CA Transition Documents
Message 3 (11 June 2013)
Dear Members of the Consultative Group,
Warm greetings from a wet Washington.
This email is a friendly reminder to all members about the deadline for comments on the two packages that were sent:
Package #1, was sent on the 17th May, and included (i) the Standard Operating Procedures, (ii) the Contribution Agreement and (iii) proposed amendments to the Charter;
Package #2 was sent on the 24th May, and included (i) the Legacy Operations Proposal and (ii) the Residual Funds Transfer.
Please note that, for all five documents, comments need to be sent to the Secretariat no later than the deadline of Sunday 9th June.
The Secretariat will consolidate the comments and recommend revisions to the documents, and recirculate them the following Friday, 14th June, in advance of the EXCO meeting in Copenhagen on 24th and 25th June. We will also be circulating on the 14th June the Agreement on Information Assets and Records of CA, as well as Budgets for the period to end 2013 (WB and UNOPS), and an indicative budget for FY2014.
We are very conscious of the size and importance of the information that we are asking you to review. Attached, below, is an updated timeline that indicates all the critical decision points as we continue to plan for the move to Brussels in the first week of September 2013.
With my thanks, and best wishes,
Message 2 (24 May 2013)
Dear Members of the Consultative Group,
Last week I sent you an email in which I indicated was the first of two packages of materials related to the transition. This email contains the SECOND package, and provides you with some additional information and an update.
This was an important week in the transition, as we had the first direct engagement between the respective teams from the World Bank and their counterparts in UNOPS - we were joined by UNOPS General Counsel James Provenzano (based in New York), the Director who will assume responsibility for the Cities Alliance, Bruce McCarron, and Benedetta Audia, Legal Advisor. Through a very intense, productive and enjoyable set of meetings, agreement was reached on a number of key issues, which allows the secretariat to circulate this package and report on additional items.
This package contains two related proposals, both vital for the process of transition and for keeping to the agreed timelines:
1. The first proposal makes provisions for a project to provide the necessary resources to the World Bank for the Administration of Legacy Cities Alliance Operations. Through this proposal, the World Bank will ensure continued oversight and management of the Legacy Funds and the regular financial and substantive reporting to CA members. In addition, the proposal also makes provision for Legacy staff to support UNOPS/ CA Secretariat during the transitional period. This project will secure the necessary funds of approximately $3.1m for the World Bank to perform these tasks until December 31 2015, at which point it is envisaged that the Legacy Operations will close. (See document no.5)
2. The second proposal seeks CG endorsement for the transfer of the Residual Funds from the Cities Alliance Multi-Donor Trust Fund to the UNOPS Cities Alliance account. It is proposed to transfer these funds in installments, with the first transfer projected to be around $3.9 m. The transfer of these funds will substantially provide for the Initial Funding Requirement as discussed at the Brussels EXCO, and allow the Secretariat to complete its relocation and commence operations as soon as practical. The balance of the funds will be transferred in subsequent installments, as agreed between the World Bank and UNOPS. The final transfer would be timed to take place after all funding allocations made from the World Bank Multi-Donor Trust Fund have been closed, including the Legacy Portfolio. (See document no.6)
The World Bank, UNOPS and CA Secretariat also discussed the main elements of a draft Agreement Regarding Information Assets, Records and Publications of Cities Alliance. While there are still some details to be finalised, as Manager I am able to convey to you the secretariat's satisfaction with the overall draft Agreement, which will greatly facilitate not only a smooth transition but, most importantly, the uninterrupted servicing of our members and partners. This is a very good outcome for what we had envisaged to be a difficult issue to resolve.
The final issue I wish to address is the outcome of detailed discussions we had with respect to the ongoing role of the Bank. Last week, we circulated the SOP, which contained a reference (in the Annexes) to the proposed use of the External Funding Output as the preferred instrument for the Bank to continue to receive Cities Alliance funds.
Below is a more detailed explanation of the EFO:
EFOs, or Externally Funded Outputs, were introduced by the World Bank a number of years ago as a streamlined mechanism for contributors to finance particular activities or outputs. They are widely used as an attractive alternative to trust funds, including by many Cities Alliance donors, as well as UNOPS, and have proven effective in enabling many one-off activities implemented directly by the World Bank. In exchange for pre-agreed amounts, with no fees attached, the World Bank commits to deliver specified outputs as part of its work program under all policies and procedures that apply to World Bank budget. Because EFOs are not accounted for separately from World Bank budget, no financial reporting is provided. However, the World Bank provides progress and completion reports. Agreements follow a standardized format, allowing for rapid processing without legal reviews – a contributor and the World Bank must simply agree on the description of the output and the amount of funds to be provided. Once agreed, the World Bank has full responsibility for delivery regardless of actual cost. That said, article 11 of the EFO agreement provides that in the event that the Bank determines or decides that completion of the EFO is no longer justified within the Bank work program’s priorities, or will be substantially delayed, the Bank shall refund to the Contributor an appropriate portion of the EFO funds, as determined in its discretion, in good faith, after taking into account any work that may have already been carried out. While there is a $1 million dollar cap per EFO, there is no limit to the number of EFOs that may be entered into.
EFOs are suited for concrete deliverables within discrete time frames and allow the World Bank to undertake any effort that it could have provided as a Bank-executed activity financed by a trust fund. As part of the Cities Alliance transition, the Bank will only maintain the existing portfolio under the Cities Alliance MDTF without engaging in any new Bank-executed activities under the Cities Alliance MDTF. By avoiding the additional costs and procedures involved with the establishment of a new trust fund, EFOs offer a simple, efficient, effective alternative for transferring funds from the new Cities Alliance Core Fund managed by UNOPS to the World Bank. Through EFOs, the World Bank could continue to collaborate closely with Cities Alliance through activities implemented directly by the World Bank.
In the view of the Secretariat, the EFO provides an effective and very practical mechanism for us to ensure that the Bank is able to continue one of its key roles, that of implementer of Cities Alliance funds.
With my very best wishes
Message 1 (17 May 2013)
Dear Members of the Consultative Group,
Warm greetings from a sunny Washington spring.
This email is the first in a series that signals that we are commencing an intense period of deliberation and final decision-making, following on from the decisions taken at our 2012 CG meeting in Hanoi. Since shortly after the Extra-ordinary EXCO meeting in Brussels in February, the Secretariat has been working closely with a World Bank Working Group, chaired by Zoubida, and comprising Andrea Stumpf (Legal), Lydia Kruse Tietz (Trust Fund policy), Michele Armitage (Human Resources) and myself as Manager of the Cities Alliance. With the active support and guidance of this Working Group, as well as with many other Bank and Secretariat staff, we believe we have now established a clear path to complete the smooth and professional transition of the Cities Alliance, from Washington to Brussels, and from the World Bank to UNOPS.
In parallel, the Secretariat has also been working very closely with UNOPS in Copenhagen, and has been in regular contact with a number of CA members, for whose support and guidance we are extremely grateful. Next week, there will be a set of meetings in Washington between the World Bank team, UNOPS management, and the CA Secretariat.
Attached, please find a more detailed timeline - (See documet no.1).
In the meantime, let me summarise the situation. Commencing today and, in a week's time, we will be sending to you TWO SETS of documents;
Below is the FIRST set of three documents for the CG to review and respond. Given the importance of these documents, there is an extended period of over three weeks for CG to review. The SECOND set of documents is targeted for circulation to the CG next Friday 24th. Comments on both sets of documents will be due to be returned to the Secretariat by June 9. Following the incorporation of the comments and suggestions by the Secretariat, both sets of documents will be recirculated on the 17th June, one week in advance of the two-day EXCO meeting of Monday 24th and 25th June, which will take place at UNOPS' new Headquarters at UN City in Copenhagen.
COMPOSITION OF FIRST SET (Circulated today):
The first set is a package of three documents, and comprises:
1. Draft Contribution Agreement for UNOPS funds
The form of Legal Agreement between CA Members (listed as Donors) and UNOPS, which needs to be approved and signed by all members making a financial contribution. Signing the Contribution Agreement also binds the parties to the Standard Provisions, the Charter and the SOP. Approval of the form of agreement on behalf of all donors will be sought through CG. Once such approval has been given, signatures of the agreed form can begin without further negotiations. Any donors who have questions or require revisions are asked to indicate these in this round of review, as there will be virtually no ability to negotiate bilateral changes once the form has been approved. (See document no.2)
2. Standard Operating Procedures (SOP)
This is the core operational manual which, when approved by CG, aims to provide a complete overview of Secretariat governance, administration and operations within the new UNOPS platform. The document draws substantively on the Cities Alliance Charter and Contribution Agreement provisions to serve as a “one stop shop” for guiding and informing members, staff and prospective donors as well as partners. However, as specified in Paragraph 12, the SOP is legally subordinate to the Charter, the Contribution Agreement and UNOPS policies.
Most of the policies and procedures outlined in the SOP have been built around consolidated and best practices of the Secretariat, and are intended to draw upon the strengths of the current institutional environment in the World Bank.
Some highlights of the SOP are as follows:
1) The establishment of a robust fiduciary framework – encompassing financial management, procurement and environmental and social risks through dedicated tools and assessment – and a complete set of procedures for appraisal of proposals.
2) Inclusion of safeguards policies, adapted by the Secretariat to the scale and type of activities that are typically funded by the Cities Alliance;
3) The integration of the Results Framework into a preeminent strategic position as well as in the Secretariat’s reporting system to its governance. (Please note that the Results Framework presented in this document is in draft form. It will be further refined before being formally presented to the CG meeting in November.)
4) Three Annexes (B, C and D) that guide the main funding windows of the Cities Alliance. Two of the Guidelines – Catalytic Fund and Country Programmes – build on previously approved handbooks. The third, the Analytic and Strategic Activities (ASAs), is new. It seeks to systematise under a common umbrella what has previously been defined as Joint Work Programmes (JWP), as well as other types of learning: knowledge, advocacy events and activities. Please note that all three Guidelines are in draft form, as procedures will need to be incorporated, tested and refined in light of the new platform. Updated versions of the three Guidelines will be presented for approval at the CG meeting in November. (See document no.3)
3. The Cities Alliance Charter
There are essentially two sets of proposed amendments to the Charter:
The first set provides for changes to articles 42 and 43, dealing with the change from the World Bank to UNOPS as Trustee and Host of the Secretariat, and footnote 5, which addresses EXCO’s role in the selection of the Manager;
The second set of amendments are proposed by the World Bank, per its separate communication to you earlier today. (Articles 26, 29 and 31, and Annex 1). In this context, Annex 1 has also been updated to reflect the current membership. (See document no.4)
COMPOSITION OF SECOND SET (To be circulated by 24 May)
The second set of documents will comprise:
4. Legacy Operations:
A proposal seeking CG approval for the allocation of funds to cover World Bank costs for the management and regular closure of the Cities Alliance's Legacy Portfolio, to the end of December 2015.
5. Transfer of Residual Funds:
An associated proposal seeking CG approval for the transfer of residual funds from the CA's Multi Donor Trust Fund at the Bank to be transferred to the new Cities Alliance fund at UNOPS. These funds are expected to be meet the Initial Financial Requirement and to allow UNOPS to issue contracts to the staff relocating to Brussels, lease offices for and generally equip the Cities Alliance Secretariat, and commence operations. This will require prior establishment of the new UNOPS fund to be transferred.
6. Handover between WB and UNOPS
The third document will be an understanding between the World Bank and UNOPS through which the Secretariat (as UNOPS staff based in Brussels) will be granted access to the electronic records and project database that the Cities Alliance has built up in the World Bank since its launch in 1999, and other institutional arrangements between the two organization related to the handover of the programme.
Happy reading, and we look forward to receiving your comments. Please ensure all necessary internal reviews, legal and otherwise, and provide all comments or questions before June 9 to enable adequate EXCO and CG review of final documents and timely decision making, consistent with the anticipated timeline for the transition.
With my best wishes