MQ Guidance for Cash & Voucher Programming

MQ Guidance for Cash & Voucher Programming

June 2015

Jasper van de Reep

CRS-HRD

Contents

Acknowledgements 3

Introduction 4

1. Cash-Based Program Modalities 5

2. Beneficiary Selection 5

3. Vendor Selection in Cash & Voucher Programming 6

3.1. Process Vendor Selection Commodity Voucher (Shop/Fair) 7

3.2. Process Vendor Selection Cash Voucher (Shop/Fair) 8

3.3. Process Vendor Selection Direct Cash Transfers 9

4. Procuring/Printing Cash or Commodity Vouchers 11

5. Handling Cash/Commodity Vouchers & Debit Cards 12

6. Payments to Vendors for Cash & Commodity Vouchers 13

6.1. Vendor Administration (literate & larger vendors/shops) 14

6.2. Vendor administration (illiterate & smaller vendors (shops/fairs) 14

6.3. CRS Verification and Payment Preparation 14

7. Direct Cash Transfer, Payments to Beneficiaries (and vendors) 16

7.1. Cash 16

7.2. Check 17

7.3. Bank Transfer 18

7.4. Remittance Agent 19

7.5. Hawalla Agent 20

7.6. Mobile Phone Banking 21

7.7. (CRS) Pre-Paid Debit Cards 22

Concluding Remarks 25

Acknowledgements

The following country programs contributed to the development of this guidance by sharing their experiences, formats and tools

· Haiti

· India

· Iraq

· Jordan (Lebanon)

· Jerusalem/West-Bank/Gaza (JWBG)

· Mali

· Pakistan

· Philippines

· Somalia

· Turkey

The following people provided excellent insightful feedback to the draft version of this document.

· Seyoum Adamu

· Imran Babayev

· Geraldine (Dina) Brick

· Sarah Gilbert

· Angela Grigorian

· Nancy Hearne

· Akim Kikonda

· Lionel Lajous

· William Martin

· Jeffrey Mcintosh

· Joanna Olson

· Steve Perry

· Kassoum Quattara

· Mariana Romanciuc

· John Service

· Rebecca Steenbergen

· Jocelyn Yap

Responsibility for any errors that remain in this document rests solely with the author.

Introduction

Catholic Relief Services (CRS) has gained significant experience in cash-based programming over the past years with a majority of its country programs involved in some form of cash based programming. A clear set of program tools and guidance’s have been developed to ensure the highest standard in program quality. Cash-based programming is an area though, where traditional division of responsibilities between Program and Management Quality staff has somewhat shifted. The current tools developed for cash-based programming have not yet fully addressed the MQ anchoring of cash based projects in CRS management systems. Despite this Country Programs (CPs) have generally managed to set-up strong systems for cash-based projects in line with CRS polices.

As CRS continues to scale up and increase its professionalism in cash-based programming, and given the requirements of CRS’ own audit systems, there is a need for clear guidance for CPs and regions to have simple and standard procedures for implementing cash and voucher programs.

This document aims to meet that need by collecting best practices from various CRS country programs and presenting clear generic processes for critical MQ aspects of cash-based projects:

I. Beneficiary selection and administration

II. vendor selection,

III. procurement of vouchers

IV. voucher/debit card handling

V. vendor payments

VI. Cash-transfers.

Alongside this guidance the HRD developed a draft Risk-Assessment tool which captures the main MQ elements outlined in this guidance. The tool can be used by Country Programs to quickly assess its systems before starting a Cash Based Response or to review its ongoing interventions. (see annex risk assessment tool)

It should be noted here that this document does not intend to provide a full guidance on developing a cash-based interventions, rather it aims to complement the existing materials developed by CRS. Additionally, this guidance aims to reflect CRS Global polices on finance, procurement and other fields. However if there are cases where this guidance conflicts with CRS Global Polices it should be known that CRS Global Policies, take precedence over the content of this guidance.

Furthermore, the guidance is not a policy and what is outlined in the document is intended to assist the Country Program in developing the procedures for their own unique Cash Based Intervention with a focus on ensuring accountability. The steps outlined in the guidance can also be used to work with partner organizations to develop the procedures for their Cash Based Projects by adapting the outlined process to their policies and staff structure.

This guidance is intended for MQ staff in CPs and Regions (DRDs-MQ, HOOPs, Finance Officers, other management and logistics staff) as well as selected PQ staff (HOPs, Program Managers).

CPs are advised to include PQ and MQ staff in decision making from the early planning stages and throughout the implementation of a cash/voucher program to ensure good coordination and high program quality.

1. Cash-Based Program Modalities

There are 3 main modalities in cash based projects: Direct Cash Transfers, Cash Vouchers and Commodity Vouchers. With direct cash transfers the beneficiary receives money from the project often in the local currency. Cash vouchers are coupons on which a monetary value is printed. These coupons can be used by beneficiaries to purchase goods at selected vendors. Commodity vouchers are coupons on which a specific commodity or set of commodities, is printed for example Jerrycan or Hygiene Kit. The coupon can be redeemed at a selected vendor in exchange for the specified items. For each of these modalities there is a subset of possibilities which shape the project:

· Conditional vs. Unconditional Grants

· Using Shops vs. Setting up a Fair

· Payment through cash, check, bank transfer or other methods

· Implemented by CRS or through a local partner

Based on these options a wide variety of cash-based projects are possible. The selection of the modalities depends on the project objectives as well as the possibilities in a given context. (see also annex transfer modalities)

Modality / Conditionality / Shop/Fair / Payment Method / Direct Implementation/Partner
Direct Cash Transfers / Conditional/unconditional / Shops/Fairs/
None specified / -Cash
-Check
-Mobile Phone
-Bank transfer
-Debit Card
-Remittance Agent / Direct/Partner
Cash Vouchers / Conditional/unconditional / Shops/Fairs / -Cash
-Check
-Mobile Phone
-Bank transfer
-Debit/visa card
-Remittance Agent / Direct/Partner
Commodity Vouchers / Conditional/unconditional / Shops/Fairs / -Cash
-Check
-Mobile Phone
-Bank transfer
-Debit/visa card
- Remittance Agent / Direct/Partner

2. Beneficiary Selection

This section focuses the issue of beneficiary selection and administration. For all projects CRS implements the process of beneficiary selection is critical since targeting the right people will determine if the project will have the desired impact. The process of beneficiary selection and the administration of the beneficiary database is also critical from an accountability perspective. It is based on the list of beneficiaries that the project transfers resources and it is therefore that this process is part of the MQ guidance to increase accountability.

1. Criteria for beneficiary selection should be clearly defined by the project management and communicated clearly to staff and communities

2. Identification of beneficiaries should be done by trained staff

3. Beneficiary lists should be verified against the selection criteria in the field by a separate team visiting selected beneficiaries based on a random selection

4. Beneficiary (and distribution) lists should be signed by the project manager and kept on file.

5. The electronic beneficiary database should only be accessible to authorized staff and changes to the beneficiary lists need to be approved by the manager.

6. Distribution lists should be produced based on the approved beneficiary database and printed copies should have page numbering that indicates the page number out of the series (page 3 of 10)

7. The project should have a complaint mechanism in place to allow community members to provide feedback to CRS

8. Post distribution monitoring needs to be conducted to verify to appropriate implementation of the project by an independent team which was not involved in the distributions.

3. Vendor Selection in Cash & Voucher Programming

The first step for a CP is to determine if a cash-based project is feasible and desirable. The main considerations are; the needs of the target groups, the functioning of local markets and safety/security situation. These considerations are clearly outlined in existing manuals. From an MQ perspective it is good to realize that Cash & Voucher programming will generally put more strain on the finance team, whereas traditional distributions relied heavily on the logistics team (procurement, warehousing and fleet). As a result CPs might want to increase the number of finance staff at the start of a cash/voucher project. This guidance starts from the point where the decision is taken to engage in cash-based programming and vendors need to be selected to participate in the project.

The processes described in the next three paragraphs (2.1, 2.2., 2.3) places the process of vendor identification for cash and voucher programming in the framework of regular procurement policies. At the same time it allows the country program flexibility in appointing specific MQ and PQ staff to perform specific tasks in the process. For example, collecting vendor information and prices/quotations can be done by the procurement team, but also by an appointed purchasing committee consisting of trained project staff. The overall aim is to ensure that that checks and balances are put in place in accordance to CRS guidelines. This means for example that a request for goods/services is raised at the start of the project which needs the appropriate approval before a team goes out to collect vendor information and quotations.

The guidance outlined below will assist country programs to develop a transparent vendor selection process for this unique type of procurement relevant to their specific country context.

3.1. Process Vendor Selection Commodity Voucher (Shop/Fair)

The process below outlines the steps involved in vendor identification for a commodity voucher project. In this type of project the items to be procured are set by the project. The quantities and specifications are known and fixed. The beneficiary will collect the pre-identified materials from the pre-identified vendor(s) using the commodity voucher provided. For example a WASH project might provide latrine construction items through a commodity voucher system such as toilet bowls, pipes etc.

Project staff to determine BOQ for relief items per beneficiary and the number of beneficiaries. Beware of restricted items under USAID funding such as fertilizer, pesticides, pharmaceuticals etc. (see procurement manual for more details)
Project staff to determine criteria for vendor selection including location, minimum & maximum number of vendors, trading volume capacity, restocking time, acceptance of payment method and willingness to participate in voucher based project
Project staff to raise a Request for Goods/Services (RFG/RFS) using a Purchase Requisition Form (PRF) for the whole project stating the total quantity of items and include essential vendor criteria related to the voucher methodology
Authorizing Official[1] [2](see annex for example of Map of Authority) reviews purchase request and budget/DSPN impact then approves.
Procurement Official to lead requisition of quotations.

In general the procurement official is the procurement officer, but the CR (or designee) can appoint an alternative procurement leader from among program staff if deemed necessary based on the special nature of the procurement or the special circumstances during an emergency response

Procurement Official develops vendor information[3] bid request/quotation template and data collection process description
Procurement Official can form purchase committee using program and/or procurement staff. This is often very useful for voucher programming since markets are often remote. (composition of purchase committee to be approved by CR or designee)
Procurement official and/or Purchase Committee to collect vendor information & quotations (or bids)
“Bid” committee meeting to compare quotations and vendors and conduct vendor selection. Selection is done based on vendor criteria outlined in the PRF focusing on quality of materials, price, willingness to participate in voucher program, stocks available and ability to restock etc.
Procurement official to capture information in vendor (bid) comparison sheet
CR (or designee) to review and approve proposed vendors (due diligence, bridger)
Administration Staff with input from Project Staff to draft contract template for vendors with agreed specifications and prices per item and the conditions related to the implementation of the voucher methodology such as the number of beneficiaries, the free or restricted vendor choice by beneficiaries, reporting requirements and invoicing process etc. Please note that CRS does not issue a purchase order when beneficiaries can select from multiple vendors since the quantity to be bought from 1 vendor is not fixed. In cases where a single vendor is selected a PO could be considered but a contract would allow more flexibility.
CR (or designee/Head of Operations) to review and approve contract template in line with regional contract review process
Country Representative to sign 2 copies of contact with selected vendors (CR or delegate signs)
MQ/PQ staff explain the content of the contract in detail with each vendor before getting it signed by the selected vendor