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 GENERAL STANDARDS TO GOVERN THE OPERATIONS OF THE GENERAL SECRETARIAT

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GENERAL STANDARDS TO GOVERN THE OPERATIONS OF THE GENERAL SECRETARIAT[1]

CHAPTER IV

GENERAL PROVISIONS OF A FINANCIAL AND BUDGETARY NATURE

            Article 71.  Funds Administered by the General Secretariat.  The funds administered by the General Secretariat are classified under: Regular Fund, OAS Development Cooperation Fund (OAS/DCF), specific funds, and trust funds.

            Each of these funds shall be accounted for separately and in accordance with these General Standards, and shall be administered in accordance with these General Standards and the approved program-budget, and the statutes, regulations, and resolutions governing them. 

            Article 72.  Regular Fund.  This is made up mainly of the quotas collected from the Member States and includes the contributions from other funds for technical supervision and administrative support provided by the General Secretariat.  Funds received for unspecified purposes shall be treated as miscellaneous income under the Regular Fund.  The purpose of this Fund is to finance: the regular secretariat and general support services provided by the Secretariat; technical supervision and administrative support to the programs; and multilateral integral development programs, as established in Article 32 of the Charter and as specified in the approved program-budget.  The Career Service may be financed only by the Regular Fund of the Organization.

            The Regular Fund includes the following subfunds:

a.  Operations Subfund to which shall be credited all income of the Regular Fund, and against which shall be charged all obligations and expenditures in accordance with the Regular Fund program-budget.  

At the end of each year, any excess in income over obligations and expenditures shall be transferred from the Operations Subfund to the Reserve Subfund, or any excess in obligations and expenditures over income shall be transferred from the Reserve Subfund to the Operations Subfund. The General Secretariat shall report on these actions to the Permanent Council within thirty days of the date the transfer was made.

b.  Reserve Subfund, the purpose of which is to ensure the regular and continuous financial functioning of the General Secretariat.[2]

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)(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.

The Reserve Subfund may be used only on a temporary basis to cover:

i.  Expenditures under the program-budget financed by the Regular Fund, pending full receipt of the anticipated income; and

ii.  Special expenditures not provided for in the program-budget.  Such expenditures must be authorized by the General Assembly or, when it is not in session, by the Permanent Council, which shall first hear a report on the condition of the Reserve Subfund and the reasons for such expenditures from its Committee on Administrative and Budgetary Affairs (CAAP).

No withdrawals shall be made from the Reserve Subfund for purposes other than to ensure the regular and continuous financial functioning of the General Secretariat until such time as the Reserve Subfund shall have reached 10 percent of the annual quotas of the Member States earmarked for the program-budget of the Regular Fund approved by the General Assembly. 

The amounts withdrawn for the purposes set forth in this article shall be reimbursed to the Reserve Subfund in the following manner:  in the case covered by subparagraph (i) above, as soon as the corresponding income permits; and, in the case of subparagraph (ii), by means of equivalent appropriations in the program-budget for the next fiscal period or in such a manner as may be determined by the General Assembly.

            Article 73.  OAS Development Cooperation Fund (OAS/DCF).  The purpose of the OAS/DCF is to contribute to the financing of national and multilateral cooperation programs, projects, and activities carried out under the Strategic Plan for Partnership for Development.  The OAS/DCF is financed through voluntary contributions from the Member States and other assets.  The Fund's uses and limitations are defined in the OAS/DCF Statutes.

            The OAS/DCF shall consist of the Integral Development Account, of Sectoral Accounts established in accordance with the priorities of the Strategic Plan, and of the Reserve Account, which shall be established with 10 percent of the annual voluntary contributions of the Member States.  The Reserve Account shall maintain for unforeseen activities a sum equivalent to 3 percent of the amount of resources existing in the OAS/DCF.

            Article 74.  Specific Funds.[3]  The Secretary General may establish specific funds in separate accounts.  The purposes and limitations of these funds shall be defined in precise terms in accordance with the instruments establishing them, and the Permanent Council, CIDI, IACD, or such other organ or entity of the Organization having an interest in the disposition of those funds, as the case may be, shall be advised thereof.

            Specific funds are made up of special contributions, including those received without purposes and limitations specified by the donor, from Member States and permanent observer states of the Organization and from other member states of the United Nations, as well as from individuals or public or private institutions, whether national or international for the execution and or strengthening of development cooperation activities or programs of the General Secretariat and other organs and entities of the Organization in accordance with agreements and contracts entered into by the General Secretariat in exercise of the powers conferred under the Charter.

            Article 75.  Trust Funds. The Secretary General may establish trust funds in separate accounts, the purposes and limitations of which shall be defined in precise terms, in accordance with the respective instrument establishing them, and, as the case may be, shall advise the Permanent Council, CIDI, IACD, or such other organ or entity of the Organization having an interest in the disposition of those funds.[4]

            Trust funds shall be established by bequests or grants to finance purposes specified by the donor or legator, held in trust, and used in accordance with the pertinent provisions or instruments.

            Article 76.  Currency of Quotas and Voluntary Contributions.  The General Secretariat shall receive all the funds of the Organization.  The annual quotas shall be set and paid in United States dollars.  A portion of each voluntary contribution may be paid in the national currency of the respective Member State, within such limits as the Secretary General may establish, taking into account the need for expenditures in the currency of that country.

            Article 77.  Currency of the Accounts and Financial Reports.  The accounts of the General Secretariat and its financial reports shall be kept and presented in United States dollars.

            The accounts of the offices away from headquarters and those of the applicable parts of the multilateral, specific, and trust funds may be kept initially in such currency as the Secretary General determines.

            Article 78Banking Deposits, Interest, and Indirect Costs.[5]  The following provisions shall govern the designation of banking institutions, the crediting of interest to funds administered by the General Secretariat, and the crediting of indirect cost recovery funds administered by the General Secretariat:

 

a.       The Secretary General shall designate the banking institutions in which the funds of the Organization and those entrusted to it shall be deposited.

 

b.       Interest earned by the Regular Fund shall be credited to that Fund, and interest earned by the OAS/DCF shall be credited to the OAS/DCF.

 

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.

i.        Interest earned by the Specific Funds will defray part of the Indirect Costs referred to in Article 80 of these General Standards, unless otherwise specified in the corresponding agreement with the donor.

ii.       In-kind contributions may be accepted by the General Secretariat to defray part of Indirect Costs referred to in Article 80 of these General Standards, unless otherwise specified in the corresponding agreement with the donor.

iii.       The General Secretariat’s quarterly reports to the Permanent Council and CIDI 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.

iv.      The Secretary General may make exceptions to the provisions in this Paragraph c, and he shall inform the Permanent Council semi-annually of any such exceptions made.

d.       The interest earned by each Trust Fund established under Article 75 of these General Standards shall be credited to that fund.

e.       The General Secretariat shall report on a semi-annual basis to the Permanent Council and CIDI on the accreditation and utilization of interest earned by each Specific Fund.

            Article 79.  Investment of Funds.[6]  The Secretary General shall invest the funds of the Organization that are not essential to meet immediate disbursement needs, and he shall give an accounting thereof to the General Assembly.  Regarding the investment of funds administered under the IACD Statutes by the Executive Secretariat for Integral Development, the Secretary General shall take into account guidelines established by the IACD Management Board. The information on those investments shall be included in the regular reports of the Executive Secretariat for Integral Development to the IACD Management Board and to CIDI.

            Article 80Direct Costs and Recovery of Indirect Costs.[7]  The following provisions shall govern Direct Costs and the recovery of Indirect Costs incurred by the General Secretariat in the administration of projects:

a.       Direct Costs.  Costs that can be attributed to a particular activity or project with a high degree of accuracy (e.g.: personnel, travel, supplies, equipment, narrative and fiscal reports, and external specific audit), etc.

b.       Indirect Costs.  Costs that are incurred for a common purpose which cannot be easily attributed to a particular activity or project (e.g.: financial reporting, procurement of goods and services, legal and financial review of donor agreements, etc.).

c.       The budget for every project of the General Secretariat funded all or in part by specific funds and trust funds shall include all the Direct Costs, as well as a line item for recovery of Indirect Costs, and it shall indicate their source of financing.

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.

e.       The General Secretariat may recover from trust funds a reasonable amount for the cost of administering those funds and for the fiduciary services provided by the General Secretariat, as established in the pertinent trust documents and applicable law.  In implementing this provision for any year for a particular trust fund, the General Secretariat shall seek first to recover those costs from the income earned by that fund in that year, so as to maximize the objective of preserving fund capital.

f.        Contributions to the Regular Fund for the cost of technical supervision and administrative support to the programs shall be made by the OAS/DCF.  The contribution shall be up to 15 percent, and the basis for its calculation will be the total net amount of the contribution in the Organization’s fiscal year.

g.       When the appropriations financed by de-obligations of funds of previous years are approved, they shall not be subject to a new contribution for technical supervision and administrative support.  At the end of each budgetary execution, the General Secretariat shall present a statement of de-obligated resources from which the supervision and support percentage contribution has been deducted and which will be transferred to the reserves of the respective fund.  On the basis of that information, the General Secretariat will inform the administrator of the respective fund the amount at which those deductions shall begin.

h.       During Budget execution, periodic deductions shall be made based on the amount of obligations of the OAS/DCF in accordance with the established levels, and those deductions shall be paid to the Regular Fund.

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.

j.        The following funds shall be exempt from the recovery of Indirect Costs and other reimbursement requirements under this article:

A.   Contributions by a Member State Government totaling no more than $20,000 in the Organization’s fiscal year to an ongoing activity;

B.   FONDEM (Inter-American Emergency Aid Fund);

C.   All Specific Funds and Trust Funds administered by the General  Secretariat and designated by CIDI or the Permanent Council as Humanitarian Funds;

D.   The Capital Fund for OAS Fellowship, Scholarship, and Training Programs;

E.   The Leo S. Rowe Pan American Fund;

F.   The OAS Medical Benefits Trust Fund;

G.   The Rowe Memorial Benefit Fund;

H.   The OAS Retirement and Pension Fund;

I.   The OAS Tax Reimbursement Fund; and

J.   Other funds established for the financing of staff benefits as designated by the Secretary General.

            Article 81.  Revolving Funds.  The Secretary General, in order to be able to determine operating costs, may account for internal operations originating from execution of the program-budget by the mechanism known as a revolving fund, provided the General Assembly gives prior approval to its purpose.

            Article 82.  Acceptance of Inheritances, Gifts, and Bequests.  The Secretary General may accept on behalf of the Organization, inheritances, gifts, or bequests for uses consistent with the purposes of the Organization, advising the Permanent Council thereof.

            Article 83.  Effective Period and Scope of the Program-Budget.  The program-budget is annual, and the fiscal period runs from January 1 through December 31.

            The organs, agencies, and entities of the Organization whose expenses are to be included in the program-budget of the Organization shall be subject to the provisions of Chapter IV and the subsequent chapters of the General Standards.

            All activities to be financed through the Regular Fund and the OAS/DCF shall be reflected in the proposed program-budget.  The activities of the specific and trust funds shall be included in the program-budget to the extent that this is feasible.


[1].  Adopted by the General Assembly through resolution AG/RES. 123 (III-O/73) and amended through resolutions AG/RES. 248 (VI-O/76), AG/RES. 256 (VI-O/76), AG/RES. 257 (VI-O/76), AG/RES. 301 (VII-O/77), AG/RES. 359 (VIII-O/78), AG/RES. 404 (IX-O/79), AG/RES. 438 (IX-O/79), AG/RES. 479 (X-O/80), AG/RES. 671 (XIII-O/83), AG/RES. 672 (XIII-O/83), AG/RES. 731 (XIV-O/84), AG/RES. 791 (XV-O/85), AG/RES. 842 (XVI-O/86), AG/RES. 981 (XIX-O/89), AG/RES. 1036 (XX-O/90), AG/RES. 1137 (XXI-O/91), AG/RES. 1321 (XXV-O/95), AG/RES. 1322 (XXV-O/95), AG/RES. 1. (XXV-E/98), AG/RES. 3 (XXVI-E/99), AG/RES. 1725 (XXX-O/00), AG/RES. 1839 (XXXI-O/01), AG/RES. 1873 (XXXII-O/02), AG/RES. 1909 (XXXII-O/02), AG/RES. 2059 (XXXIV-O/04), AG/RES. 2156 (XXXV-O/05), AG/RES. 2157 (XXXV-O/05), AG/RES. 2302 (XXXVII-O/07), AG/RES. 2353 (XXXVII-O/07), AG/RES. 2754 (XLII-O/12), AG/RES. 2755 (XLII-O/12), AG/RES. 2756 (XLII-O/12), AG/RES. 2778 (XLIII-O/13), AG/RES. 2817 (XLIV-O/14), AG/RES. 1 (XLVIII-E/14), AG/RES. 2889 (XLVI-O/16) and by the Permanent Council through resolutions CP/RES. 652 (1033/95), CP/RES. 703 (1122/97), CP/RES. 761 (1217/99), CP/RES. 910 (1568/06), CP/RES. 919 (1597/07) and CP/RES. 1062 (2069/16) pursuant to the authority conferred by the General Assembly in resolutions AG/RES. 1319 (XXV-O/95), AG/RES. 1382 (XXVI-O/96), AG/RES. 1603 (XXVIII-O/98),  AG/RES. 2257 (XXXVI-O/06) and AG/RES. 1 (L-E/15), respectively.

[2].  First two paragraphs of Article 72 (b) were amended by resolution AG/RES. 1909 (XXXII-O/02) of the General Assembly at its thirty-second regular session in June 2002. The second paragraph was also amended ad referendum of the General Assembly by resolution CP/RES. 996 (1832/11) of the Permanent Council.

[3].  Article amended by resolution AG/RES. 3 (XXVI-E/99) of the General Assembly at its twenty-sixth special session in November 1999.

[4].  Paragraph amended by resolution AG/RES. 3 (XXVI-E/99) of the General Assembly at its twenty-sixth special session in November 1999.

[5].  Article amended by resolution AG/RES. 3 (XXVI-E/99) of the General Assembly at its twenty-sixth special session in November 1999.

      Article amended ad referendum of the General Assembly by resolution CP/RES. 919 (1597/07) of the Permanent Council, and approved by resolution AG/RES. 2302 (XXXVII-O/07) of the General Assembly at its thirty-seventh regular session in June 2007.

       Article amended ad referendum of the General Assembly by resolution CP/RES. 996 (1832/11) of the Permanent Council.

[6].  Article amended by resolution AG/RES. 3 (XXVI-E/99) of the General Assembly at its twenty-sixth special session in November 1999.

[7].  Article amended by resolution AG/RES. 3 (XXVI-E/99) of the General Assembly at its twenty-sixth special session in November 1999.

      Article amended ad referendum of the General Assembly by resolution CP/RES. 919 (1597/07) of the Permanent Council, and approved by resolution AG/RES. 2302 (XXXVII-O/07) of the General Assembly at its thirty-seventh regular session in June 2007.

       Article amended ad referendum of the General Assembly by resolution CP/RES. 996 (1832/11) of the Permanent Council.