Inter-agency collaboration in the financial and budgetary areas has continued through the Finance and Budget Network of HLCM. During the period under review, the Network addressed a number of important issues, including the single audit principle. In this context, HLCM agreed on the following policy statement (see CEB/2005/5, para. 41):

    “The United Nations Board of Auditors and the appointed External Auditors of the specialized agencies and of the International Atomic Energy Agency, retain the exclusive right to carry out external audits of the accounts and statements of the United Nations Organizations. If special reviews are required, governing bodies should request the appointed External Auditor to carry out specific examinations and to issue separate reports to them on the results.”

Also, on the recommendation of the Task Force on Accounting Standards, HLCM agreed in November 2005, that organizations of the system adopt International Public Sector Accounting Standards, effective no later than January 2010, as a common standard of accounting. At its spring 2006 session, CEB approved that support for this system-wide change be continued through the Task Force on Accounting Standards.

On the issue of support costs on extrabudgetary activities (and relationship between regular and extrabudgetary funding), a survey was launched by the Finance and Budget Network with a view to setting a common set of principles and practices related to the direct charging of execution and support for extrabudgetary funded projects, harmonizing policies and practices on support cost recovery and ensuring that extrabudgetary projects are not unduly subsidized by core resources. The organizations of the system have agreed that cost recovery policies should encompass both programme support costs and direct costs and that both these costs should be fully recovered from extrabudgetary projects.