IFAD and FAO Learning Event on GEF Rome, Italy - December 10-12, 2014

1. Financial Procedures Agreement
IFAD and FAO Learning Event
on GEF
Rome, Italy
December 10-12, 2014

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Financial Procedures Agreement
• Financial Procedures Agreements (FPAs) are agreements made
between the International Bank for Reconstruction and Development
(The World Bank) as Trustee of the Global Environment Facility Trust
Fund (the GEF Trust Fund), and a GEF Partner Agency.
• FPAs include specific procedures for all GEF funds authorized by the
Council of the GEF (the Council), or by the Chief Executive
Officer/Chairperson of the GEF (the "CEO") (where such authority has
been delegated to the CEO by the Council) that are to be allocated to a
GEF Partner Agency in accordance with paragraph 20 of the GEF
Instrument by the Trustee.

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Financial Procedures Agreements…….(2)
A set of legal documents governing the business relationship between the IBRD as the
Trustee of the GEF Trust Fund and the GEF Agencies, setting definitions and rules for:
• Commitment of funds by Trustee
– Amount, date of Council approval/CEO endorsement
– Letters of Commitment
– Setting financial liability for Agencies including adjustments for
cancellation and closed projects and fees
• Transfer of funds to GEF Agency
• Use of funds by GEF Agency
– In accordance with Agency’s policies and procedures
– Trustee is not responsible for use of funds by Agency
• Reflows from GEF Agency to the Trustee
• Investment income arrangements
• Reporting requirements (Quarterly, Semi-annual and Annual)

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Process of Fund Transfer
Three major steps that Trustee performs in the process of transferring funds to
the Agency:
1. Fund Set-aside: for FSPs, project funds are set-aside upon Council
approval of the work program;
2. Fund Commitment: project funds are committed to the Agency
following CEO endorsement;
3. Fund Transfer: project funds are ready for transfer to the Agency upon
receipt of Agency internal approval of the project.
 Upon submission of Agency internal approval of project, Agency can
request transfer of money to the Agency, following the provisions in
the Financial Procedures Agreement; it is usually done in batches
semi-annually.

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Reporting Requirements Under the FPA
Reporting requirements: to comply with External Auditors, Internal Audit Unit and
Controllers requirements, there is a need for a more consistent flow of information
between Trustee and the Agencies.
 Quarterly reports within 30 days after the end of each quarter informing the Trustee
of:
 Individual projects (FSPs, MSPs, Eas only) approved by the Agency Board,
ready to receive GEF funds;
 Individual projects (FSPs, MSPs, Eas, PPGs, PDFs) and Special Initiatives that
were dropped, cancelled or financially closed (including closing date, final
amount used and amounts unused);
 Individual fees cancelled;
 Reflows of funds received by Agency from GEF projects.
 Semi-annual Investment Income reports within 60 days after the end of each
semester and returns funds to Trustee, as requested.
 Annual audited Financial Statements within six months after the end for Agency’s
fiscal year.
 Annual Reconciliation Reports upon request by Trustee.

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Memorandum of Understanding
The Memoranda of Understanding (MoU):
 an agreement between the GEF Secretariat and the seven GEF
Agencies plus all newly accredited GEF Project Agencies, not
listed in the Instrument as Implementing Agencies.
 commits the GEF Partner Agencies to follow all GEF Policies and
establish the conditions in which the GEF Agencies can seek GEF
resources for the preparation and implementation of GEF projects
from the GEF Council and the GEF CEO, as appropriate.
 sets out the respective duties and responsibilities of the GEF and the
GEF Agencies with respect to the allocation and use of such
resources.

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Thank you for your attention!
Questions?
Lily Uy Hale (Lhale@thegef.org)
Sr. Operations Officer
Operations and Business Strategy
GEF Secretariat