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Cash Transfer Programming 1

Cash Transfer Programming

EcoSec, Logistics and Administration

Standard Operating Procedures

June 2015


1 Introduction ____________________________________________________________________ 3

1.1 Purpose of the standard operating procedures _________________________________________ 3

1.2 Brief introduction to cash transfer programming _______________________________________ 3

1.3 Overview on different types of CTP __________________________________________________ 4

2 CTP key roles and responsibilities within ICRC _______________________________________ 6

3 CTP Procedures ________________________________________________________________ 8

3.1 CTP process flow chart _____________________________________________________________ 8

3.2 Planning phase ____________________________________________________________________ 9 3.2.1 Economic security assessment _____________________________________________________________ 9 3.2.2 Response options analysis and CTP feasibility assessment _______________________________________ 9 3.2.3 Project proposal _______________________________________________________________________ 11

3.3 Implementation procedures for cash transfers ________________________________________ 11 3.3.1 General recommendations _______________________________________________________________ 11 3.3.2 ICRC direct cash distribution _____________________________________________________________ 12 3.3.3 ICRC Cash transfers through service providers _______________________________________________ 13 3.3.4 ICRC additional procedures for cash-for-work programmes _____________________________________ 15 3.3.5 Beneficiary terms of payments ____________________________________________________________ 16 3.3.5.1 Fixed amount to beneficiaries / households ________________________________________________ 16 3.3.5.2 Varying amounts to beneficiaries / households _____________________________________________ 16 3.3.6 Documents needed to settle payments and accounting bookings __________________________________ 16 3.3.7 Account for Cash transfers (see annex 2) ____________________________________________________ 16

3.4 Implementation procedures for vouchers _____________________________________________ 17 3.4.1 Implementing voucher programmes (being paper or electronic version) ____________________________ 17 3.4.2 Implementing fairs _____________________________________________________________________ 18 3.4.3 Documents needed to settle the payment and accounting bookings ________________________________ 19 3.4.4 Account for voucher programmes (see annex 2) ______________________________________________ 19

4 Legal provisions _______________________________________________________________ 19

Annex 1: JDE Process for Cash and Voucher Programmes ________________________________ 21

Annex 2: Accounts for Cash and Voucher Programmes ___________________________________ 23


This document jointly produced by EcoSec, Logistics and Administration is an update from the January 2013 version. The document draws inspiration from the procedures established in various cash transfer programmes that have been implemented by the ICRC since 2004. Further detailed guidance and policies; tools and templates, as well as examples, experiences and lessons learned on cash in emergency and market assessments can be found in EcoSec Resource Centre at ICRC intranet.

1 Introduction

1.1 Purpose of the standard operating procedures

The aim of these standard operating procedures is to support and facilitate the set-up and the implementation of cash-based and voucher programmes within ICRC by:

specifying the respective roles and responsibilities of the Administration, Logistics and EcoSec staff in such programmes at different steps of the project cycle,

defining the processes involved and the minimum documentation requirements,

providing key documents of reference or technical information. In line with the Red Cross Red Crescent Movement guidelines and toolkits for Cash in Emergency (CiE), Rapid Assessment for Market (RAM) and Market Assessment Guidance (MAG)1, this document explains the internal ICRC procedures and establishes the financial management framework and administrative procedures for cash transfer programming.

1.2 Brief introduction to cash transfer programming

Cash transfer programming (CTP) is a form of humanitarian response based on the transfer of cash to beneficiaries, which can be used to address basic needs and/or to protect, strengthen or restore livelihoods. Cash transfers are used in pre-crisis, acute crisis, chronic crisis and post-crisis situations. They do not necessarily replace but can also accompany other forms of assistance. Cash transfers are a different means to achieve the same goals as other interventions. There is no blueprint for cash transfer programmes, as different contexts require different mechanisms to transfer cash. Assessments will have to confirm the relevance, the feasibility and the appropriateness of a CTP and will help decide which mechanism is the most relevant. Various options could be considered, depending on answers to the below questions:

Should it be conditional or unconditional?

Should the use of cash be restricted in the form of voucher?

Do we consider one-off or repeated payments / instalments?

Will the cash amount transferred be fixed or variable?

Do we implement blanket cash transfers or target specific groups?

Do we implement alone or in partnership? When conditions allow, an increasing number of agencies and donors prefer using cash transfer (direct transfer of money, vouchers and organizing market fairs) as a means to support beneficiaries rather than substituting the market through in-kind distributions. The reasons are the following:

Increased choice, flexibility and dignity for beneficiaries

Functioning or rapidly recovering market systems and existence of transfer mechanisms even during crisis or conflict

Address urgent and post-emergency needs by strengthening markets and supporting livelihoods

Support the local economy and potentially reduce risks of market distortion

1 http://www.icrc.org/eng/resources/documents/publication/pguidelines-cash-transfer-programming.htm

Other documents and tools are under design, finalisation or publication before being posted for a wider use.

http://www.icrc.org/eng/resources/documents/publication/pguidelines-cash-transfer-programming.htm


Faster to set-up and implement (especially when preparedness measures are taken)

Often cost-effective and cost-efficient particularly if repeated distributions are envisaged

Better tracking and reduction of risks when using electronic transfers. The context in which a CTP is being proposed should be systematically analysed, including, as a good practice:

identify feasible options that would allow to meet the objectives of the assistance, including combined approaches such as cash together with in-kind transfers

review the advantages and disadvantages of each option, including risks and mitigating measures

compare options and select the most relevant, based on keys factors such as effectiveness, cost, time to set-up, beneficiary preferences, primary and secondary impacts, security concerns, etc.

1.3 Overview on different types of CTP

Conditionality refers to specific conditions that beneficiaries should fulfil in order to receive cash. Conditionality does not include limitations on beneficiaries to access specific items or services as is the case for vouchers. It is also unlinked to beneficiary selection criteria for cash transfers. Unconditional cash transfers (UCT) - no conditions are imposed on beneficiaries concerning how they can receive the cash or use it. Conditional cash transfers (CCT) - cash is given to beneficiaries for a specified objective (e.g. to purchase agricultural inputs) or against specific conditions, such as receiving the transfer(s) only after they have conducted a basic market assessment to start their own business, or only if they attend health care services or if they send children to school. As long as beneficiaries comply with the agreed conditions and / or objective, they are free to spend the cash as they wish. Cash-for-Work (CfW) - payment in cash to individuals in exchange for work done generally to build or rehabilitate community or public infrastructures. CfW is a form of conditional transfer that generates two-side benefits: workers receive cash that they can use as they wish while the community or individuals benefit from infrastructures. Cash voucher - paper or electronic transfer with a specific money value that can be exchanged against a range of items or services in determined shops or institutions. The amount of items or services is limited by money value. The voucher participating shops/institutions return the collected vouchers to the ICRC for redemption. Commodity voucher - paper or electronic transfer with a fixed quantity of goods or services to purchase in determined shops or institutions. As above, the voucher-participating shops/institutions return the collected vouchers to the ICRC for redemption. Cash and commodity vouchers combination - A commodity voucher compels the beneficiaries to "access" a given set of items while a cash voucher enables them to complement these items with additional products and services among those allowed in the determined lists. Fairs - are organised to allow beneficiaries acquiring what they need, such as agricultural seeds, tools or equipment, livestock, shelter, construction materials, essential household items, etc. However fairs seldom cover all these items at once and a “choice” is made by the organising agency on what the priority needs are, based on preliminary consultations with the affected population. Local producers/traders are enrolled to sell the selected products/goods at the fairs. Fairs are often organised to support dysfunctional or even non-existing markets. Traders or sellers are involved during a short period of time. They expose their items to buyers, which offers them the opportunity to control quality and compare prices. Beneficiaries are provided with vouchers that they exchange against the required items and participating vendors return vouchers to ICRC for redemption at the end of the fair.


The decision tree hereunder illustrates some of the key conditions to consider when identifying which modalities of cash-based transfer program are feasible. Once done, one can decide what response option is the best, based on a comparative analysis of the different feasible options, including in-kind or mixed approaches.

The market is the default mechanism for people to exchange their products and services. In most cases markets will function at the appropriate level, balancing people's demand with supply. It is also necessary to remember that except from unexpected circumstances, markets with their range of traders usually supply more people than ICRC targeted beneficiaries. Thus, when assessing market capacity to address a demand, ICRC should consider both demand generated by its humanitarian response and the community’s demand in general. Moreover, when designing cash/voucher-based assistance programme, other elements must also be examined, such as potential negative intra-household and intra-community effects (depending on who receives the transfer), beneficiary preferences for in-kind, security and the time needed to set up the cash transfers. A combination of in-kind and cash should also be considered as a potential response


option, as well as a direct support to market infrastructures or actors in order to deliver assistance to beneficiaries through markets, as showed by the tree above.

2 CTP key roles and responsibilities within ICRC

EcoSec

1. Assess the needs of affected the populations and define programs’ objectives 2. Estimate the amounts to be transferred, the duration, the number and the

frequency of cash instalments. 3. Assess the access to market, the market performances and capacities. 4. Conduct (CTP) risk analysis and define the mitigation actions. 5. Manage the process to identify feasible options and select the most

appropriate modality of intervention and transfer mechanisms. 6. Establish the selection criteria for beneficiary identification, organise

beneficiary registration, communicate with the communities and set CTP feedback and complaint mechanisms.

7. Describe cash transfer services or mechanisms needed; and submit the necessary information (i.e. in Operational Plan or Project Proposal) to Logistics to prepare CTP Memorandum of Understanding (MoU) and/or contract with service providers2.

8. Participate in assessing the capacity of cash transfer service providers with LOG and FAD and draw project proposals.

9. Ensure that community and beneficiaries are informed on the programme and establish the necessary coordination with other stakeholders.

10. Monitor the implementation of the CTP such as the encashment by beneficiaries, the use of cash, the impact of the programme on their livelihoods, on local markets and the community perception of the programme.

11. Report along the project cycle. 12. Organise the review of the programme to learn lessons and define next steps.

Finance and Administration

1. Review contracts and MoU as per financial rules. 2. Consider legal issues that may be related to cash transfer programming. 3. Ensure that cash is available is case of direct cash distribution by ICRC. 4. Ensure or supervise the cash distribution to beneficiaries when done by ICRC. 5. Execute payments to service providers as per signed contracts or MoU.

2 This step is likely to include a Data Protection Impact Assessment (DPIA) if not done earlier, in order to clarify legal basis for

the collection of personal data, implications in terms of data security and privacy, and particularly measures to be taken to assure respect of data security and privacy by service providers involved in the program.


Logistics

1. Support EcoSec to assess market capacities and performances (i.e. supply chain capacities at country level).

2. Participate in responses option analysis, particularly in the identification of feasible cash transfer options, risk analysis and mitigations, ICRC capacity to implement programme as well as in cost efficiency analysis.

3. Identify, assess the capacities and select cash transfer service providers as well as suppliers or traders to involve in voucher-based programmes3.

4. Establish MoU or contracts with cash transfer service providers and suppliers or traders for voucher-based programmes, and ensure the required validation.

5. Liaise with finance and EcoSec to ensure timely transfer through providers: Order the transfer of cash from Finance to service providers’ accounts, then to beneficiaries’ accounts if necessary (i.e. mobile phone, card, etc.)

6. Ensure the preparation for vouchers, including quality test and check quantities of items available.

7. Collect vouchers from traders and reconcile with those produced / distributed. 8. Monitor the transfer of cash to beneficiaries’ accounts and the voucher-based

programmes throughout the process, and report accordingly.

CIM/ICT

1. Provide technical expertise on ICT-related aspects of transfers, including the use of mobile devices such as mobile phones.

2. Provide guidance in the application of the Data Protection Reference Framework (DPRF) and particularly in the elaboration of the Data Protection Impact Assessment (DPIA) if applicable, as well as the necessary contractual clauses for the service provider to ensure application of the DPRF.

Management

1. Assess the security situation and advise the team accordingly. 2. Endorse EcoSec Operational Plan and Project Proposal. 3. Endorse cash transfer programming as per the financial rules of the

delegation.

3 Make sure to involve Finance-Admin as per each expertise (bank, money dealers, mobile phone companies, etc.)


3 CTP Procedures

3.1 CTP process flow chart

Following the decision of ICRC Direction of Operations since the last quarter of 2014 an Allocation of Expenditure (AoE) is only requested for expenses not budgeted in the Planning for Result (PfR) document.

The next sections explain in detail the responsibilities and procedures related to the each of the steps displayed in the previous chart.


3.2 Planning phase The planning phase consists of an economic security assessment including affected populations, markets and cash transfer mechanisms, a feasibility study (CTP and in-kind distributions) and a response option analysis. If a CTP is feasible, appropriate (meeting the defined objectives of the assistance), and represents the best option of response (efficiency, effectiveness, etc.), a project proposal is drafted. The planning phase is the same for CTPs as for any other EcoSec programme. The planning phase should already consider the necessary steps to ensure compliance with the Data Protection Reference Framework.

3.2.1 Economic security assessment EcoSec is responsible for the needs and market assessments. As per RCRC Movement guidelines on CTP, the assessment should analyse:

the affected population’s economic security situation and unmet needs

the urgency to respond to these needs

the foreseen target population

the beneficiaries preferences with regards to the type of assistance: cash, voucher, in-kind or a combination of cash and in-kind

intra-household and intra-community issues, including gender roles attributed with the management of cash/voucher and in-kind resources

the usual means of accessing cash by the targeted households

target beneficiaries’ physical access to markets or shops

capacities of local markets or shops to meet the needs and the demand triggered by cash transfers or vouchers

To further define a CTP the assessment should also determine:

the amount of cash to be transferred in total, per beneficiary and per location

the frequency of payments

the number of beneficiaries that will need to be served in each location in a given timeframe

the usual way of the targeted households to obtain cash

the familiarity of the target population with various existing financial transfer mechanisms such as bank accounts, ATMs, mobile banking, transfers through mobile phones, etc.

3.2.2 Response options analysis and CTP feasibility assessment Based on the results of the assessment, EcoSec defines the main objectives of the intervention including the needs to be addressed, the type and number of beneficiaries to be assisted and their locations, the amount to be transferred, and the timing and duration. On this basis, an analysis of the possible response options is conducted, including all transfer modalities (cash grant, vouchers, cash combined with in-kind, etc.) and mechanisms (i.e. electronic transfer, direct cash distributions, etc.). The identification of the possible response options are determined by the feasibility to used different CTP modalities and different mechanisms of transfer. In order to assess the feasibility, a joint team including EcoSec, Finance-Administration and Logistics collects information on service providers and other factors, as summarized in the table below. Moreover, beneficiariey Data Protection Reference Framework (DPRF) consideration and possibly Data Protection Impact Assessment (DPIA) need to be conducted with support of the Data Protection Officer (DPO).


Feasibility factors Leading department

Supporting departments

Access of target population to markets and cash transfer services.

EcoSec N/A

Market capacity and performance: competition between traders, links between different markets, ability to respond to increased demand, prices inflation, etc.

EcoSec Logistics, especially along the supply chain

Availability of cash transfer mechanisms. Cash transfer service providers and their capacities.

Logistics EcoSec and Finance-Admin

Availability and quality of items that comply with ICRC health, safety and performance standards (e.g. food-grade aluminium or stainless steel to avoid metal migration, type of paint, UV resistance level for tarpaulins, thermal & pilling resistance for blankets, etc.)

Logistics, if voucher-based programmes

EcoSec

Legal framework: What are measures to ensure the fiscal controls/standard? What are (if any) the laws, regulations and government policies in place with regards to cash transfers)?

Finance-Admin Logistics

Security and risks: Are some mechanisms of transfer more secure than others, for both the ICRC and beneficiaries? What are the existing risks? How likely would they happen and in case they happen what would be their impacts? What can be the mitigation actions? Does ICRC have a “fraud history” in the concerned context?

EcoSec Management, Logistics and Finance-Admin

ICRC capacity to distribute cash directly to the beneficiaries

Finance-Admin EcoSec

ICRC capacity to monitor cash transfer programming based on result indicators.

EcoSec

Compliance with Data Protection Reference Framework.

EcoSec Data Protection Officer (CIM)

Following a positive outcome of the feasibility assessment, the EcoSec, LOG and FAD team needs to decide on one or a combination of cash transfer modalities and mechanisms taking into account the objectives of the intervention. Options for cash transfer mechanisms include:

Hand-to-hand cash or cheque distribution by ICRC

Transporter, traders, informal institutions, etc.

Service providers (banks at counter or through ATM, post offices, mobile phone companies, remittance companies)

Electronic payment (card and e-voucher, mobile account)

Paper voucher (cash or commodity)

Most of the transfer mechanisms will require an agreement with a service provider, trader or shopkeeper. As for all humanitarian assistance programmes, security is the top priority for both the beneficiaries and the institution. In this regard, direct ICRC distribution of cash is generally the least preferred option.


The options identified and characterized should be compared between themselves, and with in-kind distribution, under the lead of EcoSec, with the support of Logistics and Finance-Admin when necessary. Further comparison criteria to be used are eeffectiveness, cost-efficiency, timeliness (time of delivery), secondary impact, impact on local economy, beneficiary preferences, inter-household and inter-community issues.

3.2.3 Project proposal On the basis of the feasibility assessment and the selection of the best response option, EcoSec drafts a project proposal as per its usual procedures. The budget, with inputs from Logistics and Finance-Admin, needs to include the following:

The number of beneficiaries multiplied by the amount to be paid (in the currency of payment)

Human resources costs

Transport costs

Handling costs (bank or other charges, cash transfer fees)

Administrative costs (office equipment needed) The project is either integrated within the PfR framework (usually) or non-budgeted (rare). In the latter case, the implementation is subject to the revised Allocation of Expenditures (AoE) procedure. Whereas the planning phase is the same for cash (directly by ICRC or through providers) and voucher transfers, the implementation phase follows different sets of procedures. The implementation of cash transfers is treated in Chapter 4 and the implementation of voucher programmes in Chapter 5.

3.3 Implementation procedures for cash transfers When the provision of cash is the best option (versus voucher and versus in-kind, or in combination with those), the following procedures apply for the cash transfers.

3.3.1 General recommendations a) In case the Delegation selects the same bank used for other ICRC regular financial operations, the

follow up of EcoSec cash transfer programmes with the bank should be done directly by ICRC Administrator and not by Logistics to avoid multiple interlocutors, if relevant.

b) In general, as for any programme, the EcoSec teams must be rotated along the process in order to ensure transparency and avoid suspicion. It should not be the same person who conducted the needs assessment who also supervises the payments and monitor or evaluate the programme.


3.3.2 ICRC direct cash distribution In a limited number of cases, the feasibility study will conclude that cash or cheques should be distributed directly to beneficiaries. In case of cheque beneficiaries will then encash the amount at the bank from an ICRC account. EcoSec Finance-Admin Logistics

1 Initiate an AoE as per the established procedures.

Ensure that the initiated AoE is granted and monitor as per the established procedures.

Check if an AoE has been granted as per the established procedures.

2 Register beneficiaries e.g. EPMT, ID card number, locations, amounts to be transferred in the determined currency, dates of transfers, frequency and number of instalments.

3 Fill in a Payment Request (PR) and attach the lists of beneficiaries to initiate the payment or establish the cheque. Launch a Working Advance or prepare the cheque if EcoSec effects the payment or distributes the cheque instead of Finance-Admin. Note that as a matter of principle (segregation of duties) cash/cheque distributions should be handled by Finance-Admin and any other modality should remain an exception.

Ensure enough cash is available in the Sub Delegation at the time of payments. Clarify insurance of the cash or cheque distribution. Establish the cheque and ensure enough cash in the bank account for cheque redemption. Prepare the cash in envelopes. Plan for the distribution to beneficiaries in consultation with EcoSec.

4 Plan and organize the distribution with communities, beneficiaries and local authorities when requested.

5 If feasible, attend the cash payments or cheque distribution to oversee the good process and help with problem-solving.

In case EcoSec did the payment, provide Finance-Admin with the necessary justifications to clear the Working Advance. As noted, it is recommended that Finance-Admin rather than EcoSec distributes the cash or cheques.

Do cash payment or distribute cheque to beneficiaries.

If not possible otherwise, supply EcoSec with cash or cheque for distribution. Then carry out random checks of payments done or collect proof of cheque redemption at the bank.

As a matter of principle (segregation of duties) cash/cheque is handled by Finance-Admin and any no-feasible situation should remain an exception.

Provide transport means for the implementation of the cash or cheque distribution.

6 Monitor beneficiaries’ use of cash, the impact of cash transferred on local markets and the community perception of the programme.

7 Evaluate the programme Participate in the evaluation from the financial perspective.

Participate in the evaluation from the logistics perspective.

8 Implement the exit strategy


3.3.3 ICRC Cash transfers through service providers Service providers can be banks (at counter or using ATMs), post offices, mobile phone companies, remittance companies, traders, transporters, etc.

EcoSec Finance-Admin Logistics




2 Initiate a Service RO/SR at once or per transfer if required. The RO/SR should contains the amount to transfer to beneficiaries and all related charges. Add the ToRs and send to Logistics to select service providers.

Prepare and launch tenders as per the standard procedures.

3 Participate in the assessment of the capacity and the selection of the cash transfer service providers.

Participate in assessment and decision making of cash transfer service providers.

Assess and select the cash transfer service providers.

4 Attend the negotiations with cash transfer service providers if appropriate to ensure that DPRF is applied.

Participate in negotiating the terms and conditions with the selected cash transfer service providers, if banks, money dealers, etc. are involved.

Negotiate the terms and conditions with the selected cash transfer service providers.

5 Check and ensure that legal framework and regulations are respected. Approve the contracts or MoU as per ICRC Logistics procedures and Financial rules.

Prepare and sign contracts or MoU as per ICRC Logistics procedures and Financial rules.

6 Register beneficiaries e.g. EPMT, ID card number, locations, amounts to be transferred in the determined currency, bank accounts or mobile phone numbers, dates of transfers, frequency and instalments.

7 Prepare PR and send to Logistics. Logistics receives PR. Logistics and Finance-Admin performs payments as per the Financial rules.

8 Help beneficiaries to access the financial services (e.g. help open bank accounts or secure the necessary documentation).

9 If necessary, facilitate the work of the cash transfer service providers by organizing the beneficiaries in groups on certain days, providing crowd control, etc.

10 If feasible, attend the distribution to oversee the process and document hick-ups.

Monitor the transfer process as per the contractual or MoU requirements.

Monitor the transfer process as per the contractual or MoU requirements.

11 Ensure a proof of payment exists (e.g. electronic proof of transfer, signed receipts, or signed distribution lists), collect proof of receipt from the beneficiaries and take copies from Logistics/Finance-Admin.



12 Ensure reconciliation based on mandatory documents for accounting purpose.

13 Monitor beneficiaries’ use of cash, the impact of cash transferred on local markets and the community perception of the programme.

14 Evaluate the programme. Participate in the evaluation from the financial perspective.

Participate in the evaluation from the Logistics perspective.

15 Implement the exit strategy.

Remark: In case cash is transferred through local non-governmental organisation or public bodies, a MoU should signed before the implementation.


3.3.4 ICRC additional procedures for cash-for-work programmes

It is necessary to clarify the legal and administrative issues when setting-up the project, e.g. local labour, insurance and taxation laws, legal ownership of the asset created, etc.





2 Select the programme site and set the daily wage in line with local market rates, legislation and practices.

Advise EcoSec on the national and local wage and the related legal aspects.

3 Consult WatHab for engineering component of the programme where applicable as well as for the safety and the protection of workers.

4 Identify programme partners and discuss partnership modalities whenever applicable.

Support EcoSec with established procedures and guidance if external expertise is needed.

5 Ensure the acceptance of the programme by all concerned parties and clarify the ownership of the asset to be created.

6 Establish the lists of workers, with ID card numbers, locations, working days, working hours per day (man-days), daily rate, amounts to be transferred in the determined currency, dates/frequency/number of transfers and deadline to complete the work.

7 Initiate a RO/SR and provide technical specifications for materials to purchase. Include the amount to transfer and the related charges. Define ToRs in case MoU or contracts are needed and send to Logistics.

Launch tenders, prepare and sign contracts or MoU as per Logistics procedures and Financial rules.

8 Cash payments to workers For hand-to-hand or cheque distribution by ICRC, consider steps 4 to 6 under Section 4.2, Page 12. For cash transfers or payments through service providers, consider steps 7 to 12 under Section 4.3 -Pages 13-14.

Cash payments to workers For hand-to-hand or cheque distribution by ICRC, consider steps 4 to 6 under Section 4.2, Page 12. For cash transfers or payments through service providers, consider steps 7 to 12 under Section 4.3 -Pages 13-14.

Cash payments to workers For hand-to-hand or cheque distribution by ICRC, consider steps 4 to 6 under Section 4.2, Page 12. For cash transfers or payments through service providers, consider steps 7 to 12 under Section 4.3 -Pages 13-14.

9 Monitor the completion of project, the use of created assets, the use of cash by beneficiaries, the impact of cash transferred on local markets and the community perception on the project.

10 Evaluate the programme. Participate in the evaluation from the financial perspective.

Participate in the evaluation from the logistics perspective.

11 Implement the exit strategy.


3.3.5 Beneficiary terms of payments

3.3.5.1 Fixed amount to beneficiaries / households If a fixed amount, based on EcoSec assessment and in coordination with other actors involved in similar programme, is proposed to beneficiaries to cover the cost of the same pre-determined goods or services available at the local shops, markets or institutions; Logistics applies the standard procedure (benchmark and selection table) to set the value of goods or services at the very start of the programme. However, prices of goods or services should be monitored and a decision mechanism established by both EcoSec and Logistics to adjust the amount accordingly, or to review the intervention if needed (e.g. switch to in-kind assistance) so that the intended objectives of the programme are still met. Note that the ‘fixed’ amount may also be adjusted according to other factors such as household size, level of vulnerability and income. This decision is the prerogative of EcoSec based on the needs assessment and objectives of the programme. The multiplying factor(s) will apply to the benchmark figure provided by Logistics.

3.3.5.2 Varying amounts to beneficiaries / households

If the amounts to be paid to beneficiaries are determined by individual lists of items or services that they need to purchase (e.g. to start a Micro-Economic Initiative), EcoSec needs to provide the lists to Logistics to ensure the pricing and benchmarking. Logistics, with the support of EcoSec if needed, perform a market price monitoring and establish the benchmark for the different items. Logistics will then establish the selection table in accordance with Financial rules (according to the families of items: cf. MEI procedures), and agree with EcoSec on the value of each grant. Finance-Administration crosschecks the benchmarks with the prices paid in succeeding payments.

3.3.6 Documents needed to settle payments and accounting bookings The following justification documents need to be submitted to Finance-Admin in order to settle payments:

Required documents From To

1. Copy of the RO/SR and Payment Request (PR) Logistics Finance-Admin

2. Copy of the contract, PO or MoU with the cash transfer service provider

Logistics Finance-Admin

3. Lists of beneficiaries with the necessary information EcoSec Logistics then to Finance-Admin

4. Encashment lists or proof of payments to the corresponding beneficiaries


In case of direct cash distribution by the ICRC, working advances are issued based on the documents 1 and 3 provided above. The clearance is done based on documents 1, 3 and 4.

3.3.7 Account for Cash transfers (see annex 2)


3.4 Implementation procedures for vouchers

A voucher can have a money value or a commodity value. It may be restricted to a single commodity or service or it may be spent on a range of goods and services. EcoSec is responsive to ensure that beneficiaries can access what they need according to ICRC standard. Logistics is in charge of quality control for all commodities defined for the programme. A cash voucher is used in the same way as cash, in that the value of any good or service is established on the usual local market, shop or service institution benchmarking ways. A commodity voucher is valid only for a specified type and quantity of items or services. Generally, vouchers have a limited period of validity during which they can be exchanged.

3.4.1 Implementing voucher programmes (being paper or electronic version)





2 Design the voucher as securely as possible (e.g. two unique marks, one watermark). Initiate a Printing RO/SA and send to Logistics.

Ensure that vouchers are kept in safe (inventoried, possibly in a sealed envelope)

Verify the voucher design, if necessary.

Contract the voucher printing service preferably outside the distribution area or even outside the country if relevant. In case of electronic voucher, contract the company that can provide with the required device.

3 Initiate a RO/SA, include the list of authorized items, their specification and send to Logistics. Participate in the selection of traders and/or service providers if relevant.

Approve the contract as per established procedures.

Launch the tenders, establish and sign the Selection Table and contracts with traders or service providers as per established procedures.

4 Register beneficiaries e.g. EPMT, ID card numbers, locations, amounts to be transferred in the determined currency and if relevant, the bank account, mobile phone number, etc.

5 As a proof of payment, design the voucher encashment list that includes serial number, trader code, name of holder, amount / commodity entitled, date of encashment and signature of the holder.

Participate in the design of encashment lists to ensure all the necessary information is provided.

Distribute encashment lists to traders involved in voucher-based assistance programmes.

6 Distribute the vouchers to beneficiaries and assist in the collection of items or access to service by beneficiaries.

Ensure that traders are ready with the required items. Apply ICRC quality, health and safety check standard. Conduct monitoring of the traders or service providers during implementation as per the contract.

7 Collect the encashed vouchers from the suppliers or traders, ensure that the final number of vouchers matches the contracts and invoices.



8 Monitor beneficiaries and verify how they used the vouchers.

Execute payments to the suppliers and service providers after receipt of required documents from Logistics.

Carry out financial reconciliation to provide Finance-Admin with all documentation for payments. Carry out reconciliation of all vouchers and finalizing the POs.

9 Evaluate the programme Participate in the evaluation from a Financial-Admin perspective.

Participate in the evaluation from a Logistics perspective.

10 Implement the exit strategy

Additional remarks

a) The collection of vouchers and encashment lists from traders or service providers, as well as the follow up on the expired vouchers should be regulated under a specific article within the contract signed with traders or service providers.

b) Advance payments to traders or service providers are possible per joint decision of the Logistics,

EcoSec and Finance-Admin departments. c) The payment is executed preferably to the bank account of the traders or service providers. d) It may be decided not to use encashment lists. Instead traders or service providers are asked to

keep receipts of what the beneficiaries have purchased or received as a service. Encashment list may facilitate reconciliation and help ensure that the beneficiaries collecting the goods or receiving the service are the same as those who received the vouchers (not thefts / exchange of vouchers).

3.4.2 Implementing fairs4 Fair is an alternative way to assist beneficiaries by means of a closed market system. Local traders are identified and mobilized to expose items meeting beneficiaries’ needs (e.g. EHI, food, seeds) at a pre-selected location and for a pre-determined duration (e.g. 1 to 3 days). The items of interest are identified with the beneficiaries beforehand, so that the traders respond to their priorities and needs. Traders are not allowed to bring in other articles than those discussed (e.g. clothing if only seeds are to be presented for sale). A price ceiling is agreed upon with the traders for each article, but prices remain negotiable with beneficiaries for reductions. There are two types of fairs. Restricted fairs where only pre-selected traders or suppliers are allowed to expose their articles and Open fairs where the predefined types and quality of goods are exposed by all traders or suppliers interested. Fairs should only be established following a detailed assessment and require a sound knowledge of local trading system for the goods (or services, e.g. livestock vaccination) that the ICRC intends to provide. Quality control is a main challenge with fairs because it is difficult to assess on spot the quality of goods brought in by traders. Thus, quality standards have to be set before fairs to take place. The quality of the available items should be analyzed by Logistics in collaboration with EcoSec based on health and safety standards, in addition to the performance and durability of the products. Logistics will communicate the required standard to the traders. If diverse qualities are accepted, the prices have to be adapted. The quality provided directly by ICRC Logistics as for in-kind assistance is usually higher than the one on the local markets. If very lower quality items are proposed for fairs, then ICRC standard items

4 For further details on how to organize fairs, please refer to “EcoSec COD Executive brief on fairs (EN)” at

http://intranet.gva.icrc.priv/ecosec/topics/cash/index.jsp

http://intranet.gva.icrc.priv/ecosec/topics/cash/index.jsp


should be preferred when health and safety are not guaranteed. Otherwise, when the quality of items is lower in terms of performance or durability, the decision on whether to include them in the fair or not must take into account the primary objectives of the programme and beneficiaries’ preferences. In particular, and if beneficiaries’ health and safety are not at stake, a lower than optimal performance and durability of the products may still be acceptable in order to meet the needs identified in a timely manner, respecting beneficiaries’ preferences. When arriving at the fair, each trader has to be registered and the quantity of goods he is bringing. When leaving the fair, the quantity of goods remaining to each trader should be recorded. This will ensure proper crosscheck of the goods sold versus vouchers used. The beneficiary signs the beneficiary list when receiving the voucher and the trader requests the beneficiary to sign the encashment list (indicating what has been bought) when the voucher is cashed-in at his/her stand. As for any other programme, the legal aspects of the respective context must be checked before engaging in fairs (for example government/mayor authorization, security of the site, etc.) In conclusion, Logistics plays a key role in organising fairs as follows:

Initiate a Purchase Order (PO)

Prepare a standard agreement (bearing the PO number) to be signed by the traders: The agreement can be signed prior to the fair or on the same day as the fair.

Register the traders attending the fair and the quantities of goods they brought.

Check and approve the quality of goods in cooperation with EcoSec (visual check if relevant).

Collect vouchers and encashment list from traders.

Register the traders and the quantity of leftover goods upon departure. See Annex 1 JDE process for Cash and Voucher Programmes.

3.4.3 Documents needed to settle the payment and accounting bookings The following justification documents need to be submitted in order to initiate, settle and book the payment:

Required documents From To

1. Copy of the RO/SR Logistics Finance-Admin

2. Copy of the contracts (PO) with the traders and service providers


3. Vouchers and signed beneficiaries’ encashment lists EcoSec Logistics then to Finance-Admin

4. Invoice from the traders corresponding to the amounts on vouchers and encashment lists submitted


3.4.4 Account for voucher programmes (see annex 2)

4 Legal provisions The procedures stated in this document are subject to the ICRC Code of Conduct and ICRC Fraud policy. They come into force as of May 2015. Annex 1 - JDE Process for Cash and Voucher Programmes Annex 2 - Accounts for cash and vouchers assistance programme


Note that other documents related to CTP can be found at EcoSec Resource Centre → Topics → Cash

Transfer and Markets at http://intranet.gva.icrc.priv/ecosec

http://intranet.gva.icrc.priv/ecosec


Annex 1: JDE Process for Cash and Voucher Programmes

Request Type

Sales Request (SR) Selection Table PO / contract PO Receipt Remarks

Cash transfers programme Cash transfers using a service provider

Cost of service No registration of the CASH transferred itself in JDE, only the service cost for transferring.

Release: SD/OD Split SD line to get as many suppliers as chosen for the programme. Item: items to be distributed Item: SADMFINA01 - Financial services, fees Qty: nb of transfers UoM: Ea Value UoM: Cost 1 transfer

Select supplier(s) for the service as per purchasing procedures ST is for the cost of service Validation threshold for ST approval is the amount to be transferred. Frame agreement signed with each supplier of Service

PO type: OD SADMFINA01 - Financial services, fees

Qty: nr. of transfers UoM: Ea Value UoM: Cost of 1 transfer

Receipt of OD closes PO

Value of the service

(Closure of PO file) One or several PO receipts based on the transfers’ modalities

Customer Type C only Item: SADMFINA01 Ship to Address type RP Line type “N” PO to be closed with the proofs of transfer to beneficiaries to confirm that the service was completed. The service provider has to produce invoice(s) and consolidated list of beneficiaries.

Cash voucher Defined amount of cash equivalent in goods is withdrawn from a restricted number of suppliers

Cost of service Voucher value (if needed for reporting )

Release: SD/OD Split SD line to get as many suppliers as chosen for the program. Item: items to be distributed Item: RVOUFINAVALUE - Voucher value Qty: nb of vouchers UoM: Ea Value UoM: Value of 1 voucher Item: SCTRPRINPR01 - PRINTING SERVICE, production, Qty: nb of vouchers UoM: Ea Value UoM: Value of printing of 1 voucher

Select supplier(s) for the service as per purchasing procedures Validation threshold for ST approval is the total amount for the vouchers

PO type: OD SCTRPRINPR01 - PRINTING SERVICE, production, Qty: 1 UoM: EA Value UoM: Value of printing Item: RVOUFINAVALUE - Voucher value Qty: nb of vouchers UoM: Ea Value UoM: Value of 1 voucher Not Recommended =>When reporting of actual items distributed is needed. RVOUFINAVALUE* item can be released into an SD/OD and edited AND changed to reflect actual items taken by beneficiaries. A new OD be created. Original OD with RVOUFINAVALUE items will need to be cancelled.

Receipt of OD closes PO Value of Service Value of actual goods distributed.

1. For the reimbursement of vouchers to suppliers, use the OD created for RVOUFINAVALUE during the SD/OD release. 2. For the reimbursement of the vouchers to suppliers, the encashment list authorized by both LOG and EcoSec is forwarded to finance for payment to suppliers. 3. When actual goods are indicated on the PO, voucher matching is done as usual PO procedures.


Request Type

Sales Request (SR) Selection Table PO / contract PO Receipt Remarks

Commodity voucher Items defined and restricted to certain types with a restricted number of suppliers

Cost of assistance Cost of service

SR Release : SD/OD Split SD line to get as many suppliers as chosen for the program. Item: items to be distributed. Item : Code of items defined Qty : Actual of each Price : actual for each Item: SCTRPRINPR01 -PRINTING SERVICE, production, Qty : 1 UoM : Ea Value/ UoM: Cost of print

Select suppliers of commodities/services authorised as per Log procedures Standard agreement signed with each supplier participating in the program Validation threshold for ST approval is the total value of the goods to be distributed.

Global PO (If conceivable 1 PO per supplier ) 1 PO for printing service if necessary PO type: OD Item: items to be distributed. Qty: Total Quantity Value UoM : price of Each PO type: OD Item: SCTRPRINPR01 - PRINTING SERVICE, production, Qty: 1 UoM: Ea Value UoM: Value of printing


Customer Type C only Ship to Address type RP Actual line type

Fairs Market fairs, with a large selection of items and suppliers

Voucher value (if needed for reporting ) Cost of service

SR Release: SD/OD Split SD line to get as many suppliers as chosen for the program. Item: items to be distributed Item: RVOUFINAVALUE - Voucher value Qty: nb of vouchers UoM: Ea Value UoM: Value of 1 voucher Item: SCTRPRINPR01 - PRINTING SERVICE, production, Qty: nb of vouchers UoM: Ea Value UoM: Value of 1 voucher

Standard agreement signed with each supplier participating in the Cash voucher program Select suppliers of - commodities - services per Log procedures. Validation threshold for ST approval is the total amount on the Vouchers

PO type : OD SCTRPRINPR01 - PRINTING SERVICE, production, Qty: 1 UoM: Ea Value UoM: Value of printing Not Recommended =>When reporting of actual items distributed is needed. RVOUFINAVALUE* item can be released into an SD/OD and edited AND changed to reflect actual items taken by beneficiaries. A new OD be created. Original OD with RVOUFINAVALUE items will need to be cancelled.


1. For the reimbursement of vouchers

to suppliers, use the OD created for

RVOUFINAVALUE during the SD/OD

release

2. For the reimbursement of the

vouchers to suppliers, the encashment

list authorized by both LOG and

EcoSec is forwarded to finance for

payment to suppliers.

3. When actual goods are indicated on

the PO, voucher matching is done as

usual PO procedures.


Annex 2: Accounts for Cash and Voucher Programmes

What Accounting

Code Earmarking Item Code Functioning

FOOD Commodity Voucher

940 800 Earmarked R VOU FOOD ITEM

The beneficiary receives a voucher that can be exchanged against FOOD items in a fixed quantity or within a maximal monetary value.

Supplier(s) chosen and paid by ICRC against deliveries

AGRO Commodity Voucher

941 800 Earmarked R VOU AGRO ITEM

The beneficiary receives a voucher that can be exchanged against AGRO / VET items in a fixed quantity or within a maximal monetary value.


MISCLEANOUS Commodity Voucher

945 800 Earmarked R VOU MISC ITEM

The beneficiary receives a voucher that can be exchanged against certain goods, including Essential Household and Housing Items in a fixed quantity or within a maximal monetary value.


Value (or cash) based vouchers

956 800 No

R VOU FINA VALUE - dummy for transaction value for validation purposes

Beneficiary receives vouchers. The vouchers are used to obtain any type of commodity/service within the maximal monetary value.

R VOU FINA VALUE - code for service costs

ICRC purchases vouchers to a 3rd party service provider or directly to the supplier.

Supplier(s) or service provider(s) paid by ICRC against deliveries

Cash Transfer (Financial assistance) / Cash for Work

956 000 No

No item code; No SR; validation done via Payment Request

Money is transferred/given to a beneficiary directly by ICRC.

S ADM FINA 01 Money is transferred/given to a beneficiary via a service provider.

The beneficiary decides what, where and when to purchase goods/or services.