Serbia

UNDP Cost Recovery Policy - What you need to know

Within its overall development assistance mandate, UNDP provides a number of specialized services to its externally funded programmes. In line with international standards (and based on Executive Board Decision 98/2), UNDP is required to fully and transparently recover costs that arise from any service provision through two complementary mechanisms:

General Management Support (GMS)

UNDP applies a percentage fee for the recovery of General Management Support (GMS) services to all externally funded programmes and projects. The minimum GMS fee amounts to 7% for donor-, and 3% for government co-funded interventions, respectively.

·        GMS is designated to cover costs related to general oversight, management and quality assurance services (e.g. project formulation and appraisal, project/programme reviews, reporting and donor relations, office infrastructure, knowledge management, etc.);  

·        GMS-generated income is re-invested into the development of UNDP’s in-country presence and programme;

·        GMS applies to any external contribution for programmes and activities and is deducted at cost-sharing level.

Implementation Support Services (ISS)

UNDP is required to recover costs for Implementations Support Services (ISS), arising directly from implementation of regular and externally funded programmes and projects. The fee is calculated on a service-by-service basis and based on average actual expenses per type of service – UNDP Serbia has last revised the ISS costing list in July 2010 (See the currently valid ISS price list) 

·        ISS is designated to recover costs for services directly related to the delivery of programmes and projects (e.g. human resources or procurement support, financial transactions or other administrative or logistical support);

·        ISS is used to cover actual implementation costs and does not generate any additional income;

·        ISS applies to all services provided in the framework of implementation of programmes and projects; it is budgeted and charged at activity level.

 

NB: Fundamentally, the percentage fee for GMS is not intended to recover the cost of ISS, which instead should either be built into projects or recovered based on a transaction fee.