Special-purpose accounts
(A) General
(A1) At the first part of the 16th session (April 1955: CO-ORDINATION/R.193/ Rev.1), after reviewing the various cases of ad hoc special funds existing in certain agencies, the Committee affirmed its general belief in the concept of a complete and unified budget covering all operations of an organization. It expressed the opinion that special funds should be established only for particularly compelling reasons. The Committee did not consider it practical to formulate any precise statement of policy on conditions warranting the establishment of special funds.
(A2) For trust funds, see section 20.1.
(B) Terminal benefits accounts
(B1) At its 30th session (March 1969: CO-ORDINATION/R.733, paras. 104-107) CCAQ discussed the level of financing of terminal payments funds and the types of charges to be made to them.
(B2) CCAQ ascertained at the same session that in the majority of organizations which maintained terminal benefits funds, charges to those funds were confined to repatriation grants, service benefits (where still payable) and the restoration of prior contributory service in JSPF. A number of organizations felt that items such as payments for accrued annual leave, repatriation travel or termination indemnities should also be charged to the extent that they could not be accommodated in the project accounts. It was agreed that the matter should be considered further at a future session.
(B3) CCAQ also agreed at the 30th session that the 8 per cent of estimated project costs credited to the funds in addition to refunds to the organizations by JSPF appeared to be adequate in the case of UNDP (TA) projects, but that the trend of terminal payments under the Special Fund component was rising. Organizations would be asked by UNDP to give details of their experience, so that when the WGAFM reviewed (in October 1969) the pro-forma costs of experts for 1971 adequate provision could be made for the terminal benefit funds. CCAQ also agreed that the question whether the 7 per cent JSPF refunds should be continued might be reviewed at a future date. Meanwhile, as from 1 January 1969, separate terminal payments accounts (or sub-accounts or other records) would be maintained in respect of personnel financed from UNDP resources to allow separation of the two sources of income (that is, the 8 per cent charges to UNDP projects and the 7 per cent refunds) and of the charges to the accounts for terminal payments and JSPF restoration costs. (As indicated at the beginning of section 17.2, refunds to organizations from JSPF were abolished in 1982.)
(B4) At the 52nd session (March 1980) CCAQ discussed difficulties that arose in connection with the charges that sometimes had to be made to relatively small programmes where separations occurred after transfer from one programme to another. The Committee considered that the solution lay not in the amendment of the Inter-Agency Transfer Agreement, but in the establishment of appropriate terminal payments fund arrangements (ACC/1980/16, para. 42).
(C) Funding of compensation payments
(C1) At the first part of the 21st session (April 1960: CO-ORDINATION/R.325, para. 98) CCAQ discussed possible funding of payments from EPTA in respect of compensation for service-incurred injury, illness and death. It expressed doubts about the advantage of funding and recorded its view that "the decision of TAB to charge payments to projects with, if necessary, a recourse to contingency allocations, is technically sound and administratively satisfactory".
(C2) At the 58th session (March 1983) CCAQ considered information collected by IAPSU on organizations' arrangements and experience concerning compensation payments in respect of staff financed by UNDP, together with suggestions by UNDP on the financing of such payments. Since a number of the organizations represented had contracted commercial insurance to cover payments of this kind, the Committee wished to explore possibilities of reducing premiums through a common policy and requested IAPSU to investigate the matter (ACC/1983/11, paras. 48 and 49). At the 60th session (March 1984), during discussion of IAPSU's report, it was noted that organizations' arrangements for covering compensation payments in respect of UNDP staff varied widely, and that some organizations did not envisage a change. It was suggested that UNDP should put forward further proposals for dealing with the problem (ACC/1984/10, paras. 48-50).
(C3) At the 67th session (September 1987) the Committee was informed of a decision by UNDP to adopt new arrangements to cover liabilities for compensation payments to staff and consultants employed on UNDP-financed projects (such payments being charged, under these arrangements, to the general resources of UNDP except in the case of project personnel financed from UNDP-administered trust funds, for whom a reserve for compensation payments was to be established). UNDP agreed that an organization which was unable to make use of this scheme should maintain its existing arrangements, and requested that questions to which the scheme gave rise should be submitted to it as soon as possible (ACC/1987/12, paras. 50 and 51). (In view of requests by several organizations to withdraw from the scheme, UNDP subsequently announced that the arrangements would not be pursued.)
(D) Other special-purpose accounts
(D1) For funds maintained to meet unbudgeted costs arising from currency instability, see Section 16.4.
(D2) At its February 2004 meeting (CEB/2004/HLCM/12/Rev.1, paras. 9-10) the FB Network considered issues related to After-Service Health Insurance (ASHI) liabilities. The UN's ASHI liabilities were expected to exceed to $1.4 billion and a report on possible measures to fund this liability over time was due to be submitted to the UN General Assembly for their consideration. A number of Network members shared their experiences on how they managed to fully fund their ASHI liabilities through a combination of prescience, forward planning and astute investment. One large agency which had under-funded ASHI liabilities had succeeded in obtaining an additional funding source via contributions from Member States to the biennial budget. The Network (a) requested the Task Force on Accounting Standards to consider the possibility of a common actuarial study for all organizations for the biennium 2004-2005 since this could only bring both efficiency and consistency and (b) noted the intention of the UN to circulate for comment, to all organizations, an annex to the draft report to the General Assembly, on the current practices of organizations with regard to how they funded, and accounted for, their respective ASHI liabilities.
(D3) Related to this issue, the Network also discussed the issue of long-term care (ibid, para. 11-12). Although it had been studied in the past by the HR Network, it could potentially have significant financial implications. The Network agreed to propose to the HLCM that a working group be created on this issue, comprising members from both the HR and FB Networks.