its voluntary core funding now we would
lose our ability to influence UNFPA on the above MAR reforms across the organisation and
also reduce the number of women and girls that benefit from UNFPA’s work. Stopping our
voluntary non-core funds would potentially reduce the number of programmes in developing
countries that in turn would impact on UK development objectives.
Changing the volume of our voluntary core funding is an option at the mid-point review in
2013. In the meantime, because of the importance of UNFPA to UK aid objectives, we need
to work with it to strengthen its performance over the next two years. If its performance
does not improve we will consider cutting our voluntary core funding and provide voluntary
non-core funding to areas or countries where UNFPA is effective to ensure that progress is
made on the maternal and reproductive health agenda and UK development objectives.
Appraisal Case
A. Determining Critical Success Criteria (CSC)
Each CSC is weighted 1 to 5, where 1 is least important and 5 most important based on the
relative importance of each criteria to the success of the intervention.
The logical framework for this programme outlines our key progress monitoring indicators.
These critical success criteria set out the conditions and assumptions which need to be
fulfilled in order for the outcomes and impact documented in the log frame to be achieved.
The CSC is built around the specific areas where weaknesses were identified in the MAR.
These are areas where UNFPA must show evidence of improvement if they are to show
better value for money at the mid point review.
CSC
for Description
Results/Reforms
1
UNFPA’s Executive Director and senior management
team and board members support and implement the
organisational-wide reforms that have been identified in
the MAR.
2
UNFPA staff in-country provide much better leadership
and demonstrate policy influence on key SRHR issues
including family planning programming, commodity
security and safe/unsafe abortion.
3
Organisational reforms are enacted to allow UNFPA to
continue to be seen as an effective organisation.
Priority areas are:
i) Its next strategic plan (due in 2013) demonstrates
priority setting and focus on key areas of SRHR
where UNFPA has a comparative advantage and
has a robust results framework.
ii) It
addresses
all
outstanding
audit
recommendations.
iii) It improves its transparency and meet IATI
standards.
Weighting (15)
5
5
5
B. Feasible options
The MAR has identified the key areas in which UNFPA is operationally and organisationally
weak. Our reform agenda is defined by the MAR. There are other areas that UNFPA needs
to reform but the selected areas have been prioritised as those which are weakest and which
we judge would result in the greatest improvements in UNFPA’s organisational effectiveness
and delivery on the ground.
The theory of change underpinning this intervention has been outlined in Part B of the
Strategic Case. In order to make progress on reforms DFID needs to use our funding to
drive forward reforms and increase our influence in the organisation. To achieve this there
are two financing options to consider. There are also different approaches to how we can
influence the organisation. These are also discussed below.
Option 1: Voluntary core funding
This type of funding is allocated to an institution (such as UNFPA) but is not tied to a
particular theme or project. It can be spent against any activity that relates to UNFPA’s
mandate.
Option 2: Voluntary non-core funding
This type of funding can be allocated against specific projects in country (for example a
HIV/AIDS project in Nigeria) or by a particular theme (for example reproductive health
commodities security). Once allocated it can not be spent on other issues beyond the scope
of the original project or theme.
Engagement / Influencing
There are two options for engaging with and influencing UNFPA. DFID can simply tell
UNFPA the areas where we wish to see reform then reassess its performance in two years’
time, and adjust funding accordingly. This approach would allow DFID to scale down its
engagement with UNFPA over the coming two years and invest staff resources elsewhere.
Alternatively, DFID can increase its influencing with UNFPA by strengthening officials’
engagement with the agency. This approach would require additional staff resources but
would allow DFID to maintain its knowledge base and engagement with the agency. Bearing
in mind that UNFPA is critical in achieving the UK's objectives on improving maternal health
and achieving universal access to reproductive health and family planning and the
complexities of creating change in the UN, the preferred option is to increase our
engagement.
DFID will work with UNFPA to improve delivery of priority SRHR programmes in country. In
order to do this UNFPA need to strengthen its country offices by ensuring that the staff incountry have the relevant expertise and experience to be able to carry out their duties. To
support this DFID will work with specific country offices to seek feedback, understand
delivery problems at country level and track UNFPA’s progress towards improved delivery.
These issues can then be addressed bilaterally with UNFPA or at Board level as appropriate.
DFID officials will continue to push for reforms and improvements through the Executive
Board which meets 3 times a year. Officials will work directly with other like-minded donor
countries to build alliances around our reform priorities. This will be done through bilateral
meetings between UNCD officials, including at head of department level, and counterparts in
other countries. We will also look for opportunities to engage with UNFPA staff, including
senior management at ministerial level as and when the opportunity arises. UNCD’s Results
Adviser will provide support to UNFPA to assist it in understanding and refining its results
management, monitoring and reporting. The introduction of UNFPA’s new results based
budgeting model will also offer the opportunity to engage and make progress on the results
agenda.
C. Appraisal of options
Option 1: Voluntary core funding
The benefits of this option 1 are
 DFID will continue to have leverage with the agency and other board members on key
reforms that need to occur.



The provision of voluntary core support will allow UNFPA to maintain a global
presence and operate in countries were DFID can not work, but still have a high need
for maternal and reproductive health services.
UNFPA can use DFID’s funding to make changes on MAR reforms which will make
them more efficient and effective
UNFPA programme work will be more sustainable as UNFPA country offices can use
voluntary core funding on priority projects.
The costs of option 1 are:
 In the absence of a robust results framework voluntary core funding does not have a
direct link to country level results and so DFID’s funding can not be directly attributed
to progress against specific development results.
 DFID will need to maintain a significant policy engagement with UNFPA to ensure
these funds are well spent.
 Cutting DFID’s voluntary core support could undermine the financial viability of
UNFPA as it needs a certain level of voluntary core funding in order to operate
globally. Reducing or stopping our voluntary core contribution to UNFPA could slow
progress on SRHR thereby having a negative effect on achieving UK development
objectives.
Option 2 – Voluntary non-core funding
An alternative would be to target our funding i.e. only provide funding to be used for a
specific programme e.g. the Global Programme to Enhance Reproductive Health Commodity
Security (GPRHCS). The UK already has specific voluntary non-core funding to this
programme, providing £100m over a 4 year period from FY 08/09 to 12/13.
The benefits of this option 2 are
 DFID can target specific programmes or themes which are important to UK
development objectives and more robustly measure results.
 It would potentially allow DFID to reduce its central engagment with UNFPA,
The costs of option 2 are:
 DFID would lose influence in the governing board of UNFPA and have reduced
leverage over key reforms that we need to see.
 As voluntary non-core funding is restrictive it would only allow UNFPA to operate
where donors provide adequate support. For example, to target funding only through
the GPRHCS would mean that the money can only be spent on that programme,
which predominantly works in 45 countries but can also provide emergency funding to
additional countries that face stock-outs of commodities. This would mean that
UNFPA would not be able to use these resources for programmes elsewhere where
needs are still unmet and this would reduce the effectiveness of UNFPA in reaching
all of those most in need.
D. Comparison of options
The same weighting is used as for CSC above. The score ranges from 1-5, where 1 is low
contribution and 5 is high contribution, based on the relative contribution to the success of
the intervention.
Analysis of options against Critical Success Criteria
Option 1
Option 2
CSC
Weight Score Weighted Score Weighted
(1-5)
(1-5) Score
Score
1
5
5
25
2
10
2
5
2
10
4
20
3
5
5
20
1
5
Totals
55
35
Conclusion
Voluntary non-core funding is a useful tool when there is a particular project or theme being
funded e.g. the GPRHCS, where we are looking for specific results in an area where UNFPA
can bring maximum impact. However, as described above, targeted funds only have limited
coverage and cannot cover all of an agency’s mandated areas or work in all countries where
there is a need.
The MAR found that UNFPA needs to make changes at an organisational level. A provision
of voluntary core funding is the best way to support these efforts. However, the provision of
voluntary non-core funds (e.g. the GPRHCS or in-country funding) will continue. Voluntary
core funding also enables DFID to legitimately promote organisational reforms. Without the
voluntary funding it is also arguable that the impact of DFID’s voluntary non-core funding is
also reduced
In order to ensure that we continue to have influence over the organisation and make
progress on reform priorities we will engage more directly with the agency on issues such as
strengthening results reporting and improving indicators for outcomes and outputs in the mid
term review of the strategic plan. We will also look for opportunities to push our reform
issues through statements and decisions at the Executive Board and through direct contacts
with the organisation at all levels. We will build stronger relations with other member states
who consider that reform is necessary to improve the effectiveness and efficiency of UNFPA
and we will look for a stronger relationship with the agency on these issues.
The provision of voluntary core funding allows DFID to pursue these objectives. However, if
the mid-point review indicates that no progress is being made on our top reform asks DFID
will consider changing our approach to funding to continue to ensure maximum value for
money for the UK taxpayer.
E. Measures to be used or developed to assess value for money
DFID will use the same broad criteria to assess the value for money of its voluntary core
contribution to UNFPA in two years’ time that were used under the MAR. In FY 2013/14 a
further review will be undertaken to assess progress against key reforms areas identified as
weak by the MAR, which included weak reporting on results, poor financial management and
weak delivery of programmes in country. As a result of the outcome of the mid-point review,
DFID will decide if the best value for money can be achieved by continuing voluntary core
funding at £20 million per year, increasing this amount, decreasing it and/ or targeting it for
specific programmes. In the meantime, indicative funding levels for FY 2013/14 and FY
2014/15 have been made at £20 million per year.
Commercial Case
A. Value for money through Procurement
The MAR found no material weakness in UNFPA’s approach to procurement. However,
there are areas where UNFPA needs to continue to improve. DFID will increase its focus on
procurement and ask for regular updates on UNFPA’s performance at Executive Board
meetings in order to develop a better understanding of the effectiveness of UNFPA’s
procurement work.
UNFPA has no overall strategy for procurement but it does have procedures that are
regularly reviewed and updated, either annually or biannually and procurement policies are
available to all Country Offices along with guidelines on developing country procurement
plans.
UNFPA procurement policies have been certified as being compliant with best practise by
the International Organisation for Standardisation (ISO); this certification is renewed
annually. UNFPA is the only UN agency with this certification.
UNFPA does not have a specific policy on achieving savings nor are its offices and staff
required to achieve specific efficiency savings from procurement. UNFPA does ensure that
contracts are tendered for using standard UN terms.
In terms of staff, UNFPA’s procurement staff undertake a week-long introductory training
course with further one or two week workshops on Enterprise Resource Systems.
Procurement staff also need to disclose their financial situation.
UNFPA has a good record in commodity pricing and quality. The Procurement Services
Branch (PSB) has recently introduced a new procurement initiative called ‘Access RH’ which
aims to shorten supply chains and drive cost efficiencies by pooling purchase orders of
partner governments and other stakeholders. It will facilitate the supply of quality, affordable
reproductive health commodities and reduce delivery times for clients in over 140 developing
countries.
This initiative went live in February 2011 and it has recently filled its first order for condoms
to Mongolia. While it is too early to say how successful this initiative will be previous
experience on sharing intelligence on pricing with USAID and others had driven price
reductions. As a provider of voluntary core funding to UNFPA and one of the main donors to
the Global Programme to Enhance Reproductive Health Commodity Security (GPRHCS),
which has overall responsibility for Access RH, DFID has a keen interest in the success of
this initiative. Supporting the successful implementation of ‘Access RH’ is our primary
objective and opportunity for ensuring more effective UNFPA procurement over the period
covered by this business case. We will increase our engagement on this at the Board.
UNFPA spent $209 million in 2010 on projects that are delivered by national partners
corresponding to over 2,300 projects delivered by over 1,295 implementing partners at 132
country and regional offices and headquarters units. Ensuring that UNFPA achieves value
for money and adequate oversight of this “national execution” spending is a top priority,
which we will pursue primarily through our interventions in the Board.
Financial Case
A. How much it will cost
Voluntary core funding will be £20m per year for each of FY 2011/12 and 2012/13. In 2013
DFID will review progress against the MAR reform priorities and Ministers will take a decision
as to whether funding should remain the same, increase, decrease or be targeted against
specific projects/programmes. Pending that review a further £20 million has been
provisionally set aside for each of FY 2013/14 and 2014/15.
B. How it will be funded: capital/programme/admin
The funding will be paid from DFID’s programme budget.
C. How funds will be paid out
The £20 million allocation for FY 2011/12 and 2012/13 will be released in two payments of
£10 million, this reduces the possibility of paying in advance of need.
For FY 2011/12 DFID will make the two £10 million payments in August and November. In
FY 2012/13 the payments will be made in April and September to provide funding more
evenly in the UN’s financial (calendar) year. By September 2013 the mid-point review will
have been completed. DFID will release funding for FY 2013/14 by October. For FY
2014/15 payments will be made in April and September. The timing of payments will be set
out in a Memorandum of Understanding between DFID and UNFPA.
To ensure no payment in advance of need DFID will monitor UNFPA’s balance of voluntary
core resources. In 2009 UNFPA’s cash balance was $19.1m, which is acceptable as a
reserve, representing 4% of voluntary core funding resources for that year. We will continue
to monitor this annually.
D. How expenditure will be monitored, reported, and accounted for
UNFPA’s expenditure is monitored through the UK’s engagement at Executive Board
meetings and bilaterally with UNFPA, as required. These functions are carried out by both
officials in the UK and also at the UK’s Mission to the UN in New York.
UNFPA provides a range of reports to the Executive Board that DFID uses to monitor its
performance. The main reports are:
 The Executive Director’s annual report: Provides an overview on the results UNFPA has
achieved over the year.
 The Statistical and Financial report. Provides details of all income and expenditure in the
calendar year, including details of fund balances and reserves held at the end of the
financial year. Expenditure is initially broken down between expenditure on programmes
and projects and expenditure on administration/management. The overall programme
expenditure is then further broken down to show spend by region, activities, including
procurement, and into the 3 programme areas from its mandate i.e. reproductive health,
population and development and gender equality. This allows the UK to see how
UNFPA’s voluntary core funds have been spent.
 The annual internal audit and biennial evaluation reports: Provide an overview of
UNFPA’s programmatic performance, the risks facing the organisation and the steps that
are needed to address any weaknesses.
DFID’s voluntary core funding financial contribution is accounted for through the biennial set
of certified accounts that are completed by the UN’s Board of Auditors (BoA). The BoA’s
report provides an opinion on the financial integrity of the organisation.
Management Case
A. Oversight
Governance arrangements
UNFPA’s Executive Board consists of 36 UN member states that are elected for three-year
terms; 12 donors and 24 programme countries sit on the Executive Board and each member
has equal voice and voting rights. Non-board members can also participate in board
sessions to express their views but do not have voting rights. All Executive Board meetings
are held in public, unless the board determines otherwise. The UK is a board member until
the end of 2011 and will resume its membership in 2013 for three years.
The Board provides strategic policy advice and oversight to management and takes
decisions on papers and documents that are presented. The Board aims to take decisions
by consensus.
If countries have serious concerns with UNFPA’s operations these are usually raised through
bilateral contacts with the UNFPA Executive Director.
All governing board meetings are held in public, unless the board determines otherwise.
Intergovernmental organisations and non-governmental organisations can participate in
executive board meetings but have to be accredited to the UN and formally invited by the
board.
Oversight in UNFPA
UNFPA’s accountability system broadly conforms to National Audit Office standards i.e. it
has an independent internal auditor, an independent external auditor and an independent
Audit Advisory Committee.
Internal audit is carried out by the Department of Oversight Services (DOS) under the
oversight of its Director. UNFPA’s external auditor is the UN Board of Auditors that provides
a certified set of accounts every two years – in line with all UN agencies. The Audit Advisory
Committee is made up of 5 independent members who provide advice to management on
the risks facing the agency.
The DOS reports to the Executive Board annually on internal audit and oversight issues. It is
the responsibility of DOS to assess if UNFPA is working in an effective manner and
complying with its financial regulations and controls. Oversight by DOS includes internal
audits and fraud detection and investigation. The DOS also monitors progress against
recommendations made by the Board of Auditors.
The UN Board of Auditors is responsible for certifying UNFPA’s financial statements. The
UK’s National Audit Office is currently the member of the Panel of Auditors that assesses
UNFPA and will certify UNFPA’s next set of accounts for 2010 and 2011. The BoA provides
a comprehensive report to the board that covers both compliance and value for money.
The Audit Advisory Committee is responsible for assisting the Executive Director in carrying
out their oversight responsibilities. It also provides an annual report to the Executive Board
on the major strategic oversight issues facing the organisation.
Reports from all three parts of UNFPA’s oversight machinery are presented to the Executive
Board with management responses from the Executive Director. These reports provide an
update on the implementation of any audit recommendations and an overview of the risks
facing the organisation. All of these reports are available on the UNFPA website.
Executive Board members can comment on the reports and make suggestions to UNFPA
which will help to improve and strengthen its audit. The UK actively participates in the
Executive Board meetings and raises issues of concern.
B. Management
DFID staff exercise due diligence in oversight of UNFPA’s activities. Board documents and
reports are scrutinised to ensure that funds are spent efficiently and effectively to maximise
the impact of UNFPA’s work.
DFID has adequate staff resources to provide proportionate management and oversight of
UK taxpayers’ funds. The team responsible for relations and oversight with UNFPA will be
led by an A2 Team Leader in DFID’s United Nations and Commonwealth Department
(UNCD). The team leader is also responsible for 2 other agencies, WHO and UNAIDS, as
well as UN system-wide issues. All programme management, including project reviews and
payments will be the responsibility of a dedicated B1 Deputy Programme Manager. All
programme management activities will be carried out in accordance with the DFID oversight
requirements. The Team Leader or the DPM will support UKMis in representing the UK
during Executive Board meetings.
The UK Mission to the UN (UKMIS) in New York is the focal point for engagement with
UNFPA. UKMIS will take the lead on issues where discussions are sensitive and a face-toface meeting is required to ensure appropriate oversight.
UNCD’s A1 governance adviser and A2 results adviser will provide policy advice on the
appropriateness and effectiveness of UNFPA’s governance arrangements and results
systems.
DFID’s Internal Audit Department will provide advice on key financial papers that are
presented to the Executive Board. Procurement department will also provide advice and
guidance on procurement issues as necessary.
Technical inputs will be provided by a Health Adviser in Policy Division. Policy Division will
also assist UNCD when information is being gathered from the in-country offices through
providing details of overseas health advisers and providing guidance on technical questions
to be used to draw out the most relevant information for further assessment purposes.
UNCD will also use contacts with a range of DFID and other member state country offices to
improve the feedback on UNFPA’s performance in country.
C. Conditionality
The level of funding for the outer 2 years will be dependent on progress being made against
the reform agenda which was set out in the MAR. If there is little or no progress further
consideration will be required as to whether funding should be decreased or restricted for
use against specific projects/programmes.
E. Monitoring and Evaluation
As part of this business case DFID has developed a logical framework (log-frame) which will
be used to measure UNFPA’s progress annually. The baseline for reforms in the log-frame
will be the results of the MAR. The log-frame shows the high-level goals which have been
set and contain indicators (what we will measure), milestones (how the end result will be
reached) and targets, (what should be achieved by the end date). The information in the logframe will be reviewed annually to check if progress is being made.
The progress will be assessed through information provided by UNFPA in a range of
different reports to the Executive Board. We will also seek opinions from the DFID country
offices who work directly with UNFPA in-country. This will allow a systematic monitoring of
performance at country level. Their views will be incorporated in the reviews.
UNFPA is currently undertaking a mid-term review of its Strategic Plan which is due to be
completed and presented to the Executive Board in September 2011. The review must
result in UNFPA being able to demonstrate its contribution to development outcomes which
are critical to UK objectives. DFID are providing support on this exercise through inputs from
UNCD’s results adviser.
The first annual review will assess UNFPA’s progress against key reforms and if there have
been no major events which would knock the reforms off track. At the mid-point a more
holistic review will be undertaken that will result in UNFPA’s funding levels being reviewed.
UNFPA introduced a new evaluation policy in 2009 but DFID considers this to be relatively
weak. Previous audit reports have highlighted this as a recurring issue and this has been
raised at the Boards. DFID continues to press for improvements in this through inputs at the
boards where we have support from other board members. DFID will not conduct an indepth evaluation of UNFPA’s work but DFID’s Evaluation Department will provide advice on
how UNFPA can improve and strengthen its evaluation functions.
G. Risk Assessment
Risks to UNFPA
As a multilateral organisation UNFPA’s country programmes and headquarters units are
audited using a risk-based approach. UNFPA’s own internal auditors have identified 3 risks
categories that the agency needs to manage.
Governance: UNFPA has a unique role but in order to function effectively it must focus on
its comparative advantage. It needs to continue to build strong relationships with key
stakeholders (partner governments, NGOs, donors) and refocus its work on areas where it
matters most. Unless it continues to sharpen its focus it risks reducing its potential impact
and results.
People: UNFPA has recently further decentralise decision-making to its 129 country offices.
73% of staff are based in-country, with a further 10% in regional centres. However, many
critical posts remain vacant for long periods of time. UNFPA faces a risk of managing a
large volume of remote entities, with a large percentage of staff in new or reassigned
functions without the proper skills and expertise.
Programmes: To date UNFPA has not been successful in measuring its global level result
but it also has a number of compliance issues to address relating to projects that are
delivered through national partners. UNFPA needs to manage the risks to its reputation by
addressing outstanding audit issues and strengthening its results systems.
Through the UK’s membership of the executive board DFID will track how the organisation is
managing these risks and take appropriate action through board decisions and bilateral
meetings.
Risks to DFID’s reform agenda
There are two key risks which could threaten the success of our reform agenda with UNFPA.
While these risks could have a high impact on the successful delivery of this intervention, we
consider that we can lessen them through continued dialogue and engagement with other
donors and UNFPA itself.
Other board members block reforms: The UN mostly takes decisions by consensus.
There are many other donors and board members who may agree with some of the MAR
findings but do not feel as strongly about them as DFID does, in particular on obtaining clear
value for money through better results. The risk is that we cannot get others to support our
reform objectives.
While this is a major risk we will manage this by increasing our engagement with UNFPA
and its Board. Senior officials from DFID, including the Head of UNCD, will engage more
regularly with other likeminded donors to encourage them to support our reforms. UKMIS
will also engage with other influential board members in New York to explain the rationale
behind the reforms and encourage their support too. We will also seek opportunities for top
management and Ministerial engagement with UNFPA.
UNFPA staff are reluctant to change: The new Executive Director accepts the need for
reforms, and many of his reform ideas mirror DFID’s, however there is a risk that UNFPA
staff will resist change. Reform could therefore stall. To mitigate this risk UKMis will actively
engage with UNFPA staff in middle, senior and top level grades to make the case and
monitor progress on reforms. This will be carried out through regular meetings led by UKMis
staff or further direct engagement by senior DFID officials.
F. Results and Benefits Management
The logical framework sets out the goal, impact, outcomes and outputs for this business
case. The logical framework is based on the reform priorities identified through the MAR and
if these are delivered this should lead to better, more efficient performance by the agency at
the country level. Milestones have been included where possible to assess if progress is on
track.
We will revisit the log-frame after the mid point review in 2013 and seek to introduce more
targets that relate to UNFPA’s in-country delivery and MAR reform areas. In the interim:
 Overachievement would constitute UNFPA being judged as a strong performer
against the MAR reform areas (results, in-country delivery, financial management,
costs control and transparency) and no slippage in all other areas by the mid-point
review in 2013.
 Underachievement would constitute UNFPA being judged to have made no, or limited,
progress against the MAR reform areas (results, in-country delivery, financial
management, costs control and transparency) by the mid-point review in 2013.
DFID will increase our engagement with DFID country offices and other non-focus countries
to gather more feedback on UNFPA’s performance in-country.
The log-frame is annexed.