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All United Nations System organizations plan to adopt International Public Sector Accounting Standards (IPSAS) effective no later than 2010. The Task Force on Accounting Standards recommended the adoption of IPSAS in 2005. After FB Network endorsement, the HLCM approved IPSAS adoption on 30 November 2005. The Task Force is led by Jay Karia, Director, Accounts Division, UN Secretariat, and supported by Gwenda Jensen, Accounting Standards Specialist.
Voluntary funding agreements between the European Commission (EC) and UN organizations traditionally contained a verification clause that permitted the EC to audit, on a spot-check basis, how funds had been spent. Such a clause contradicted the single audit principle that all organizations hold with their respective external auditors and as embodied in each organization’s financial rules and regulations. Work in this area is led by Chris Kirkcaldy, Chief, Financial Resources Service, UNDCP/UNODC.
The Financial Management Framework Agreement has been negotiated in March 2006 between the World Bank and the United Nations. The WB makes grants to UN Organizations from its own funds and from funds administered by it in trust funds established by one or more donors. Grant Funds benefits either developing countries, by providing support for particular programs; or UN Organization by supporting global and regional initiatives. This Agreement sets out how the Parties, acting within their respective applicable policies, rules and procedures, obtain reasonable audit assurance on the use of Grant Funds provided by the WB to an UN Organization.
Transition towards Result Based Management is intended to strengthen efficiency and effectiveness of UN system organizations operations, to align bevaiours and create incentives towards the achievement of the main goals and to make consistent the planning, programming, monitoring and reporting cycle. An HLCM Community of practice has been created in 2006; link to the knowledge management repository of the community is provided below.
Many organizations are moving to greater integration of regular and extra-budgetary activities as part of their strategic programme budgeting and implementation. The steady and significant increase in the level of extra-budgetary resources may have a disproportionate effect on the overall level of administrative and support work funded by the regular or core budget, especially when the latter remains static, as has been the case in many organizations in recent years. Although it is acknowledged that organizations have made efficiency shifts lately, unless an appropriate level of funding is made available for the additional administrative and support costs required by the upwards trend in extra-budgetary financed programmes, further imbalances may become difficult to sustain. The FB Network has been working on this subject with the objective of reaching a common agreement on a common methodology or a set of principles on support costs recovery for extra-budgetary activities, including the system of full cost recovery. An HLCM working group was activated in October 2003 and concluded its activity in 2005. The working group compared the existing practices and agreed on a set of definitions and on basic principles for cost recovery policies. As part of the UN Development Group’s follow-up to the Triennial Comprehensive Policy review, the UNDG Management Group, in collaboration with the HLCM, agreed to develop interim guidelines on cost recovery for multi-donor trust funds (MDTFs), joint programmes and joint offices. More recently the FB Network held in Geneva the 20-22 June 2007 decided to reactivate a working group on cost recovery policies with the mandate to develop and further pursue the homogenization of the support cost recovery policies. The Working group met for the first time in Paris on July 26 and 27 and decided to carry out a comprehensive analysis on the current cost classification policies in oder to procede further with the cost recovery policy harmonization. Work in this area has been included in the HLCM Proposal for Business Practices Harmonizations. Work in this area is led by Yolande Valle, Director, Bureau of the Budget, UNESCO and Mina Dowlatchahi, Programme Budget and Evaluation Division, FAO.
The issue of taxation of salary and emoluments of UN staff members of US nationality has a long history. The need for tax reimbursement arises primarily because one member state, the US, does not recognize UN derived income as tax exempt. Tax equalization and reimbursement schemes are cumbersome substitutes for tax exemption. The use of these mechanisms treats US nationals employed by the UN differently from other nationalities, because UN derived salaries and emoluments are mixed with other income of the US staff member when taxed. Furthermore, in some organizations UN-derived income is considered “last income”, while in other organizations it is considered “first income”. For first income arrangements, non-UN income does not receive full benefit from exemptions and standard/itemized deductions. Also, non-UN income is taxed at the highest marginal rate. The FB Network is following this subject with the objective of coordinating negotiations with Member States regarding tax reimbursement matters, in order to provide equal or equivalent treatment for all UN staff members. IAEA is becoming the center of expertise in the UN system on the subject, in particular since its establishment of a website with relevant information and advice. Through this website, IAEA is also providing tax reimbursement services for US staff members for other UN organizations.Work in this area is led by Richard Hilliard, Head, Special Accounting Unit, IAEA.
In the conclusions of the seventh session of the High Level Committee on Management (London, 8-9 March 2004) the Committee requested: “... that the Finance and Budget Network review all cost-sharing arrangements, including those for security". The FB Network takes therefore the responsibility for cost-sharing formulas and the review of jointly financed budgets, such as ICSC, JIU, and the CEB Secretariat, as well as Field Security and Security Management System, Malicious Acts Insurance Policy, and Salary Surveys. The Network is also charged with further refinements of cost-sharing formulas and the budgets of inter-agency funded bodies”. CEB Secretariat is responsible for coordinating the activities on all such cost-sharing arrangements.
The General Assembly at its 59th session adopted Resolution A/RES/59/276 – Strengthened and unified security management system for the United Nations. While recognizing the operational difficulties linked to cost sharing by organizations, the General Assembly decided “to maintain the existing arrangements with regard to cost sharing for safety and security” rather than funding these costs under the UN’s regular budget. The resolution also requested the Secretary General, in his capacity as the Chairman of the CEB, “while fully implementing the decision of the GA to maintain the current cost sharing arrangements, to submit a report to the GA at its 61st session on measures taken to improve the operational administration of existing cost sharing arrangements.” By this same resolution, the GA also recognized “the need for a clearer presentation of security spending by each organization of the UN system”. It therefore requested the Secretary General, as Chairman of the CEB, “to inform the GA at its 60th session of this issue”. The FB Network has been working on this subject with the objective of collecting comprehensive data on security-related spending of UN system’s organizations, as well as of highlighting any methodological issues concerning the identification and presentation of such data, in order to address “… the need for a clearer presentation of security spending by each organization of the United Nations system” identified by the General Assembly in Resolution A/RES/59/276. The results of a data collection exercise carried out by the CEB Secretariat were presented in a report of the FB Network (CEB/2005/HLCM/22) in July 2005, and later incorporated in Secretary General’s report A/60/317. The folder contains as well the latest developments on the Identification and Implementation of Equitable and Sustainable Funding Arrangements for the United Nations Security Management System (CEB/2007/HLCM/23) and on the Inter-Agency Security Management Network. Work in this area is led by the CEB Secreta
This item was brought to the HLCM’s attention in view of a report of the Board of Auditors to the 59th session of the United Nations General Assembly (A/59/5) which inter alia requested that the United Nations System establish a corruption and fraud prevention mechanism. Since then, most organizations of the UN system have gone quite ahead in reviewing or developing their own fraud and corruption prevention policies, committing significant dedicated resources to such task. The FB Network has therefore proposed that organizations shared the results of their individual efforts on this subject (or even any work in progress) through its website, and that before the Network's 2006 face-to-face meeting the CEB Secretariat carried out a survey to check where organizations were in developing their own policies.
When one UN entity spends money on behalf of another, the "funding" agency requires that the "spending" agency reports detailed expenditures formatted based on the "funding" agency's account codes and systems. As UN organizations have very diverse coding structures and systems, this has meant much customization of reporting. Now that many organizations are moving to a new generation of ERP systems, it is desirable that the issue be reviewed before a whole new round of customization of reporting is started. The UNDG group on joint programming have agreed to a set of clusters for reporting, which are being considered as a possible model to start with. At the same time, building on the UNDG framework, UNFPA is proposing a breakdown of reporting lines for joint programming for review and eventual adoption by all member organizations. In order to develop such a common framework, UNFPA is collecting and comparing organizations’ budgetary clusters, to consolidate them in a consistent grouping. The FB Network is following this subject with the objective of adopting a common financial reporting structure on Inter-Agency implementation projects. Work in this area is led by Richard Barr, Chief, Finance Branch, UNFPA.
Results of the FB Network survey of December 2007 on "Current policies and practices with regard to the provision for outstanding assessments". Access to the contents of this folder is for registered members only.
Last modified 2008-01-22 12:29