The steps below detail the closure process when UNDP transfers the role of Principal Recipient (PR) to another entity, or when Global Fund funding is discontinued (i.e. countries that become ineligible): 

1. Global Fund Notification Letter ‘Guidance on Grant Closure’.
2. Preparation and submission of grant Close-out plan and Budget.
   • In preparing the actual grant Close-out Plan and Budget, the PR must account for all assets. Funds required for closure (i.e. clearing outstanding commitments and liabilities and other closure activities) must be determined.
   • All remaining health products with valid shelf life as well as equipment and infrastructure in working condition as of the grant end date must be accounted for by the PR, and the transfer of assets agreed with the Global Fund. Specifically, disposition for the following asset types must be provided:
     • Cash assets – All Global Fund grants undergoing grant closure must return all unspent grant funds to the Global Fund. These include any unspent grant funds disbursed to the Country Office (CO), cash held by the Sub-recipients (SRs) and Sub-Sub-recipients (SSRs) (including interest, exchange rate gains, tax refunds and any other savings after eligible liabilities are settled), advances to SRs (in CO books), and all proceeds from social marketing and other revenue-generating activities).
     • Health products – when there is stock remaining after the grant closure date, the CO should provide information on the use and distribution of the health products.
     • Non-cash assets – The CO should list all non-cash assets purchased under the grant and indicate in the plan its proposal for their use, transfer or sale. This includes assets purchased directly by UNDP and held by UNDP.  These remaining non-cash assets should be used for similar purposes as during the life of the Global Fund grant. Following the program ending date, the CO has three options for use of these non-cash assets: PR to retain ownership; transfer ownership to another entity (for example, a new PR, government ministry, or non-governmental organization); or sell the assets.
   • The plan should include a comprehensive list of assets acquired under UNDP’s Grant Agreement with the Global Fund, including their location, technical specifications, purchase value, actual conditions, and the custodian. Before submission to the Global Fund, the list of assets must be reconciled with the accounting records, and a verification exercise completed.
   • The plan should also propose the steps for disposal of the assets. Particular consideration should be given to cases where local tax regulations impose a significant tax burden on a receiving entity to which assets are transferred. The plan should clearly outline the rationale for the proposed recipients of the assets.
   • Estimated cash balance – The CO is asked to provide an estimated cash balance as of the program ending date. When estimating this figure, the CO is encouraged to provide a conservative estimate to ensure that it will cover all grant closure activities over the time-frame. Any remaining cash will be returned to the Global Fund.
3. Global Fund approval of grant Close-out Plan. The Global Fund’s Implementation Letter will list the reporting documents that the CO is expected to submit to the Global Fund by the date detailed in the letter, including:
   • Final Progress Update – The PR should submit report(s) on the progress towards programme objectives and targets from the last Progress Update date until the grant end date.
   • Final Annual Financial Reporting (AFR) – The PR should submit AFR(s) covering the period from the last submitted AFR up to the grant end date, no later than 60 days after the end of the reporting period.
   • Final Cash Statement – The Final Cash Statement includes all programme revenues and expenditures from the date of the beginning of the last quarter of the programme to the grant closure date. All revenue generated from grant funds (for example, interest, foreign exchange gains, tax refunds, proceeds from social marketing) must be treated and accounted for as income in this Final Cash Statement. This is equivalent to the UNDP Certified Financial Statement and is prepared by the Office of Finance and Resource Management (OFRM).
   • Final Grant Report –from the program start date to the grant closure date. The letter will also include Information relating to any potential refund of Global Fund monies back to the Global Fund.
4. Implementation of Close-out Plan and completion of final Global Fund requirements (grant closure period).
   • The CO ensures implementation of the approved Close-out plan and Budget. No disbursements will be made to the CO after the programme ending date, and any undisbursed funds will stay with the Global Fund. The Global Fund may disburse funds after the program end date only to finance closure activities for an unanticipated grant closure. All Global Fund grants undergoing grant closure must return all unspent grant funds to the Global Fund. These include any unspent grant funds disbursed to the CO, remaining cash balances held by the SRs and SSRs (including interest, exchange rate gains, tax refunds and any other savings after eligible liabilities are settled), advances to SRs, and all proceed from social marketing and other revenue-generating activities.
   • The CO should rapidly determine in-country cash balances, including at SR level, and undisbursed funds under the closing grant. These will be transferred to the Global Fund after setting aside funds required to settle outstanding commitments and liabilities under the closing grant.
   • Sub-recipient closures: The PR must ensure that the SRs complete activities and submit information (progress and financial reports, asset registers and inventory lists if applicable) in a timely manner so that the PR can comply with Global Fund grant closure requirements. The SRs should refund uncommitted cash balances as of grant end date to UNDP.
5. Documentation of grant closure with Global Fund grant closure letter.