# What NGOs should expect from a HACT micro assessment

If a UN agency has told you a micro assessment is coming, it is not an audit
of your past spending. It is an assessment of your capacity to manage cash
transfers going forward. The distinction matters, because it changes what the
assessor is looking for and how you should prepare.

## What HACT is, briefly

The Harmonized Approach to Cash Transfers is the framework UNICEF, UNDP and
UNFPA use to manage funds channelled through implementing partners. Instead of
each agency running its own checks, HACT sets a shared approach: assess the
partner once, assign a risk rating, and match the level of ongoing assurance
to that rating. The micro assessment is the entry point.

## What the micro assessment looks at

The assessor reviews your financial management capacity across five areas:

- **Implementing partner profile** — legal status, governance, scale of
  operations and funding history.
- **Accounting policies and procedures** — whether your books, records and
  controls can track a grant separately and reliably.
- **Internal controls** — segregation of duties, authorisation, safeguarding
  of assets, bank and cash handling.
- **Flow of funds** — how money moves from the agency to activities, and how
  it is documented on the way.
- **Procurement and reporting** — how you buy, and how you report what you
  spent against what was agreed.

Each area feeds an overall risk rating: low, moderate, significant or high.

## Why the rating matters to you

The rating is not a grade you pass or fail. It sets how the agency works with
you for the rest of the relationship: the cash transfer modality, how often
spot checks happen, whether a scheduled audit is required, and how much
assurance activity you should budget for. A partner rated low deals with a
lighter touch than one rated significant. Preparation is what keeps the rating
honest to your actual capacity rather than to gaps in your paperwork.

## How to prepare

1. **Put your policies in writing.** An assessor cannot credit a control that
   lives only in someone's head. A finance manual, a procurement policy and an
   organisation chart do real work here.
2. **Show segregation of duties.** The person who approves a payment should not
   be the person who records it. If your team is small, document the
   compensating controls you use instead.
3. **Make the grant traceable.** Be ready to show that a specific expense can be
   followed from budget line to voucher to bank statement.
4. **Have last year's financials ready.** Audited statements, bank records and
   your registration documents answer the profile questions quickly.
5. **Do not improvise on the day.** A calm, prepared partner reads as a
   well-controlled one. The opposite reads as risk.

## A note on Yemen

Operating conditions in Yemen — banking access, cash movement, dual authorities
and currency handling — raise practical questions an assessor will probe.
Address them openly and show the controls you use to manage them. Naming a
constraint and the control around it is far stronger than leaving the assessor
to assume the worst.

## Where we fit

We prepare implementing partners for micro assessments: we review your finance
manual and controls against the HACT questionnaire, close the gaps that would
otherwise cost you a higher rating, and help you present a grant trail an
assessor can follow.

## Sources

- [UNDG / UNICEF-UNDP-UNFPA Harmonized Approach to Cash Transfers (HACT) Framework](https://www.unicef.org/media/83331/file/HACT-Framework.pdf)
- [HACT micro assessment questionnaire and guidance](https://www.unicef.org/)