Compact Implementation Guidance

Program Closure Guidelines

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Annex I

Outline of the Program Closure Plan

  1. Accountable Entity Status: Each Program Closure Plan must include a description of the post-Compact treatment of the Accountable Entity.
    If the Accountable Entity will be closed upon the Closure Date, the Program Closure Plan must include the following:

    1. Accountable Entity and other key personnel (per section 5.5):
      • A plan for release or termination of staff, including any financial obligations incurred by the Accountable Entity to effect the plan.
      • A plan for which staff will be retained for part or all of the Closure Period, as well as a brief justification of why the selected staff are required for closure tasks. Include any special arrangements to retain key staff during the Closure Period.
    2. Administrative Program Assets: A brief description of the intended disposition of Program Assets used by the Accountable Entity for the administration of the Program by category. This section should include the proposed timeline for asset disposition, to ensure adequate documentation of the process and timely disposition of assets. The description should include use of any third party agents or Government entities to assist in the disposition of assets.
    3. Website: This section should describe how the Accountable Entity will ensure that the website will be publicly available for one year after the Compact End Date.
    4. Treatment of Sensitive Information: A brief description of how the Accountable Entity will ensure that reasonable steps to safeguard or remove sensitive data and information are taken for all relevant Program Assets prior to transfer, as specifically described in these Guidelines.

    If the Accountable Entity will continue operations beyond the Closure Date through sources of funding other than MCC Funding (per section 5.5.1), the Program Closure Plan must include a description of the funding and proposed operations, as well as documentation supporting commitment of such other sources’ funding. The Program Closure Plan should also include any plans to use the Accountable Entity name and logo beyond the closure date.

  2. Project Closure: For each Project, the Program Closure Plan must include the following components:
    1. A brief description of the closure strategy for the Project. If applicable, the Program Closure Plan for the Project should include detail at the Activity or sub-activity level.
    2. Identification of completion risks and sustainability risks for the Project/Activity, including how the Accountable Entity plans to address these risks, and contingency plans for how to respond if these risks materialize. An example of a completion risk to include: if construction of small works does not begin by a certain date, the works will be terminated and appropriate stakeholders will be informed, or sources of funding other than MCC Funding have been mobilized to support any construction beyond the closure date, should the schedule experience any delays. Sustainability and completion risks should be treated in detail, including a plan for how to monitor these risks during the last year of the Compact and the Closure Period.
    3. Any environmental, social (including resettlement), health, safety or gender risks and how these will be managed during the last year of the Compact and the Closure Period.
    4. Plans to manage contingency amounts for the Project/Activity through the last year of the Compact and the Closure Period (when contingency funds will be released, how those funds will be utilized, etc.).
    5. A brief description of the intended disposition of all forms of applicable Program Assets by Activity and asset category (e.g. equipment, vehicles, furniture). This section should include the proposed timeline for disposition of assets, to ensure adequate documentation of the process and timely disposition of assets. Disposition of Financial Assets as described in section and Guarantees and Retention Monies Securing Contractor Obligations as described in section are particularly complex issues and should be treated in detail in the Program Closure Plan.
    6. An inventory, description, and timeline for the closure and/or assignment of each contract, grant, and Implementing Entity Agreement related to the Project.
  3. Financial Management:
    1. Closure Budget. The Program Closure Plan should include a budget for the Closure Period, with a description of how the issues described in section 6 have been addressed, including any anticipated reallocation of funds.
    2. New commitments. This section should include a description of any commitments anticipated during the Closure Period, as well as plans for a contingency amount to cover unexpected Closure Expenses (if applicable).
    3. This section should indicate how any outstanding (not yet reimbursed) tax amounts will be reimbursed by no later than 60 days after the Compact End Date (per section 5.9.8).
    4. Financial Assets. This section should indicate how any Financial Assets remaining in the possession of the Accountable Entity and any Imprest Funds not expended before the Compact End Date, plus accrued interest, will be transferred to MCC or its designee prior to the deadline established to close all Accountable Entity permitted accounts (per section 5.4.1.
  4. Monitoring and Evaluation:
    1. This section should provide a brief overview of the closure strategy for M&E disaggregated by Project and Activity as structured in the M&E plan. The closure strategy should: a) highlight any data collection activities, such as surveys, impact evaluations, and special studies that are at risk of not being completed by the Compact End Date; and b) include a description of all M&E activities that are planned to be conducted after the Compact End Date as agreed by MCC.
    2. This section should describe the data and documentation to be provided as electronic copies to MCC, including: (a) all MCC-funded survey data sets and supporting materials, such as questionnaires, enumerator field guides, data entry manuals, data dictionaries, meta data and final reports; and (b) other analyses, evaluations, data quality reviews and/or special studies that were funded out of the M&E budget within the Compact.
    3. If the individual serving in an M&E capacity will continue operations beyond the Closure Date through funding provided either by the Government or other sources, the Program Closure Plan should include a description and supporting documentation of the commitment from those funding sources.
  5. Marking and Communications with Stakeholders: The Program Closure Plan should include a brief description of how the results of the Program will be communicated to stakeholders, including the board of the Accountable Entity, the Implementing Entities, the Accountable Entity personnel, Project stakeholder groups, contractors, and the public. This section should also address how the Accountable Entity will ensure compliance with the Standards for Global Marking as described in section 5.11.
  6. Legal Requirements: This section should describe any modifications to legal agreements that may be required to effectively execute the Program Closure Plan, following the review described in section 8.2.
  7. Ongoing Government Responsibilities: This section should identify the Principal Representative for the Government, if this will change during the Closure Period, and any Additional Representatives that will be the primary points of contact for any obligations of the Government that extend beyond the Compact End Date.
  8. Reports and Auditing: This section should include a plan to produce the Compact Completion Report (for example, whether the Accountable Entity intends to hire a consultant to facilitate the process).
  9. Retention and Safekeeping of Records:
    1. This section should describe how the Accountable Entity will ensure that relevant records are provided to MCC, as necessary, prior to the Closure Date, and remain accessible beyond the Closure Date as required.
    2. This section should include an indicative list of the types of records, as well as a description of the process and timeline for finalizing these lists.


There may be many annexes associated with the Closure Plan. Examples include:

  • Legal Opinion: a draft opinion from legal counsel engaged by either the Accountable Entity or the Government confirming that the Program Closure Plan is in accordance with the provisions of the Compact and supplemental agreements and complies with applicable laws and regulations of the country.
  • Procurement/Contracts List and Procurement Tracking Tool: a comprehensive list of contracts and their characteristics used to close contracts and evaluate action steps to be taken.
  • Pro-forma Closure Budget: a budget specifically formulated to cover necessary closure expenses; it does not contain programmatic activities.
  • Sample forms, e.g. Asset Transfer Agreement forms: various forms which will be needed during closure activities.

Annex II

Guidance on Certain Compensation Arrangements

The goal of special compensation or other arrangements proposed to retain staff through the Compact End Date (referred to herein as “retention incentive payments”) is to ensure that certain Accountable Entity staff members whose jobs are deemed critical to the smooth administrative closing of the Compact remain with the Accountable Entity as long as needed. Such payments represent an incentive to remain at the Accountable Entity until a date that is determined through developing the Program Closure Plan for each accountable entity. Retention incentive payments are not entitlements, and should not be used for the purpose of rewarding loyalty, acknowledging years of service or seniority, or for any similar purpose, and they are not to be termed bonuses, gratuities, awards, or similar terms.

  1. Staffing Needs Assessment – As part of the Program Closure Plan, each Accountable Entity must perform an assessment of the staffing needed to successfully and responsibly close the Program. This assessment must be based on project work plans and the timing of closure tasks. The final assessment must be realistic and be intended to identify only those staff who must be retained until the Compact End Date or through some or all of the Closure Period to ensure a successful Compact closure, and who must be incentivized to remain because of the real costs and benefits to the program of replacing them and/or training replacement staff. This assessment must also identify the date through which the service of each employee is required (e.g. – Compact End Date, Compact End Date + 30 days, Closure Date, etc.).
  2. Individual Eligibility for a Retention Incentive Payment – The following limitations apply to the eligibility of staff to receive retention incentive payments:
    1. Accountable Entity staff who are not identified as critical for Compact closure through the staffing needs assessment and approved by MCC in the Program Closure Plan are not eligible.
    2. Accountable Entity staff who depart (either voluntarily or are removed from their position) from the Accountable Entity prior to the date identified as critical for them to remain are not eligible for any part of the planned retention incentive payment.
  3. Justification of Retention Incentive Payments – Each Accountable Entity shall assess what is normal and reasonable to successfully retain critical staff identified in the staffing needs assessment. The justification for the retention calculation should consider:
    1. Benchmarking with comparable organizations in competitive labor markets, specifically considering whether and to what extent additional compensation is necessary to retain staff.
    2. Stage of the Closure Period that services are no longer required (if a greater incentive may be needed to retain staff during the Closure Period than simply to Compact End Date).
    3. The real costs involved in the hiring and re-training of replacement staff late in the Compact Term and/or during the Closure Period critical staff leave early.
  4. Amount and Overall Reasonableness of Retention Incentive Payments – Notwithstanding the factors included in Guideline 3, all incentive payments must be assessed for overall reasonableness as required by the MCC Cost Principles for Accountable Entity Operations. As such, no individual retention incentive payment may exceed:
    1. For any staff member required for the entire Closure Period, a maximum of four (4) months of the employee’s basic monthly salary.3
    2. For any staff member required through the Compact End Date, a maximum of three (3) months of the employee’s basic monthly salary.
    3. For staff required for only a portion of the Closure Period, a maximum between three (3) and four (4) months of the employee’s basic monthly salary, determined by a pro-rated percentage of the Closure Period that their service is required.
  5. Timing of Retention Incentive Payments – To emphasize the nature of retention incentive payments and maximize their impact, the entire amount will be paid to each employee in one lump sum only after the employee has completed the term of service approved as part of the Program Closure Plan.
  6. Overlap with Other Forms of Compensation – These guidelines are not applicable to the calculation of other forms of compensation, including severance payments mandated by local law, merit awards, or merit salary increases. Moreover, changes in the merit award/increase structure intended to supplement or circumvent the maximum allowable limits on retention incentive payments are not allowed. Likewise, payments for severance should only be allowed when mandated by local labor laws.

Annex III

Outline of Records Retention

The purpose of this annex is to elaborate on section 5.10 regarding Government’s responsibility to store and safely maintain important Records for a period of five years after the Compact End Date. This annex provides an indicative list of the types of materials that should be maintained. The Accountable Entity’s Program Closure Plan must include a specific list of Records and the related storage arrangements for each.

Records Category Document Type
Accountable Entity Management and Administration Board materials and minutes
Governing Documents – legislation, relevant statues, regulatory notes, etc.
General correspondence (including all email of all Accountable Entity staff– see below)
Legal documents- court filings, correspondence related to contractor disputes, etc.
Conventions and agreements (IEAs, MOUs)
Audit reports and responses
Vehicle logs
Physical inventory reports
Human Resources Staff employment contracts
Performance management system
Human resources manual
Training materials
Travel orders and trip reports

Financial Management

Financial records
Fiscal agent records
Payment invoices
Interim payment certificates
Worksheets associated with calculation of advances, retentions, etc.
Bank statements
Fiscal agent periodic reports
Backup of accounting software
Fixed assets registers
Guarantees of all types (advance, performance, retention)
Asset Transfer Agreement forms
Transfer agreements
Titles (e.g. vehicles)
Tax exemption/refund documentation
Procurement Procurement agent files
Procurement plans and general procurement notices
Documents related to bid challenges and resolutions
Bid challenge system
Contracts and contract-related documents (amendments and modifications, cure and notification letters)
Contract closeout forms
Notifications to vendors
Project Management Contractor deliverables (studies, site reports, design documents, completion certificates and defects lists, etc.)
Work plans
Resettlement compensation documentation
Environmental audit reports
Grant agreements
Grant manuals / operations manuals
Monitoring and Evaluation Surveys and data
Indicator data
Communications Communications materials (brochures, videos, etc.)
Workshop materials
Stakeholder committee meeting minutes
Documents related to media and public outreach
Website snapshot
Intellectual property
Copyrights and patents

Accountable Entities should also establish an indexing system for the records in sufficient detail that any given record could be located quickly from its storage area. Electronic records of any type (e.g., email correspondence) must also be stored or archived in a commonly used searchable format. More details on email retention are below.

Email Retention Guidance
Email Retention Each Accountable Entity should archive all emails during the life-cycle of the Compact, and for a period of five years after the Compact End Date.

All archived emails should be protected by encryption and password.

Access Control Restrictions to access emails should include a unique identification element (user name) and a unique authentication element (password).

Accounts holders should maintain their authentication element confidential and protected from unauthorized access.

Electronic authentication elements should be encrypted using AES 256 encryption algorithm.

Encryption All emails retained in a removable storage device; for example, a USB flash drive or removable hard drive, must be encrypted using an encryption algorithm of AES 256, or stronger.

Electronically stored passwords should be encrypted at rest with an encryption algorithm of AES 256, or stronger.

Passwords All passwords should be at least twelve characters and should utilize upper case, lower case characters, numbers, and special characters. Passwords should never be dictionary words in any language.
Email Archiving Procedures and Annual Testing The Accountable Entity should devise written archiving instructions.

Archiving and retrieval should be tested annually.

Testing should include all operational requirements to retrieve emails.

System Logging and Auditing All email access should be logged and audited. Logs should indicate the user accessing the email; the date and time of access; and the actions the user took (e.g., read, write, or delete).

Audit logs should be protected from alteration.

Separation of Duties The Accountable Entity should separate duties of personnel that have the ability to make changes to the information technology system and personnel that oversee their security and auditing functions to reduce the risk of unauthorized system or data changes/alteration.
  • 1. These guidelines have been prepared based on the assumption that a procurement agent has been selected to perform all procurement activities of the Compact. In case the program does not include a procurement agent, all references to procurement agents must be substituted by the Accountable Entity procurement director or procurement unit, whichever is appropriate.
  • 2. Found at: