Review of the policies and practices for determining the rates of programme support costs in organizations of the UN system

The Joint Inspection Unit (JIU) has released a new system-wide review on programme support costs (PSC), providing a comparative analysis of how its 28 participating organizations define, structure and apply PSC rates.

The review highlights the absence of a common definition across the system and shows that approaches continue to differ due to organizational mandates, business models and funding structures.

Findings show that nominal PSC rates generally range from about 5 to 13 per cent, though actual rates are often lower because of waivers, donor-specific arrangements and project characteristics. Donor reluctance to fund PSCs remains a major influence on applied rates, driven by comparisons across organizations and misunderstandings about the purpose of PSCs. The report recommends clearer communication with donors and calls on executive heads to make PSC or cost-recovery policies publicly available.

The review also examines financial management and budgeting practices. Organizations take different approaches to budgeting PSC income and expenditure—some integrate PSC resources into their regular budget, while others present them separately. Despite these variations, most organizations maintained a positive balance between PSC income and related expenditures from 2019 to 2023. The Inspectors encourage continued prudence in expenditure management and highlight cash-upfront collection of voluntary contributions as a good practice particularly in the current financial environment.

Finally, the report identifies opportunities for greater coherence and collaboration across the system. While a single PSC rate is neither practical nor appropriate, more consistency among organizations with similar characteristics is encouraged, as demonstrated by the coordinated approaches of the New York-based funds and programmes, which show how comparable entities can align practices while retaining flexibility. The review also underscores the value of inter-agency cooperation, including better accessibility of Finance and Budget Network outputs. The review contains three formal and seven informal recommendations.

Read more:

Access the report (comparative analysis) here

Access the expanded report (comparative tables) here

Access the review highlights here