Inter-organization charges

(1) At the 47th session (September 1977: CO-ORDINATION/R.1238, para. 48) the Committee agreed that with effect from 1 January 1978 the organizations should absorb charges of up to $50 incurred by them on behalf of other organizatons, with the exception of charges involving third parties, including staff members. It was subsequently established, following review by correspondence, that the maximum amount to be absorbed would be $20.

(2) The Committee at its 51st session (September 1979) discussed the desire of the UNDP Governing Council that organizations using UNDP services should provide appropriate reimbursement for the costs involved. While agreeing to the principle that readily identifiable services rendered should be paid for, the Committee suggested that UNDP should exercise restraint in this domain; participants cautioned against publishing - for the information of the Governing Council - data on this question whose accuracy might not be entirely verifiable (ACC/1979/R.69, para. 34).

(3) At the 57th session (September 1982) CCAQ noted recent action by the Governing Council authorizing the Administrator to continue to provide organizations, at current levels and without charge, with services in accordance with the aims and responsibilities of UNDP which were already being provided; where organizations required UNDP to perform additional tasks or assume significantly increased workloads involving identifiable additional resources, the Administrator was to make adequate arrangements with them (ACC/1982/25, para. 47).

(4) At the 58th session (March 1983) the Committee, having noted the instructions issued by UNDP pursuant to the Governing Council's action, was informed by UNDP that certain small charges made by one of its field offices to one of the organizations were administrative errors. CCAQ decided to review its 1977 agreement on inter-organization invoicing (see para. 1 above) at the next session, and the organizations' experience under the UNDP instructions in a year's time (ACC/1983/11, paras. 55-59).

(5) At the 59th session (September 1983) the Committee decided that with effect from 1 October 1983 the amount below which services rendered between organizations would not be invoiced would be increased to $50, on the under-standing that certain types of inter-organization transactions, including those relating to staff members' payments or the distribution of communication costs would continue to be regarded as falling outside the agreement (ACC/1983/21, para. 43).

(6) At the 60th session the Committee also reviewed experience under UNDP's arrangements concerning charges for services provided by its field offices (see paras. 3 and 4 above). Although this experience was generally satisfactory, it had been proposed in one country that organizations should meet substantial costs for continuing administrative services in respect of trust-fund projects from their support-cost receipts, the Government having declined to contribute to the costs. After review of the position, it was agreed that the various possibilities of dealing with the problem should be placed before the Governing Council, by whose decision the organizations would be guided (ACC/1984/10, paras. 51-55).

(7) At the 61st session (September 1984) the Committee noted Governing Council decision 84/42, which indicated that the kind of costs referred to in the preceding paragraph should be borne by the organizations concerned unless they were met by the donor or the beneficiary Government. Some participants feared that this might lead to substantial charges to the organizations for UNDP field support services to trust-fund projects and to significant reductions in support costs available for their own support operations. UNDP drew attention to Amendment 1 to its circular UNDP/ADM/636, which showed that the Administrator intended to maintain services to UNDP executing agencies to the maximum possible extent. The Committee decided to review developments at its sixty-second session (ACC/1984/17, paras. 65-69). The review held at that session showed that the arrangements made by UNDP were functioning smoothly (ACC/1985/7, para. 52).

(8) At the 69th session (September 1988) the Committee - subject to the objections of UNDP and UNFPA in respect of premises occupied by them in Geneva - noted information from UN that from 1990 it would charge rent to all agencies and other outside bodies occupying space in UN premises, at the highest rate currently paid by UN for the rental of commercial space (ACC/1988/5, para. 12; ACC/1988/13, para. 24).

(9) It was agreed at the 73rd session (September 1990) that organizations would reimburse UNDP for emergency security costs incurred on their behalf at certain field stations, pending a review by UN of whether such costs could be included in the cost-sharing agreement covering security measures (ACC/1990/12, para. 7; see also section 16.6).

(10) At the 76th session (March 1992) the Committee discussed the principles applied by UNDP when seeking reimbursement from other organizations for services provided by its field offices, and in particular the implications of Governing Council decision 91/46 for a review of costs charged to the UNDP budget which were not related to delivery of the IPF programme. Participants agreed to study, and to respond to as far as they were able, a UNDP request that their organizations provide what indications they could on costs incurred by them on behalf of UNDP (ACC/1992/11, paras. 39-42).

(11) At the 79th session (August-September 1993) several member organizations drew attention to the increasing number of charges received by them for services provided by UNDP field offices. UNDP recalled that its administrative budget provided for substantial costs of this kind, but that budgetary reductions prevented some field offices from providing services other than for operational activities free of charge. In such cases they sought to respond to reasonable requests at a reasonable charge. In case of disagreements, contacts should be made with Resident Representatives concerned. The applicable guidelines had been reaffirmed and recirculated in UNDP/ADM/92/88 of 11 November 1992. The Committee agreed that its members should continue to monitor the situation, to which it would return at a future session (ACC/1993/23, para. 63-65).

(12) At its 83rd session (August - September 1995), CCAQ(FB) discussed the issue of the increasing number of requests from UNDP field offices for the recovery of costs. There appeared to be no uniform approach to or formula for calculating these. These disparate requests therefore had to be dealt with on a case-by-case basis at a time when many organizations were having to reduce, simplify and rationalize administrative operations.

(13) While appreciating the work done by UNDP field offices for other organizations, a number of participants were able to give examples of requests for cost recoveries which were either unjustified or for exceedingly small amounts. The Committee recalled that it had taken a decision, at its 59th session (September 1983) (cf. para. 5 above) , that the amount below which services rendered between organizations would not be invoiced would be set at $50, on the understanding that certain types of transactions, including those related to staff members’ payments or the distribution of communication costs would continue to be regarded as falling outside the agreement. It now decided that this amount could be raised to $200, while maintaining the same understanding regarding certain types of transactions. As regards the requests for cost recoveries by UNDP field offices, UNDP undertook to investigate the matter and to report back to the Committee at its next session (ACC/1995/20, paras. 45 and 46).

(14) At the February 2004 meeting (CEB/2004/HLCM/12/Rev.1, paras. 16-17) of the FB Network, UNDP presented its new Atlas system for electronic payment management. The use of html technology would enable the electronic exchange, by the end of 2004, of data between UNDP field offices, UNDP headquarters and other organizations, thus negating the need for the processing of hard copies of vouchers. Atlas would also provide an external access facility where organisations could log on, perform their own data entry, authorise payments and download reports of payments in real time. It was anticipated that UNDP would provide training on the Atlas system to organizations in due course. Draft agreements with organizations covering the issue of liability if an organization’s access code was misused or used fraudulently were under preparation. There was also a discussion on having similar arrangements for eliminating the current practice of exchanging hard copies of inter-agency billing transactions amongst the UN entities. It was agreed to review this at future FB Network meetings.