CP/RES. 996 (1832/11)

INDIRECT COST RECOVERY

(Approved at the meeting held on December 9, 2011)

THE PERMANENT COUNCIL OF THE ORGANIZATION OF AMERICAN STATES,

TAKING INTO ACCOUNT the need to strengthen further the financial management of the Organization, taking the fullest advantage of all resources, in particular the funds derived from Indirect Cost Recovery (ICR);

CONSIDERING General Provisions of a Financial and Budgetary Nature of the General Standards to Govern the Operations of the General Secretariat of the Organization of American States (OAS);

RECOGNIZING that the authority to amend the General Standards to Govern the Operations of the General Secretariat rests with the General Assembly;

BEARING IN MIND the current financial stringencies of the Organization; and

WITH A VIEW TO ENSURING that indirect cost recovery funds are used in compliance with the program-budget and the Regular Fund of the Organization,

RESOLVES:

To approve ad referendum of the General Assembly, in accordance with Articles 54.g and 91.b of the Charter of the Organization of American States (OAS), amendments to Articles 72, 78, and 80 of the General Standards to Govern the Operations of the General Secretariat to read as follows:

a. Article 72. Subparagraph b. is amended to read as follows:

b. The amount of the Reserve Subfund shall be 30 percent of the total of the annual quotas of the Member States. This amount shall be reached through crediting to this Subfund the annual income in excess of the obligations and expenditures of the Operations Subfund and resources from the Indirect Cost Recovery Reserve Subfund, in accordance with Article 80 (i) and (ii) of these General Standards. To the extent that the Subfund exceeds 30 percent of the total of the annual quotas of the Member States, the excess shall be available for any purpose approved by the General Assembly.

b. Article 78. Subparagraph c. is amended to read as follows:

c. Interest earned by each specific fund established under Article 74 of these General Standards shall be credited to the Fund for Indirect Cost Recovery (FICR) referred to in Article 80 (i) of these General Standards.

iii. The General Secretariat’s quarterly reports to the Permanent Council and CEPCIDI on the use of the Funds administered by the General Secretariat shall include all accreditations to and disbursements from the FICR, including the source and use of the money collected for each technical area within the General Secretariat, and the total interest earned. These reports shall also include disbursements made from that Fund to supplement income to the Regular Fund, as required by the General Assembly in the approved annual Program-Budget of the Organization.

c. Article 80

i. Subparagraph d. is amended to read as follows:

d. The General Secretariat shall establish the rate for the Indirect Cost Recovery (ICR) for projects funded by the Specific Funds and Trust Funds. The General Secretariat shall submit a quarterly report to the CAAP regarding the ICR resources. The report shall contain any information that may be requested by the CAAP and all information that the General Secretariat considers useful for planning the use of the ICR resources, including:

i. A list of exemptions approved by the General Secretariat from ICR relating to specific funds;

ii. A budget execution report by each Secretariat;

iii. The balance and financial flow affecting the Indirect Cost Recovery Reserve Subfund (ICRRS); and

iv. A projection of ICR for the following 12 months.


ii. A new subparagraph i. shall be included, to read as follows: /

i. All resources from indirect cost recovery (ICR) shall be assigned to the Fund for Indirect Cost Recovery (FICR). The FICR shall include two Subfunds: the ICR Operations Subfund (ICROS) and the ICR Reserve Subfund (ICRRS). The FICR shall be subject to the following guidelines:

i. The General Secretariat shall submit to the Permanent Council a proposed budget for use of the ICR resources, which shall form an integral part of the draft Program-Budget. This proposal shall be based on projected revenue equivalent to 90% of the average ICR obtained in the three years immediately preceding the year in which the Program-Budget is adopted and shall be applied to the subsequent three years. The average shall be reviewed every three years in adopting the Program-Budget of the Organization and the General Assembly shall also adopt the ICR budget. In the event that the revenue from ICR collected in the fiscal year concerned is less than the revenue projected, and to the extent that funds are available in the ICRRS, the General Secretariat may transfer from the ICRRS to the ICROS an amount equal to the difference between projected ICR revenue and ICR revenue collected in the current fiscal year. If revenue collected is more than that projected, the surplus shall be deposited in the ICRRS.

ii. Every three years the CAAP shall evaluate the ICRRS level to determine whether transferring funds from the ICRRS to the Reserve Subfund of the Regular Fund is justified. In such event, the Permanent Council shall approve the amount or percentage to be transferred.

iii. The ICRRS resources shall be invested in the same way as other funds of the Organization, pursuant to Article 79 of these General Standards.

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 1. The current subparagraph i. becomes subparagraph j.