UN Official Provides Update on New Funding Compact for UN Development System
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In May 2018, UN Member States welcomed the call by the UN Secretary-General to establish a funding compact and launch a funding dialogue in 2018 with a view to finalizing the compact.

The funding compact relates to voluntary funding of the UN development system and other contributions.

Convening the third funding dialogue, UN Deputy Secretary-General Amina Mohammed provided an update on the preparation of the compact, and briefed delegates on the "reinvigorated resident coordinator system”.

17 December 2018: Governments have been meeting to discuss the funding compact that will support the reformed UN development system, and a draft of the compact has been circulated to Member States. Addressing the third plenary of the dialogue series, UN Deputy Secretary-General Amina Mohammed said funding will “make or break the reform,” and proposed extending the funding dialogue until mid-February 2019.

Responding to mandates of UN General Assembly (UNGA) resolution 71/243 on the quadrennial comprehensive policy review of operational activities for development of the UN system (QCPR), in 2017 UN Secretary-General António Guterres released two consecutive reports setting out major changes required to ensure a more coherent, accountable and effective support to the 2030 Agenda for Sustainable Development by the UN development system. Among key areas for transformation, he suggested, in his first report, to work with UN Member States on proposals for a funding compact to explore reasonable options that could help improve the quality and predictability of resources allocated to the UN development system, “in return for greater effectiveness, transparency and accountability on system-wide results.” In his second report, he noted his intention to establish a funding dialogue with Member States during 2018 to operationalize the funding compact, specifying that the dialogue would take place under the leadership of the Deputy Secretary-General as Chair of the UN Development Group (UNDG).

In May 2018, UN Member States adopted UNGA resolution 72/279 on repositioning the UN development system in the context of the QCPR, welcoming the call by the Secretary-General to establish a funding compact and to launch a funding dialogue in 2018 with a view to finalizing the compact. Per the resolution, the funding compact relates to voluntary funding of the UN development system and other contributions, and the Secretary-General will have to report on the outcome of the funding dialogue at the operational activities for development segment of the 2019 session of the UN Economic and Social Council (ECOSOC).

On 17 December 2018, during the third plenary meeting of the funding dialogue, convening at UN Headquarters in New York, US, Mohammed provided an update on the funding compact process, noting that a draft of the compact has been circulated to all Member States. She said the draft includes a “more elaborate” set of commitments provided by Member States to increase core, pooled and thematic funds, and commitments by the UN development system to improve transparency of spending, visibility requirements, joint activities, system-wide evaluations and reporting, efficiency gains and cost recovery.

The technical track of the funding dialogue will resume on 15 January 2019, and a final plenary meeting is expected to take place in February.

Mohammed said more time is needed to finalize the compact, including on tightening commitments and refining indicators, and proposed to extend the funding dialogue until mid-February 2019. She announced that the “technical track” of the dialogue will resume on 15 January 2019 to further refine the compact, with clear commitments and measurable targets, and that a “final plenary meeting” will take place in February.

The Deputy Secretary-General also briefed delegates on the “reinvigorated Resident Coordinator system” that will be formally established on 1 January. As explained in this SDG Knowledge Hub story, the reform of the RC system entails delinking it from the UN Development Programme (UNDP), and aims to create a system that is fully dedicated to the 2030 Agenda and independent from any UN agency, while being more transparent and more accountable to Member States. Mohammed indicated that there is a placeholder in the draft funding compact regarding this topic, and the next iteration of the compact should reflect commitments from both the UN system and Member States to fully fund the reformed RC system and ensure full transparency in the management of funds allocated to it.

On other aspects of the RC system, Mohammed reported that: operational and legal guidance was issued to all RCs; the Secretary-General has sent letters to host countries to designate RCs in their new, delinked functions; all UN agencies, funds and programmes have been contacted to ensure full support and alignment by UN country teams; and a new accountability paradigm is being developed to provide full clarity on the resident coordinator-UN country team reporting model on the ground. Following the announcement by UNDP Administrator Achim Steiner that the UN Development Operations Coordination Office (DOCO) – which previously worked under the leadership of the UN Development Group (UNDG) Chair and guidance of the UNDG – had been transitioned to the UN Secretariat, Mohammed indicated that the hiring for DOCO had started in order “to build the type of backstopping that a reinvigorated system requires.”

Mohammed noted that voluntary commitments received to date, combined with the doubled cost-sharing from UN entities, represent US$177 million, and will allow for the transition to the reinvigorated RC system, as planned with core capacities in RC offices and DOCO. She remarked, however, that a funding gap of US$104 million remains, and called on all Member States to step up.

On UN country teams (UNCTs), Mohammed said 2019 will “see the advent” of a new generation of them, and UNCTs will have the tools and support required to transform the way it supports the 2030 Agenda. Among the work carried out in this regard, she noted: the redesigning of the UN Development Assistance Framework (UNDAF); the articulation of a system-wide strategic document; and the advancement of work on common business operations to ensure that more effort is placed on mandates and less on administration. [UN Deputy Secretary-General statement during the third plenary meeting of the funding dialogue] [SDG Knowledge Hub coverage of UN reforms] [UN Reform Website] [Frequently Asked Questions on the UN Development System Reform]

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