10 Financing of corporate services/enabling functions is currently provided through the following four main sources: WHO assessed contributions, Programme Support Costs (PSC), Post Occupancy Charge (POC) and costs recovered from partnerships.
20 WHO assessed contributions are used primarily to fund the leadership, governance and strategic parts as these costs generally do not change based on the volume of voluntary contributions. As a general principle, WHO's Assessed Contributions should not be used to subsidize voluntary contribution funded activities. It is therefore important to ensure that the full incremental costs of implementing the activities of a voluntary contribution agreement is recovered by charging the programme directly (for direct costs) and indirectly through PSC and POC (for indirect costs).
30 Programme Support Cost (PSC) or Administrative Support (AS) is charged to all voluntary contributions in order to provide partial funding for incremental indirect costs incurred in relation to the implementation of projects. AS funds are used mainly for management and administration component. PSC is charged on a monthly basis to the expenditure incurred. In accordance with World Health Assembly resolution WHA34.17, WHO applies a standard 13% charge. Certain exceptions are granted in accordance with United Nations system-wide agreements or based on special agreements approved by the Director General. These rates do not necessarily reflect the actual indirect costs related to programme implementation which vary depending on the location, cost-structure, and type of work to be performed. Reducing PSC has direct consequences for financing support functions where other core resources are not available. Any exceptions to the 13% PSC rate are summarized in the Operational Guide to PSC – http://intranet.who.int/homes/act/pol/. Additional ad hoc exceptions are very rare and must be approved in advance by the Comptroller.
40 The Post Occupancy charge (POC) was introduced in 2012 as a complement to the PSC as PSC was not sufficient to fund the costs associated with implementing programmes, especially those voluntary funded programmes with a high staff component. POC is charged on the salary cost and is used to pay for those expenses within management and administrative costs that are most closely linked to the level of staffing, including: HR management and administration, staff development and learning; information and communication technology (infrastructure, user support and applications management); payroll administration; and conducive working environment, including UN common security costs. POC is included as direct costs, e.g. in donor agreements and is reported as an integral part of staff costs.
50 Costs recovered from partnerships: WHO hosts and provides administrative support to several partnerships. Resolution WHA63.10 endorsed a partnership policy that seeks reimbursement for all costs incurred in providing hosting functions to partnerships. A new methodology, implemented in 2016, apportions applicable administrative and management costs to partnerships using their relative weight of staff costs, since staff costs are a major cost driver of administration and management costs. Staff costs serve as an approximate measure of the cost of services consumed and offer a reasonable indication of the size and scale of a partnership relative to WHO as a whole as, for example, staff occupy space, utilize IT infrastructure and benefit from security services. The choice of relative staff costs as a basis for cost recovery from partnerships is guided by the principle of an equitable sharing of costs, with the objective of avoiding an overt subsidy in either direction and minimizing transaction costs.
