10 This section provides an overview of WHO's policy for cost recovery for Corporate services/enabling functions.
20 WHO's Organization-wide cost recovery policies aim to ensure that:
• administrative and management costs attributable to programme implementation are fully charged to those programmes;
• a fair and transparent method for identifying, budgeting and charging both direct and indirect costs; and
• the total amount recovered is adequate to pay for the services required.
30 Corporate services/enabling functions comprise leadership, governance, transparency, accountability, risk management, internal controls, strategic planning, resource coordination, reporting, management and administration and strategic communications that are necessary to maintain the ongoing activities of WHO. Costs attributable to programme implementation should be fully charged to those programmes. These costs can be divided into two broad categories: Direct and Indirect costs.
40 Direct costs are those that can clearly be attributed, either wholly or in part, to a programme or project; they include costs associated with providing management and other support functions where a direct link between the cost and project can be identified. Full recovery of all direct costs is a key component of WHO's budgeting.
50 Indirect costs are those that cannot be traced unequivocally to specific activities, projects or programmes, but which are nevertheless incurred in support of such activities. Indirect costs can be incurred when performing the following functions: project formulation; preparation, monitoring and administration of work-plans and budgets; recruitment and servicing of staff; consultants and fellowships; procurement and contracting; financial operations, payroll, payments, accounts, collection of contributions, investments of funds, reporting and auditing, in addition to other similar administrative and management activities. Indirect costs also include the Organization's leadership, oversight, and governance costs. Many of these costs are "fixed" in nature, since they do not tend to vary as much with the amount of work involved – for example the costs of holding a governing body meeting such as the WHA, or the costs associated with maintaining WHO buildings.
