The IPU is a public organization funded in a transparent way by Member Parliaments and Associate Members (international parliamentary assemblies affiliated with the IPU) , whose annual fees are assessed in accordance with a scale of contributions approved by the Governing Council. In 1992, the contributions to be paid by Associate Members were set at 5 per cent of the average of the contributions paid by the parliaments represented within the Associate Member in question.
In addition, a growing volume of financial resources is mobilized through voluntary contributions, most of which are provided by donor governments.
As international civil servants, members of the IPU staff pay an internal staff assessment at the rate established by the International Civil Service Commission. This system of internal taxation generates revenues for the benefit of all IPU Member Parliaments.
The overall governing instrument of the Union's financial adminstration is the Financial Regulations, approved and amended by the Governing Council. The Council is also responsible for approving annual financial results, prepared in the form of the Financial Report and the Financial Statements in accordance with the Union's accounting policies. The Council has delegated some of its responsibilities to the Internal Auditors, in particular as regards reviewing annual Financial Statements and meeting with the External Auditor and IPU management.
The consolidated IPU budget gives a multi-year perspective for the development of the Union and focuses on results and indicators of achievement. It shows as clearly as possible what IPU Members can expect from the expenditures that they fund.
The budget is divided into six cost centres corresponding to the Executive Office of the organization, its four substantive divisions and a cost centre for grants and reserve contributions. In accordance with general IPU policy, the budget presents the relative positions of men and women in the internal structures of the IPU and the resources given to gender issues and activities.
The following consolidated IPU budget documents, as approved by the Governing Council, can be downloaded from this site:
|2013 Approved Consolidated Budget||CL/191/7-P.1 (24 October 2012)|| [English] [French]|
|2012 Approved Consolidated Budget||CL/189/7-P.1 (19 October 2011)|| [English] [French]|
|2011 Approved Consolidated Budget||CL/187/7-P.1 (6 October 2010)|| [English] [French]|
|2010 Approved Consolidated Budget||CL/185/7-P.1 (21 October 2009)|| [English] [French]|
|2009 Approved Consolidated Budget||CL/183/7-P.1 (14 October 2008)|| [English] [French]|
|2008 Approved Consolidated Budget||CL/181/7-P.1 (10 October 2007)|| [English] [French]|
|2007 Approved Consolidated Budget||CL/179/7-P.1 (18 October 2006)|| [English] [French]|
The IPU is making a commitment to curbing climate change by applying an environmental policy adopted by the Governing Councl. It is acknowledging its greenhouse gas emissions, setting targets for reductions and proposing appropriate mitigating measures, including the purchase of carbon offset credits. The IPU carbon footprint is determined in accordance with the framework set out by the World Business Council for Sustainable Development under the greenhouse gas (GHG) protocol.
The IPU emissions inventory includes scope 1 direct emissions from heating and vehicle use and scope 3 indirect emissions associated with air travel, employee commuting and paper use. Scope 3 indirect emissions by participants in IPU activities are quantified separately. Over the medium term, the IPU seeks to reduce direct and indirect CO2 emissions to 90 per cent of 2000 base-year levels. The target is consistent with the pledge made by Switzerland, the host country, under the Kyoto Protocol.
The idea of offsetting greenhouse gas emissions by paying for projects that reduce the gases elsewhere was adopted at the Kyoto Summit in 1997. There is now a large voluntary market in which companies and individuals buy carbon credits from sellers who invest in energy conservation projects. The sale of carbon credits is unregulated and the market offerings, while well meaning, are unreliable. Effective offsetting requires: (a) accurate computation of emissions; (b) accurate estimation of carbon saved elsewhere; (c) guarantees of additionality – that the energy savings would not have happened regardless.
The IPU budget contains a provision for direct investment in energy conservation and advocacy as an alternative to purchasing third-party offerings. The relevant environmental policy was adopted by the Governing Council of the IPU in April 2009.
SCALE OF CONTRIBUTIONS
Most of the operating revenue of the IPU comes from Members’ assessed contributions.
In 2006, the Governing Council adopted a new scale of assessment which is directly related to the United Nations scale of contributions. The new scale reflects current economic realities and reduces the burden of contributions on the least developed countries. It also makes participation in the IPU more affordable to parliaments that are not yet members of the IPU and represent countries with small or weak economies.
| Year || Contributions assessed || Change * |
* Average increase in Members' contributions. The total reflects changes to the membership base.
The management of the IPU is responsible for the reliability, integrity and objectivity of the annual Financial Report and Financial Statements. Where necessary, the statements include amounts that are based on judgments and estimates by management. A system of internal accounting controls has been established to provide reasonable assurance that the financial statements are accurate and reliable and that assets are safeguarded.
The following texts of recent Financial Reports and Audited Financial Statements of the IPU, as approved by the Governing Council, can be downloaded from this site:
|Financial Results for 2012
||CL/192/10-R.1 (28 February 2013)|| [English] [French]|
|Financial Results for 2011||CL/190/10-R.1 (12 March 2012)|| [English] [French]|
|Financial Results for 2010||CL/188/10-R.1 (7 March 2011)|| [English] [French]|
|Financial Results for 2009||CL/186/10-R.1 (15 February 2010)|| [English] [French]|
|Financial Results for 2008||CL/184/10-R.1 (28 February 2009)|| [English] [French]|
|Financial Results for 2007||CL/182/10-R.1 (20 March 2008)|| [English] [French]|
|Financial Results for 2006||CL/180/10-R.1 (14 March 2007)|| [English] [French]|
|Financial Results for 2005||CL/178/10-R.1 (17 March 2006)|| [English] [French]|
The financial statements are prepared in accordance with the requirements of International Public Sector Accounting Standards applicable to a going concern, which assume that the organization will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.
(a) Revenue recognition
Assessed contributions are recognized as revenue when they come due. Other revenues are recognized when services are performed or when products are shipped.
Investments in mutual funds are reported at lesser of market value or book value
Stocks of publications for future distribution are written down to a net realizable value of nil in each reporting period. Official gifts are valued at cost.
(d) Property, plant, equipment and depreciation
The value of the headquarters building and office equipment are recorded at cost, which includes interest costs and project management costs incurred during construction or acquisition. Capital costs are reduced by the amounts of any capital grants received. The Union reviews the value of its property, plant and equipment at the end of each reporting period to determine whether carrying values are recoverable with any resulting write-downs charged as an expense.
Buildings and each class of equipment are depreciated on a straight-line basis over their useful estimated lives, which are as follows:
|IT hardware and software||4 years|
The IPU has been expressly recognized by the two countries in which it is physically located, Switzerland and the US, as an international organization entitled to the appropriate privileges and immunities. It enjoys a special international organization tax-exempt status in both countries. In Switzerland, under the terms of a 1971 Accord, the IPU is exempt from direct and indirect federal, cantonal and community taxes and is subject to the same duties as other international organizations. In the United States, the IPU is exempted from direct federal taxes and duties under the terms of the International Organizations Immunities Act and is exempted from the payment of New York State and local sales and use taxes.
Any recoverable taxes paid in either jurisdiction are recorded as accounts receivable.
(f) Staff assessment
Staff salaries are taxed internally for the benefit of all member parliaments. The gross amount of staff salaries is reported as an expense, while the internal staff assessment is reported as revenue. The amount of staff assessment is determined in accordance with the United Nations common system of salaries, allowances and benefits based upon the average tax rates of Geneva, London, Montreal, New York, Paris, Rome and Vienna.
(g) Pension and retirement allowance expenses
The Union has a pension fund for past retirees which is operated as a separate entity and which is governed by its own Pension Board. The Union's representative on the Pension Board provides a report to the Executive Committee each year on the activities of the pension fund.
Active employees participate in the United Nations Joint Staff Pension Fund. The liability of the Union in respect to the pensions of active employees is limited to the annual contributions and any deficiency payment determined by the Fund.
Other retirement allowances earned by employees are reported as expenses in the year they are earned.
(h) Foreign currency translations
The Union uses Swiss francs as its functional currency. Revenue and expense items arising from transactions in US Dollars are converted into Swiss francs at the UN exchange rate for the month. Transactions in Euros are converted into Swiss francs at the rate posted by the European Central Bank. Transactions in other currencies are converted into Swiss Francs at the spot rate quoted on the internet at the time of posting. Monetary assets and liabilities are translated into Swiss francs at the exchange rate in effect at the balance sheet date. Exchange gains or losses from translations of monetary items are recognized as expenses.
(i) Use of estimates
The preparation of financial statements in conformity with International Public Sector Accounting Standards adopted by the International Federation of Accountants requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates are based on management's best knowledge of current events and actions that the Union may undertake in the future. Actual results can differ from these estimates.
The consolidated financial statements include the accounts of the Union and the accounts of technical cooperation projects carried out with third-party funding. All internal transactions and balances are eliminated on consolidation.
(k) Changes in accounting policies
Grants for technical cooperation, interest earnings and contributions from new or re-affiliated members are recognized as revenues.