Guide
HACT micro-assessment: a plain guide for local organisations
What a UN HACT micro-assessment looks at, what the risk ratings mean, and how to prepare, written for local and national NGOs.
The basics
What a micro-assessment is
By Richard Prouse · Updated
The Harmonized Approach to Cash Transfers (HACT) is a common way for UN agencies that use it, including UNDP, UNFPA and UNICEF, to manage the risk of transferring cash to implementing partners. Before or early in a partnership, the agency commissions a micro-assessment: a review of the partner’s financial management and control framework.
A third-party assessor with experience of financial management risk carries it out. It usually includes a site visit, interviews with your staff and a review of your documents. The result is an overall risk rating: low, moderate, significant or high.
The rating does not decide on its own whether you are funded. With other information, it helps the agency choose how to transfer cash to you and how often to run assurance activities such as spot checks and audits.
Coverage
What the questionnaire covers
Recent terms of reference use a questionnaire in eight sections:
- Organisation
- People and behaviours
- Activities
- Reporting and accountability
- Assets and inventory
- Procurement
- Sub-partners
- Systems
Older reports and templates use seven subject areas, which you may still see:
- Implementing partner
- Programme management
- Organisational structure and staffing
- Accounting policies and procedures
- Fixed assets and inventory
- Financial reporting and monitoring
- Procurement
Ask the assessor which version they will use. The questions cover the same ground: who runs the organisation, how money is controlled and reported, how you buy and look after goods, and how you manage any partners you fund.
Before the visit
How to prepare
- Have your core documents ready: registration certificate, constitution or statutes, board list and minutes, organisational chart, financial policies, latest audited or reviewed accounts, recent bank statements and reconciliations, procurement policy and records, and an asset register.
- Check they are current. Assessors look at whether statements, minutes and policies are recent. Update or date them before the visit.
- Be ready to describe practice, not just policy: who approves payments, how cash is handled, how you choose suppliers, how reports are checked.
- Be honest about gaps and show a dated plan to close them. A clear plan helps more than a paper policy you do not follow.
Sources
- UNFPA Pacific: Terms of reference for partner capacity micro-assessment (HACT)
- United Nations Iran: Terms of reference for micro-assessment, with questionnaire (2023)
Guidance changes. Always follow the current form and instructions from the organisation assessing you. Aidfolio is independent and not affiliated with the UN, Charter for Change or Humentum.
Common questions
What is a HACT micro-assessment?
A review of an implementing partner’s financial management and control framework under the Harmonized Approach to Cash Transfers (HACT). It is commissioned by a UN agency, carried out by a third-party assessor, and results in an overall risk rating.
What risk ratings can a micro-assessment give?
Low, moderate (sometimes called medium), significant or high risk.
What does the risk rating change?
Together with other information, the rating helps the UN agency decide how it transfers cash to you and the type and frequency of assurance activities, such as spot checks and audits.
Who carries out the micro-assessment?
A third-party service provider commissioned by the UN agency or agencies, with experience of financial management risk. It usually involves a site visit, interviews with your staff and a review of your documents.
How can a local organisation prepare?
Gather your registration, governance and financial documents in advance, check that they are current, and be ready to explain how money is approved, recorded, reported and checked. Aidfolio’s free readiness check lists the documents, flags those out of date, and gives you a dated action plan.