UNDP ELECTION FUNDING REQUIREMENTS MET WITH USG

UNCLAS KABUL 001444 DEPT FOR S/CRS SIPDIS SENSITIVE E.O. 12958: N/A TAGS: KDEM PGOV AF SUBJECT: UNDP ELECTION FUNDING REQUIREMENTS MET WITH USG CONTRIBUTION ¶1. (SBU) Summary: USAID forwarded a much awaited cooperative agreement (CA) to the United Nations Development Program (UNDP) for USD $55 million, making the USG the largest donor in the international community for the upcoming presidential and parliamentary elections. Assuming all other international donors meet their pledges, total funding will not only meet current requirements, but will provide the UNDP with the critical ability to respond to any new challenges that may arise during the election cycle. Substantial involvement provisions have been included to ensure proper accountability and use of funds, and UNDP ELECT representatives in Kabul appear amenable to the new provisions. While UNDP New York has not yet officially signed the CA, we expect they will do so in the next few days. End Summary. ¶2. (SBU) This week, USAID forwarded a draft cooperative agreement for USD $55 million to the UNDP, thus closing a funding gap which had concerned the international donor community. At a Donor Coordination Meeting at UNDP Kabul on June 2, the chair expressed gratitude on behalf of the international community for the much needed funds. The agreement makes the United States the largest donor to the election, bringing the overall planned contribution level to $240 million (with $120 million for the UNDP ELECT program and the rest channeled through other implementers including IFES, NDI, IRI, and Global Strategies). The need to channel most elections funding through an implementer accepted by both the GIRoA and the donor community gives UNDP a unique role in these elections. This is further supported by unilateral instruments listed above. ¶3. (SBU) UNDP reports that 15 funding pledges are being finalized, while another six are still unsigned. Aside from the United States' funding, other existing donor commitments to date amount to $60.54 million USD, with EU funding - $47.2 million - possibly arriving as late as August. The EU commitment is contingent upon approval by the European Parliament, which is expected in early July. This notwithstanding, the USG donations enable UNDP to fully implement planned programs in support of the elections. Furthermore, the funding permits UNDP to fully assist the IEC and other associated bodies, while providing the UNDP with the critical ability to respond to any new challenges that may arise during the election cycle. ¶4. (SBU) The draft CA also calls for greater USG oversight to prevent misuse of funds. Due to concerns regarding UNDP's prior management of USAID Afghanistan funds, the Mission opted to issue a fresh CA with several substantial involvement clauses. These include: 1) Amending the traditional letter of credit (LOC) method of financing by requiring additional financial documentation and USG review and approval prior to each disbursement; 2) Prohibiting funding for UNOPS; 3) Mandating the hiring by UNDP of an additional dedicated financial management staff member on the project; and 4) Requiring that all USAID funds be separately tracked and reported on a monthly basis, and that UNDP ELECT program will not spend financial resources beyond those not previously secured. Although UNDP New York has not officially signed the CA, UNDP ELECT representatives in Kabul appear amenable to the new provisions. EIKENBERRY