Financial management for sustainable health policies and programmes


Robust financial management systems and capacities are required to plan, direct and control financial resources so that the objectives of national health programmes can be effectively and efficiently achieved. In addition to managing the short-term cashflow needs, financial management includes budgeting, systems, procedures and controls to protect financial assets, and ensuring there is sufficient relevant and reliable information for good decision-making.

Financial management must be prioritized within the overall programme management responsibilities of an entity implementing a health programme, with close coordination between financial planning and budgeting, and between the planning and delivery of programmatic results. Likewise, systems for financial management and reporting of donor-funded health programmes must be integrated into national public financial management systems to ensure their sustainability.

UNDP takes a multifaceted approach to strengthen the financial building blocks of the health system that make it possible to deliver services of high quality. At the national level, UNDP works with governments to strengthen national public financial management systems for health and develop the capacities of national entities to sustainably manage and generate domestic and international health financing. This includes support to generate and evaluate accurate financial information, including from the private sector, to inform health policies and identify sustainable models to scale health services.

At the programmatic level, UNDP provides technical assistance to national institutions and civil society organizations to strengthen financial management capacities for effective implementation of large-scale health programmes, including those funded by the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund). UNDP provides end-to-end technical support for financial management to implementing entities on issues including planning, budgeting and forecasting, revenue generation, expenditure, monitoring and controls, reporting, and audit and assurance.

The pages in this section provide guidance and further details of UNDP’s support to governments and other health partners across each of these dimensions of financial management for national health systems and programmes, including HIV, tuberculosis and malaria programmes funded by the Global Fund. For further guidance on UNDP’s technical support to sustainable health financing, refer to the “Sustainable Finance” section. Additional tools and more detailed guidance on financial management processes for UNDP-managed Global Fund programmes can be found in the UNDP-Global Fund and Health Implementation Guidance Manual.

UNDP’s approach

UNDP provides end-to-end capacity development support to help government and civil society organizations (CSOs) manage all aspects of the financial management process in the implementation of large-scale health programmes. Financial management involves much more than accounting for income and expenditure. It includes all aspects of planning, organizing, directing and controlling financial activities.

Through its interconnected support to promote sustainable financing models and improve institutions, policies and processes that govern the use of public funds for health at the national level, alongside work to enhance financial management capacities and processes in the implementation of national disease programmes, UNDP’s capacity-building approach provides mutually reinforcing entry points to help countries progress towards universal health coverage. Strong financial management in programmes ensures that existing resources for health are efficiently used to maximize health outcomes, while enhanced public financial management and sustainable financing ensures that these outcomes can be scaled and sustained in the long term. Financial management involves much more than accounting for income and expenditure. It includes all aspects of planning, organizing, directing and controlling financial activities. UNDP therefore works in close partnership with health system actors to ensure accurate and timely financial data contribute to making critical and evidence-based decisions for health-related goals.

UNDP’s entry points for support include processes and capacities for financial management, financial data for accountability and decision-making and financial risk management.

1. Processes and capacities for financial management

As part of its financial capacity-building activities for government and civil society organization partners, including as interim Principal Recipient of grants from the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) in countries facing challenging operating environments, UNDP does the following:

  • It takes into account existing assessments and findings for financial management: UNDP has developed comprehensive capacity assessment tools to help governments identify how closely existing financial management policies and procedures meet current and expected financial management needs. Using these tools helps to establish a baseline and a clear understanding of what financial management systems can achieve.
  • It supports selection of performance indicators and measurable milestones on financial management to support sustainable transitions of health programmes from donors to national entities and systems.
  • It supports the development and implementation of a capacity development plan to facilitate short, medium, and long-term interventions with a focus on building sustainable financial systems for health.
  • It provides technical assistance, mentoring and training on financial management for public health actors at all levels of the health system.
Mentoring to strengthen financial systems in Zambia

In 2016, the Ministry of Health in Zambia decentralized the implementation of HIV, tuberculosis and malaria programmes by appointing all 10 provincial health offices to directly implement programme activities in their respective catchment areas. Based on the new Ministry of Health financial management system, UNDP and the Ministry of Health conducted a joint assessment and designed the decentralized roll-out to support the financial system in all provinces. The support included the installation of enterprise resource planning software and risk management, training and development of procedures to ensure compliance with both financial and programmatic reporting. UNDP also worked with the Ministry of Health to introduce on-site mentorship to the provincial health offices. In 2018, UNDP partnered with Gavi, the Vaccine Alliance (Gavi) to further support the Ministry of Health to augment financial and programme management capacities at the district level.

Read more in Country Case Studies.

2. Financial data for accountability and decision making

Good decision-making to achieve health programme objectives requires timely, relevant and reliable financial data. In both government and non-government sectors, it is critical to set clear goals and establish systems and controls to report on them. Beyond optimizing programme performance, the ability to demonstrate financial results of key interventions within the health sector facilitates the prioritization and scaling- up of effective measures. UNDP’s support to enhance financial accountability recognizes that financial information requirements need to reflect the fundamental accountability structures of the health system. In a highly centralized system, the information system should track expenditure over the whole of the health system, and feed information into the centre.

Fiscal transparency in the public sector strengthens governance and accountability and should also result in improvements in programme performance to support better health outcomes. To strengthen the linkage between financial reporting and improved health programme performance, UNDP:

  • supports national entities to assess the current financial management system and consider the options to meet national and international reporting requirements;
  • assists national entities to strengthen their financial systems and consolidate financial data, including real-time data to improve monitoring and decision-making;
  • leverages customized digital technology and commercial software to help national partners, including ministries of finance, strengthen public financial management systems for the health sector.
Support to the financial management system in Zimbabwe

The Government of Zimbabwe Public Financial Management System (PFMS) had been in limited use by government ministries and did not have the capability to manage donor funding. With UNDP’s support, through funding from the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund), the Ministry of Health and Child Care became the first ministry to roll out a grant management module for the PFMS in 2015–2016, starting with the configuration of Global Fund grants. The grant management module allows for data capture in near real-time for reporting to the Ministry of Health and Child Care and donors. Since 2016, more than 90 grants have been configured into the module, enabling improved timeliness and completeness of financial data for the delivery of health services.

Read more in Country Case Studies

3. Financial risk management

Financial control and risk management are central to the effective management of a health system. UNDP helps countries to assess risk factors and ensure risk management is embedded in strategic planning for health programmes as well as in routine daily practices for health implementation activities. Through its partnership with the Global Fund and role as interim Principal Recipient of grants in challenging operating environments, UNDP has also helped to reduce the risk of corruption and fraud by strengthening financial management, working together with national entities to better manage grants, set up web-based accounting systems, and introduce robust control frameworks.

Applying a coherent focus on strategic, operational and financial risk factors, UNDP does the following:

  • It works with the management of health programmes to focus on identifying actual and potential threats and opportunities, assessing the impact of those risks and prioritising them;
  • It selects appropriate financial tools to mitigate risk, including different payment modalities such as direct payments on behalf of implementing partners and reimbursement to implementing partners to enable their implementation in high-risk environments. The direct cash transfer modality can be used for institutions with adequate capacity to manage and report on the utilization of advances. This modality also plays a role in the strengthening of national financial accounting and reporting systems.
  • It supports national entities to make informed decisions about the level of risk that they want to take in order to effectively pursue their objectives;
  • It helps to set up appropriate risk management frameworks and internal controls, including financial management systems, to counter threats and take advantage of opportunities.

Key resources

UNDP Enterprise Risk Management (ERM) Toolkit
United Nations Development Programme
This ERM space hosts the latest information on the ERM Policy, risk governance mechanisms, relevant guidance/tools

UNDP Corporate Risk Profile PowerBI Dashboard
United Nations Development Programme

Commission on Financial Management and Control Systems in the Health Service
Lenus – The Irish Health Repository, Dr. Stevens Library, Health Service Executive

A detailed examination and review of the financial management and control systems in the Irish health service.

Improving Public Sector Financial Management in Developing Countries and Emerging Economies
This paper explores how public financial management can be improved and capacity strengthened in developing countries and emerging economies.

Self-assessment of Internal Control Health Sector, A Toolkit for Health Sector Managers
USAID, Health Finance and Governance
This tool is designed to help public health officials determine the areas of strength and weakness in how public funds are managed and spent.

Guided Self-assessment of Public Financial Management Performance – A Toolkit for Health Sector Managers
USAID, Health Finance and Governance
This self-guided assessment adapts the public expenditure and financial Accountability assessment methodology – developed and implemented by a multi-donor partnership – to focus specifically on the health sector.

Internal Controls – A Review of Current Developments
International Federation of Accountants
This information paper reviews current developments and some of the latest thinking in the area of internal control.