Central Emergency Response Fund: Review of First Year of Operations

CIDA has invested considerable efforts in strengthening the broader international humanitarian system. This includes working with other donors and the United Nations in shaping the development of the UN Central Emergency Response Fund. The Fund will provide a predictable source of money for rapid response and address the needs of so-called 'forgotten crises'. CIDA commissioned an independent consultant to review the first year of operation of the CERF.

Executive Summary

Background
Central Emergency Response Fund
Results
CERF Issues
Recommendations

Background

This report reflects the results of a review of the first year of operations of the Central Emergency Response Fund (CERF). This review was primarily a desk review, focusing on processes and systems, rather than a systematic assessment of results. The review included a document review and interviews with 37 key stakeholders: Government of Canada (3), Office for the Coordination of Humanitarian Affairs (OCHA) (14), bilateral donors (9), UN agencies (8) and others, including an NGO, national government and UN mission (3). At the same time as this review was being carried out, OCHA commissioned an interim review that would focus on case studies and would be conducted in selected countries that had received CERF funding. Information from this OCHA review will complement the information in this CIDA review.

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Recommendations

The CERF was set up under the General Assembly (GA) Resolution 60/124 of 15 December 2005, expanding the former Central Emergency Revolving Fund with a grant component with the following objectives:

• To promote early action and early response to reduce loss of life;
• To enhance response to time-critical humanitarian requirements; and
• To strengthen core elements of humanitarian response in underfunded crises.

The CERF, which is administered by the Emergency Relief Coordinator (ERC), supported by a small New York-based secretariat housed in OCHA, includes two components: a loan facility of up to $50 million and a grant facility with a target ceiling of up to $450 million. Funding from the grant facility is split into two windows: rapid response window and underfunded emergencies window.

Only UN agencies and the International Office of Migration (IOM)¹are eligible to apply for funding under the grant facility of the CERF². Based on the procedures and guidelines developed over the first year of operation, the key criteria for CERF funding includes the following:

• Projects must be developed at the country-level and endorsed by the Humanitarian Coordinator/Resident Coordinator (HC/RC);
• Projects must be needs-based;
• Projects must include only lifesaving activities;
• CERF must be an emergency funding source, i.e. all other donor and agency funds have been exhausted before applying for CERF funding; and
• Projects must respect the fund commitment deadlines³.

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Results

The key result of the CERF in its first year of operations was that OCHA was able to establish the overall administrative framework for the fund while, at the same time, disbursing CERF funds. Most respondents were very positive about the concept of the CERF and the grants to date. However, in order to achieve these results, OCHA had to secure donor pledges, develop the administrative infrastructure and then make the first disbursements.

In 2006, the paid contributions-$US 298.6 million-reportedly exceeded OCHA's expectations. There were paid pledges from 50 countries and two other organizations (one local government and one NGO), including some non-traditional donors. The initial pledges for 2007 look promising, with an increase in the contributions from the top ten donors from 2006 and two countries (Canada and the United States) yet to pledge.

In 2006, funds were provided to nine UN agencies (including the International Organization for Migration) and were used for humanitarian responses in 35 countries. As of April 2007, the CERF has funded 468 projects. As announced by the ERC, 70 percent of the CERF funding was used for the rapid response window and the remaining 30 percent for the underfunded window. These funds have already reportedly contributed to addressing humanitarian needs (as defined by country-level teams and at OCHA HQ). Examples are provided in CERF documents of CERF contributions to:

• Supporting humanitarian response in the early days of a disaster;
• Providing the infrastructure to support a humanitarian response;
• Mitigating the impact of disasters on lives; and
• Accelerating the implementation of priority lifesaving programs in underfunded emergencies.

During the first year, OCHA has developed the infrastructure for the administration of the CERF, including developing and revising, as required:

• Administrative tools (procedures, criteria and guidelines, and project submission and agreement templates);
• Reporting mechanisms and tools for agency and country-level reporting;
• Information sharing/advocacy materials, including the CERF website, which is the primary reporting tool for the CERF;
• Training materials to support ongoing HC training and train-the-trainer training for UN agencies in HQ and the field; and
• Consultation mechanisms, including an ad hoc group of Inter-Agency Standing Committee agencies and the CERF Advisory Group, which provides policy guidance and expert advice for the CERF.

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CERF Issues

While the infrastructure and disbursements have been welcomed, there are a number of outstanding issues with respect to the CERF design and implementation:

• The absence of a clear policy framework and the lack of transparency and clarity on definitions of key concepts, such as "lifesaving," "underfunded" and "donor of last resort";
• Frustrations of the UN agencies with the existing financial agreements and reporting that, if not resolved, risk undermining the timely response to humanitarian crises;
• The lack of a CERF performance framework that would define key results, identify the information to be collected on an ongoing basis, identify baseline data for key variables, develop methodologies for addressing some of the more challenging issues (for example, additionality) and identify external reporting mechanisms-particularly for the CERF donors;
• The extent to which value is provided for the administrative costs of the UN Secretariat and the UN agencies;
• The limited capacity of the CERF Secretariat to manage the portfolio of projects; and
• Links to other funding mechanisms.

The GA set up the CERF such that only UN agencies were eligible to receive funds directly. However, the role of NGOs in the CERF and their lack of direct access to the Fund has been the subject of considerable and continuing debate.

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Recommendations

Some recommendations for change can be addressed now. However, most issues need to be further researched (particularly through the collection of information on CERF implementation at the field level). This can be carried through the current OCHA interim review of the CERF, as well as the General Assembly-mandated review to be conducted in 2008, which will be based on slightly longer-term experience with the CERF.

It is recommended that OCHA:

• Develop urgently a CERF performance framework in order to ensure that adequate information is being made available for ongoing reporting on the CERF and that the General Assembly-mandated evaluation of the CERF in 2008 can effectively address the key issues for the Fund (Recommendation 2);
• Ensure that the General Assembly-mandated evaluation addresses the following issues:
  • Value provided for the administrative fees retained by the UN Secretariat and the UN agencies; and
  • Role of the NGOs in the CERF and their access to CERF funds (Recommendation 4); and
• Address the following issues with the additional information that will be available about the CERF implementation from the field perspective after the completion of the interim review:
  • The need for a clear policy framework that links the overall requirements of the General Assembly Resolution with the specific Fund criteria;
  • The need for greater transparency and/or clarity on CERF definitions and funding criteria; and
  • The relationship between the CERF and other humanitarian response funding mechanisms (Recommendation 5).

It is recommended that CIDA, in consultation with other bilateral donors, and the CERF Advisory Group:

• Encourage the resolution of the issues concerning the financial arrangements with the CERF, to encourage adherence to the practices of Good Humanitarian Donorship (Recommendation 1); and
• Encourage OCHA to provide adequate resources for the CERF Secretariat, particularly in light of the over six million dollars in program support costs provided from the CERF expenditures. (Recommendation 3).

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1. Throughout this report, the term "UN agencies" is used to refer to these agencies and the IOM.
2. OCHA cannot apply for grant funding, but is eligible for a CERF loan.
3. Funds allocated under the rapid response window must be committed within three months following disbursement from CERF. Funds allocated from the under the under-funded window must be committed by 31 December of the year in which the funds were granted. An exception was made for funds allocated in 2006 from the under-funded window, which allows CERF receiving agencies to commit the funds by 30 June 2007.