Objects of expenditure

(1)     At its lst session (1948: CO-ORD-PREP/16, section A.1) CCAQ recommended that members should use a specified panel of objects of expenditure in summaries to be attached to each budget for 1949 and in the standard definitions within the framework of their budget form.

(2)     At the 4th session (January 1949: CO-ORD-PREP/98, para. 5) a simplification of the standard summary was achieved, but it was agreed that full comparability was impossible until all agencies were using common definitions of the objects of expenditure.

(3)     At the 11th session (1951), in connection with the information annex to the UN budget, dealing with agency budgets, CCAQ considered the relation of the common panel of objects of expenditure to the standard code being developed by TAB for technical assistance purposes, voicing the opinion that in principle the same objects of expenditure should be utilized for technical assistance as for normal budgetary purposes. It also revised the common panel in order to make it more suitable for common use (CO-ORDINATION/R.93, paras. 11-21).

(4)     The standard panel and definitions of objects of expenditure were further discussed, in the context of comparative budget presentations, at the 12th and 13th sessions (April and September 1952: CO-ORDINATION/R.124, section IV.A.16, and CO-ORDINATION/R.132, section C.VI). The Committee approved steps towards further elimination of areas of disagreement in the standard panel without making changes in it.

(5)      At the 32nd session (August 1970: CO-ORDINATION/R.828, paras. 13-18 and annex C) CCAQ agreed upon a revised classification for objects of expenditure. As numbering of the objects at the level of the third digit and beyond would probably not be required in inter-agency reporting, organizations requiring more detail for internal accounting purposes were to be free to supply their own numbering pattern at those levels. CCAQ also agreed on a correlation between UNDP's "project components" and the classification of objects of expenditure. It proposed that from l January 1972 the new object-category codes should be used for UNDP accounting purposes, for inter-agency reporting of regular budget accounts, for compatible budget annexes and, to the extent possible, for internal object-of-expenditure reporting. The standard classification of objects of expenditure, as adopted at that time, appears in Handbook annex VII.

(6)      At the 53rd session (September 1980) CCAQ examined the use being made of the standard classification, notably as regards extension of its use to technical co-operation activities financed from all sources of funds. It referred the questions raised to its Working Party on the Harmonization of Financial Statements (ACC/1980/32, para. 7). Following consideration of the Working Party's second report, in March 1981, the matter was referred to UN and UNDP for preparation of a report (ACC/1981/10, para. 21(e)).

(7)      The report submitted at the 55th session (September 1981) described a classification of objects of expenditure recently introduced in UN, which united at the highest level the CCAQ classification and the UNDP structure of project component and budget lines. This classification was noted and referred to other organizations for information (ACC/1980/30, para. 16).

Programme sectors

(8)      In the period 1967-1968, work was undertaken at a series of ad hoc meetings of senior financial and budgetary officers, and then in the framework of CCAQ, on a report by ACC to ECOSOC on expenditures of the UN system, in which expenditures were to be shown under programme headings (see section 17.6). At its 31st session (March 1970: CO-ORDINATION/R.799, paras. 12-18 and annex C) CCAQ prepared a revised set of programme headings and sub-headings for the ACC report. It recognized the need to develop clear indications of what these headings were to cover. The draft classification was to be tested in 1970.

(9)      At the 32nd session CCAQ agreed upon a revised programme classification for use in the ACC report and for other inter-agency reporting, e.g. for UNDP. This classification was also intended as a basis for the programme structures being developed by individual organizations in their progress towards programme budgeting (CO-ORDINATION/R.828, paras. 4-7 and annex B).

(10)      At the 37th session (March 1973: CO-ORDINATION/R.985, paras. 44 and 45) CCAQ agreed to new subprogramme titles under "Health" (CO-ORDINATION/R.985, annex E). It also agreed that if ILO found difficulty in fitting its programme on Occupational Safety and Health into the new classification it should include the programme under "Labour, management and employment", either under one of the existing headings, by a modification of an existing heading or, as a last resort, by the insertion of a new heading.

(11)      At the 43rd, 45th and 46th sessions (March 1976, September 1976 and March 1977: CO-ORDINATION/R.1146, paras. 26 and 27, CO-ORDINATION/R.1174, paras. 6-9, and CO-ORDINATION/R.1211, paras. 16-22 and annex III, paras. 3-32) the Committee considered suggested changes in the programme classification and the report on expenditures, taking account of the views of individual organizations and also, at the 46th session, of the recommendations of its Working Party on Revision of the ACC Programme Classification and its Task Force on Harmonization of Programme Budget Presentation. With the exception of three minor changes accepted at the 45th session, it was agreed that the classification should remain unchanged in the reports to be submitted in 1977 and 1978, but that in the meantime a complete revision should be undertaken subject to the views of ECOSOC on the usefulness of the classification and the directions in which it should be further developed. ACC was requested, and subsequently agreed, to request ECOSOC's views on these matters in the introduction to the 1977 report (E/6012).

(12)      The matter of the programme classification was taken up again, in the framework of consideration of the form of the ACC report, at the second session of the CCAQ Working Party on Programme Planning, Budgeting and Evaluation, which had evolved from the Task Force referred to in the preceding paragraph. The Working Party had concluded (CO-ORDINATION/R.1279, annex III, paras. 11-18) that the existing programme classification should be refined, but had also felt that one classification could not meet all needs and that there should be a dual presentation, in which "classification A" would follow the existing pattern whereas "classification B" would be open-ended, comprising a "selected list of main areas of special concern", under which the expenditures reported would not necessarily be additive. The Working Party had agreed to give priority to developing these two classifications, but in the meantime it had stated six general principles that should apply to the new "classification A" (CO-ORDINATION/R.1279, annex III, para. 14(a)-(f)). It had also agreed tentatively on 12 broad headings for that classification (ibid., para. 15) and had identified an "illustrative list" of eight broad headings that could be used for "classification B" (ibid., para. 17). At its 48th session (March 1978) CCAQ endorsed these conclusions (CO-ORDINATION/R.1279, paras. 9, 10, and 12). It agreed that at its next session the Working Party should try to finish the revision of the programme classification, following the dual approach.

(13)      The conclusions of the Working Party were before CCAQ at its 50th session (March 1979: ACC/1979/R.11, paras. 4-9 and annex III). In its report the Working Party had restated the principles which should govern the establishment of the listing referred to as "classification A" (ACC/1979/R.11, annex III, para. 7(a)-(f)), although it had some difficulty in applying them in all cases. It had submitted a proposed revised classification - which CCAQ approved with some amendments (ACC/1979/R.11, annex IV, and R.11/Corr.1) - and had recommended that guidelines be provided so that the organizations would assign their expenditures to the various headings according to consistent common practices. CCAQ agreed to this approach. It also endorsed recommendations by the Working Party that functional activities should be reported in the sector concerned; that expenditures for all management and support activities should be distributed; and that for reporting purposes organizations should dispense with analyzing their expenditures below the subprogramme level or its equivalent. Further criteria for reporting should be developed as necessary. CCAQ further endorsed a Working Party recommendation that the "broad terms" being developed by IOB to describe the organizations' programmes should be grouped according to the headings of the revised classification. On the subject of "classification B", the Working Party had suggested that it might be wholly or largely composed of programme areas of special interest to CPC and other UN bodies that requested financial information on them (examples: Energy; Water; Women). However, the boundaries of the areas concerned would first have to be defined and agreement would be needed on other criteria, in the framework of the CCAQ machinery. The Working Party had also called attention to the extra work required to provide the necessary data and suggested that the number of programme areas dealt with should be kept to a minimum (ACC/1979/R.11, paras. 5-9 and annex III).

(14)      At the 51st session (September 1979) CCAQ took note of several suggestions on the revised programme classification and decided to bear them in mind when the time came to review the classification generally; for the present the classification should remain unchanged, except for minor adjustments. It was agreed that reporting should be closely reviewed, particularly so that as far as possible activities whose primary objectives - from the system-wide viewpoint - lay in the same subject areas were reported under the same headings (ACC/1979/R.69, paras. 5 and 7).

(15)      At its 52nd session (March 1980) CCAQ approved suggestions submitted by UN to clarify the guidelines for reporting under "General development issues, policy and planning". The suggestions provided in particular that activities involving sectoral planning and elaboration of sectoral policies at the international and national levels should be reported under that heading (ACC/1980/16, para. 9).

(16)      At the 55th session (September 1981) the Committee considered a request by UNWTO that a new sector should be added to the programme classification to provide separately for activities in the field of tourism, given their multi-disciplinary character. CCAQ did not feel able to accede to this request in view of the orientation of the classification towards activities of the UN system only, the relatively small volume of activities reported in the tourism field and the desirability of avoiding changes in the classification between over-all revisions (ACC/1981/30, paras. 65 and 66).

(17)      A new request by UNWTO, involving the transfer of tourism activities as a sub-sector under another sectoral heading, was considered at the 56th session (March 1982). In support of its request UNWTO pointed out that the Manila Declaration adopted by the World Tourism Conference in October 1980 called for the insertion of tourism in socio-economic development. The Committee considered that the treatment of tourism in the classification had to reflect a common perception of its place by the two UN system organizations principally concerned, UN and the ILO. A change might be made in the context of revised expenditure reporting arrangements currently under consideration (ACC/1982/6, paras. 18 and 19).

(18)      At the 62nd session (March 1985), following a further request by UNWTO, CCAQ agreed to transfer the heading "Tourism and related services" from "Industry" to the next-to-last place under "International trade and development finance"; and to restructure the sector for "Health", at the request of WHO, under three headings (ACC/1985/7, paras. 23 and 24).

(19)      In accordance with a recommendation by CCSQ(PROG) (September 1990: ACC/1990/13) arrangements were made to revise the ACC programme classification. An informal joint working group of CCSQ(PROG) and CCAQ(FB) met in March 1991 and agreed on broad principles and guidelines (ACC/1991/8) and a joint technical working group of the two committees then met in July of the same year and worked out a revised classification. This was agreed in amended form by CCSQ(PROG) (ACC/1991/13) and submitted in September to a joint meeting of CCSQ(PROG) and CCAQ(FB), which recommended the new classification to ACC (ACC/1991/14). ACC adopted a definitive text, including agreed breakdowns for the new sectors General statistics and Environment (decision 1991/22). The new classification was to be applied by the organizations from 1 January 1992, and thus would be inter alia the basis for the next ACC report on programmes and resources of the organizations of the system, due for submission to ECOSOC in 1993 (on this report, see section 17.6). Apart from General statistics and Environment it incorporated new sections for Energy and Communications and information, making a total of 20 instead of the previous 16. The classification is reproduced in full in Handbook annex VIII.

(20)      For the listing of components of agency support costs developed in the framework of the CCAQ cost-measurement system, see section 20.2.