Rapid Response Fund 2008

Total Appeal Target: US$ 1,450,000

Balance Requested from ACT Network:   US$1,135,000

Rapid Response ACT CO Request

The ACT CO has, since its establishment in 1995, maintained and administered a global fund, the Rapid Response Fund (RRF). The RRF can be used in emergencies of a sudden-onset nature (e.g. floods or earthquake) and or emergencies of a complex humanitarian character (e.g. internal displacement resulting from a breakdown of social, political and economic systems). As such, it is a core project activity of the ACT CO and ACT International alliance.

How is the RRF utilised?

• The primary purpose of this fund is to provide financial resources of up to USD 60,000[1] (previously USD 50,000) per disaster/emergency in a country to a member or members to facilitate the immediate response in saving lives. In small- to medium-scale emergencies, the RRF, combined with locally available resources could be sufficient to meet the immediate life-sustaining materials and actions such as the procurement of food, clothing, temporary shelter, household and health kits. The maximum period for which the funds can be used is 3 months. In this case, no follow-on appeal is issued.
• In cases of medium- to large- scale emergencies, the RRF may also be utilised as an advance to save lives. In this instance, an appeal may either have been issued already but funds have not yet been forthcoming or will be issued subsequently. In both these situations, the RRF advanced funds are/ should be recovered from the appeal funding received after the advance has been given.
• As part of the rapid response mechanism, the fund will also be used for the ACT International Rapid Support Teams (RST)[2] which has replaced the previous Co-ordination Assessment Teams (CATs). The purpose of the RST is to support and assist members of the ACT International alliance, along with the ACT Co-ordinating Office, in implementing a rapid, timely and effective response in the first weeks and months following an emergency. Note should be taken that the RST will not be operational, but will be deployed as a support to ACT International members implementing the emergency response. It will also not displace local member initiative in the emergency response and ownership of the response.

Other new developments

Following the work of the consultant that was employed to assist the ACT CO in reviewing how the rapid response fund and the rapid response mechanism have operated, over and above the recommendation to increase the amount to US$60,000, a further recommendation was for ACT International to establish a Revolving Fund. The purpose of the Revolving Fund is to make immediate funding available to ACT International members in the early stages of a medium- to large-scale emergency operation. The use of the Revolving Fund is directly connected to the appeal process, to respond quickly through a Preliminary appeal. Here, the funding amount may be up to US$100,000 and in exceptional instances, at the discretion of the director and depending on the availability of funds, could be higher.

Although this recommendation was also approved by the ACT Executive Committee in its December meeting, the ACT CO has still to put in place the various necessary systems and controls while taking into account the two options that were put forward to the ACT CO by the consultant. These options are:

Because some work must still be done, this appeal will be revised, possibly around July 2008, to include this component. The ACT CO plans for this revolving component/ fund to be fully operational by 2009.

How has the RRF performed in 2007?

Funding

Since its inception, the RRF has been funded with private/ own member funds. There is no evidence of back-donor/ government funding ever been received.

The year 2007 was opened with a total US$233,711 balance of funds brought from 2006. Of this balance, US$144,278 were funds which could be used to respond to ACT member requests so as to save lives whereas US$89,433 was earmarked for the CATs deployment expenses that may/would be incurred. During the course of the year members supported the RRF appeal by contributing funds that would be disbursed at the discretion of the ACT CO (no additional earmarking beside the appeal reference). In some cases members replenished, fully and or partly, the funds transferred towards specific emergency requests for rapid response where no appeals followed.

The ACT CO received US$634,818 unallocated contributions from 16 members. A total US$420,173 was received from 12 members (some of whom are also in the afore-mentioned number) to replenish the transfers that were made by the ACT CO towards emergencies where no appeal was issued. US$547,943 was recovered from appeals and US$1,192 unspent balances from closed appeals. In total US$1,748,405 are funds that were available for 2007 for emergency response and US$77,348 for the RST activities.

Expenditure/Disbursements: (details in enclosed spreadsheet)

In the same period around 35 transfers totalling US$1,511,183 were made; some of these transfers were in the form of advances recoverable from appeals while others were non-recoverable transfers. Of the advances, US$547,943 as stated as funds available above, was recovered in the course of the year.

Of the total funds transferred to members,  US$963,903 are funds which will be accounted for as a “real” cash out-flow not recoverable as they have been utilised to respond to emergencies. The regional breakdown of this US$963,903 transfer is:

Expenditure from CAT component

In the year 2007, US$12,085 was used towards the RRF/RRM mechanism review by the consultant. This includes consultant’s fees and consultant’s visit to a couple of members.

Balance of funds on hand

As at 31 December, prior to year-end closing adjustments, the balance in the RRF stands at US$314,569 of which US$237,221 are funds available for member response and US$77,348 for RST deployments.

Reporting for the RRF

The ACT CO has identified that reporting -narrative and financial- for the RRF is an area that needs to be improved.  Currently, the ACT CO receives reports from members for transfers made per emergency. These reports have not consistently been reviewed and shared with the members who have made funding available. On the other hand, the ACT CO shares, bi-monthly, an update on the status of this fund, that is, provides a list of contributions by member and a list of payments made to member(s) by emergency. However, this update does not give how funds have actually been spent. This information is found in the individual member reports. To address this weakness, the ACT CO is working out a mechanism to ensure that members receive a general report (finance and narrative) six-monthly. Because it will not be an easy task to consolidate all member expense reports into one, the ACT CO will systematically inform members of reports that have been received and will send those reports that have been received to members upon request.  This is one way in which members receive only those reports which they need rather than clogging them with many reports they do not need.

Reporting schedule:

Funding Request for 2008

Based on responses to questionnaires that were sent to all ACT International members, it was noted that the RRF is one of the most popular instruments of emergency response; as such we expect that the demand on this fund would increase rather than go the other way.  

Also taking into account the total amount of funds that were disbursed in each 2007- US$1,511,183 and 2006- US$1,140,903 for instance, the fact that the amount that may be transferred per emergency has been increased from US$50,000 to US$60,000 as well as the possibility for this amount to be higher where more than two members are seeking funds for the same emergency,  the ACT CO concludes that US$1,450,000 is a reasonable amount for the year. The level of amounts that is being requested will take into consideration the balance of funds on hand.

Signed by:

John Nduna
ACT Director