MCC Guidance to Accountable Entities on Technical Reviews and No-Objections

Key definitions

• Accountable Entity (AE) – the legal entity designated by the Government to implement the Program on behalf of the Government. After a program is signed, these are often referred to as Millennium Challenge Accounts (MCAs). Prior to the creation of MCA, this refers to the Permitted Designee, as defined in the relevant grant agreement.
• Fatal Flaw – a specific finding during a review that leads to MCC issuing an Objection.
• Feedback – (1) comments provided to the AE in response to a request for No-Objection which are not Fatal Flaws but MCC suggests that the AE address; and/or (2) comments provided by MCC on items submitted for Technical Review.
• Government Expenditures – expenditures from the partner country government, including both Country Contributions, as defined in MCC’s Guidelines for Country Contributions, and supplemental government funding, as defined in a relevant implementation letter or other legal agreement, that a country provides for project shortfalls or other reasons to support the program.
• Informal Review – technical collaboration between counterparts whereby MCC staff provide comments during the initial drafting phase for documents that will ultimately be submitted for No-Objection, or on items that do not need to be submitted for No-Objection.
• MCC Country Team – the MCC team assigned to work with a partner country on the development and implementation of a grant program.
• MCC Country Team Leadership  –  the individual(s) responsible for leading the MCC Country Team. This may include the Country Team Lead, Country Director, Resident Country Director, Deputy Resident Country Director, and/or Resident Threshold Director.
• MCC Funds – the funds granted to a partner country by MCC.
• No-Objection – written statement to the AE indicating (1) that it may move forward with, that MCC Funds can be used as set forth in, and/or that it may implement the requirements of, a request, and/or (2) that a Government Expenditure is expected to fulfil the government’s obligations to MCC.
• Objection – statement to the AE documenting MCC’s determination that a request submitted for No-Objection contains one or more Fatal Flaws and that they may not move forward with the request or use of MCC Funds, as applicable.
• Opt-in – MCC’s decision to review a document or other item which may not otherwise require MCC No-Objection.
• Opt-out – MCC’s decision not to review a document or other item which would normally require MCC No-Objection.
• Resident Country Mission – the MCC Country Team members responsible for coordinating engagement with the AE, including primary responsibility for coordinating the No-Objection process. This typically includes the MCC Country Team Leadership, Program Officer(s), and locally employed staff.[[Note that during program development, the RCM may not actually be resident in the country.]]
• Technical Review – the process by which a document or other item is submitted to MCC for preliminary assessment and Feedback prior to it being submitted for No-Objection.

Introduction

This guidance seeks to provide AEs with (1) information related to the MCC Technical Review and No-Objection processes, and (2) best practices on the establishment of internal AE processes relating to MCC document reviews. This guidance is intended to help AEs efficiently and effectively manage their internal review process, which can lead to submission of high-quality requests that meet all MCC requirements and can receive timely MCC Feedback and/or No-Objections.

Background and Key Elements of the No-Objection Process

The purpose of MCC’s No-Objection is to ensure that requests submitted by the AE comply with MCC’s policies, standards, and practices and the relevant legal agreements, as part of the agency’s stewardship of U.S. taxpayer dollars. MCC’s No-Objection assures the AE and the partner country that MCC will allow MCC Funds to be used for the proposed action and/or that a Government Expenditure is expected to fulfil the government’s obligations to MCC. No-Objection reviews allow MCC to oversee what is being proposed and how it will be accomplished or implemented, before permitting MCC Funds to be used. This process is critical, as items that move forward without receiving a required No-Objection could be subject to refund by the AE or partner country government or result in a Government Expenditure not being counted toward the government’s obligations to MCC.

Documents and Decisions Requiring MCC No-Objection

MCC No-Objection Review Process

Following submission, MCC’s internal review involves a process with many stakeholders—it is not only one person within MCC who assesses a request for No-Objection.

Fatal Flaws

Fatal Flaws include, without limitation, the following:

• Inconsistency with program or project objectives and requirements;
• Inconsistency with the Program Guidelines[[Program Guidelines are defined in the relevant grant agreement and include the Audit Guidelines, MCC Environmental Guidelines, Governance Guidelines, MCC Program Procurement Guidelines, Program Grant Guidelines, Reporting Guidelines, MCC M&E Policy, MCC Cost Principles for Government Affiliates Involved in Compact Implementation, Guidelines for Country Contributions, MCC Program Closure Guidelines, MCC Gender Policy, MCC Gender Integration Guidelines, MCC Cost Benefit Analysis Guidelines, MCC Standards for Global Marking, and any other guidelines, policies or guidance papers relating to the administration of MCC-funded programs, in each case, as such may be posted from time to time on the MCC Website.]] or applicable AE policies (Fiscal Accountability Plan, Procurement Operations Manual, Human Resources Manual, etc.);
• Deficiencies that would significantly increase risk of fraud or corruption;
• Significant risk of reputational harm;
• The quality of the document makes it unlikely that the purpose of the document would be achieved; and
• Inadequacy of budget (including appropriate contingency)[[Interpreted as infeasible with funds known to be available within the relevant program or through contributions from the partner government or another donor.]] or serious reservations about use of funds.

When MCC objects, the specific Fatal Flaw(s), and suggested remedies, will be communicated to the AE in writing by the RCM.

Responding to a No-Objection Request

If MCC provides a No-Objection, the AE is authorized to move forward with the request. However, if MCC objects, MCC Funds cannot be used for the request. MCC’s Objection would likewise mean that a Government Expenditure used to implement the request would not fulfil the government’s obligations to MCC. Following an Objection, the AE will typically revise the request and resubmit it for No-Objection.

In some cases, MCC may provide its No-Objection, but also provide Feedback on issues that could help improve the document or request but are not considered Fatal Flaws. In these cases, the AE may choose whether to address or respond to the Feedback in the final version. Edits to address MCC Feedback are the only substantive changes an AE is authorized to make after MCC provides its No-Objection. If other substantive changes are introduced after MCC provides its No-Objection, the AE should resubmit the request for No-Objection.

The AE should always submit the final version[[The “final version” refers to the signed/executed version and/or the final version that will be shared with the target audience(s), as applicable.]] of the document to MCC, including incorporation of any Feedback. If the final document or decision is materially different from what MCC provided a No-Objection to, MCC could withhold funding, and might even demand refunds of any amounts spent for purposes other than those approved by MCC.

Review Timing

Particularly complex requests may require additional processing time and multiple submissions (in addition to Technical Reviews). In cases where the AE submissions have significant deficiencies and/or require additional coordination within MCC, the response time may be longer. AEs should also be aware that if they submit several requests for No-Objection in a short timeframe MCC may require more time than usual to process all the requests. In cases where MCC requires a longer turnaround time than normal, the RCM will alert the AE as early as possible.

Technical Reviews

MCC are strongly recommended. This can help ensure that documents are in an acceptable state before they are submitted for No-Objection.

Technical Reviews provide an opportunity to identify and address significant issues that may be Fatal Flaws. Technical Reviews allow the MCC Country Team and AE counterparts to identify and discuss Feedback, varying technical approaches, and professional differences. They also allow the MCC Country Team to identify and recommend changes related to grammar or stylistic issues. In cases where MCC and AE staff disagree, each side should justify their position (based on previous experience, global standards, etc.) such that MCC can determine the way forward.

As discussed in Section III below, MCC and the AE should agree on whether, or in what circumstances, Technical Reviews are required,[[ Per the M&E Policy, the M&E Plan must always be submitted for Technical Review. ]] and the specific protocols for Technical Review submissions. When documents are submitted to MCC for Technical Review, they will be circulated to all MCC staff who will have a role in the No-Objection process.

The timeline for Technical Reviews may vary widely based on the level of complexity of the document(s) and whether any Informal Reviews are completed before the document is submitted for Technical Review. It is important, however, for MCC and the AE to agree up front on an appropriate timeline for a given Technical Review.

At the end of the Technical Review, MCC provides Feedback; an Objection or No-Objection is not issued.

In certain limited circumstances it may be possible for MCC to undertake expedited reviews; however, this is expected to be uncommon and based on a specific, exigent and justified need. In cases where the AE expects to request an expedited review, the AE should consult the RCM as early as possible to determine if it will be possible and if so, to agree on an appropriate review period.

Informal Reviews

AE staff are encouraged to discuss the substance of upcoming requests directly with their MCC counterparts during the drafting process, and before the item is ready for Technical Review or submission for No-Objection. When documents are shared with technical counterparts for Informal Review, they may be shared with others on the MCC Country Team, but there are no standard requirements or procedures that govern this.

Counterpart Communications

AE staff should collaborate closely with their technical counterparts in MCC, discussing upcoming requests and addressing any key questions. This provides an opportunity for MCC staff to share best practices from experience in other countries. It is also an opportunity for AE staff to confirm that the right AE staff are involved in the internal AE review process, and to determine up front what supporting documents may be required for a given No-Objection.

In planning for upcoming reviews, different types of requests could warrant different types of collaboration between counterparts. MCC and AE staff should employ various types of collaboration, including written exchanges, document reviews, phone calls about specific issues, collaborative work sessions to review and jointly edit documents, etc., as appropriate for the specific request.

Multiple Submissions

Preparing for MCC Reviews: Establishment of Protocols with MCC

• What individual(s) at the AE are responsible for monitoring and ensuring compliance with required No-Objection requests;
• What technical mechanism, if any, will the AE set up to send and receive responses to No-Objection requests (dedicated listserv, specific email box, etc.);
• The process within the AE to ensure that all appropriate team members have reviewed and signed off on the request prior to submission to MCC;
• Who in the AE is responsible for/allowed to send No-Objection requests to MCC;
• Whether the subject and body of the emails between MCC and the AE should have any specific, mutually agreed upon format or nomenclature;
• To whom in MCC the AE should send requests No-Objection (e.g., straight to the MCC Country Team Leadership, to the Program Officer(s), to a dedicated listserv, etc.);
• Who should be copied on MCC’s responses (MCC and AE technical counterparts, dedicated MCC or AE No-Objection listservs, consultants such as the Fiscal Agent or Procurement Agent, etc.);
• What form MCC’s response should take (email, a formal memo, etc.);
• How and to whom MCC responses to requests for No-Objection are communicated within the AE;
• Whether or in what circumstances Technical Reviews are required;
• How and with whom review periods for Technical Review are agreed upon (noting that timelines may vary widely depending on the type of request);
• If the Technical Review process follows the same process and protocols as No-Objections, or if different procedures are expected; and
• The process for MCC to identify and the AE to internally communicate about any documents that MCC has opted-in to review.

Tracking Upcoming Reviews

Clear communication with MCC, at both the technical and management levels, can help promote appropriate planning on both sides. This is especially critical in cases of time-sensitive, large, or critical documents, requests that may require input from MCC consultants,[[Many technical requests are also reviewed by MCC consultants. Processing delays can be minimized if AEs provide at least 1-2 weeks advance notice of an anticipated submission, and then submit the request on the communicated timeline (and/or keep counterparts informed if delays are expected).]] and/or items that also have to go to the AE’s Board.

Please refer to Annex 3 for an example tracking tool. AEs are also encouraged to incorporate submissions for No-Objection into its master workplan.

Submissions in MCC MIS[[For additional information, please refer to the MCC Guidance to Accountable Entities on the Quarterly Disbursement Request Package and/or the MCC MIS User Guide.]]

Special Considerations

Review Periods for AE Contractor/Consultant/Grantee/Partner Deliverables

Note that although MCC will make its best effort to identify all documents MCC will need to provide No-Objection on during the planning phase, MCC may still Opt-in to document reviews at a later date. In these cases, the AE should promptly communicate with the consultant if there is an expected need to amend contractual timelines or if there are any expected delays in deliverable finalization.

Contract Amendments

For contract and grant amendments that require MCC No-Objection, prior amendments and the original contract or grant agreement are often relevant supporting documents that MCC needs to assess the request; this is particularly true in cases where those contracts, grant agreements, or amendments were not previously submitted to MCC for No-Objection. MCC and the AE should establish protocols for how the AE will transmit copies of the original signed contracts/grant agreements and any earlier amendments that preceded the amendment being sent for MCC No-Objection.[[For instance, will they be submitted via email with the request for No-Objection? Will the PA maintain a site that is accessible by MCC staff where MCC can find all the relevant amendments? Other approaches?]]

To facilitate the review process, MCC also recommends that AEs include a cover sheet/justification with No-Objection request for contract/grant amendments. For a template cover sheet for contract amendments, which has been used successfully in some MCC countries, see the Contract Amendment Authorization Form within the MCC Procurement Toolkit for MCA Entities.[[MCC shares this toolkit directly with the AE Procurement Director and PA. For any questions, please consult the MCC Country Team Program Acquisition and Assistance (PAA) lead and AE procurement leads.]]

Contractual scope changes and grant program description changes may also introduce additional issues that MCC and AE staff must carefully consider. For instance, what is initially viewed as a simple change may have implications for expected program outcomes more broadly that will require careful analysis of the costs, benefits, risk, purpose, potential delays, change in economic rates of return (ERRs), etc. For a framework to help teams think through potential scope changes please refer to the AE’s Contract Administration Manual (CAM), Contract Management Manual (CMM), Contract Administration and Management Manual (CAMM), Grants Operational Manual (GOM), Leverage Grant Facilities (LFG) Operational Manual and Partnership Navigator, and/or change management documents, as applicable.

Program Modifications

For proposed budget reallocations submitted through Schedule A in the Quarterly Disbursement Request Package (QDRP), the AE must submit a budget reallocation request.[[An outline for this request can be found in Annex 3 to the MCC Guidance to Accountable Entities on the Quarterly Disbursement Request Package.]] For other types of program modifications, AEs should consult the MCC Country Team Leadership to determine what specific documentation may be required.

Preparing for Reviews: Establishment of Internal AE Protocols

Roles and Responsibilities (recommended but not required)

Noting the volume of No-Objection requests that are typically submitted over the course of a program, many AEs have found that having a single No-Objection focal point who is responsible for submitting and receiving responses to requests for No-Objection and monitoring the overall process has helped promote process efficiency.

Process Flows (recommended but not required)

Similarly, AE Board of Directors (AE Board) bylaws often require approval of many different types of documents. While the Accountable Entity Guidelines (Section 3.2.E), PPG, and PGG Approvals Matrixes outline some specific items that always require AE Board approval, each AE Board establishes its own review and approval requirements. To ensure that both AE and MCC staff understand which documents require AE Board approval within a specific country, the AE should develop a clear list of items requiring AE Board approval;[[The AE Legal Director, with support from the Procurement and Financial Directors, would typically be best placed to develop this list. The AE could also seek assistance from MCC if the appropriate AE staff members are unavailable.]] this list should be shared widely within the AE and with the MCC Country Team.

AEs are encouraged to develop one or more process flows to outline the roles, responsibilities, and steps in the AE-level review process. When developing the process flow(s), AEs should establish the order in which reviews take place, including whether the MCC Technical Review and/or No-Objection processes are undertaken before, after or concurrently with other external stakeholder reviews. Note that the internal review process undertaken by AE staff should normally be completed before documents are submitted to MCC. For reference, a process flow explanation and example process flow diagram are included in Annexes 4 and 4a.

AE Clearance Matrix (recommended but not required)

There are many forms this matrix can take, and AEs are encouraged to consult the MCC Country Team Leadership if they want to learn more about different approaches. An example AE Clearance Matrix is included in Annex 5. This example focuses specifically on items that require MCC No-Objection, though AEs are encouraged to expand or modify the matrix to include rows for additional, program-specific requests that will require internal review. AEs should also review and modify the columns and designations in the matrix to fit their specific staffing structures and country circumstances. To the extent possible, AEs are also encouraged to delegate approval responsibilities below the executive level.

This matrix should be updated periodically, and could be used to assign specific roles and responsibilities for each item in the No-Objection tracker, discussed in Section III.A above.

Clearance Sheets (required)

AEs should agree with the RCM on a format for the clearance sheet. AEs should also establish clear internal processes and procedures for filling out clearance sheets and ensuring that they are submitted to MCC as part of the No-Objection request. In cases where a member of the AE had concerns and did not clear, the reason for their non-clearance, as well as the approver’s rationale for overruling their non-clearance, should be explained on the clearance sheet. Noting that MCC technical staff may raise concerns similar to those of AE technical staff, including this information on the clearance sheet provides an opportunity for MCC to consider the different perspectives when deciding whether to provide a No-Objection.

While the clearance sheets are not required for Technical Reviews, AEs are encouraged to provide MCC with information on which AE staff have provided input, and whether their feedback has been incorporated. This can help facilitate a more efficient MCC Technical Review process.

Document Management and Version Control (recommended but not required)

Some AEs have struggled with document management and version control. This can have significant impacts on program timelines and can negatively affect the No-Objection process. To address this issue, AEs are encouraged to use collaborative software to manage the internal document development and review processes.[[AEs with compacts that entered into force prior to July 2021 have access to Google Drive, including Google Docs Editor Office Suite. This is an online platform which allows users to collaboratively create, edit, review, and share documents, spreadsheets, presentations, forms, and more. AEs with compacts that entered into force after July 2021 are expected to have access to Microsoft 365, a line of subscription services which includes Microsoft Word, PowerPoint, Excel, SharePoint, Teams, etc. Within SharePoint, users can collaborate in real time and changes can be tracked.]] AEs are also encouraged to establish a document management process that defines roles and responsibilities, nomenclature, and other details related to document management.[[Note that this should include document management both within the AE and across AE consultants, contractors and/or grantees. This may require incorporation of specific contractual language into relevant contracts. Some AEs have established a shared drive for document management which also provides access for MCC. This has increased efficiency, as it has allowed MCC staff to directly access contracts, deliverables, etc. without having to request the action from AE counterparts.]] For additional information on how to use available software and/or establish document management systems, please consult MCC’s MCA MIS team.

With regards to specific No-Objection requests, the document owner should retain responsibility for ensuring that the correct version of the document is used for all steps in the No-Objection process.

Training for AE Staff

Annexes

• Annex 1: Standard items requiring MCC No-Objection
• Annex 2: Example MCC Country Team and AE Protocol for Managing Technical Review and No-Objection Processes
• Annex 3: Example tracker
• Annex 4: Example No-Objection process flow explanation
• Annex 4a: Example No-Objection process flow
• Annex 5: Clearance Matrix example
• Annex 6: Clearance sheet example