Council 2006
Antalya, 4 November 2006
Agenda item:
Document C06/92-E
5 October 2006
Original: English
Chairman of the Council Working Group
for the Elaboration of the Draft Strategic Plan and the Draft Financial Plan
REPORT ON THE DRAFT FINANCIAL PLAN 2008-2011
AND ON THE REVISION OF RESOLUTION 91
I-
Background
In line with the ITU Constitution (No. 62A), the 2005 session of the ITU Council initiated the
preparation process for a draft new strategic plan for 2008-2011. It adopted Decision 527,
which foresees the establishment of a working group on the elaboration of the draft strategic
and financial plans. It should be noted that the discussions on the financial plan were open to
ITU Member States only. The working group held four meetings between Council 2005 and
Council 2006.
At its 2006 session, Council decided to continue the activities of the working group in order
to prepare a report on the draft financial plan for 2008-2011 and on the revision of Resolution
91 (Minneapolis, 1998) to the final meeting of the Council (4th November 2006) for
submission to the Plenipotentiary Conference 2006. The final draft of the financial plan would
have to be sent to the ITU Member States no later than 25 September 2006.
The working group held its fifth meeting on 27-28 June 2006 and its sixth and final meeting
on 14-15 September 2006.
All relevant documents can be found on the website of the Council working group:
www.itu.int/stratplan.
II-
Outcome of the fifth meeting
2.1- Draft financial plan
At its fifth meeting, the documents that the Secretariat had been tasked by Council to prepare
were introduced to the working group: revised estimates for income and expenditure
(Document WG-SF-FP-06/27) complemented with a document on the ratio of the unit
payable by Sector Members (Document WG-SF-FP-06/28) and an assessment matrix between
objectives and outputs (Document WG-SF-FP-06/29), as well as a draft revision of
Resolution 91 (Document WG-SF-FP-06/31). The Secretariat also produced an update of the
costs of outputs presented at Council in Annex I of Document C06/23 (Document WG-SF-
C06/92-E
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FP-06/34) and information on unfunded short, medium and long-term security requirements
(Document WG-SF-FP-06/36).
Three contributions were presented by Australia (Document WG-SF-FP-06/32), Romania
(Document WG-SF-FP-06/33) and Sudan (Document WG-SF-FP-06/30b). The Australian
contribution received a very large support. The Romanian contribution was also broadly
supported. The oral presentations from Ghana and Portugal were further issued respectively
as Document WG-SF-FP-06/38 and 37.
The working group agreed on the following general principles:
-
efficiency measures were still possible; they had to be identified and reflected in the
financial plan;
there was a clear need to identify duplications of functions, activities and outputs
between and within the Sectors as well as the General Secretariat;
functions should be better coordinated and harmonized;
as far as income was concerned, forecasts should be cautious;
a global cut to balance income and expenditure should be avoided; instead new
options to further reduce expenditure had to be identified;
new activities should be implemented through redeployment;
since the new accounting methodology, approved by Council at its 2005 session by its
Decision 535, had been used in the preparation of the draft financial plan, a more
detailed matrix should be provided by the Secretariat with a clear breakdown of direct
and indirect costs. This would contribute to a better understanding of appropriations
by output.
Furthermore, specific comments or explanations were made regarding some of the options
already included or to be included in the draft financial plan:
-
-
-
-
Increase of the ratio from 1/5 to 1/4: the meeting was not convinced by this proposal.
In conclusion, the meeting felt that such a proposal could only be put forward as a
very last solution and strongly asked that the financial plan continue to be drafted on
the basis of the present ratio, i.e. 1/5. The Secretariat was tasked to provide more
details for the next meeting.
Free access to ITU-T recommendations: the loss expected by the Secretariat was
questioned since the figure of CHF 7 million did not appear accurate enough.
However this level should be considered as a maximum potential loss and could be
further reviewed.
RRC-06 post-conference work: whilst the costs of the conference itself (RRC-04/06)
were covered by cost recovery, the expenditure foreseen (CHF 5,2 million) for the
post-conference work fall under the regular budget of the ITU as this work is
considered as general activities of the Union to the benefit of the membership. It is
therefore appropriate that they appear in the draft financial plan.
Additional expenditures: an estimate of the resources needed for the implementation
of IPSAS in the ITU should be included in the financial plan. The organization of
seminars on electronic magnetic compatibility should also be included in some way.
All these principles and comments as well as a list of specific options for reducing
expenditures were included in Annex 1 to the fifth report (see Document WG-SF-FP06/39) to serve as guidelines to the Secretariat for further elaboration of the draft
C06/92-E
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financial plan. The Secretariat was to deliver the information requested no later than
15 August 2006.
2.2- Resolution 91
Regarding Resolution 91, the working group reviewed the draft document prepared by the
Secretariat and generally supported the proposed changes. It agreed on additional
amendments mainly:
- to introduce the principle of pre-payment for new services and products subject to cost
recovery,
- to refer to market-testing and benchmarking.
A revised updated document was to be posted no later than 15 August 2006.
III-
Outcome of the sixth and final meeting
The sixth and final meeting of the working group was held in Geneva on 14-15 September
2006. The working group reviewed the documents prepared by the Secretariat
(Documents WG-SF-FP-06/28 (Rev. 1), WG-SF-FP-06/31 (Rev. 1), WG-SF-FP-06/40,
WG-SF-FP-06/41) as well as three contributions from Syria on behalf of the Arab States
(Document WG-SF-FP-06/43), the United States (Document WG-SF-FP-06/44) and
Argentina (Document WG-SF-FP-06/45).
3.1- Draft financial plan
The meeting focused on Document WG-SF-FP-06/41, reviewing both the comments from the
Secretariat as well as the contributions from Syria, United States and Argentina, taking into
account comments made by participants. The meeting noted that only few of the options
identified for reducing expenditure could be quantified and, when it was the case, only led to
a CHF 9 million savings approximately, thus, leaving the gap between income and
expenditure to CHF 43 million. Regarding the level of income, it took note of the official
announcements made by Denmark and Benin to the ITU to decrease their class of
contribution from 4 to 2 units (Denmark) and 1/4 to 1/8 unit (Benin). Regarding the level of
expenditure, the Secretariat announced that the cost of implementing IPSAS within ITU was
evaluated at CHF 2.5 million.
3.1.1- Points of agreement
In reviewing Document WG-SF-FP-06/41, the meeting reinforced its views on the potential
for further savings in avoiding duplications within the ITU (functions, activities, workshops
and seminars) and in coordinating with regional offices of the ITU and with regional and subregional organizations in view of sharing available resources and avoiding duplication of
activities. It was agreed that the advisory groups should be closely involved in this
coordination effort.
Regarding possible savings in connection with the natural attrition, it was noted that the 119
departures foreseen in the four coming years would provide the opportunity to review the
overall structure of employment although the benefits and savings might only occur in the
mid and long run. Clear guidance should be given to the new Secretary-General in this regard
with special attention to grade levels, number of D2 posts, centralization of specific activities
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in the General Secretariat (for example promotions, fellowships, administrative and finance
tasks, IT support activities), ratio between professional and administrative staff taking into
account best practices in other public organizations as well as the impact of computerization,
review Sectors’ Study Groups support activities.
The Secretary-General pointed out that 90% of the costs of the ITU were staff costs and that
any reduction of personnel should be included in a broader reflection on the level of activities,
its possible reduction and prioritization. Some participants were of the view that a reduction
of staff should not affect the activities of the Union, while others believed that ITU resources
should reflect its priorities.
Documentation was identified by the working group as one of the items where efficiency
measures were still possible although the meeting agreed that they were linked to strategic
decisions on other issues, in particular languages. The importance of the outcome of the
Council working group on languages was underlined in this regard. All possible savings were
supported (with some concerns expressed regarding the number of sets sent to administrations
and preference for it to be maintained to 5) and should be further explored. Special attention
should be given to posting documents online on time. As for publications, it was indicated
that there was a need for defining a clear policy on priorities for publications since it was an
essential output of the ITU. The meeting welcomed two specific proposals to increase the sale
of publications: develop the use of abstracts, either on line, or in a specific publication;
introduce reduced price for outdated reports.
Regarding implementation of WSIS activities, the Working group confirmed that it should be
absorbed through staff redeployment within the existing resources throughout the ITU. At the
request of the meeting, the WSIS implementation plan within ITU was reviewed by the
Secretary-General to clearly identify activities traditionally part of ITU’s mandate but with
the addition of new tasks following WSIS, activities within ITU’s traditional mandate but
requiring substantive new multi-stakeholder facilitation and moderation, new WSIS activities
requiring coordination among UN agencies, activities previously conducted by WSIS-ES now
being transferred to ITU secretariat, other new WSIS-specific activities being conducted in
partnership with other WSIS stakeholders and/or benefiting from voluntary contributions (see
Document WG-SF-FP-06/40 (Rev. 2).
As for meetings, the Working group welcomed information related to breakdown of the costs
of Study Groups, Working Parties and Task Groups and to statistics on participation. This
information, to be harmonized with the format of the tables provided by the TSB, will be
useful when discussing possible restructuring of Study Groups. Regarding limitation of the
number of Study Group meetings and their duration, it was pointed out that such a measure
may not give the expected results since the costs of Study Groups are mainly linked to
documentation and not to interpretation which is already limited, especially for ITU-T Study
Groups. Better organization of Study Groups meeting (e.g. back-to-back meetings of Study
Groups) could however allow for a more effective and less-costly use of interpretation.
Budgetary steps will be taken by the Secretariat to introduce in detail all feasible options.
It was decided that Advisory Group meetings could be limited to one meeting of 3 days per
year maximum although some participants underlined that each Sector should be given the
necessary flexibility to organize its meetings (cycle and duration) within its financial
resources, i.e. reduce the costs of meetings through reduction of interpretation.
Regarding more specifically radiocommunication activities, reduction of the duration of
World Radiocommunication Conferences (WRC) was confirmed as an option for savings. It
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was agreed that a WRC and a CPM should not exceed 20 days, or 23 to 24 days with the
inclusion of the Radio Assembly. However, such a reduction should be adequately reflected
when the membership determines the Agenda of the next WRC. Elimination of one RRB
meeting (three meetings per year instead of four) was identified as a possible new option for
savings without being formally introduced in the draft financial plan.
The elimination, as far as possible, of physical meetings of the working groups of Council
was confirmed.
Regarding new programmes and activities, the working group agreed on a general principle,
that the level of achievement of the different programmes and activities throughout the ITU
should be analyzed before deciding on any new programme or activity. A “value-added
impact statement” should also justify how the proposed programmes differ from current
and/or similar programmes. This information should be available at the Plenipotentiary
Conference.
There was a general agreement on deferring the question on considering the re-organization
of regional presence to the Plenipotentiary Conference within the context of Marrakesh
Resolution 25. Moreover, the working group confirmed that there should be a sound
consideration of the resources allocated to regional initiatives, programmes and assistance to
Members, to the regional presence both in the regions and at the Headquarters, as well as to
those resulting from the outcome of the WTDC and the Doha Action Plan.
3.1.2- Pending issues
Due to a lack of consensus, the working group was not able to confirm the following options
for savings identified at its previous meeting:
- Limitation of regional preparatory meetings for the WTDC and WTSA, except for
Africa: it was suggested that regional organizations should be consulted to express
their views known on this matter.
- One pilot project for all regions for the implementation of the New Programme for
Regional initiatives in the Doha Action Plan.
Furthermore, some participants reopened the debate on issues that had been discussed at the
previous meeting. For Post-Conference work for RRC-06, the Arab Group still considered
that the costs foreseen (CHF 5.2 million) should be based on cost recovery although the
Director of the Radiocommunication Bureau pointed out that these costs covered regular
activities of the Bureau with regard to the permanent management of the plans.
The proposal to maintain the 1/5 ratio between Member States and Sector Members
contribution did not meet consensus. Some participants (USA, Germany in particular)
strongly believe that raising the ratio to 1/4 would not solve the problem of the increasing gap
between income and expenditure in the ITU. Others, like Argentina who introduced a very
detailed contribution (Document WG-SF-FP-06/45) on this issue, were of the view that it
should be modified, due to the progressive measures taken by Member Sates to grant Sector
Members more rights and greater involvement. Finally, the Arab States established a direct
link with the free access to ITU-T Recommendations decided by Council at its 2006 session:
should this decision be confirmed by the Plenipotentiary Conference, the loss (CHF 7 million)
should be covered by an increase in the ratio from 1/5 to 1/4. On the contrary, the ratio could
remain as is, should the Plenipotentiary Conference decide to terminate the free access.
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3.1.3- Possible way forward
The working group was unable to agree on a balanced financial plan. Therefore, in addition to
the agreed options for savings, it suggested to apply a global cut of 8% and requested the
Secretariat to produce two options, the only difference being the ratio maintained to 1/5 in one
case (Option 1) or modified to 1/4 in the other (Option 2). These two options, which should
be considered as working hypothesis, are presented in Annex 1. Option 1 indicates a
shortage of income of CHF 33.3 million; Option 2 indicates a shortage of income of
CHF 12 million. The draft financial plan sent out to membership as Doc C06/93 on
25 September 2006 presents the two options and reflects Option 1 with regard to the income
estimates in Section 6.
Furthermore, the working group reaffirmed that a global cut should be considered as a last
solution should the Plenipotentiary Conference not be in a position to identify and agree on
priorities. However, in case that such a global cut would appear as unavoidable, a set of
principles to be followed for this exercise had been identified:
-
A global cut should be based on the expenditure levels projected by the General
Secretariat and the Sectors and on a value of the contributory unit of CHF 318 000,
Each Sector and the General Secretariat working in a coordinated manner should
address the consequences of a global cut on the core missions of the ITU,
The Secretary-General and the Directors should express preferences for priorities to be
reflected in the Strategic Plan.
Pointing out the difficulties to operate a global cut, the Secretary-General underlined that the
new Secretary-General would need detailed guidelines as well as flexibility and trust from
membership. The Chairman of the working group suggested that these guidelines and all the
principles identified by the working group, when reviewing possible options for savings,
should be listed in the new Decision on the financial plan to be adopted by the Plenipotentiary
Conference.
In addition, Canada suggested to refer to the concept of “Unfunded Mandated Activities”
(UMACs) which was introduced by the 2002 Plenipotentiary Conference in order to highlight
a number of activities within the overall programme of work mandated by the governing
bodies of the Union, as well as those support activities which are deemed essential to
implement the mandated activities, but could not be accommodated within the limits of
income level set by the Council or Plenipotentiary Conference. Should the Plenipotentiary
Conference decide to request the Union to implement the programme activities in full and
thus increase the level of assessment, the contributory unit would have to be increased. The
Secretary-General would be authorized to incur expenditure on these activities provided that
savings are achieved or additional income is generated.
It is clear that, at this point, in order to achieve a balance of income and expenditure, certain
mandated activities, in the absence of increased income, will not be implemented during the
period 2008-2011.
3.2- Resolution 91
The draft resolution updated by the Secretariat on the basis of comments and proposals
made at the previous meeting was further amended and noted (see Annex 2). It was
underlined that although there was no consensus on this draft, it could however be a tool to
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assist the regional organizations in their preparation for the Plenipotentiary Conference and
serve as a basis for further discussions at the PP.
Two main concerns were raised during the meeting:
•
The use of cost recovery on a prepaid basis, introduced in Resolves 1, would
need to be further investigated to avoid any possible legal inconsistency in
particular with regard to satellite filings. This notion might have to be restricted
to some products.
•
The benchmarking concept, inserted in Resolves 4vii), supported by some
delegations, was not understood by others who pointed out that it seems difficult
to make comparisons with external organizations. Despite jointly efforts to reach
an agreement on a single text, no consensus could be found on this issue.
Therefore the text reads as follows in the draft resolution:
vii)
Allows for the products or services to be delivered in the most efficient
and cost effective manner [compared with other organizations, where
appropriate]
IV- Recommendation
The Council is requested, as appropriate, to convey the information contained in this Report
to the Plenipotentiary Conference.
C06/92-E
-8ANNEX 1
Draft Financial Plan 2008-2011: Income and Expenditure Estimates
Doc. WG-SP-FP06/27
Option 1 (Doc.
WG-SP-FP-06/46)
318'000
000'CHF
318'000
000'CHF
519'548
103'685
10'800
634'033
519'548
103'685
10'800
634'033
1'347
0
0
-2'125
-7'000
-7'000
21'249
0
4'000
4'000
7 Revised income estimates
653'629
628'908
8 Expenditure estimates (ref. Document C06/23)
673'662
673'662
Security Projects
WSIS (Doc. 41, item 7) ****
RRC-06 post-conference work
WTSA-04 outcomes ****
WTDC-06 outcomes (Doc. 41, item 19) ****
WTDC-06 Doha Action Plan (Doc. 41, item 16)
IPSAS implementation (Doc. 41, section B, item 1)
0
3'800
5'200
2'400
3'400
4'500
0
0
0
5'200
0
0
4'500
2'500
Options for reducing the expenditure:
Reduction in staff costs
Reduction in travels on duty
Reduction in fellowships
Reduction in external consultants
Reduction in public services
Reduction in the volumes of documentation
Advisory Groups (Doc. 41, item 10)
Council Working Groups (Doc. 41, item 11)
WRC/RA/CPM (Doc. 41, item 12)
Regional Preparatory Meetings (Doc. 41, item 13)
Study Group Meetings
Interpretation
-2'000
-1'000
-500
-1'000
-1'000
-1'500
0
0
0
0
0
0
-2'000
-2'000
-1'000
-1'000
-1'000
-11'500
-560
-490
-600
0
-2'000
-1'500
685'962
662'212
32'333
33'304
Amount of the contributory unit (in CHF)
1 Income estimates (ref. C06/23, Add.)
Assessed contributions (408 9/20 full units)
Cost Recovery income
Other income
2 Adjustment to the number of contributory units as of 1/05/2006 (+
3
4
5
1 1/17 full units)
Adjustment to the number of contributory units as of 13/09/2006
(406.78 full units) *
Reduction due to the free access to ITU-T recommendations **
Options for increasing the income:
Increase from 1/5 to 1/4 of the ratio for the contributory unit
payable by Sector Members***
6 Increase of the price of publications (10% on average)
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28 Revised expenditure estimates
29 Shortage of income
30 Global cut
* -Denmark has announced a reduction of its class of contribution from 4 to 2 units.
-Benin has announced a reduction of its class of contribution from 1/4 to 1/8 unit.
-Compared with the situation as of 1.5.2006, the number of units of Sector Members has
decreased by 4 5/16, and the number of Associates has increased by 9.
** A variant to this option would be without this reduction of 7 million, considering that this is done
on a trial basis
*** This amount assumes the current level of Sector Members' participation (1.5.2006)
**** Requests expected, either explicitly or implicitly, to be carried out within existing resources
5.0%
C06/92-E
-9ANNEX 1
Draft Financial Plan 2008-2011: Income and Expenditure Estimates
Doc. WG-SP-FP06/27
Amount of the contributory unit (in CHF)
Option 2 (Doc.
WG-SP-FP-06/46)
318'000
000'CHF
318'000
000'CHF
519'548
103'685
10'800
634'033
519'548
103'685
10'800
634'033
1'347
0
0
-2'125
-7'000
-7'000
21'249
21'249
4'000
4'000
653'629
650'157
673'662
673'662
0
3'800
5'200
2'400
3'400
4'500
0
0
0
5'200
0
0
4'500
2'500
-2'000
-1'000
-500
-1'000
-1'000
-1'500
0
0
0
0
0
0
-2'000
-2'000
-1'000
-1'000
-1'000
-11'500
-560
-490
-600
0
-2'000
-1'500
685'962
662'212
32'333
12'055
1 Income estimates (ref. C06/23, Add.)
Assessed contributions (408 9/20 full units)
Cost Recovery income
Other income
2 Adjustment to the number of contributory units as of 1/05/2006 (+
3
4
1 1/17 full units)
Adjustment to the number of contributory units as of 13/09/2006
(406.78 full units) *
Reduction due to the free access to ITU-T recommendations **
Options for increasing the income:
5 Increase from 1/5 to 1/4 of the ratio for the contributory unit
payable by Sector Members ***
6 Increase of the price of publications (10% on average)
7 Revised income estimates
8
9
10
11
12
13
14
15
Expenditure estimates (ref. Document C06/23)
Security Projects
WSIS (Doc. 41, item 7) ****
RRC-06 post-conference work
WTSA-04 outcomes ****
WTDC-06 outcomes (Doc. 41, item 19) ****
WTDC-06 Doha Action Plan (Doc. 41, item 16)
IPSAS implementation (Doc. 41, section B, item 1)
Options for reducing the expenditure:
16
17
18
19
20
21
22
23
24
25
26
27
Reduction in staff costs
Reduction in travels on duty
Reduction in fellowships
Reduction in external consultants
Reduction in public services
Reduction in the volumes of documentation
Advisory Groups (Doc. 41, item 10)
Council Working Groups (Doc. 41, item 11)
WRC/RA/CPM (Doc. 41, item 12)
Regional Preparatory Meetings (Doc. 41, item 13)
Study Group Meetings
Interpretation
28 Revised expenditure estimates
29 Shortage of income
30 Global cut
* -Denmark has announced a reduction of its class of contribution from 4 to 2 units.
-Benin has announced a reduction of its class of contribution from 1/4 to 1/8 unit.
-Compared with the situation as of 1.5.2006, the number of units of Sector Members has
decreased by 4 5/16, and the number of Associates has increased by 9.
** A variant to this option would be without this reduction of 7 million, considering that this is done
on a trial basis
*** This amount assumes the current level of Sector Members' participation (1.5.2006)
**** Requests expected, either explicitly or implicitly, to be carried out within existing resources
1.8%
C06/92-E
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ANNEXE 2
DRAFT
Resolution 91 (Rev. Antalya, 2006)
Cost Recovery for some ITU products and services
The Plenipotentiary Conference of the International Telecommunication Union
(Minneapolis, 1998), (Antalya, 2006)
considering
a)
that Resolution 39 of the Plenipotentiary Conference (Kyoto, 1994) endorsed the
examination of options for strengthening the financial base of the Union, including
reducing costs, more effective allocation of resources, ranking of activities according
to the objectives of the strategic plan, wider participation of entities other than
Member States and, where appropriate, charging fees for ITU services, particularly
where these services are sought on a discretionary basis or to a greater extent than the
level of facilities generally provided;
b)
that recommendation 20 of the ITU-2000 Group recommended that the Council
"implement the use, as extensively as possible, of cost recovery for products and
services and to consider additional opportunities for cost recovery that might prove
promising";
c)
that discussions in the ITU-2000 Group focused on the need for the elected officials
and the Sector advisory bodies to review their activities and develop groups of
products and services which could be subject to improvements in efficiency and
cost-recovery mechanisms;
b)
that Council Resolution 1210 instructed the Secretary-General to establish a costaccounting process that results in the cost of individual ITU projects and activities
being identifiable and auditable, essential for the development of an accurate
activities-based budget and for implementing cost-recovery;
d c)
that solidarity among Member States and Sector Members in sharing equitably in the
defrayal of financial obligations should continue to be an important principle for the
financial base of the Union;
e)
that the adoption and implementation of cost recovery for a wide range of products
and services within the Union could raise some concerns about the intergovernmental
nature of the Union;
f) d)
that the Union has developed a contributory system in which some Member States
have voluntarily assumed a large share of financial support for the Union's core
activities, from which all Member States benefit, although the importance of those
activities may be weighted differently by different Member States,
noting
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a)
the Results-Based budgeting concept that has been developed and implemented in
connection with the 2006-2007 budget of the Union, in line with Resolution 1216 of
Council;
b)
that the 1998 Plenipotentiary Conference decided to implement operational planning
in the General Secretariat and the three Sectors in order to link financial planning and
the strategic plan by adopting Resolution 72 (Minneapolis, 1998) which was
subsequently amended by the 2002 Plenipotentiary Conference [and this conference];
c)
the adoption by Council Decision 535 of a cost allocation methodology which
provides accuracy in the cost accounting process and in the allocation of costs to
outputs through the design and implementation of a time tracking system, and enables
the full costs of activities and outputs to be identified;
e) d)
the role of the Council in establishing safeguards and controls on income and
expenditure when adopting biennial budgets and when reviewing annual operational
plans and financial operating reports,
recognizing
a)
that cost-recovery charges for products and services are segregated to the specific
product or service, covering only the exact cost of providing the product or service to
which they relate, and should not be considered as generating revenue or profit;
b)
that cost recovery can be a means of promoting efficiency by discouraging
unnecessary or wasteful use of products and services,
resolves
1
to endorse the use of cost recovery on a prepaid basis as a means of funding the
products and services of the Union for which the cost-recovery approach is adopted;
2
that further application of cost recovery may be considered by the Council, and, if
appropriate, implemented:
i)
for new ITU products and services;
ii) for products and services recommended by a conference or assembly of a Sector;
iii) in such other cases as the Council may consider appropriate;
3
that when the Council is addressing the application of cost recovery for a particular
product or service, the following factors shall be taken into account:
i)
when a product or service is provided for the benefit of a limited number of
Member States or Sector Members;
ii) when a product or service is requested to a significantly greater extent by a small
number of users;
iii) when products or services are requested on a discretionary basis;
4
that cost recovery should be implemented by the Council in a way which:
C06/92-E
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i)
ensures that no more than the actual costs of providing products and services are
recovered;
ii)
allows for open and transparent accounting for costs and receipts;
iii) provides a means of adjusting the charge for the product or service based on
actual expenditure;
iv) takes account of the special needs of developing countries, particularly the least
developed countries, to ensure that cost recovery is not an impediment to the
development of telecommunication services or networks in those countries;
v)
allows all Member States an adequate level of the product or service free of
charge, where appropriate;
vi) ensures that charges are not applied to products or services requested prior to the
date of the decision by the Council or the Plenipotentiary Conference to apply
cost recovery,
[vii) allows for the product or service to be benchmarked, against external
organizations, with a view to its efficient delivery,]
instructs the Secretary-General
in consultation with the Directors of the Bureaux, Member States and Sector Members,
1
to continue considering and recommending a set of criteria for the application of cost
recovery, consistent with, but not limited to, resolves 2, 3 and 4 above;
2
to propose additional products and services to which the cost-recovery approach may
be applied, either fully or partially;
3
to propose a clear and consistent methodology for the implementation of cost-recovery
charges;
43
to prepare a report for consideration at each annual session of the Council, including
further actions which may be required for the implementation of cost recovery;
instructs the Council
1
to consider the report of the Secretary-General and adopt criteria for the application of
cost recovery in a manner consistent with resolves 2, 3 and 4 above;
2
to consider, on a case by case basis, products and services which meet the criteria
referred to above, and decide which products and services should be subject to cost recovery;
3
to develop appropriate charges based on full attribution of the costs of providing the
service;
4
to implement appropriate arrangements to meet the needs of developing countries,
particularly the least developed countries;
5
to develop accounting and control mechanisms, using appropriate accounting
principles, which:
i)
segregate income and expenditure for the specified product or service, such that
these funds cannot be mixed in with general or reserve budget funds;
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ii)
ensure that charges are consistent with, and do not exceed, the actual cost of the
product or service;
iii) allow for the disclosure of any subsidies from Member State and Sector Member
contributions for products or services that are subject to cost recovery;
iv) promote efficiency in the delivery of products and services which are subject to
cost recovery charges;
5
to ensure that any shortfall of income is properly managed, in reviewing annually the
actual performance of activities subject to cost recovery so that timely corrective measures
can be taken as appropriate;
6
to improve the forecasting of cost recovery income by using the Results-Based
budgeting framework, time-tracking sytem and cost allocation methodology;
67
to amend the Financial Regulations as required in order to enable the implementation
of cost recovery and ensure accountability and accuracy;
7
to keep the application of cost recovery under review at each Council meeting,
including consideration of whether products and services subject to cost recovery continue to
meet the relevant criteria and to act accordingly;
8
to report to the next subsequent Plenipotentiary Conference on action taken to
implement this resolution.
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