SHOW - Section 3: Project Closure

Project completion means that the activities outlined in a project workplan with a funded partner have been successfully carried out and the procurement contracts with a vendor have been fulfilled within the agreed time and allocated funds. The partner or vendor reports the completion of activities, which UNHCR then verifies. This process may include auditing the partner and recovering outstanding funds.

Each year, partners submit project workplan end-reports by the deadlines stipulated in the reporting section of the project workplan contract. These reports, namely the end-results report, end-narrative report and end-project financial report (end-PFR) cover the project’s finances, achievements, and results and are verified by the operation before the project audit and closure by the below stipulated deadlines.

The partner reports have specific cut-off dates:

End reporting requirements

The rest of the section outlines the reporting requirements and process for ending the project workplan upon completion of implementation.

End-results report

Partners share actuals disaggregated by population group, location and/or age, gender and disability for the output indicators, as part of the end-of-project workplan reporting requirements.

End-narrative report

As part of completing the project, the partner submits the end-narrative report detailing progress on project activities and performance quality. This report highlights achievements, challenges, and consultations with forcibly displaced and stateless people benefitting from the project [see End Narrative Report Template (EN, FR, ES)]. UNHCR reviews the draft report and may provide feedback for the partner to consider before finalizing.

End-project financial report

The partner submits an end-PFR demonstrating accurate expenditures against the financial plan in the project workplan.

The partner can use any interest earned from a UNHCR-funded agreement for activities aligned with the partnership’s goals and documented according to the partner’s financial rules. If the partner’s financial rules require returning the interest revenue, it will be repaid to UNHCR and reported with the PFR via the relevant supporting documentation but not included in the PFR.

The partner reports non-interest revenue from a UNHCR-funded agreement with the next PFR, along with the supporting documents. This includes insurance revenue resulting from project-related insurance claims, income-generating activities and value-added tax (VAT). This amount is reported by the partner with the next PFR after the revenue is received via the relevant supporting documentation, when submitting the PFR.

The representative has the authority to approve if non-interest revenue will be used by the partner for partnership activities or refunded to UNHCR.

Interim and end-financial reports

The partner submits their interim PFR in the last quarter of the implementation year, by the date agreed upon in the project workplan and no later than 10 December. UNHCR verifies all interim reports by the end of December.

Local organizations may submit their end-PFRs by the end of January or early February, while international organizations might need more time due to additional clearance processes.

A staggered deadline approach is recommended to facilitate UNHCR’s verification process. Partners therefore submit their end-PFRs the following year, after project completion and liquidation, by the agreed date in their project workplans. UNHCR must verify end-PFRs by the end of February of the following year and as such, appropriate deadlines need to be set during the project workplan development.

Approval of the end-PFR is essential for the year-end closure and audit process. Each bureau closely monitors timely compliance with deadlines.

UNHCR end-verification

UNHCR completes the verification of information and data reported by a partner throughout the year, as detailed in GET– Section 4.

After the project workplan implementation ends, UNHCR conducts several verifications to ensure timely project closure. These include the results manager’s review and validation of the reported indicators by the end of January.

The following steps are completed by the end of February:

As an outcome of the end-verifications, UNHCR gives feedback to allow partners with ongoing agreements to make adjustments or re-program, if applicable.

Assets

As mentioned, in GET – Section 2, there are two types of assets: 

• UNHCR assets, which UNHCR owns and loans to the partner under the right of use clauses referenced in the project workplan. 
• Project assets, which the partner receives from UNHCR via transfer or acquires using UNHCR funds. The partner is responsible for the proper disposal of all project assets at the end of their useful life.

The physical verification of UNHCR assets under loan can be done anytime during the year through a visit to the partner. If this visit does not happen during the year, and the project is coming to an end with no extension, the verification must be done before the project ends, especially if the assets need to be returned to UNHCR or handed over to a new partner. The programme function coordinates this verification of assets, based on the list available in UNHCR's Cloud ERP. The partner must facilitate the asset verification and collaborate with UNHCR or authorized persons. See GET – Section 4 for more details on preparing for the verification.

Grant agreement final report

A grant agreement only requires a final narrative report at the end of the activity. UNHCR fills out the relevant sections (as shown in the report template), including details on capacity strengthening, monitoring, assessments (e.g., those related to sexual exploitation and abuse, sexual harassment, fraud etc.) and any safeguards completed for the activities. The due date of the final report is indicated in the agreement. The final narrative report is uploaded to PROMS’ “Document Register”. See the Final Reporting Template for Grant Agreements (EN, FR, ES).

UN-to-UN agreement final report

Given that there is no financial verification for the PFR, the UN organization submits the final PFR, which UNHCR approves in PROMS. It is recommended to attach a completed project performance verification (PMC02) with the final PFR. Additionally, the partner submits an end-report, if stipulated in the agreement.

Partnership framework agreement (PFA) final report

In the final year of the PFA, the partner is required to submit an extended narrative report. However, they do not need to submit a project workplan end-narrative report for that year, thereby avoiding unnecessary duplication. The PFA final report summarizes the overall performance and results of the partnership and is the only narrative report needed for a PFA. It includes all the components of the project workplan end-narrative report and addresses variations, amendments to the original agreement, participation of and accountability to forcibly displaced and stateless people, the exit strategy, coordination arrangements and lessons learned. It also briefly outlines achievements in localization, cost-effectiveness, risk management and integrity. See Final Partnership Report Template (EN, FR, ES).

When a partner has an unspent balance, it is essential to first agree on how these funds will be managed. If a refund is necessary, the operation and partner establish a clear timeline to ensure that it is completed before the end of March in the year after implementation.

Where the decision is made to apply the unspent balance against prepayments for the subsequent year, the operation informs the bureau to ensure that no refund or accounts receivable will be recorded, and the partner’s expenditure can be tracked accordingly throughout the following implementation year. The decision regarding the unspent balance is documented in Aconex through the process of recovering the funds, specifying the exact amount to be deducted from the partner’s next prepayment.

It is crucial to inform the partner that they are responsible for reporting against the full financial plan for the following year, not just the new prepayment amount. This communication is summarized within the comments of the PFR that contains the reduced prepayment. The partner’s final PFR for the year must include all expenditures, both from the unspent balance and the new prepayments, ensuring full financial accountability and transparency throughout the collaboration with the partner. Any unrecovered amounts are deducted from the subsequent prepayment before the end of December of the following implementation year.

See the UNHCR External Guidance Recovery of Partnership Funds (EN, FR, ES).

The partner may provide feedback directly to the operation using the standard template in Aconex, the PROMS platform. This is optional and does not affect project closure but supports the collective efforts to advance relations between the operation and the partner. Feedback can be given any time after project completion.

See the Step-by-Step Guide for Partner Feedback and the video tutorial.

Additionally, an independent third party may conduct an annual perceptions survey. For example, InterAction collates, analyses and anonymizes feedback from UNHCR’s partners globally and shares the results transparently.

When it comes to assurance, UNHCR relies not only on reports produced internally and by the partner but also on project audits. A project audit is an independent assessment conducted to ensure the project’s PFR is accurate and follows the agreement terms. It also assesses the partner’s capacity, highlighting strengths and weaknesses in their internal controls. These findings help improve project management and results for forcibly displaced and stateless people.

UNHCR uses a risk-based approach to determine which projects are selected for audit, based on financial value and other associated risks. External audit firms conduct these audits and provide an audit certificate with their opinion on the project’s financial report. According to UNHCR Financial Rules, the United Nations Board of Auditors (UN BoA) is mandated to audit UNHCR’s overall funds and annual financial statements. The sections below offer more guidance on conducting project audits.

Timeline of the audit process

The project audit usually happens after the annual implementation period has ended, and the partner has submitted the project workplan end-PFR. In some exceptional cases, audits and reviews may occur during the project or up to six years after it ends.

For projects with extended implementation and/or liquidation periods, auditors may conduct an audit based on an interim PFR covering significant expenditures up to 31 December of the budget year under review. If this audit results in a modified opinion, auditors will verify the end-PFR when available. If there are no major issues from the interim PFR audit, UNHCR’s financial verification of the end-PFR complements the assurance.

It is critical for UNHCR to submit project audit reports to the UN BoA in a timely manner, as the permissible period is very limited. The following schedule is respected:

Timeline of the audit process

Projects identified for project audit

The operation is required to conduct project monitoring and verifications during implementation. These due diligence steps are crucial for operational management and provide comprehensive assurance but do not replace a project audit.

headquarters employs a risk-based approach and consults with operations, bureaux, and the Inspector General’s Office (IGO) to identify which projects will be audited each year. This process considers project and context risks, financial plans, and audit costs. A certified external auditor assigned by UNHCR may audit projects implemented by partners. UNHCR or national auditors audit government partners according to local regulations. UNHCR does not audit other UN organizations implementing its projects, but they need to follow the UN Financial Regulations and Rules for external and internal audits.

Project auditors

The Supply Management Service (SMS) selects the project auditor through a procurement process. The Director of the relevant headquarter entity signs the statement of work for the specific annual audit. The auditor is chosen based on price, availability for onsite audits, past performance, and rotation and retention considerations. They must comply with audit terms of reference and remain independent. Headquarters oversees the audits, and the Director of DSPR approves major changes to the audit terms of reference.

During the audit, the auditor needs full cooperation and unhindered access to documents, sites, people and other necessary subjects from UNHCR and the partner. The operation ensures this access, which may include identification details of forcibly displaced and stateless people.

The auditor conducts the audit efficiently and professionally, following international standards on quality control for firms that perform audits and reviews of financial statements, and other assurance and related service engagements. UNHCR and its oversight bodies assess the auditor’s performance, the quality of audit reports and compliance with contractual terms. Headquarters seeks feedback from the operation and the partner on the performance and quality of the audit fieldwork and assigned auditor.

UNHCR, the UN Board of Auditors, and, in some cases, the Office of Internal Oversight Services/Inter-Agency Standing Committee assess the level of credibility, consistency and quality assurance of the audit, as well as the performance of the project auditor, the audit reports and the compliance with contractual terms.

Project audit work and enquiries
The operation facilitates auditors’ work and ensures that audits are conducted in an ethical and professional manner.

The project control function manages planning and communication with partners and auditors. The project auditors use PROMS to request documentation and communicate with partners directly, sharing also the audit schedule, other requirements or important deadlines.

Audit certificate

The project auditor submits an audit certificate, which includes:

• A project audit report with a clear audit opinion on the end-PFR for each project, following international standards on auditing and applicable formats.
• A management letter on the partner’s compliance with the PFA and project workplan.
• An internal control questionnaire (ICQ) assessing the partner’s internal control systems, covering areas like cash management, procurement, sub-contracting, personnel, data protection and information security, managing misconduct, financial and budgetary matters, and compliance with other terms of the agreement. If the partner previously had an unmodified audit opinion, the ICQ is not reassessed for three years starting from the date of the most recent ICQ.

The auditor uses UNHCR’s standard templates available on the United Nations Partner Portal (UNPP).

The partner reviews the draft report and can submit comments within seven days. The operation also comments before the final certificate is issued. The final audit certificate is given to UNHCR and the partner within 15 days of the field audit.

Audit reports are confidential and are not shared with external entities except with UN organizations via the UNPP. Audit certificates are accessible to UNHCR on the UNPP.

The operation reviews the audit certificates before accepting them. The reports specify reasons for modification and quantify any financial findings requiring refunds from partners. The representative or director immediately reports significant issues indicating possible misconduct, such as fraud and corruption, to the IGO, the headquarters focal point, the regional controller and/or the senior resource manager in headquarters, as appropriate, following the Strategic Framework for the Prevention of Fraud and Corruption. UNHCR may share partner audit reports with other UN organizations and donors, but partners need written consent from headquarters and the project auditor to share reports with third parties.

The operation and partner promptly address any observations or recommendations. UNHCR may request a refund from the partner for ineligible expenditures identified by the auditors.

The operation reviews audit certificates to determine the amount to be recovered. If the operation agrees with the partner’s justification and the refund amounts are deemed eligible, the bureau director is consulted for approval. The approval of headquarters is required for modified audit opinions.

Project control extracts audit recommendations from the “Audit” module in UNPP and shares them with the partner via Aconex for follow-up.

Recovery of funds from partners post-audit or financial verification

After audits or financial verifications, operations may need to recover previously accepted partner expenses. These recoverable amounts must be registered as accounts receivable (AR) in Cloud ERP. Partners are required to return these funds promptly upon receiving the audit reports or official requests from UNHCR. Headquarters will coordinate with the concerned operations to confirm the amounts to be recovered and ensure they are accurately recorded as AR invoices in Cloud ERP.

Operations are responsible for liaising with partners to secure refunds, which must be deposited into UNHCR’s bank accounts in the same currency as the original prepayments. If a refund in a different currency is required, it must be approved by the regional controller after consultation with headquarters. 

See the UNHCR External Guidance Recovery of Partnership Funds (EN, FR, ES).

Special audits and other advisory services

Headquarters collaborates with oversight bodies to review allegations of possible misconduct, such as fraud and corruption. It engages audit firms to conduct project audits and advisory services when required and monitors remedial actions by operations and partners.

Project workplan closure

The purpose of project closure is to close UNHCR accounts and prepare financial statements on time. This is done via PROMS. In exceptional cases, a project workplan may be extended into the following year (see GET – Section 4).

The project workplan closure includes the following steps:

1. The partner achieves/ planned results and delivers all goods and services by 31 December (or earlier for shorter partnerships) unless an extension is approved.
2. The partner submits the end-reports, according to the agreed deadlines, together with the necessary documents and/or through the specific system stipulated within the project workplan.
3. UNHCR verifies the partner’s end-report, including the end-project performance verification (PMC02), validated results against indicators, and financial verification (PMC03).
4. The partner reports expenditures for commitments settled within the approved liquidation period.
5. If the partner is audited, the auditor submits the project audit report, and project control confirms the resolution of audit observations and recommendations.
6. The partner returns any unspent balances, audit recoveries, interest revenue (if applicable), and non-interest revenue unless the representative or director has approved for the partner to spend them on activities aligned with the goals of the partnership.
7. The relevant MFT member closes outstanding recommendations via “Field Issues”, as feasible.
8. The operation completes and approves the annual order closure template in PROMS.
9. Headquarters closes the project workplan contract in Cloud ERP.

Sharing partnership-related information publicly

UNHCR may disclose information about partnership funds to ensure efficiency, transparency and accountability. This information is available for partners following the International Aid Transparency Initiative (IATI) Standard. It includes partners’ names, regions or countries, implementation locations, sectors of work, and total budgets unless confidentiality, security or data protection concerns apply.

Closing partnership framework and data protection agreements

The closure of a PFA and a data protection agreement (DPA) usually aligns with the end of an operation’s multi-year strategy.

The PFA closure process includes:

• The partner submitting a final extended narrative report (see above the section on PFA final report for more details).
• The operation reviewing and closing (to the extent feasible) all implementation monitoring recommendations raised during the partnership via the “Field Issues” module in PROMS. It will then close the PFA and DPA contracts in Cloud ERP.
• Headquarters closing the PFA and DPA contracts in Cloud ERP.

For the necessary steps to take if a PFA or a DPA is amended before the initial end date, see GET – Section 4.

Closing a UN-to-UN agreement

The closure of a UN-to-UN agreement aligns with the contract’s end date within the UNHCR budget year. The process involves:

• The partner achieving planned results and delivering all goods and services by 31 December (or earlier if the contract is shorter).
• The partner submitting the final PFR.
• The operation attaching a PMC02 to the PFR workflow, if applicable.
• The operation completing and approving the annual order closure template in PROMS.
• Headquarters closing the UN agreement contract in Cloud ERP.