Cost recovery refers to the requirement for the organization to recover costs from other resources that are not directly linked to providing the required organizational structures for projects and programmes. The fundamental aim of cost recovery is to achieve a proportional funding of organizational costs between regular and other resources. This demands that UNDP must avoid using regular resources to subsidize activities funded from other resources, including the use of regular resources to cover costs related to the management and support of programme activities funded by other resources. The fundamental principle and benefits of the application of the cost recovery methodology contribute to a more equitable sharing of costs of management activities between regular and other resources. By funding qualified development effectiveness activities, where appropriate,
Costs that are in addition to direct project costs, and are incurred by an organization as a function and in support of its other resources funded activities, projects and programmes, and cannot be traced unequivocally to specific activities, project or programmes.
A joint decision of the Executive Boards of UNDP/UNFPA, UNICEF and UNWOMEN approved a new harmonized conceptual framework for defining and attributing all costs, both programme costs and organizational costs (DP-FPA/2012/1), and a new harmonized methodology for calculating cost-recovery rates on other resources (non-core) (DP-FPA/2013/1; DP/2013/9).