13.05 Financial management and payments

Financial management and payments refers to the procedures involved in the following activities:
  • monitoring financial execution of the contract;
  • processing invoices received for payment in a timely manner;
  • reviewing the financial implications of contract changes; and
  • liquidating financial securities once the reason for requesting them no longer exists.


UNAIDS staff must ensure that the terms and conditions of payment are consistent with those specified in the contract document. Payment should not be made in cases of non-delivery or delivery below the standard of quality specified in the contract.

The requestor must obtain an original invoice from the supplier and certify the invoice for good and services received. The signed PT.13.02 Payment request form must be used when requesting a payment.

Initiation of the payment refers to certifying the invoice for payment; this is done by the relevant staff with delegation of authority when accepting the services or goods.

The payment function refers to the action of authorizing funds for release following the initiation of the payment. This is normally done by WHO Accounts Payable or the Imprest Account Holder (exceptionally depending on the Petty Cash threshold. 

The payment process must uphold the separation of duties between personnel conducting the procurement process, staff managing the contract and the finance personnel effecting the payment. This separation of the buying function and the payment function is a crucial factor in the principle of segregation of duties and must be followed.

Advance payments

UNAIDS policy is to pay for the performance of contractual services rendered or to effect payment upon the achievement of specific deliverables described in the contract.

In special circumstances, UNAIDS policy allows for an advance payment up to a maximum of 25%  of the total value for individuals—or 50% of the total value for companies and organizations—upon signature of a contract.

UNAIDS, at its discretion, may determine if such a payment is warranted or not, and the conditions under which it would be made.

Any request for an advance payment is to be justified by the supplier.

Further information, e.g. audited financial statements, may be requested by UNAIDS at the time of finalizing contract negotiations with the selected bidder.

Requests for any advance payment must be addressed to the Director, Planning, Finance and Accountability Department (PFA) for approval; advance payments may require a bank guarantee or other suitable security arrangement. See  PT.10.06 Bank guarantee for advance payment.

Performance securities

If required, the supplier shall, within a specified period of time from the notification of award of contract, provide a security for performance of the contract or an advance payment security in an amount determined by UNAIDS.

The proceeds of the security shall become payable to UNAIDS in the event of the supplier’s failure to perform.

The performance security shall be returned by UNAIDS to the supplier no later than 30 days following the date of completion of the supplier’s performance obligation under the contract, including any warranty obligations.


UNAIDS, as UN entity, is exempt from direct taxes such as income tax and it is entitled to exemption/reimbursement of indirect taxes such as sales tax and value-added tax (VAT) on important purchases
  • This exemption is derived from the Convention on the privileges and immunities of the United Nations adopted by the General Assembly in 1946. (Article II, Property, Funds and Assets, Section 7, paragraphs (a), (b) and (c) and Section 8)
The policy of UNAIDS, based on UN Policy, is that all purchases are important because they are recurring and necessary for UNAIDS to carry out its official activities. UNAIDS offices should, through the relevant UN agency (mainly WHO or UNDP), liaise with the Ministry of Foreign Affairs to ensure reimbursement or exemption up front (see below).

Exemption versus reimbursement

Governments in some countries have provided an outright exemption from indirect taxes, but in other countries, UNAIDS may be required to pay taxes upfront and then seek reimbursement.

When the goods or services purchased by UNAIDS are for its own needs (e.g. administrative expenditures such as furniture for an office), payment and reimbursement must follow the conditions stipulated in the host country agreement (Usually advance payment of VAT by UNAIDS and reimbursement via a claim issued to the government; or via provision of an official certificate of exemption to suppliers).

Assistance from headquarters

Divisions at Headquarters can obtain tax exemption forms for Switzerland from the PFA Director’s office.

Offices away from Headquarters should first contact the UN host agency. If assistance is still required with issues regarding exemption from taxes or reimbursement of taxes, do not hesitate to contact the following in Headquarters by email:

  •  Exemption from taxes:
  •  Reimbursement of taxes:
 unaidsprocurement@unaids.org unaidsfinance@unaids.org