GRIF projects money to be returned ‘promptly’ if misuse uncovered

Entities implementing projects funded through the Guyana REDD+ Investment Fund (GRIF) will be required to return the money “promptly” if it is determined that it is being used in a manner that is inconsistent with the grant agreement.

This requirement is to be included in the grant agreement signed between the implementing entity and a partner entity that will oversee GRIF projects.

The GRIF is a fund for the financing of activities identified under the Guyana’s Low Carbon Development Strategy (LCDS). The Government of Norway has committed to provide up to US$250 million to the fund up to 2015, based on independent verifications of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities. The World Bank is the trustee for the GRIF.

Government spokesman Dr Roger Luncheon had said earlier this month that three main projects for submission to the Steering Committee of the GRIF were being finalised. These projects will be overseen by partner entities identified thus far, including the World Bank, the Inter-American Development Bank (IDB) and the United Nations Development Programme (UNDP).

In a recent update, the World Bank said that to date, none of the partner entities have presented any projects to the Steering Committee; therefore the committee has yet to consider project approvals. The World Bank as trustee stands ready to transfer funds to partner entities once approved by the Steering Committee, it added.

The partner entities submit projects to the Steering Committee for approval, receive funds and supervise projects according to their own fiduciary, social and environmental safeguards and operational policies and procedures, and report on implementation progress and results.

The implementing entities will receive funds from the partner entities to implement projects.  These may include the Government of Guyana or any other entity that is eligible for funding in accordance with the relevant policies, guidelines and procedures of the partner entity and approved by the Steering Committee.

Thus far, only the UNDP has signed a transfer agreement (for funds) with the GRIF trustee. This cleared the way for the transfer of funds from the World Bank to the UNDP to finance project implementation within the framework of the LCDS.

According to the transfer agreement signed by the UNDP, the agency shall ensure that each project proposal it submits to the Steering Committee is consistent with the LCDS and the overall results framework of the GRIF, once such framework is approved by the Steering Committee. The UNDP shall also ensure that each proposal includes a robust results framework for the project, as agreed between Guyana and the partner entity; and discloses any proposed waiver of the partner entity’s policies and procedures.

The UNDP agrees that any transferred funds shall be used in accordance with its regulations, rules, policies and procedures (including those in respect of the procurement of goods and services, financial management, environmental and social safeguards, reporting arrangements and its framework to combat fraud and corruption).

It also agreed that the funds will be used in accordance with the applicable decisions of the Steering Committee, including the purpose for which the allocations have been approved; the LCDS and the overall results framework of the GRIF once such framework is approved by the Steering Committee; the results framework for the project, as agreed between Guyana and the partner entity; and the project document of the partner entity, as agreed between Guyana and the partner entity. The UNDP shall be responsible for the supervision of a project’s adherence to the criteria and the supervision shall be in accordance with UNDP’s fiduciary, safeguards and operational policies and procedures.

It will be responsible for reporting to the Steering Committee on its activities carried out with the GRIF funds since upon the transfer of funds, the trustee shall have no responsibility, fiduciary or otherwise, for the use of such funds or activities carried out with it.

The UNDP has also agreed to prepare and submit to the trustee for each project, no later than 150 days after the end of each calendar year, annual reports on implementation results as well as mid-year progress narrative reports if agreed with the Steering Committee. It is required to report on results achieved compared to planned results as well as to its contribution to the achievement of the planned results of the GRIF as such and the financial status of projects and activities under its responsibility and will, within six months of the completion date of the project, provide the Steering Committee with a final report of such project.

According to the agreement, any grant agreement/arrangement that the UNDP enters into with an implementing entity shall provide that if the UNDP determines that GRIF funds are used in a manner inconsistent with the corresponding grant agreement/arrangement, the implementing entity shall promptly refund the GRIF funds to the partner entity and the partner entity shall promptly return such funds to the GRIF.

A financial contributor to the GRIF shall notify the World Bank if they have determined, in consultation with the partner entity and Guyana, that with respect to a project: there has been a substantial deviation from the project’s concept and budget approved by the Steering Committee;  the partner entity has failed to comply with any of the terms of the transfer agreement; or the partner entity has engaged in financial mismanagement, as determined in accordance with the partner entity’s policies and procedures. The trustee is then required to notify the partner entity in writing of the breaches and request the entity to remedy or cause such event to be remedied within 30 days of the notification.

If following receipt of the trustee notification, the partner entity fails to remedy or cause such event to be remedied within the specified time period to the satisfaction of the contributors, the trustee may suspend any further commitment and/or disbursement of the transferred funds for such project and/or require the partner entity to return the funds transferred to the partner entity for such project as instructed by the contributors.

According to the agreement, the UNDP undertakes to use reasonable efforts, consistent with its policies and procedures, to ensure that the GRIF funds provided to it are used for their intended purposes and are not diverted to terrorists or their agents.

The UNDP shall invite the contributors to participate in its supervision missions related to the activities funded by GRIF funds. Any contributor shall have the right to request or initiate an interim of final evaluation of the activities of the partner entity financed by the GRIF, in consultation with the partner entity and to be carried out in accordance with the partner entity’s evaluation policy. It is understood that any such evaluation will not constitute a financial, compliance or other audit of the GRIF.

The transfer agreement may be terminated by either party upon three months prior written notice while the World Bank shall not disburse any GRIF funds to the UNDP after December 31, 2016 unless the contributors so approve.

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