Earmarked contributions are made by Member States, United Nations bodies, other organizations, non-state actors and individuals, for specific programme activities, services and facilities for individual projects.
While these earmarked contributions are welcome in support of implementing the organization’s Programme of Work, a shift towards broader earmarking, targeted for example at the sub-programme level rather than a specific activity, is needed to enable the Secretariat to deliver the programme in a balanced and cost-effective fashion. “Soft” earmarking reduces programme support costs by simplifying administrative procedures. A few Member States have already applied this approach successfully to the satisfaction of both the governments and the Secretariat.
Example of a Strategic Cooperation Agreement
In 2010-2011 UNEP received US $ 267.9 million
in earmarked contributions, including counterpart contributions and trust funds directly supporting UNEP’s programme of Work. The GC.26 approved the indicative level of US $ 241.9 million
for earmarked support in the current biennium of 2012-2013. The approved indicative level of earmarked support for the upcoming biennium 2014-2015 was approved at US $202 million at GC.27.
These figures do not include GEF funds.
The most common way to accept earmarked funding in UNEP is through Trust Funds. The United Nations system has two types of trust funds: Technical cooperation Trust Funds are those that provide economic and social development assistance to developing countries. In UNEP, this category includes the trust funds that finance the employment of Junior Professional Officers; General Trust Funds support activities other than those of an exclusively technical cooperation nature (the Environment Fund of UNEP falls in this category).
In addition, UNEP distinguishes between the following categories of Trust Fund as summarized in Table 1: (a) those that provide direct support to the UNEP programme of work; (b) those that provide support to UNEP-administered conventions, protocols and regional seas programmes; (c) those belonging to the special category of UNEP trust funds, such as those for which UNEP acts as a fiduciary agent/trustee.
The total number of active trust funds has increased from one in 1973 to 74 in 2003 to 84 in 2010 and to 97 in 2013. Due to the increased number and hence increased administrative work, the UNEP Secretariat is reviewing how best to improve the management of Trust Funds as per Governing Council Decision 27/14. This Decision requested UNEP to “prepare a report highlighting the challenges of managing multiple trust funds and to propose steps which could be taken to reduce the administrative burden of maintaining these trust funds”.
UNEP has already taken steps to close inactive Trust Funds and projects. UNEP has recently also strengthened governance arrangements for certain Trust Funds to improve transparency and accountability in the use of the funds. This has involved establishing steering committees and annual donor consultations. UNEP has also enforced full cost recovery for Trust Funds to ensure they are not subsidized by the Regular Budget of the UN or the Environment Fund.
Furthermore, UNEP manages contributions to a number of Multilateral Environmental Agreements for which UNEP is administering the Secretariats.
To support a specific project or activity, UNEP also accepts counterpart contributions which are also subject to programme support cost in the same manner as the Trust Funds.