Distribution Model. Detailed Scenarios. Process Flow and Inventory

Transcription

1 Distribution Model Detailed Scenarios Process Flow and Inventory

2 Contents Introduction: Cash and Vouchers Core Responsibilities... 3 Programming Models for Cash and Vouchers... 6 Model 1: Cash-Account (Individual and/or Group)... 8 Model 2: Immediate Cash (Collection or Delivery) Model 3: Paper Voucher Model 4: Corporate Electronic Voucher This version of the document was modified in February For comments or suggestions, please contact Simon Clements in the Cash-for-Change Service. 1

3 List of Figures Figure 1 Summary of Core Responsibilities for the Implementation of Cash and Vouchers... 3 Figure 2. Cash Models and Respective Delivery Mechanisms... 4 Figure 3. Voucher Models and Respective Delivery Mechanisms... 5 Figure 4. Transfer Modality Selection Process All Models... 6 Figure 5. Cash Account: Delivery Mechanism and Partner Selection Process... 8 Figure 6. Cash Account: Contributions and Account Creation Processes Figure 7. Cash Account: Cyclical Distribution Planning, Monitoring and Reconciliation Processes Figure 8. Immediate Cash Delivery Mechanism and Partner Selection Process Figure 9. Immediate Cash Contributions and Account Creation Process Figure 10. Immediate Cash Cyclical Distribution Planning, Monitoring and Reconciliation Process Figure 11. Paper Voucher Delivery Mechanism Selection and Contracting Processes Figure 12. Paper Voucher Contributions, Pipeline and Account Creation Figure 13. Paper Voucher Distribution Planning, Monitoring and Reconciliation Process Figure 14. E-Voucher Model - Delivery Mechanism and Partner Selection Figure 15. E-Voucher Contributions, Pipeline and Registration Processes Figure 16. E-Voucher Distribution Planning, Monitoring and Reporting List of Tables Table 1. All Models - Needs Assessment Sub-Processes... 6 Table 2. All Models - Process 2 - Sectoral Capacity Assessment Sub-Processes... 7 Table 3. All Models - Process 3 - Transfer Modality Selection Sub-Processes... 7 Table 4. Cash Account: Process 4 - Delivery Mechanism Selection Sub-Processes... 9 Table 5. Cash Account: Process 5 - Partner Selection, Fee Determination and Contracting... 9 Table 6. Cash Account: Process 6 - Contributions and Pipeline Sub-Processes... 9 Table 7. Cash Account: Process 7 - Identification and Account Creation Sub-Processes Table 8. Cash Account: Process 8 - Cyclical Distribution Planning Sub-Procesess Table 9. Cash Account: Process 9 - Distribution Monitoring Sub-Processes Table 10. Cash Account: Process 10 - Distribution Reconciliation Sub-Processes Table 11. Immediate Cash: Process 4 - Delivery Mechanism Selection Sub-Processes Table 12. Immediate Cash: Process 5 - Partner Selection, Fee Determination and Contracting Table 13. Immediate Cash: Process 6 - Contributions and Pipeline Sub-Processes Table 14. Immediate Cash: Process 7 - Identification and Point of Payment Selection Table 15. Immediate Cash: Process 8 - Cyclical Distribution Planning Sub-Processes Table 16. Immediate Cash: Process 9 - Distribution Monitoring Sub-Processes Table 17. Immediate Cash: Process 10 - Distribution Reconciliation Sub-Processes Table 18. Paper Voucher Process 4 - Delivery Mechanism Selection Sub-Processes Table 19. Paper Voucher Process 5 - Partner Selection, Fee Determination and Contracting Table 20. Paper Voucher Process 6 - Contributions and Pipeline Sub-Processes Table 21. Paper Voucher Process 7 - Identification and Distribution Arrangements Table 22. Paper Model Process 8 - Cyclical Distribution Planning Sub-Processes Table 23. Paper Voucher Process 9 - Distribution Monitoring Sub-Processes Table 24. Paper Voucher Process 10 - Distribution Reconciliation Sub-Processes Table 25. E-Voucher Process 4 - Delivery Mechanism Selection Sub-Processes Table 26. E-Voucher Process 5 - Partner Selection, Fee Determination and Contracting Table 27. E-Voucher Process 6 - Contributions and Pipeline Sub-Processes Table 28 Process 7 - E-Voucher Identification and Vouchers Distribution Arrangements Table 29. E-Voucher Process 8 - Cyclical Distribution Planning Sub-Processes Table 30. E-Voucher Process 9 - Distribution Monitoring Sub-Processes Table 31. E-Voucher Process 10 - Distribution Reconciliation Sub-Processes

4 Introduction: Cash and Vouchers Core Responsibilities In 2008 Cash and Vouchers were introduced as additional transfer modalities to in-kind food. After a period of piloting and learning, the question is no longer whether cash and vouchers adequately meet beneficiaries food needs but rather in which circumstances they are appropriate and which delivery mechanisms are available. A review of on-going cash and voucher based operations was conducted with the aim to identify best practices and develop programming models that fit the majority of contexts where WFP operations are implemented. Guidance on designing and implementing cash based programs issued by some of WFP partners 1 was also reviewed. To enhance the effectiveness of WFP interventions, the approach taken in developing the cash and voucher programming models has been to integrate the three transfer modalities, i.e. cash, food and vouchers. An integrated approach allows maximum operational flexibility in shifting among the three transfer modalities and it ensures to efficiently use WFP's available capacities. Changes in WFP's traditional business process are however required to integrate the new programming tools and their respective delivery mechanisms. Programme and Logistics, while maintaining their operational focus, will need to develop the necessary skill-sets for working through markets; Finance and ICT, while continuing their traditional functions of respectively ensuring appropriate internal controls and facilitating communication, will need to play a greater operational support role. The process to setup and roll-out cash- or voucher based operations is shown in Table 1. The four main processes include sub-processes with responsibilities allocated to functional areas in light of their comparative advantage and need to ensure internal controls and segregation of duties. Figure 1 Summary of Core Responsibilities for the Implementation of Cash and Vouchers Summary of Core Responsibilities for the Development and Delivery of Cash and Voucher Business Processes Needs Assessment and Response Analysis Intervention Setup Implementation Distribution Reporting Logistics Programme Food Security, Nutrition and Market Analyses No Stop Needs? Yes Government Policies and Safety Nets CP Capacity Assessment & Operational Risk Analysis Local Retail Supply Chain Assessment & Operational Risk Analysis Effectiveness, Operational Risk and Externalities Cost-Efficiency Analysis - (Omega Value) Transfer Modality Selection CP Selection Retailer Selection (Voucher Operations) Standard Operating Procedures Registration Distribution Planning and Cash/Voucher Transfer Request Resource Availability Certification Monitoring (e.g. BCM, PDM) Monitor Transfer Delivery (Cash or Voucher) Reconciliation of Figures and Transfer Amount Distribution (POCB) Service Provider Invoice Verification (PODA) Request CP Service Payments Request Service Payment Request Retailers Payments Finance Financial Sector Assessment & Operational Risk Analysis Financial Service Provider Selection Effect Transfer to Dedicated Accounts Effect Transfer to Beneficiaries (Cash or Voucher) Perform Bank Reconciliation Effect CP, FSP and Retailer Payments ICT ICT Capacity Assessment & Operational Risk Analysis IT Solution Selection and Testing Train Partners in IT Solution Use Support Use of IT Solution within WFP and Partners Procurement RFPs Issued and Analysed Contracts Signed 1 ICRC, Oxfam, World Bank, etc. 3

5 Different contexts, population groups and needs will require different forms of assistance. As it is the case for food transfers, several cash and voucher delivery mechanisms are available to reach beneficiaries. They range from the use of banks and microfinance institutions, to the direct distribution of cash in envelopes or the use of Information Technologies such as cell phones and smart cards. These delivery mechanisms can be grouped into four programming models (see Figure 1 and Figure 2). Model 1: Cash Account Cash can be distributed through accounts that beneficiaries have opened in a selected bank, money transfer, or other financial institution. There can be as many accounts as the number of beneficiaries or in other circumstances one account can be used by a group of beneficiaries. In both cases, individuals will have several alternatives to access cash e.g. at the bank counter, with ATM cards, cell phone, etc. Model 2: Immediate Cash Cash can also be made immediately available to beneficiaries via direct delivery (e.g. on working site) or via collection from an agent or bank counter. In both cases beneficiaries are not required to open an account. Figure 2. Cash Models and Respective Delivery Mechanisms Individual Account Plastic card, Cell phone, Bank counter Cash Group of Beneficiaries Cash Delivery On-site distribution Immediate Cash Cash Collection Collect from Agent or Bank counter Model 3: Paper Voucher A voucher is a redemption slip that can be exchanged in pre-selected shops, with specified traders/service providers or at specifically organized fairs. Beneficiaries receive one or more paper coupons carrying either a monetary or a commodity value. Both cash and commodity vouchers can be exchange for items or services but not for cash. They must be reprinted prior to any distribution and their validity is determined by some unique features. 4

6 Model 4: Electronic Voucher Similar to paper vouchers, electronic vouchers carry information on the items and/or quantities they can be exchanged to. This information is stored on a barcode, a magnetic band or a microchip of a plastic card. In some cases electronic vouchers are provided through cell phones. To redeem electronic vouchers, beneficiaries have to use unique PIN codes provided individually. Electronic vouchers are issued to beneficiaries only once whereas their redemption value or quantity is credited remotely at predefined temporal intervals. Figure 3. Voucher Models and Respective Delivery Mechanisms Paper Coupons Voucher Retailer, Gvt Shop Electronic Cell Phone Plastic card 5

7 Programming Model for Cash and Vouchers The distribution model consists of ten main processes, from the selection of the appropriate transfer modality and delivery mechanism, to distribution reconciliation and reporting. The first three processes, those leading to the selection of the appropriate transfer modality, are the same across the four programming models. Lead responsibility has been allocated to HQ divisions, who are responsible to develop detailed guidance, training and tools. Figure 4. Transfer Modality Selection Process All Models Transfer Modality Selection All Models 1. Needs Assessment Process 2. Sectoral Capacity Assessment Process 3. Options Development and Modality Selection Process Notes Other / TBD ICT Finance Logistics Programme Food Security and Market Analysis Food, Nutrition, Safety Net and Regulatory Policies Needs Assessment captures basic information on geographic targeting, caseload estimation and profiling Decision to Intervene Cooperating Partner Capacity Assessment Local Market and Retail Capacity Assessment Financial Services Sector Capacity Assessment IT and Communications Assessment Field Security Assessment Sectoral capacity assessment may be undertaken in advance of any decision to intervene. Reassessment may be necessary at the design stage. Operational Scope Appropriateness and Effectiveness Analysis Comparative Cost- Efficiency Analysis Modality Options Internal and External Consultations Includes discussion of major programmatic risks Comparative Cost-Efficiency analysis should include a complete range of operational costs Selection of Transfer Modality Process 1 - Needs Assessment It includes activities to analyse household food security and nutrition, and to assess how markets usually function. Through this process basic information on geographic targeting, potential beneficiary profiling, caseload estimation, market supply and demand trends are captured. This phase supports WFP s decision to intervene in any given context. Food Security, Nutrition and Market Analysis VAM Existing Government Safety Net Policy Analysis Programme New. To review national policy and regulatory context Process 2 - Sectoral Capacity Assessment Table 1. All Models - Needs Assessment Sub-Processes Assessment data for food assistance programmes should include information on key operational sectors. Up to five assessments will inform on the potential operational scope with respect of the implementation of cash, food or voucher programmes in any given context and will support the 6

8 selection of the most adequate transfer modality. The sectoral assessments may take place at any given time and their re-assessment will be required prior to the design of a new intervention. Cooperating Partner Capacity Programme Existing Local Market and Retail Sector Capacity Logistics New. To examine potential retail sector participation in programming. Financial Services Capacity Finance New IT and Communications Capacity ICT New Field Security Assessment Security New Table 2. All Models - Process 2 - Sectoral Capacity Assessment Sub-Processes Process 3 - Transfer Modality Selection The most appropriate transfer modality will depend on the problem to be addressed, the intervention s specific objectives and the profiling of the targeted groups. The activities under this process will support the selection of a resource efficient transfer modality with the highest probability to meet the intervention s objectives. Comparative Cost-Efficiency Analysis Logistics New, to compare the actual costs of different transfer modalities. A cost matrix for cash and voucher based interventions must be developed. Effectiveness and Operational Risk Analysis Programme New, to support the selection of effective transfer modalities and to review risks with regard to achieving SOs and intervention s specific outcomes. Internal Consultation Programme Existing External Consultation Programme Existing Table 3. All Models - Process 3 - Transfer Modality Selection Sub-Processes 7

9 Model 1: Cash-Account (Individual and/or Group) The Cash Account model is one of the four WFP distribution models in which cash is made available to beneficiaries via an account-based process (such as a bank account, post office account or a mobile money transfer account). In this model, beneficiaries will access the cash using the standard methods associated with the financial service provider (ATM, MMT agent etc.). Cash can be distributed through accounts that beneficiaries have opened in a selected bank, money transfer, or other financial institution. There can be as many accounts as the number of beneficiaries or in other circumstances one account can be used by a group of beneficiaries. In both cases, individuals will have several alternatives to access cash e.g. at the bank counter, with ATM cards, cell phone, etc. Figure 5. Cash Account: Delivery Mechanism and Partner Selection Process Cash Account Model (Individual and/or Group) 4. Delivery Mechanism Selection Process 5. Partner Selection, Fee Determination and Contracting Process Notes Other / TBD ICT Finance Logistics Programme Programmatic Risk Review Financial Risk Review Configure Management Solution Instrument Selection IT will install relevant modules of corporate Management System to support beneficiaries and transfers as necessary. Organisational Approach ToRs for CPs providing Services TORs for Financial Service provider RfP to select Financial Service Provider Seek guidance from HQ on fee negotiation. Services Fee Negotiation Transfer Fee Structure Negotiation CPs Fees Financial Services fees FLA Concluded FSP Contract concluded Standard Operating Procedures Process 4 - Delivery Mechanism Selection This process concerns the selection of the delivery mechanism to ensure food assistance under the form of cash reaches WFP beneficiaries timely and safely. Several cash delivery mechanisms are available which can be grouped into two main models: Account and Immediate Cash. The choice of the delivery mechanism will depend on many factors, including the presence of existing systems, beneficiary familiarity with such systems and the most effective way of getting the money into their hands. The installation of the Management Solution, a corporate tool still to be developed but essential in cash based programming, is envisaged at this stage. The purpose of this corporate tool is to manage, monitor and track the cyclical delivery of assistance to beneficiaries. 8

10 Programme Risk Review Programme New. To review risks, pros and cons of both delivery mechanisms Finance Risk Review Finance New. To review risks, pros and cons of proposed model Management Solution Installation ICT New. To install and test application of corporate BMS Table 4. Cash Account: Process 4 - Delivery Mechanism Selection Sub-Processes Process 5 - Partner Selection, Fee Determination and Contracting This process is concerned with finalising operational and contractual arrangements for the implementation of the cash-account distribution model. Roles and responsibilities between the two groups of contractual partners Cooperating Partners (CPs) and Financial Service Providers (FSPs) should be finalised. An important part of this process includes the fee determination, which will be established locally within corporate benchmarks. Terms of Reference for CPs Programme Existing Service Fee Negotiation Programme New for cash component Field Level Agreement Finalisation Programme Existing Terms of Reference for FSPs Finance/Programme New. To select the FSP which ensures timely and safely delivery of cash into the accounts of WFP beneficiaries Request for Proposals for FSPs Procurement Partially Existing FSP Fee Negotiation Finance New. Seek Corporate guidance FSP Contract Finalisation Procurement New. It requires inputs from Legal Office to standardize contracts Standard Operating Procedures Programme Partially Existing Table 5. Cash Account: Process 5 - Partner Selection, Fee Determination and Contracting Sub-Processes Process 6 - Contributions and Pipeline This phase is concerned with the programming and management of resources, i.e. the cash pipeline. Similar to the food transfer programming, resources to be delivered to beneficiaries should be called forward, stored, managed and reported for throughout the intervention s lifespan. A dedicated project account is to be created to easily manage and transparently report on the use of the project resources. To avoid losses e.g. exchange rate, sufficient resources should be called forward timely and in line with the planned distributions. A cash-specific pipeline management tool is to be developed for that purpose. Creation of Project Dedicated Account Finance New. If applicable. Contributions Assignment Plan Programme Existing Creation of Transfer PR RMBP Existing Creation of Transfer PO Programme Existing Pipeline Management and Call Forward Progr/Log Partially Existing. Tool to be developed Table 6. Cash Account: Process 6 - Contributions and Pipeline Sub-Processes 9

11 Process 7 - Identification and Account Creation Activities under this process will lead to the organization of the cash distribution. The process includes the creation of individual beneficiary or group accounts required to transfer cash from WFP project dedicated account. The division of labour of this phase is primarily concerned with maintaining the integrity of beneficiary data and account details and with the segregation of duties among functional areas. Household Targeting Criteria Programme Existing Selection Programme Existing. Oversight of CPs Master List Creation Prog/ICT New. Cash transfers require a database to safely store beneficiaries data Account Creation Request FSP/CP New Account Verification Logistics New. account details should be managed by a third party unit not involved with the beneficiary selection or with authorising the cash transfer into their account Table 7. Cash Account: Process 7 - Identification and Account Creation Sub-Processes Figure 6. Cash Account: Contributions and Account Creation Processes Cash Account Model (Individual and/or WFP Cash Account) 6. Contributions and Pipeline Process 7. Identification and Account Creation Process Notes Other / TBD ICT Finance Logistics Programme Assignment Plan Create PO for transfer to Beneficiaries Create PR for beneficiaries cash Transfer Create WFP project dedicated account Pipeline Management and Call forward of resources Household Targeting Criteria Selection Master List Creation Request Account Creation (FSP) Verification of Individual or Group Account number recorded in BMS With the creation of accounts, the Financial Service provider may issue items such as ATM cards to facilitate cash collection or delivery. Process 8 - Cyclical Distribution Planning This process outlines the activities to be undertaken in order to regularly deliver (usually monthly) cash to the selected beneficiaries. Similar to the previous process, the segregation of duties among functional areas is applied. Authorisation follows the major planning steps, initiating the transfer distribution. 10

12 Monthly Distribution Planning Programme Existing Resource Availability Confirmation Logistics Partially Existing. Cash resources are called forward on a need base Creation of Payment Request Programme Partially Existing. Distribution Plan Certification of Payment Request Logistics Partially Existing. Equivalent to Consignment Plan Effect transfer to Project Dedicated Account Finance Existing. Amount to be distributed during the cycle is transferred to dedicated account. If applicable. Effect Transfer to Accounts Finance New Table 8. Cash Account: Process 8 - Cyclical Distribution Planning Sub-Procesess Figure 7. Cash Account: Cyclical Distribution Planning, Monitoring and Reconciliation Processes Cash Account Model (Individual and/or WFP Cash Account) 8. Cyclical Distribution Planning Process 9. Distribution Monitoring 10. Reconciliation and Services Payment Process Notes Other / TBD ICT Finance Logistics Programme Monthly Distribution Planning Resource Availability Confirmation Review and Consolidate CP Lists Create Transfer Request Certify Payment Request Effect Transfer to Project Account Effect Transfer from Project Account to Beneficiaries Programme forwards beneficiary list to Logistics to issue secured list of beneficiaries with individual cash transfer; Logistics requests Finance to authorize bank to transfer cash into beneficiary accounts. Cash Distributed Technical Support to BMS Users Distribution Process and Post- Distribution Monitoring Market, Food Price and Transfer Value Monitoring Monitoring of Cash Distributor (FSP) Monthly Distribution Report Services Distribution Report (from CPs) Transfer Services Distribution Report (from FSP) Funds Transfer Confirmation Report (from FSP) Services Report Verification and Follow-Up Transfer Distribution Reconciliation Services Entry Sheet (CPs) Transfer Services Entry Sheet (FSP) Distribution Services Payments Process 9 - Distribution Monitoring The Distribution Monitoring process comprises activities aiming at examining the distribution process and the impact of the transfer on to beneficiaries. At this stage Market and Retail Food Price monitoring should also be undertaken to estimate the beneficiary s access to food. Post-Distribution Monitoring Programme Existing Distribution Monitoring (FSP) Logistics New. Compilation of intermediate reports on cash transferred. Monthly Distribution Report Report Off Existing Market and Retail Food Price Monitoring Prog / Log New Table 9. Cash Account: Process 9 - Distribution Monitoring Sub-Processes 11

13 Process 10 - Distribution Reconciliation This process entails a comprehensive overview and reconciliation of the monthly distribution outputs (beneficiaries reached and volume/amount of assistance delivered) with reports received from CPs and FSP for respectively beneficiary and financial services provided. Irregularities will be addressed by relevant operational units. The successful conclusion of the reconciliation phase supports the payment of CPs and Financial Service Providers. Services Distribution Report Programme Existing Transfer Services Distribution Report Logistics New. Compile regular reports on cash distributed Funds Transfer Confirmation Report Finance Existing. The bank statement is submitted and uploaded if dedication WFP Cash account (owned by WFP) is used. Report submitted by the FSP at the end of the cycle to confirm the amount transferred and requesting service payment. (If FSP owns account). Transfer Distribution Reconciliation Logistics New. Reports compiled by Logistics are reconciled with end of cycle report received from FSP. Verification and Follow-Up Programme New. The overall cash delivered is reconciled with CPs report on beneficiaries assisted. CPs Services Entry Sheet Service/Benefit Programme Existing FSP Services Entry Sheet - Service Logistics New. In light of the reconciliation SES is entered by Logistics to allow Finance to proceed with payment Process/Transfer Payments - Services Finance Existing Table 10. Cash Account: Process 10 - Distribution Reconciliation Sub-Processes 12

14 Model 2: Immediate Cash (Collection or Delivery) Immediate Cash is one of the four WFP distribution models in which cash is made available to beneficiaries either through direct distribution (for example where beneficiaries are provided with cash in envelopes) or as cash at disposal (for example where cash is collected from agreed point such as bank or money transfer agent). In this model, cash can also be made immediately available to beneficiaries via direct delivery (e.g. on working site) or via collection from an agent or bank counter. In both cases beneficiaries are not required to open an account. Figure 8. Immediate Cash Delivery Mechanism and Partner Selection Process Immediate Cash (Collection or Delivery) 4. Delivery Mechanism Selection Process 5. Partner Selection, Fee Determination and Contracting Process Notes Other / TBD ICT Finance Logistics Programme Programmatic Risk Review Financial Risk Review Security Risk Review Instrument Selection Configure Management Solution This phase will determine whether cash will be either collected by beneficiaries (at a dedicated transfer agent) or delivered to beneficiaries (by a dedicated agent). Organisation Approach TORs for CPs providing Services TORs for Financial Service provider Services Fee Negotiation RfP to select Financial Service Provider CPs Fees Agreed Transfer Fee Structure Negotiation Seek guidance from HQ on fees. Standard Operating Procedures FSP Contracted FLA Concluded Process 4 - Delivery Mechanism Selection This process concerns the selection of the cash delivery mechanism to ensure assistance reaches WFP beneficiaries timely and safely. Several cash delivery mechanisms are available which can be grouped into two main models: Account and Immediate Cash. The choice of the model and subsequently of the delivery mechanism will depend on what systems are functioning, what methods recipients are familiar with and what is the most effective way of getting the money into their hands. At this stage of the project cycle, it is envisaged the installation of the Management Solution a corporate tool still to be developed but essential in cash based programming. The purpose of this corporate tool is to manage, monitor and track the cyclical delivery of beneficiaries cash entitlements. 13

15 Programme Risk Review Programme New. To review risks, pros and cons of using the account or immediate cash model Finance Risk Review Finance New. To review risks, pros and cons of proposed transfer model and available delivery mechanisms Management Solution Installation ICT New. To install and test local application of corporate BMS Table 11. Immediate Cash: Process 4 - Delivery Mechanism Selection Sub-Processes Process 5 - Partner Selection, Fee Determination and Contracting This process is concerned with finalising operational and contractual arrangements for the implementation of the immediate cash distribution model. Through this process Programme, Logistics and Finance will have to compare from different perspective various methods to ensure cash is safely and timely delivered to beneficiaries. The choice of whether cash is collected by beneficiaries (at-counter or via ATM card) or delivered to them on site (cash-in-envelope) is also critical with regard to risk, controls and security. Roles and responsibilities between the two groups of contractual partners Cooperating Partners (CPs) and Financial Service Providers (FSPs) is also critical as CPs will be responsible for a thorough planning and for the monitoring of the cash collection/delivery. An important part of this process includes the fee determination, which will be established locally within corporate benchmarks. Terms of Reference for CPs Programme Existing Service Fee Negotiation Programme New for cash component Field Level Agreement Finalisation Programme Existing Terms of Reference for FSPs Finance New. To select the FSP(s) Request for Proposals for FSPs Finance/Programme Partially Existing FSP Fee Negotiation Finance New. Seek Corporate Guidance. FSP Contract Finalisation Procurement New. It requires inputs from Legal Office to standardize contracts Standard Operating Procedures Programme Partially Existing Table 12. Immediate Cash: Process 5 - Partner Selection, Fee Determination and Contracting Sub-Processes Process 6 - Contributions and Pipeline This phase is concerned with the programming and management of resources, i.e. the cash pipeline. Similar to the food transfer programming, resources to be delivered to beneficiaries should be called forward, stored, managed and reported for throughout the intervention s lifespan. A dedicated account is to be created to easily manage and transparently report on the use of the project resources. To avoid losses e.g. exchange rate, sufficient resources should be called forward timely and in line with the planned distributions. A cash-specific pipeline management tool is to be developed for that purpose. 14

16 Creation of Project Dedicated Account Finance New Contributions Assignment Plan Programme Existing Creation of Transfer PR RMBP Existing Creation of Transfer PO Programme Existing Pipeline Management and Call Forward Progr/Log Partially Existing. Tool to be developed Table 13. Immediate Cash: Process 6 - Contributions and Pipeline Sub-Processes Figure 9. Immediate Cash Contributions and Account Creation Process. Immediate Cash (Collection or Delivery) 6. Contributions and Pipeline Process 7. Identification and Account Creation Process Notes Other / TBD ICT Finance Logistics Programme Assignment Plan Create PO for Cash Transfers Create PR for Cash Transfers Pipeline Management and Call forward of resources Create WFP Project Dedicated Account Household Targeting Criteria Selection (undertaken by CPs) Collection or Delivery Points Identified Master List (recorded in BMS) e- Account creation in BMS Technical Support to BMS Users Allocation of Beneficiaries to Collection or Delivery Points Process 7 - Identification and Point of Payment Selection Activities under this process will lead to the organization of the cash distribution. The process includes the identification together with the FSP(s) of the points where beneficiaries will go to collect or will receive their cash entitlement. A security assessment of the points of payment is highly recommended. Once beneficiaries are identified and registered, they will have to be clustered by their closest point of payment. The Corporate Management Database will be used to improve monitoring and accountability of cash transferred from WFP project dedicated account to the FSP(s) account(s) and then distributed to beneficiaries. The division of labour of this phase is primarily concerned with maintaining the integrity of beneficiary data and cash transfer details and with the segregation of duties among functional areas. 15

17 Household Targeting Criteria Programme Existing Selection Programme Existing. Oversight of CPs Collection or Delivery Points Identified Logistics New Master List Creation Programme New. Cash transfers require a database to safely store beneficiaries data New Management Database Technical ICT Support virtual Account Creation in BMS TBD Assign to CO WINGS vendor focal point. Allocation of Beneficiaries by Collection or Logistics New Delivery Points Security Assessment of Collection o/ Delivery Security New Points Table 14. Immediate Cash: Process 7 - Identification and Point of Payment Selection Sub-Processes Figure 10. Immediate Cash Cyclical Distribution Planning, Monitoring and Reconciliation Process. Immediate Cash (Collection or Delivery) 8. Cyclical Distribution Planning 9. Distribution Monitoring Process 10. Reconciliation and Payment Process Notes Other / TBD ICT Finance Logistics Programme Monthly Distribution Planning Resource Availability Confirmation Technical Support to BMS Users Create Transfer Request Certify Payment Request Effect Funds Transfer to Dedicated Project Account Mobilisation Effect Transfer from Project Dedicated Account to FSP for Collection or Delivery Cash Distributed Distribution Process and Post- Distribution Monitoring Market, Food Price and Transfer Value Monitoring Monitoring of Cash Distributor (FSP) Monthly Distribution Report Services Distribution Report (from CPs) Transfer Services Distribution Report (from FSP) Funds Transfer Confirmation Report (from FSP) Services Report Verification and Follow-Up Transfer Distribution Reconciliation Services Entry Sheet (CPs) Transfer Services Entry Sheet (FSP) Distribution Services Payments Process 8 - Cyclical Distribution Planning This process outlines the activities to be undertaken to regularly deliver (usually monthly) cash to the selected beneficiaries. Similar to the previous process, the segregation of duties among functional areas is applied. Authorisation follows the major planning steps, initiating the transfer distribution. 16

18 Monthly Distribution Planning Programme Existing Resource Availability Confirmation Logistics/Pipeline Partially Existing. Cash resources are called forward on a need base. Mention role of Pipeline Creation of Payment Request Programme Partially Existing. Equivalent to Distribution Plan Certification of Payment Request Logistics Partially Existing. Equivalent to Consignment Plan by Point of Payment Effect transfer to Project Dedicated Account Finance New. Amount to be distributed Effect transfer of funds to FSP(s) account for Cash Collection or Delivery Finance during the cycle is transferred in project dedicated account. Should note that if this is applicable. New. From dedicated account funds are transferred to the FSP account with authorization to disburse specific amounts to beneficiaries by Point of Payment. Should mention applicability. Transfer Agents at Point of Payment Mobilized Logistics New. Agents must receive a beneficiary payment plan based on their capacity Mobilization Programme New. Ensuring CPs have planned beneficiary payments according to Transfer Agent capacity Cash is Distributed Prog/Log/Fin New. On-time monitoring of amount transferred to beneficiary accounts Table 15. Immediate Cash: Process 8 - Cyclical Distribution Planning Sub-Processes Process 9 - Distribution Monitoring The Distribution Monitoring process comprises activities aiming at examining the distribution process and the impact of the transfer on to beneficiaries. Market and Food Price monitoring is an important process, enabling WFP to estimate the beneficiary food access. Post-Distribution Monitoring Programme Existing Distribution Monitoring (FSP) Logistics New. Compilation of intermediate reports on cash transferred. Market and Retail Food Price Monitoring Prog / Log New Monthly Monitoring Report Report Off Existing Table 16. Immediate Cash: Process 9 - Distribution Monitoring Sub-Processes Process 10 - Distribution Reconciliation This process entails a comprehensive overview and reconciliation of the monthly beneficiaries reached and volume/amount of cash delivered with reports received from CPs and FSP for respectively beneficiary and financial services provided. Irregularities will be addressed by relevant operational units. The successful conclusion of the reconciliation phase supports the payment of CPs and Financial Service Providers. 17

19 CPs Services Distribution Report Programme Existing Transfer Services Distribution Report Logistics New. Regular intermediate reports on cash progressively collected or delivered to beneficiaries are compiled Funds Transfer Confirmation Report Finance Existing. The bank statement is submitted and uploaded if dedication WFP Cash account (owned by WFP) is used. At the end of the cycle a comprehensive report is submitted by the FSP to confirm the amount transferred and to request service payment as per contract. (If FSP owns account). Transfer Distribution Reconciliation Logistics New. Reports compiled by Logistics are reconciled with end of cycle report received by Finance from FSP. Verification and Follow-Up Programme New. The overall cash delivered is reconciled with CPs report on beneficiaries assisted during the cycle. Services Entry Sheet Benefit Programme Existing FSP Services Entry Sheet - Services Logistics New. In light of the cash delivery reconciliation SES is entered by Logistics to allow Finance to proceed with FSP fees payment Process/Transfer Services Payments Finance Existing Table 17. Immediate Cash: Process 10 - Distribution Reconciliation Sub-Processes 18

20 Model 3: Paper Voucher The Paper Voucher model is one of the four WFP distribution models where the entitlement is transferred to the targeted recipient with a paper document stating the entitlement. A voucher is a redemption slip that can be exchanged in pre-selected shops, with specified traders/service providers or at specifically organized fairs. Beneficiaries receive one or more paper coupons carrying either a monetary or a commodity value. Both cash and commodity vouchers can be exchange for items or services but not for cash. They must be reprinted prior to any distribution and their validity is determined by some unique features. Figure 11. Paper Voucher Delivery Mechanism Selection and Contracting Processes Paper Voucher Model 4. Delivery Mechanism Selection Process 5. Partner Selection, Fee Determination and Contracting Process Notes Other ICT Finance Logistics Programme Review Programmatic Risks Establish requirements for retailers/shops selection Review Financial Risks Configure Management Solution Review options for contracting retailers/shops (WFP, CP or FSP) Design Vouchers and define their technical specifications TORs for CPs providing Services Selection of Shops TORs of the Financial Service Provider for vouchers redemption RfP to Select Financial Service Provider RfP for Printing Vouchers (Procurement) Services Fee Negotiation Prepare Agreements/ Contracts with Retailers Request Vendor Creation for Retailers (if WFP contracts them) CPs Fees agreed Sign Agreement/ Contracts with Retailers FLA Concluded FSP Fees agreed Selection of FSP Standard Operational Procedures Contracts Signed Process 4 - Delivery Mechanism Selection This process concerns the selection of the delivery mechanism for Paper Voucher. Although delivering paper vouchers is similar to deliver food i.e. CPs are typically responsible for their distribution, this process entails also the setup of an appropriate voucher redemption and retailers payment mechanism. 19

21 Programme Risk Review Programme New. To review risks, pros and cons of Design Vouchers and define their technical specifications Establish requirements for retailers/shops selection Programme Logistics delivering paper vouchers New. A corporate paper voucher design could be used New. To review the supply chain of retailers, quality of food items sold, hygiene, etc Finance Risk Review Finance New. To review risks of voucher forging, fraud and pros and cons of retailer Review options for contracting retailers/shops (WFP, CP or FSP) Logistics payment options New. To review risks, pros and cons of directly contracting the retailers, or contracting them via CPs and/or FSP. Based on the typology of retailers and Finance Risk Review Management Solution Installation ICT New. To install and test local application of corporate BMS Table 18. Paper Voucher Process 4 - Delivery Mechanism Selection Sub-Processes Process 5 - Partner Selection, Fee Determination and Contracting This process is concerned with finalising operational and contractual arrangements for the implementation of the Paper Voucher distribution model. Terms of Reference for CPs Programme Partially Existing. Service Fee Negotiation Programme New for voucher component Field Level Agreement Finalisation Programme Existing Selection of Shops Logistics New. WFP is responsible for the availability and quality of food items in the shops accepting vouchers Prepare Agreement/Contracts with Retailers Logistics New. Retailers are either contracted directly by WFP or via CP or FSP. Agreements with retailers on food quality, availability and price is required Terms of Reference for FSPs Finance/Programme New. To select the FSP which ensures the timely verification and certification of vouchers redeemed Request for Proposals for FSPs Procurement Partially Existing FSP Fee Negotiation Finance New. Seek Corporate Guidance FSP Contract Finalisation Procurement New. Issue standard contracts Request for Proposals for printing vouchers Procurement New. Not required if a corporate paper voucher is issued Standard Operating Procedures Programme Partially Existing Table 19. Paper Voucher Process 5 - Partner Selection, Fee Determination and Contracting Sub-Processes 20

22 Through this process Programme, Logistics and Finance will have to compare different methods to ensure beneficiaries will easily and timely redeem their vouchers, and retailers will be timely paid for the commodities provided to beneficiaries. The choice of whether WFP directly contracts the retailers or the latter are contracted by a Financial Service Provider is critical. In both cases WFP must be vigilant on the quality, quantity and price of foods sold by the retailers. Roles and responsibilities must be clearly defined. Typically retailers should not apply any fee for their role into the operation. Conversely, the fee determination of CPs and FSP will be established locally within corporate benchmarks. Process 6 - Contributions and Pipeline This phase is concerned with the programming and management of resources, i.e. the cash pipeline. Similar to the food transfer programming, resources to be delivered to beneficiaries should be called forward, stored, managed and reported for throughout the intervention s lifespan. A dedicated project bank account is created to easily manage and transparently report on the use of the project resources. To avoid losses e.g. exchange rate, sufficient resources should be called forward timely and in line with the planned distributions. A cash-specific pipeline management tool must be developed for that purpose. Creation of Project Dedicated Account Finance New Contributions Assignment Plan Programme/Pipeline Existing Creation of Transfer PR RMBP Existing Creation of Transfer PO Programme Existing Pipeline Management and Call Forward Progr/Log Partially Existing. Tool to be developed Table 20. Paper Voucher Process 6 - Contributions and Pipeline Sub-Processes Process 7 - Identification and Vouchers Distribution Arrangements Activities under this process will lead to the organization of the vouchers distribution. Additional to the beneficiary identification and registration, awareness on the voucher redemption process is contemplated at this stage. To that end, clear voucher distribution arrangements including when and under which conditions WFP is delivering vouchers to CPs have to be agreed upon. Household Targeting Criteria Programme Existing Selection Programme Existing. Oversight of CPs Master List Creation Programme New. Created in the Management Solution New Management Solution Technical ICT Support Allocation of Beneficiaries by retailers Logistics New. To be undertaken only when retailers capacity is very low sensitization and awareness Programme New Organization of Vouchers distribution Progr/Log Partially Existing Table 21. Paper Voucher Process 7 - Identification and Vouchers Distribution Arrangements Sub-Processes 21

23 While in most instances beneficiaries are free to redeem their vouchers in any shop having an agreement/contract with WFP, in some circumstances beneficiaries will have to be clustered and directed to their closest retail shop. The Corporate Management Solution will be used to maintain track of the vouchers serial number provided to beneficiaries and for the accountability of cash transferred from WFP project dedicated account to the FSP s account for the retailers payment. Figure 12. Paper Voucher Contributions, Pipeline and Account Creation Paper Voucher Model 6. Contributions and Pipeline Process 7. Identification and Account Creation Process Notes Other / TBD ICT Finance Logistics Programme Assignment Plan Create WFP project dedicated account Create PO for Transfers Create PR for cash to beneficiaries via Voucher Transfer Pipeline Management and Call forward of resources Define Household Targeting Criteria CPs undertake Selection and Registration List of registered Beneficiaries sent to WFP for verification Master List (recorded in BMDb) IT Support Provided to WFP, CPs and others Sensitization and Awareness Process 8 - Cyclical Distribution Planning This process outlines the activities to be undertaken in order to regularly delivery (usually monthly) vouchers to the registered beneficiaries. Monthly Distribution Planning Programme Existing Resource Availability Confirmation Logistics/Pipeline Partially Existing. Cash resources are called forward on a need base. Mention role of Pipeline. Effect transfer to Project Dedicated Account Finance New. Amount of cash equivalent to vouchers to be distributed is transferred in dedicated account. Should note that if this is applicable. Vouchers printed and deliver to CPs Logistics New. Vouchers distributed Prog/Log Partially New. Table 22. Paper Model Process 8 - Cyclical Distribution Planning Sub-Processes 22

24 Process 9 - Distribution Monitoring The Distribution Monitoring process comprises activities aiming at examining the distribution process and the impact of the voucher transfer on to beneficiaries. Market and Retail Food Price monitoring is an important element of this process, enabling WFP to ensure beneficiaries receive the planned food basket. Post-Distribution Monitoring Programme Existing Voucher Redemption Monitoring Logistics New Market and Retail Food Price Monitoring Prog / Log New Monthly Monitoring Report Report Off Existing Table 23. Paper Voucher Process 9 - Distribution Monitoring Sub-Processes Figure 13. Paper Voucher Distribution Planning, Monitoring and Reconciliation Process Paper Voucher Model 8. Cyclical Distribution Planning 9. Distribution Monitoring 10. Distribution Reconciliation Notes Other / TBD ICT Finance Logistics Programme Monthly Distribution Planning Resource Availability Confirmation Vouchers corresponding to monthly plan and/or available resources are printed and delivered to CPs (waybills?) Transfer Resources to project dedicated account In some cases, Logistics may have to provide training to selected retailers on supply chain, storage and handling Vouchers Distributed Post-Distribution Monitoring Market and Retail Food Price Monitoring Voucher Redemption Monitoring Monthly Distribution Report Services Distribution Report (from CPs) FSP provides reports on collected vouchers by shop for Redemption Verification and Follow-Up Request transfer of resources from dedicated account to FSP to redeem vouchers Effect Transfer Resources to FSP Account for Shops reimbursement (or to shops directly) Services Entry Sheet (CPs) FSP Services Entry Sheet Collect and Verify Vouchers from Shops Request Shops Payment (Reimbursement) Process Transfer Services Payment Process 10 - Distribution Reconciliation This process entails a comprehensive overview and reconciliation of the monthly distribution outputs (beneficiaries reached and volume/amount of assistance delivered) with reports received from CPs and FSP for respectively beneficiary and retailers payment services provided. Irregularities will be addressed by relevant operational units. The successful conclusion of the reconciliation phase supports the payment of CPs and Financial Service Providers for their services. 23

25 CPs Services Distribution Report Programme Existing FSP provides report on vouchers redeemed Logistics New. Like transporter invoice verification, Logistics will reconcile supporting documentation to FSP invoice - services. Should include bank statement for dedicated cash account (WFP owned or FSP) Verification and Follow-Up Programme New. The overall vouchers redeemed are reconciled with CPs report on beneficiaries assisted during the cycle. New. Upon random verification of redeemed vouchers Request transfer of resources to FSP for retailers Logistics payments Effect transfer from projected dedicated account Finance New. If applicable. Based on to FSP programme design. Services Entry Sheet -Benefit Programme Existing FSP Entry Sheet - Services Logistics New. In light of the vouchers redeemed SES is entered by Logistics to allow Finance to proceed with FSP fees payment Process/transfer Services Payments Finance Existing Table 24. Paper Voucher Process 10 - Distribution Reconciliation Sub-Processes 24