6 March 2019: The UN Deputy Secretary-General circulated to UN Member States the final draft of the funding compact that will be discussed during the Operational Activities for Development Segment (OAS) of the UN Economic and Social Council (ECOSOC). The 15-page “Funding Compact” aims to provide the financial support needed for the alignment of the UN development system with the 2030 Agenda for Sustainable Development.

The Funding Compact was called for by UN Member States in UN General Assembly (UNGA) resolution 72/279, responding to Member States’ request for “whole of UN” approaches through the 2016 UNGA resolution on the Quadrennial Comprehensive Policy Review (71/243). The proposed Funding Compact is a result of a series of in-depth Funding Dialogues between governments and the UN Sustainable Development Group (UNSDG). It articulates concrete actions on both sides, by UN Member States and all the UNSDG entities, and contains a set of commitments with relevant indicators to measure compliance for each one.

UN Deputy Secretary-General Amina Mohammed circulated the final draft version following a briefing with UN Member States on 28 February, where she presented its contents. The document notes that the Funding Compact will be submitted by the UN Secretary-General, on behalf of UNSDG, as a complement to his Annual Report to ECOSOC for consideration in the OAS, and it represents a non-binding instrument for voluntary adherence by individual Member States and other contributing donors.

The commitments included in the document apply to actions to be taken by all UNSDG entities – which are listed in an Annex to the Compact – and to the funding provided for the implementation of their development activities. For Member States, the commitments are framed as collective by nature. They aim to respect the wide disparity in current funding approaches and capacities, as well as in rules, regulations, and policy frameworks on the part of Member States. The text notes that Member States’ ability to meet various commitments will vary accordingly, and different Member States may pursue different elements of the Compact, from different starting points, progressively and at different speeds.

Through the Compact, UNSDG commits to accelerating results for countries through more collaboration. It will do so, the text says, while reporting on needs and results more clearly, consistently and transparently. It will pursue joint activities, notably in the areas of analytical work, the formulation of operational support and policy options for SDGs acceleration and evaluations. Accountability for common results, notably through the UN Development Assistance Framework (UNDAF), and engagement with partners are to be strengthened though the implementation of a new Mutual Accountability Framework. The Compact explains that this should translate into reduced costs for host governments, and greater returns for Member States’ investments.

The Funding Compact underscores the “new primacy” of the UNDAF process and framework at the country level, with UNDAF outcomes as shared UN country team (UNCT) results, to which individual UNSDG entities contribute. Strategic plans at the global level and UNDAFs at the country level are to articulate funding requirements more clearly, including by type of funding, and, the text notes, funding dialogues must be strengthened.

The UNSDG entities further commit to accelerating efforts to improve transparency, reporting and system-wide evaluations, including efforts towards data standardization and compliance with international standards for financial reporting. The results produced must be accessible and better communicated, the text says, and the UNSDG must evaluate and report with transparency and to the entire membership of the UN, notably through the UN system-wide strategic document, and at the country level, through the UNDAF and the function of the Resident Coordinator.

In parallel, Member States commit to aligning their funding with the requirements of the UNSDG entities, both in terms of quantity and quality. They commit to bring core resources to a level of at least 30% in the next five years, increase the share of multi-year contributions, and double the levels of resources channeled through development related inter-agency pooled funds and single agency thematic funds. The text explains that core resources, inter alia, provide the means to fulfill “one of the system’s most recognized comparative advantages: its convening power,” and fund critical programming funding that can “crowd in” non-core resources and act “as a catalyst for innovation and partnership development.”

These commitments are voluntary in nature, the Compact stresses. They are based on several positive trends: the “steady increase” in overall resources provided to the UN development system; the stability of the UN development system’s share of overall official development assistance (ODA); and the rapid growth of funding from new contributors including an expanded number of Member States, other multilateral organizations, and the private sector. On “new contributors and an expanded number of Member States,” an indicator for the commitment to broaden the sources of funding support to the UN development system reads, “Number of Member State contributors to development related inter-agency pooled funds and to single agency thematic funds – Baseline (2017): 59 and 27; Target (2021): 100 and 50.”

On the Compact’s focus on development-related pooled or entity-specific thematic funds, the text states that these instruments provide the type of quality funding that allows the UN development system to integrate expertise and capacities across the system, as demanded by the 2030 Agenda. In addition, the document adds, they provide the flexibility necessary to respond to “rapidly changing and new country priorities,” while for country-level funds minimizing adverse effects of funding volatility.

To that end, the text continues, recent trends in the capitalization of the Spotlight Fund, the Peacebuilding Fund and the Joint Fund for the 2030 Agenda must be accelerated, and further capitalization of other qualitative funding instruments both at global and country level should follow.

The Funding Compact notes that Member States have a responsibility in supporting UNSDG efforts by streamlining and harmonizing reporting and visibility requirements, notably at the country level, in line with the principle of national ownership, as such requirements often carry significant transaction costs for the UN and for host governments.

The Compact also contains commitments related to “efficiency gains.” Based on UN Secretary-General Antonio Guterres’ proposals and drawing on work from the Business Innovation Group, the commitments acknowledge that “achieving the ambitious efficiency goals in the next few years will require substantial upfront investment and support from Member States.”

Formal follow-up to, and tracking of, progress made in the implementation of the Funding Compact will involve two tracks:

1. System-wide reporting by the UN Department of Social and Economic Affairs (DESA) on the Compact as part of the Secretary-General’s Annual Report on the QCPR, including tracking of relevant indicators through the QCPR monitoring framework; and
2. Entity-specific tracking and reporting on commitments and indicators through entity-specific reporting mechanisms to the respective governing bodies.

In support to these mechanisms, the UN Development Coordination Office (DCO) will coordinate regular tracking of the Funding Compact commitments, in collaboration with DESA, the UN System Chief Executives Board (CEB) Secretariat, the Multi-Partner Trust Fund office, and other UN working groups and tasks forces as required. DCO will collect and coordinate data and information to track the indicators that are their responsibility to measure, drawing on public and official data normally included in relevant UN Secretary-General reports or financial data collected by individual UN entities. DCO “will closely coordinate with DESA,” the Compact says.

By the Compact, DCO tracking will inform inclusive, informal system-wide consultations convened by DCO with interested Member States until the 75th UNGA, to be held twice a year, to support entity-specific dialogues by providing updates on implementation, especially as they relate to the tracking of efficiency gains over time and their redeployment for programming, including coordination.

The text underscores that the successful implementation of the Funding Compact will require “sustained engagement with and by the governing bodies of the UNSDG entities.” By the Compact, Member States and the UNSDG commit to taking the Compact to countries, at capital level and in the field, “to both advocate for it and implement it at once.” [SDG Knowledge Hub Sources] [UN Reform Webpage]