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.