FINANCIAL

STATEMENTS
2021
CONTENTS
FINANCIAL STATEMENT DISCUSSION AND ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

STATEMENT OF INTERNAL CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

OPINION OF THE EXTERNAL AUDITOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

STATEMENT I – CONSOLIDATED STATEMENT OF FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

STATEMENT II – CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

STATEMENT III – CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

STATEMENT IV – CONSOLIDATED STATEMENT OF CASH FLOW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

STATEMENT V – CONSOLIDATED STATEMENT OF COMPARISON OF REGULAR BUDGET AND ACTUAL AMOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

NOTE 1 REPORTING ENTITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
NOTE 2 SIGNIFICANT ACCOUNTING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
NOTE 3 ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
NOTE 4 ACCOUNTING STANDARDS ISSUED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
NOTE 5 CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
NOTE 6 INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
NOTE 7 ACCOUNTS RECEIVABLE FROM NON-EXCHANGE TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
NOTE 8 ADVANCE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
NOTE 9 OTHER RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
NOTE 10 PROPERTY, PLANT AND EQUIPMENT (PP&E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
NOTE 11 INTANGIBLE ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
NOTE 12 EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
NOTE 13 INTEREST PAYABLE TO DONORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
NOTE 14 VOLUNTARY CONTRIBUTIONS WITH CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
NOTE 15 ADVANCE RECEIPTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
NOTE 16 BORROWINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
NOTE 17 OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
NOTE 18 NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
NOTE 19 REVENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
NOTE 20 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
NOTE 21 CONTINGENT LIABILITIES, COMMITMENTS AND CONTINGENT ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
NOTE 22 REGULAR BUDGET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
NOTE 23 FINANCIAL RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
NOTE 24 RELATED PARTY DISCLOSURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
NOTE 25 AMOUNTS WRITTEN-OFF AND EX-GRATIA PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
NOTE 26 SEGMENT INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73

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 FINANCIAL STATEMENT
DISCUSSION AND ANALYSIS

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INTRODUCTION
The consolidated financial statements and financial
report of the Organization for the year ended
31  December 2021 are prepared in accordance with
Article 11.1 of the Financial Regulations.
The consolidated financial statements have been
prepared in accordance with International Public
Sector Accounting Standards (IPSASs) and cover
all of the operations of the Organization, including
those funded by the regular budget, voluntary
contributions, revenue generating activities as well as
those of the nine Category 1 Institutes. The Category
1 Institutes’ source of funding consists of the regular
budget allocation provided by UNESCO, in addition
to voluntary contributions raised by the Institutes.
While the Institutes are part of the biennial Integrated
Budget Framework of UNESCO, and their financial and
performance reporting is included in the reports to the
Executive Board of UNESCO, the respective Governing
Boards of most Institutes approve the budget of the
Institute on an annual basis. Performance reports are
provided by the Institutes to their Governing Boards.
The Financial Regulations specify a biennial financial
period, however for statutory financial reporting in
accordance with IPSAS, annual financial statements
are presented. The appropriated regular budget
component under the General Fund is considered
as the Approved Budget for purposes of Statement V
under UNESCO’s consolidated Financial Statements.
Reporting annual financial statements on an IPSAS
basis provides a different view of UNESCO’s financial
results as compared to budgetary reporting, which
continues to be presented on a modified cash basis. As
the basis of the budget and the financial statements
differs, a reconciliation between the appropriated
regular budget and the IPSAS statement of financial
performance is presented in Note 22.2 to the
consolidated financial statements.
HIGHLIGHTS FOR 2021
In 2019, UNESCO indicated that the extent of the impact
of COVID-19 pandemic on the financial performance
of UNESCO will depend on future developments.
The travel bans and restrictions, cancellations and
postponement of duty travel and home leave etc. had
resulted in reduced activities of the Organization in
the year 2020. The Organization’s 2021 revenue and
expenses largely bounced back to pre-COVID levels.
FINANCIAL STATEMENT DISCUSSION AND ANALYSIS
Total expenses ($688 million in 2021 compared to
$578 million in 2020) reached 2018 and 2017 levels
due mainly to an improvement in the COVID sanitary
situation and lifting of restrictions and resumption of
programmatic activities.
The consolidated net assets of the Organization
increased by $187 million in 2021 due mainly to a large
decrease in the After-Service Health Insurance (ASHI)
liability ($158 million), partly offset with the increase
under cash and cash equivalents and investments
($47 million). However, it should be noted that:
(a) While the consolidated financial performance
shows a surplus, this is driven primarily by the fact
that voluntary contributions are booked as revenue
in accordance with IPSAS, while expenses are in the
process of being incurred against these receipts
towards agreed programmatic activities.
(b) Similarly, while the consolidated net assets of the
Organization increased to $597 million, a large part
of these net assets ($490 million) are generated
from the voluntary contributions under Proprietary
Fiduciary Funds (PFF) (booked as revenue based
on IPSAS) in the process of being used for the
implementation of agreed project activities (in
other words, expenditures are expected to be
incurred against these in future, and balances
will be returned to donors to the extent that they
remain unspent for such project activities unless
agreed otherwise).
(c)
When PFF voluntary contribution funds are
excluded, the Organization’s activities show a very
different picture - the assets assigned to the General
Fund (GEF) do not have adequate reserves to
address its long-term financing needs, notably for
buildings and ASHI. The Organization has initiated
various steps in this regard so as to put in place a
financing mechanism to adequately address the
funding needs of long-term capital and employee
benefit liabilities, but this remains a risk without
fully adequate mitigation in place at this time.
The year also witnessed the development and
implementation of the long-term financial planning
strategy to fund certain long-term obligations. In
particular,
(a) the strategy for long-term financing of capital and
strategic investments was developed and approved
by the Governing Bodies, through the creation
of a Special Account for Capital and Strategic
Investments (CSI) and a policy related to its use,
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FINANCIAL STATEMENT DISCUSSION AND ANALYSIS

(b)
consistent and comprehensive approach to REVENUE
financing end-of-service entitlements related to
termination indemnity, repatriation travel and As indicated in Figure 1 below, UNESCO’s 2021 total
shipment was implemented, and revenue amounting to $694 million is mainly made up
of assessed and voluntary contributions, representing
(c) renewed discussions on the financing of the ASHI 95% of total income. Gross assessed contributions
liability were initiated with the Governing Bodies represent 39% of the total revenue (2020: 40%) while
and are to be continued in future. voluntary contributions account for 56% (53% in 2020).
Actions are planned to provide better clarity on the
application of the Integrated Budget Framework (IBF) TABLE 1: FINANCIAL SITUATION FOR THE YEARS
and its relation with the information in the consolidated 2021-2020
financial statements through the review and update of Expressed in million US dollars 2021 2020 VARIATION
UNESCO’s Financial Regulations.
Total Revenue 694 655 39
Total Expenses (688) (578) (110)
Surplus 6 77 (71)
FINANCIAL SITUATION
Assets 1 567 1 507 60
The table 1 below summarizes the financial situation Liabilities (970) (1 097) 127
of the Organization for the year 2021 as compared Net Assets 597 410 187
to the previous year 2020 and the accompanying
sections provide details on the financial performance
and financial position of the Organization for the year
ended 2021.

FIGURE 1: COMPOSITION OF 2021 REVENUE ($694 MILLION)

Expressed in million US dollars

Revenue producing Other revenue;

activities; $22M; 3%
$11M; 2%

Assessed
contribution;
$274M; 39%
Voluntary
contribution;
$387M; 56%

Table 2 below provides a summary of the changes by revenue type as compared to 2020.

TABLE 2: CHANGE IN REVENUE 2021-2020

(Expressed in million US dollars) 2021 2020 VARIATION VARIATION (%)
Assessed contributions 274 262 12 5%
Voluntary contributions 387 346 41 12%
Revenue producing activity 11 11 - 0%
Other/miscellaneous revenue 15 14 1 7%
Foreign exchange gains - 12 (12) (100%)
Finance revenue 7 10 (3) (30%)
Total revenue 694 655 39 6%

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 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS

The increase of total revenue by $39 million is mainly EXPENSES

attributable to higher level of voluntary contributions.
The marginal increase in revenue from assessed
contributions (5%) is due to currency exchange
movements between the US dollar and the Euro. In
particular, part of Member States’ contributions that is
assessed in Euros was recorded at higher exchange rate
in United States dollars.
Total expenses for the year ended 31 December 2021
amounted to $688 million. As depicted in Figure 2
below, staff costs (including staff and service contracts)
represent 52% of the total expenses of the Organization,
followed by contracted services at 21%.

As compared to a foreign exchange gain of $12 million

in 2020, 2021 recorded a foreign exchange loss of
$11 million (as shown in Table 3).

FIGURE 2: COMPOSITION OF 2021 EXPENSES ($688 MILLION)

(Expressed in million US dollars)

Staff costs; $360M; 52%

Consultants, external experts

and mission costs; $64M; 9%

Other; $33M; 5% External training, grants

Expense for assessed contributions allowance; and transfers; $27M; 4%
$6M; 1% Supplies, consumables and
Contracted services; $143M; 21% other running costs; $55M; 8%

Table 3 below provides a summary of changes by expense category compared to prior year.

TABLE 3: CHANGE IN EXPENSES 2021 – 2020

Expressed in million US dollars 2021 2020 VARIATION VARIATION (%)
Staff costs 360 333 27 8%
Consultants, external experts and mission costs 64 44 20 45%
External training, grants and other transfers 27 31 (4) (13%)
Supplies, consumables and other running costs 55 38 17 45%
Contracted services 143 106 37 35%
Expenses for assessed contributions allowance 6 5 1 20%
Foreign exchange losses 11 - 11 100%
Other expenses 22 21 1 5%
Total expenses 688 578 110 19%

Total expenses as at 31 December 2021 increased
by $110 million or 19%. This is due mainly to an
improvement in the COVID-19 sanitary situation and
lifting of restrictions, resulting in acceleration of the
Organization’s programme implementation. While
the expenses show increase compared to 2020, the
expenses across most expense categories are similar to
the pre COVID-19 period.
The increase in consultants, external experts and
mission costs reflects the easing of travel restrictions
and resumption of mission travel driven by increased
project activities. 2021 was also the second year of
the biennial program of work where the activities and
expenses are generally higher, including those related
to the General Conference.

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FINANCIAL STATEMENT DISCUSSION AND ANALYSIS
Contracted services increased by 35% due to various
reasons such as the improvement of the health
situation that allowed resumption of project activities
of the Organization, increased activities in the
second year of the biennium and the cost incurred in
relation to the General Conference. The contracted
services include implementing partner agreements,
financing activities contracts, intergovernmental body
allocations, translation, data processing contracts as
well as contract for services.
FINANCIAL POSITION
At 31 December 2021, the Organization had net assets
of $597 million, with total assets of $1,567 million and
total liabilities of $970 million.
TABLE 4: 2021 FINANCIAL POSITION BY SEGMENT
Expressed in million US dollars GEF OPF
Total Assets 594 153
Total Liabities (678) (20)
NET ASSETS - 2021 (84) 133
NET ASSETS - 2020 (212) 126
ASSETS
As at 31 December 2021, cash and cash equivalent
amounted to $169 million as compared to $255 million
in 2020. The reduction in cash and cash equivalent was
due to an increase in the investment portfolio by $132
million. An amount of $119 million of the cash and cash
equivalent (Other Proprietary Funds (OPF), PFF and
Staff Fiduciary Funds (SFF) segment) is considered as
restricted cash as the use of these funds is determined
either by a specific regulation or on agreements signed
with the donor.
On a consolidated basis, current assets less current
liabilities, amounting to $678 million (2020:
$636  million), remained stable due to the significant
amount of cash and cash equivalent and investment
held by the Organization in 2021.
Assessed contributions-receivables
The collection of assessed contributions has a direct
impact on the Organization’s liquidity position under
the regular budget, and a significant influence on the
8
The consolidated net assets for 2021 improved by
$187 million over 2020 (table 4 below), due largely to
the decrease in ASHI liability. As a result, the net assets
of the General Fund, which are largely financed by
assessed contributions, increased by $128 million in
2021, but still remained with a negative balance of $84
million (2020: negative $212 million).
Net assets of Programme Fiduciary Funds (PFF)
increased by $48 million and represent primarily the
voluntary contributions in hand, which are yet to
be utilized for programme delivery. This is purely a
timing issue, since these funds are either expensed
on programme delivery or returned to donors upon
operational termination of these projects. The net asset
position of other proprietary funds and staff fiduciary
funds increased marginally.
INTER-FUND
PFF SFF TRANSACTIONS TOTAL UNESCO
761 63 (4) 1.567
(271) (5) 4 (970)
490 58 - 597
442 54 - 410
Organization’s ability to implement activities funded
thereunder. The Working Capital Fund (WCF) of $31
million represents on average, a month and a half of
expenditures. The Director-General has the possibility
to resort to internal borrowing from funds at her
disposal and not needed for expenditures under the
OPF segment if the liquidity needs exceed the level of
the Working Capital Fund. No such internal borrowing
was needed in 2021. The collection rate for the
biennium 2021-2020 was 93% as compared to 90% at
the end of December 2020.
Gross outstanding assessed contributions amounted
to $678 million, similar to the previous year’s level.
Outstanding contributions to the regular budget are
due from 64 Member States, nine Associate Members
and two States that have withdrawn from the
Organization (2020: 84 Member States, five Associate
Members and two States that have withdrawn from the
Organization).
The gross assessed contributions are due and payable
to the Organization in accordance with the Constitution
and Financial Regulations of the Organization and

none of the balance is written-off. However, as required
under IPSAS, for financial reporting purposes, an
allowance is made according to the expected date of
payment of contributions. Allowance provided for
unpaid assessed contributions in 2021 increased by
$6 million to $646 million. The net outstanding assessed
contributions decreased to $32 million as compared to
$38 million in 2020.
Investment portfolio
The investment portfolio of the Organization as at 31
December 2021 amounted to $810 million compared to
$678 million as at 31 December 2020 (including the ASHI
FIGURE 3: UNESCO INVESTMENT PORTFOLIO – RATING BREAKDOWN
amounts in USD million
500
428
400
300
200
188
127
100
88
0 6
AAA AA
Other investments
On 31 January 2021, a second external asset manager
was given a segregated mandate of $75  million to
manage on behalf of UNESCO. The strategic objective
of the new externally managed investment portfolio is
to manage funds against the Bank of America/Merrill
Lynch 6 months US T-Bill index. The portfolio must
maintain, at minimum, weighted average portfolio
rating of AA-.
The primary objective of UNESCO’s Investment
Policy is the preservation of the value of resources of
the Organization. Within this general objective, the
principal considerations for investment management
are in order of priority: security of principal,
liquidity and rate of return. UNESCO’s EUR and USD
investments outperformed their benchmarks (other
FINANCIAL STATEMENT DISCUSSION AND ANALYSIS
funds), and constitutes the largest component of assets
(52% compared to 45% in 2020). The portfolio is mainly
composed of investments in saving accounts, money
market deposits and other short-term investments with
major banking institutions with strong credit ratings
(minimum single ‘A-’). Figure 3 below provides rating
breakdown of UNESCO’s investments, including cash
and cash equivalents.
The functional currency of UNESCO Brasilia (UBO) is the
Brazilian Real (BRL) and consequently its investments
were made in short-term Brazilian Government Treasury
Bills in BRL that were rated BB- as at the year-end.
69
4 42
22
3 1 1
A BBB <BBB N/A
Cash and cash equivalents
than one externally managed USD portfolio that
underperformed the benchmark). The performance of
the BRL investment portfolio was in line with that of
its respective benchmark. The investment portfolio of
the After-Service Health Insurance (ASHI) Programme
is invested in accordance with the UNESCO ASHI Fund
Investment Policy Statement. Investments are made in
Exchange Traded Funds (ETFs) and currently amount to
$34.5 million.
The decrease in advance receipts is mainly attributable
to reduced advance receipts from assessed
contributions. In 2020, early assessment of 2021
contributions was issued that facilitated the receipt of
advance payments from Member States.
9
FINANCIAL STATEMENT DISCUSSION AND ANALYSIS
LIABILITIES
Total liabilities as at 31 December 2021 amounted to
$970 million ($1 097 million as at 31 December 2020).
Employee Benefits
The most significant liabilities were the employee future
benefits accrued for staff members and retirees. The
ASHI liability alone represents 64% of UNESCO’s total
liabilities as at 31 December 2021 (2020: 71%). The ASHI
liability decreased in 2021 by $158 million over 2020,
primarily as a result of a refinement in valuation due to
“actuarial gain”, and adjustment in the discount rate.
The actuarial gain includes, among others, a refinement
to the application of the pre-retirement and post
retirement mortality tables for active participants that
had an impact of decreasing the liability by $79 million.
UNESCO finances payments due under its ASHI liability
on a pay-as-you-go basis. The Programme and Budget
for 2020–21 included a provision of $11.1 million for
this purpose. In accordance with IPSAS-39, no plan
assets have been offset against the liability, however,
an amount of $36.5 million has been accumulated
in the ASHI Special Account as at 31 December 2021
($29.6 million as at 31 December 2020) to cover future
liabilities, and represents around 3.8% of the total
liabilities. The Organization, under the advice and
guidance from its governing bodies, is working closely
to further explore financing and/or cost containment
options.
Long-Term Borrowing
UNESCO’s borrowings consist of three loans towards (i)
the purchase of a building for the UNESCO International
Bureau of Education (IBE) in Geneva; (ii) the renovation
under phase II of the Belmont plan; and (iii) the
renovation of Miollis Building V. The loan toward IBE
building is expected to be fully paid by 2022 whereas
the Belmont plan was fully repaid in 2021.
In December 2019, UNESCO signed a financing contract
with the European Investment Bank (EIB). Under this
agreement, the EIB is lending €26.5 million to finance
part of the building V renovation cost in Miollis (Paris).
On 6 February 2020, UNESCO signed a second loan
agreement of €15.3 million with BNP Paribas. The
total cost of the renovation is estimated to be €49.5
million (2020: €45.5 million), of which €41.8 million
is funded through borrowings, €3.7 million will be
covered by available funds in the Miollis sub-account
for the Restoration and Improvement of UNESCO
Headquarters, in accordance with 40  C/Resolution 79,
10
and €4 million is guaranteed from the available funds
in the Bonvin sub-account for the Restoration and
Improvement of UNESCO Headquarters, pending the
approval by the General Conference to reimburse the
Bonvin sub-account.
The two loan facilities for Miollis renovation are
guaranteed by the French Government. In addition, the
French Government has agreed to reimburse UNESCO
the equivalent of the interests paid on both facilities.
The second tranche, amounting to €6.8 million, of the
Miollis Building V EIB loan was received on 28 January
2021. The Miollis Building V BNP Paribas loan’s first
tranche of €5.2 million was received on 29 January
2021.
BUDGET PERFORMANCE
UNESCO’s biennial budget is prepared under an
Integrated Budget Framework (IBF), the scope of
which includes programmes funded by (i) assessed
contributions (the regular budget), which largely
equates to the General Fund (GEF); (ii) certain revenue
generating accounts, part of the Other Proprietary
Funds (OPF); and (iii) voluntary contributions received
from donors, reflected under Programme Fiduciary
Funds (PFF). Staff Fiduciary Funds (SFF) and certain
revenue generating accounts under OPF are outside
the Integrated Budget Framework. The biennial
regular budget component under the General Fund is
considered as the approved budget for the purpose of
presenting the statement on budget vs actual amount
in the financial statement. The budget utilization
report for the biennium is presented in the Financial
Management report to the Executive Board (214 EX/4.
II.A)
However, the annual consolidated financial statements
include an annual view of the comparison between
regular budget vs actual amounts. The table 5 below,
therefore, presents a biennial view of the IBF. The
regular budget, financed from assessed contributions,
was utilized in full - the Executive Board recommended
that the General Conference (to take place in 2023)
approves the transfer of the remaining balance of
$44,000 to the Special Account for Capital and Strategic
Investments (214 EX/Decision 4.II.A), while the voluntary
contributions, including additional appropriations,
were carried forward and will be utilized in future
budget periods.
 FINANCIAL STATEMENT DISCUSSION AND ANALYSIS

TABLE 5: OVERVIEW OF BUDGET VS ACTUAL FOR REGULAR PROGRAMME AND INTEGRATED BUDGET
FRAMEWORK

MAIN APPROPRIATION LINE REGULAR PROGRAMME INTEGRATED BUDGET FRAMEWORK

INTEGRATED TOTAL
40 C/5 FINAL BUDGET BUDGET EXPENDITURES
BIENNIUM ACTUAL LESS ACTUAL FRAMEWORK INCLUDING
Expressed in million US dollars 2020-2021 EXPENDITURE EXPENDITURES AS ADJUSTED OBLIGATIONS BALANCE1
PART I - General policy and direction 53.9 51.8 2.1 62.8 60.7 2.1
PART II - A Programmes and programmes-
335.5 337.4 (1.9) 1098.1 900.4 197.7
related services
PART II - B Programme-related services 34.6 35.4 (0.8) 45.6 47.7 (2.1)
Participation Programme and Fellowships 13.4 13.2 0.2 12.7 12.7 -
PART II - TOTAL 383.5 386.0 (2.5) 1 156.4 960.8 195.6

PART III - Corporate services 89.1 89.0 0.1 143.7 136.0 7.7
Reserve for Staffing Adjustments - - - - - -
Reserve for the ASHI liability 3.3 3.3 - 3.3 3.3 -
PART IV - Loan Repayments 4.8 4.5 0.3 4.9 4.5 0.4
Total Budget,
534.6 534.6 - 1 371.1 1 165.3 205.8
excl Additional Appropriations
Additional Appropriations 20.7 14.2 6.5 20.7 14.2 6.5
Offsetting related to Management cost
- - - (28.4) (28.5) 0.1
recovery from VC
Offsetting related to the internal charge
- - - (12.4) (13.0) 0.6
back
TOTAL BUDGET 555.3 548.8 6.5 1 351.0 1 138.0 213.0

1 The balance of $213 million comprises of $0.04M of regular programme and $6.54 million of Additional Appropriations (refer 214 EX/4 Part II)

11
 STATEMENT OF
INTERNAL CONTROL

13

SCOPE OF RESPONSIBILITY
As Director-General of the United Nations Educational,
Scientific and Cultural Organization (UNESCO), in
accordance with the responsibility assigned to me and,
in particular, Article 10 (c) of the Financial Regulations,
I am accountable for maintaining a sound system
of internal control to “ensure the accomplishment
of established objectives and goals for operations;
the economical use of resources; the reliability and
integrity of information; compliance with policies,
plans, procedures, rules and regulations; and the
safeguarding of assets.”
PURPOSE OF THE SYSTEM OF INTERNAL CONTROL
Internal control is designed to reduce and manage
rather than eliminate the risk of failure to achieve the
Organization’s aims and objectives. Therefore, it can
only provide a reasonable and not absolute assurance
of effectiveness. It is based on an ongoing process
designed to identify the principal risks, evaluate the
nature and extent of those risks and manage them
efficiently, effectively and economically.
My current statement on UNESCO’s internal control
processes, as described above, applies for the year
ended 31 December 2021, and up to the date of
the approval of the Organization’s 2021 financial
statements.
UNESCO’S OPERATING ENVIRONMENT
UNESCO is guided by the implementation of an 8-year
Medium-Term Strategy (C4) and a Programme and
Budget for 4 years (C/5), with the latest documents
approved in November 2021 by the General Conference
as 41 C/4 (for 2022-2029) and 41 C/5 (for 2022-2025).
The Medium-Term Strategy (41 C/4) outlines a structured
action in response to the priorities and needs of Member
States, focusing on the achievement of the 2030
Agenda Sustainable Development Goals (SDGs) as well
as relevant international frameworks for action. The 41
C/4 is based on four strategic objectives that respond to
some global challenges in education, the environment,
social cohesion and technology in the digital age, which
have been exacerbated by the global sanitary crisis, with
multiple and long-term consequences. The strategic
objectives are accompanied by one enabling objective,
Statement of Internal Control
in order to frame actions to improve the Organization’s
accountability, governance, partnerships and visibility.
The Programme and Budget for 2022-2025 (41 C/5)
translates each of the strategic objectives into outcomes
detailing UNESCO’s priority areas of action, based
on its comparative advantages. They are associated
with a limited number of sectoral and intersectoral
outputs. This framework allows better cooperation and
facilitates synergies between programme sectors to
make UNESCO’s actions more effective. It also supports
a better integration of UNESCO’s global priorities
within the programme sectors and a clearer approach
in favour of UNESCO’s priority groups and its action in
crisis situations.
UNESCO has committed since 2018 to a strategic
transformation to adapt and modernize both its
programmes and its management methods.
Within this overall framework, UNESCO senior managers
at Headquarters, in Field Offices and Category 1
Institutes are required to review and monitor on an
ongoing basis the level of exposure to all risks relating
to their functions and activities, and to maintain a good
level of internal control while adapting to the changes
in working methods brought by the COVID-19 context
as necessary.
RISK MANAGEMENT AND CONTROL FRAMEWORK
UNESCO’s risk management policy (revised in
November 2021), defines the overall approach to
risk management to ensure a consistent application
across the Organization and provide reasonable
assurance regarding the achievement of the
Organization’s objectives. The policy clarifies the roles
and responsibilities for managing risks, as well as the
way in which risk management will be monitored and
reported on as an integral part of the governance.
A comprehensive internal control system framework
is in place to ensure that the Organization’s objectives
are achieved efficiently through the establishment of
a policy framework for internal control, comprising of
policies, procedures and processes underpinned by
appropriate ethical values. These include, but are not
limited to, comprehensive manuals and guidelines
for the management and control of administrative
processes such as financial management, procurement
and contracting, travel and human resources.
15
Statement of Internal Control
REVIEW OF EFFECTIVENESS
My review of the effectiveness of the system of internal
controls is mainly informed by:
• Senior managers, in particular Assistant Directors-
General, Directors of Bureaus and Offices,
Directors and Heads of Established Offices and
Category 1 Institutes away from Headquarters,
who play important roles and are accountable
for the achievement of expected results and
managing their Sector/Bureaus/Office/Institute’s
activities and the resources entrusted to them to
this effect. They provide me with a self-assessment
of the accomplishment of their responsibilities
for maintaining effective internal control and risk
management on a day-to-day basis;
• Independent audit, evaluation and investigation
reports, as well as related observations and
recommendations, issued by the Internal Oversight
Service (IOS);
• The Ethics Advisor, who provides confidential
advice and counsel to the Organization and its staff
on ethics and standards of conduct, and promotes
ethical awareness and responsible behaviour;
• Reports and related observations and
recommendations from the External Auditor and
the Joint Inspection Unit (JIU);
• The Oversight Advisory Committee (OAC), whose
purpose is to advise me and Executive Board
in fulfilling our oversight responsibilities. OAC
scope includes audit, evaluation and investigation
functions; the effectiveness of ethics, risk
management, internal control and other systems,
policies and procedures as well as internal
oversight-related matters in relation with the
Organization’s operations;
• The Governing Bodies’ observations.
SIGNIFICANT MATTER(S) ARISING DURING THE YEAR
Financial situation and resource mobilization
The challenges for prudent financial management are
significant in the current global economic and financial
environment. The COVID-19 crisis impacts the capacity of
governments as well as donors across the world to fund
economic recovery domestically as well as to continue
to support development, international assistance
and multilateral organizations and initiatives. The
combination of the regular programme with voluntary
contributions are necessary for programmatic activities
16
as well as for corporate and management services
that support the basic infrastructure, internal control
system, and other core services in the Organization.
The Programme and Budget for 2022-2025 (41 C/5)
sets the framework for the assessed contributions for
which UNESCO continues to rely on the commitment of
Member States to provide timely contributions, which
are closely monitored.
The establishment and funding for the new Special
Account for Capital and Strategic Investments was
approved by the Executive Board in April 2021 to cover
for the long-term funding needs of the Organization for
capital expenditures and strategic investments.
A total of $756.5 million was mobilized in voluntary
contributions during the biennium as highlighted
under the Resource Mobilization Strategy (214 EX/5.
II.B). Though this represents a decrease of 10%
against the 2018-2019 biennium, it should be seen
as an achievement considering the challenges of the
COVID-19 crisis; of the funds mobilized in 2021, 49%
($162 million) were mobilized during the last quarter.
UNESCO’s approach to partnership and resource
mobilization is increasingly informed by emerging
developments in United Nations reform, notably the
United Nations Sustainable Development Cooperation
Framework (UNSDCF) to which UNESCO country
strategies are aligned at the country level. The 53%
increase in funding from United Nations sources to
UNESCO in 2020-2021 compared to 2018-2019, can be
attributed at least in part to the shared commitment
of United Nations agencies and government donors
alike to channel funding through joint United Nations
programming mechanisms at country level under the
leadership of United Nations Resident Coordinators.
Ethics, fraud and corruption prevention
Several measures were taken in 2021 to strengthen
UNESCO control environment through raising
awareness on ethical codes of conduct, anti-fraud and
anti-corruption policies:
a. Revision of UNESCO’s whistleblower protection
policy in October 2021 to reflect the relevant JIU
recommendations and align with the 2019 Anti-
Harassment Policy;
b. Improved training and outreach on Ethics with
a considerable increase of training certificates
from 1,129 certificates in 2020 to 3,102 in 2021.
Specifically, 450 employees followed the Anti-
harassment Workshops; 82 senior managers took

the Ethical Leadership Training; 665 employees
followed the updated ethics e-learning training;
and 1,905 completed the e-learning course on the
Policy on protection from sexual exploitation and
abuse (PSEA);
c. The Anti-Fraud and Anti-Corruption (AFAC) Policy
was revised in November 2021, with clarification of
roles, responsibilities and applicable procedures in
fraud prevention, detection and response;
d. More than 60 staff were trained over period
2020-2021 through practical webinars to detect
fraud red flags, targeting areas exposed to high
fraud risks such as procurement, finance and
certification. The webinars will be scaled up to
extend to certifying officers in Field Offices and
Institutes over this biennium 2022-2023.
Other measures which contribute to mitigate the top
10 risks
The top 10 risks (presented to the Executive Board
under document 209 EX/5.II.F, Annex II) are the most
significant institutional risks that can affect the entire
Organization and the achievement of C/4 strategic
objectives.
The following key measures were taken to mitigate the
top 10 risks, as presented in the latest progress report
on ERM to the Executive Board (214 EX/5.II.A):
a. Risk appetite statement defined in April 2021 and
corresponding mitigation strategies presented to
the Executive Board in April 2022;
b. Cybersecurity reinforced through systems in place
to monitor and block cyber-attacks; enhanced
security for networks and mandatory staff training
and user awareness initiatives (top risk 9);
c. Implementation of appropriate precautionary
measures for staff in relation to the ongoing
COVID-19 crisis (top risk 10).
Operational matters still requiring continuous
monitoring
For the year ended 31 December 2021, UNESCO
internal control is generally assessed as adequate by
the majority of Senior Managers, which is in line with
a well-established and functioning internal control
system. As the Organization is dynamic, there are a
certain number of areas identified for improvement
for which the Senior managers propose action plans to
continue to strengthen the internal control system.
Statement of Internal Control
The following areas, identified in previous periods, will
continue to require attention. They also correspond to
areas needing improvement, as identified from internal
audits:
a. Risk environment: the risk assessment process
needs to be supported by a higher completion of
risk registers to support the documentation and
reporting on risks, thus contributing ultimately
to improve the risk maturity. The risk assessment
process will be systematized, using the guidance
issued under ERM policy in November 2021;
b. Programme management: there is a need to
enhance UNESCO country strategies (UCS) and
resource mobilization plans, to guide programme
implementation, support the alignment to
Member States’ priorities, United Nations common
agenda and resource mobilization efforts. UCS are
progressively prepared to align to the UNDSCF,
where applicable, and efforts are made to
systematize resource mobilization plans. Project
management processes also need to be reinforced.
c. Human resources: the capacities need to be
improved through appropriate staffing plans
(using the ongoing field review, outreach efforts
and improved recruitment planning), training
and securing the needed human resources
to support field office operations and project
implementation;
d. Procurement: procurement planning needs
to be improved to secure the required goods
and services with ensuring value for money; this
is particularly important in the current context
of supply chain shortages or limited markets in
some regions for certain complex services such
as construction works for heritage sites. Standard
procurement planning templates and related
guidelines have been revised in 2021 to facilitate
the preparation of procurement plans;
e. Travel: travel planning (when online alternative
means do not prove effective) has been a challenge
due to constant changes entailed by the COVID-19
context; those constraints were mitigated to the
extent possible.
CONCLUSION
Effective internal control, no matter how well designed,
has inherent limitations – including the possibility
of circumvention – and therefore can provide only
reasonable assurance. Furthermore, because of changes
17
Statement of Internal Control

of conditions, the effectiveness of internal control may of the internal control system for the year ended 31
vary over time. December 2021 and up to the date of approval of the
financial statements.
As Director-General, I am committed to addressing any
weaknesses in internal controls noted during the year
and to ensure that continuous improvement of the
system of internal controls is in place.
(Original signed)
Based on the above, I conclude that, to the best of Audrey Azoulay
my knowledge and information, there are no material Director-General
weaknesses that compromised the overall effectiveness

18
 OPINION OF THE
EXTERNAL AUDITOR

19
 OPINION OF THE EXTERNAL AUDITOR

INDEPENDENT OPINION REPORT

To the General Conference of the United Nations Educational, Scientific and Cultural Organization

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of the United Nations Educational, Scientific and Cultural
Organization and its controlled entities (the Group), which comprise the consolidated statement of financial
position as at 31 December 2021, and the consolidated statement of financial performance, consolidated statement
of changes in net assets, consolidated statement of cash flow and consolidated statement of comparison of regular
budget and actual amounts for the year then ended, and notes to the consolidated financial statements, including
a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the
consolidated financial position of the Group as at 31 December 2021, and its consolidated financial performance
and its consolidated cash flows for the year then ended in accordance with International Public Sector Accounting
Standards (IPSASs).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group in accordance with the ethical requirements
that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information. The other information comprises the information included
in the Financial Statement Discussion and Analysis, but does not include the consolidated financial statements and
our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon

In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements
in accordance with IPSASs, and for such internal control as management determines is necessary to enable the
preparation of consolidated financial statements that are free from material misstatement, whether due to fraud
or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or
has no realistic alternative but to do so.

21
OPINION OF THE EXTERNAL AUDITOR

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism
throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit
opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.

Report on Compliance with Specified Authorities

22
 OPINION OF THE EXTERNAL AUDITOR

Opinion

In conjunction with the audit of the consolidated financial statements, we have audited transactions of the United
Nations Educational, Scientific and Cultural Organization coming to our notice for compliance with specified
authorities. The specified authorities against which compliance was audited are the UNESCO Financial Regulations.

In our opinion, the transactions of the United Nations Educational, Scientific and Cultural Organization that came
to our notice during the audit of the consolidated financial statements have complied, in all material respects, with
the specified authorities referred to above. Further, as required by the UNESCO Financial Regulations, we report
that, in our opinion, the accounting principles in IPSASs have been applied on a basis consistent with that of the
preceding year.

Responsibilities of Management for Compliance with Specified Authorities

Management is responsible for the United Nations Educational, Scientific and Cultural Organization’s compliance
with the specified authorities named above, and for such internal control as management determines is necessary
to enable the United Nations Educational, Scientific and Cultural Organization to comply with the specified
authorities.

Auditor’s Responsibilities for the Audit of Compliance with Specified Authorities

Our audit responsibilities include planning and performing procedures to provide an audit opinion and reporting
on whether the transactions coming to our notice during the audit of the consolidated financial statements are in
compliance with the specified authorities referred to above.

Karen Hogan, FCPA, FCA

Auditor General of Canada
Ottawa, Canada
27 June 2022

23
APPROVAL OF THE CONSOLIDATED
FINANCIAL STATEMENTS

25
 APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

In accordance with Financial Regulation 11.1 of the United Nations Educational, Scientific and Cultural Organization
attached are the consolidated financial statements and accompanying notes for the year ended 31 December 2021.

The consolidated financial statements are the responsibility of Management and have been prepared in
accordance with International Public Sector Accounting Standards and comply with the Financial Regulations of
the United Nations Educational, Scientific and Cultural Organization.They include certain amounts that are based
on Management’s best estimates and judgements.

Accounting procedures and related systems of internal control, developed by Management, provide reasonable
assurance that assets are safeguarded, that the books and records properly reflect all transactions.

The External Auditor, in line with Article 12 of the Financial Regulations, provides an opinion on the consolidated
financial statements.

The consolidated financial statements numbered I to V and the accompanying notes are hereby approved and
submitted to the Governing Bodies of the United Nations Educational, Scientific and Cultural Organization.

(Original Signed) (Original Signed)

Established by: Approved by:

Magdolna Bona Audrey Azoulay

Chief Financial Officer Director-General

27 June 2022 27 June 2022

27
 CONSOLIDATED
FINANCIAL STATEMENTS

29
Consolidated Financial Statements

UNESCO STATEMENT I – CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2021
Expressed in ‘000 US dollars NOTE 2021 2020

ASSETS
Current Assets
Cash and cash equivalents 5 169, 302 254,803
Investments 6 732,328 606,440
Accounts receivable from non-exchange transactions 7 36,270 37,972
Accounts receivable from exchange transactions 2,253 2,262
Inventories 325 341
Advance payments 8 42,533 23,809
Other receivables 9 9,646 6,845
Total current assets 992,657 932,472
 

Non-current assets
Accounts receivable from non-exchange transactions 7 1,649 2,020
Investments 6 77,364 71,192
Property, plant and equipment 10 493,415 500,660
Intangible assets 11 1,498 747
Total non-current assets 573,926 574,619
TOTAL ASSETS 1,566,583 1,507,091
 

LIABILITIES
Current Liabilities
Accounts payable and accruals 27,572 12,528
Employee benefits 12 61,179 58,602
Interest payable to donors 13 13,298 15,263
Voluntary contributions with conditions 14 158,652 142,693
Advance receipts 15 37,868 51,507
Borrowings 16 1,399 950
Other liabilities 17 14,647 14,376
Total current liabilities 314,615 295,919
 

Non-current Liabilities
Employee benefits 12 637,413 793,670
Voluntary contributions with conditions 14 - 1
Borrowings 16 18,022 6,989
Total non-current liabilities 655,435 800,660
TOTAL LIABILITIES 970,050 1,096,579
NET ASSETS 18 596,533 410,512

The accompanying notes form an integral part of these consolidated financial statements.

30
 Consolidated Financial Statements

UNESCO STATEMENT II – CONSOLIDATED STATEMENT OF FINANCIAL PERFORMANCE

FOR THE YEAR ENDED 31 DECEMBER 2021
Expressed in ‘000 US dollars  NOTE 2021 2020

REVENUE

Assessed contributions 273,838 262,220

Voluntary contributions 386,217 345,777

Revenue producing activities 11,145 10,822

Other/miscellaneous revenue 15,403 13,770

Foreign exchange gains - 12,309

Finance revenue 7,038 10,408

Total revenue 19 693,641 655,306

EXPENSES

Staff costs 360,265 333,392

Consultants, external experts and mission costs 63,552 43,641

External training, grants and other transfers 26,773 30,767

Supplies, consumables and other running costs 54,959 38,403

Contracted services 142,849 106,074

Depreciation and amortization 18,585 18,323

Expense for assessed contributions allowance 6,233 4,631

Other expenses 1,374 725

Foreign exchange losses 11,485 -

Finance costs 1,998 2,343

Total expenses 20 688,073 578,299

SURPLUS FOR THE YEAR 5,568 77,007

The accompanying notes form an integral part of these consolidated financial statements

31
Consolidated Financial Statements

UNESCO STATEMENT III – CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS

FOR THE YEAR ENDED 31 DECEMBER 2021
Expressed in ‘000 US dollars   NOTE 2021 2020

Net Assets at the beginning of the year 410,512 386,661

Exchange differences from foreign operations 18 (3,856) (9,936)

Actuarial gain/(loss) on post-employment benefits 18 186,611 (39,784)

Other adjustments 18 - 597

Return of funds to donors 18 (2,302) (4,033)

Total of item recognized directly in Net Assets 180,453 (53,156)

 
Surplus for the year 18 5,568 77,007

Total change in Net Assets 186,021 23,851

Net Assets at the end of the year 596,533 410,512

The accompanying notes form an integral part of these consolidated financial statements.

32
 Consolidated Financial Statements

UNESCO STATEMENT IV – CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE YEAR ENDED 31 DECEMBER 2021
Expressed in ‘000 US dollars NOTE 2021 2020
     

Cash flows from operating activities

Surplus for the year 5,568 77,007
Depreciation and amortization 18,585 18,323
Decrease/(Increase) in accounts receivable 1,976 (6,978)
Decrease/(Increase) in inventories 17 (45)
(Increase)/Decrease in advance payments (18,755) 14,229
(Increase)/Decrease in other receivables (2,661) 7,883
Increase/(Decrease) in accounts payable and accruals 15,002 (11,957)
Increase in employee benefits 35,202 35,183
(Decrease) in interest payable to donors (1,682) (229)
Revaluation of borrowings 16 (1,477) 783
Increase in voluntary contributions with conditions 16,303 36,778
(Decrease)/Increase in advance receipts (13,628) 4,335
Increase/(Decrease) in other liabilities (2,551) (4,295)
Loss on disposal of property, plant and equipment 413 27
Change in fair value of investments (2,976) (1,817)
Effect of exchange rates on operating activities 8,422 (11,794)
Net cash flows from operating activities 57,758 157,433

Cash flows from investing activities

Purchase of property, plant and equipment 10 (11,800) (5,057)
Purchase of intangible assets (772) -
Proceeds of sale of property, plant and equipment - 15
Net (Purchase)/Redemption in current investments (129,842) (4,136)
Purchase of non-current investments (25,104) (43,584)
Redemption of non-current investments 16,291 14,164
Net cash flows from investing activities (151,227) (38,598)

Cash flows from financing activities

Increase in long term loan 16 14,583 6,696
Repayment of loans 16 (1,624) (2,830)
Net cash flows from financing activities 12,959 3,866
Net increase/(decrease) in cash and cash equivalents (80,510) 122,701

Cash and cash equivalents, beginning of the year 5 254,803 125,365

Effect of foreign exchange gain/loss on foreign-denominated cash & cash
(4,991) 6,737
equivalent
Cash and cash equivalents, end of the year 5 169,302 254,803

The accompanying notes form an integral part of these consolidated financial statements.

33
Consolidated Financial Statements

UNESCO STATEMENT V – CONSOLIDATED STATEMENT OF COMPARISON OF REGULAR BUDGET AND ACTUAL

AMOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021
FINAL BUDGET
2021 ORIGINAL AUTHORIZED ADDITIONAL 2021 BUDGET ACTUAL LESS ACTUAL
Appropriation Line (Expressed in 000’s US dollars) BUDGET 2020 BALANCE TRANSFERS1 APPROPRIATIONS2 AS ADJUSTED EXPENDITURE EXPENDITURE3

PART I - GENERAL POLICY AND DIRECTION

A. Governing bodies 6,483 504 (164) - 6,823 (5,808) 1,015
B. Direction
Directorate & Executive Office of DG 3,111 12 132 - 3,255 (3,255) -
Internal Oversight 2,281 10 234 - 2,525 (2,515) 10
International Standards and Legal Affairs 1,453 - 396 - 1,849 (1,849) -
Ethics 360 - 8 - 368 (368) -
C. Participation in the Joint Machinery of the United
12,054 3,495 (177) - 15,372 (14,332) 1,040
Nations System
TOTAL, PART I 25,742 4,021 429 - 30,192 (28,127) 2,065

PART II –PROGRAMMES AND PROGRAMME-RELATED

   
SERVICES
A. Programmes      
Education 41,714 5,251 750 1,776 49,491 (48,711) 780
Natural Sciences 18,831 2,831 1,528 1,010 24,200 (22,121) 2,079
Intergovernmental Oceanographic Commission 5,541 420 (11) 7 5,957 (6,040) (83)
Social and Human Sciences 13,443 2,268 (316) 1,064 16,459 (16,112) 347
Culture 23,262 3,870 947 2,450 30,529 (28,741) 1,788
Communication and Information 11,996 890 426 741 14,053 (14,443) (390)
UNESCO Institute for Statistics (UIS) 4,211 - 144 - 4,355 (4,355) -
Management of Field Offices 44,016 1,995 626 982 47,619 (47,738) (119)
Supplementary funding for the Field Network Reform 250 250 - - 500 (460) 40
Total, II.A 163,264 17,775 4,094 8,030 193,163 (188,721) 4,442
B. Programme Related Services      
Sector for Priority Africa and External Relations
Office of the ADG and Field Coordination 1,209 (69) 35 - 1,175 (1,390) (215)
Coordination and monitoring of action to benefit Africa 1,855 (33) (183) 48 1,687 (2,035) (348)
External relations 4,778 (75) 320 45 5,068 (5,283) (215)
Coordination and monitoring of action to implement Gender
961 (30) (1) - 930 (1,064) (134)
Equality
Strategic planning 3,429 250 210 - 3,889 (3,808) 81
Public information 4,651 177 155 299 5,282 (5,044) 238
Total,II.B 16,883 220 536 392 18,031 (18,624) (593)
C. Participation Programme and Fellowships 6,692 2,942 8 - 9,642 (9,433) 209
TOTAL, PART II 186,839 20,937, 4,638 8,422 220,836 (216,778) 4,058
PART III – CORPORATE SERVICES        
Sector for Administration and Management
Office of the ADG of the Administration and Management Sector 818 - 1,256 - 2,074 (2,074) -
Human resources management 12,250 747 (190) - 12,807 (12,807) -
Financial Management 5,011 - (1,321) - 3,690 (3,690) -
Operational support and the support for the Organization of
13,467 1,335 860 - 15,662 (14,937) 725
conferences, languages and documents
Organization-wide knowledge management 5,033 (568) 178 - 4,643 (5,706) (1,063)
ICT Infrastructure and Operations 2,401 - 63 - 2,464 (2,464) -
Management of security and safety 4,923 353 44 - 5,320 (4,837) 483
TOTAL, PART III 43,903 1,867 890 - 46,660 (46,515) 145
TOTAL, PARTS I - III 256,484 26,825 5,957 8,422 297,688 (291,420) 6,268
Reserve for Staffing Adjustments 500 500 (971) - 29 - 29
Reserve for the After Service Health Insurance long-
1,663 - - - 1,663 (1,663) -
term liability (ASHI)
PART IV - LOAN REPAYMENTS 2,374 (57) - 62 2,379 (2,095) 284
PART V - ANTICIPATED COST INCREASES 2,245 2,245 (4,490) - - - -
TOTAL, PARTS I - V 263,266 29,513 496 8,484 301,759 (295,178) 6,581
Note: the budget and accounting basis is different. This statement of Comparison of regular Budget and Actual amounts is prepared on the budget basis
1. Between lines transfers excess of 5% require the approval from the Executive Board (40 C/Resolution 101). The Director-General is authorized to accept and add to the regular budget, voluntary contributions (40 C/
Resolution 101).
2. The Director-General is authorized to carry forward any unspent balance of such additional appropriations to the following budget period (39 C/Resolution 91)
3. The balance comprises of $0.04M of regular budget and $6.54 million of Additional Appropriations (refer 214 EX/4 Part II)

34
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

35

NOTE 1
REPORTING ENTITY
The United Nations Educational, Scientific and Cultural
Organization (UNESCO) was created in London on 16
November 1945 by governments of the States Parties
to contribute to peace and security by promoting
collaboration among the nations through education,
science and culture in order to further universal
respect for justice, for the rule of law and for human
rights and fundamental freedoms which are affirmed
for the peoples of the world, without distinction of
race, sex, language or religion, by the Charter of the
United Nations Organization. As one of the specialized
agencies referred to in Article 57 of the Charter of the
United Nations Organization, the provisions of Articles
104 and 105 of that Charter concerning the legal status
of that Organization, its privileges and immunities,
apply in the same way to UNESCO.
UNESCO is governed by a General Conference,
consisting of the representatives of its Member States,
which determines the policies and main lines of work of
the Organization. The Executive Board, which consists
of 58 Member States elected by the General Conference,
takes, in accordance with the decisions of the General
Conference, all necessary measures to ensure the
effective and rational execution of the programme of
work by the Director-General.
The Organization has its Headquarters located in Paris,
in France. It is also composed of 53 field offices, nine
Category 1 Institutes and one centre (Bonn). These
Offices and Institutes are located around the World and
specializes in the fields of competency of UNESCO.
The Organization enjoys privileges and immunities
as granted under the 1947 Convention on Privileges
and Immunities of Specialized Agencies of the United
Nations and the headquarters agreement with the
Government of France, and as such its assets, income
and other property are exempt from all direct taxes.
NOTE 2
SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION AND PRESENTATION
Basis of preparation
The consolidated financial statements have been
prepared on an accrual and going concern basis in
accordance with the requirements of International
Public Sector Accounting Standards (IPSAS) and comply
with UNESCO’s Financial Regulations.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The accounting policies set out below have been applied
consistently in the preparation and presentation of
these financial statements.
Financial period
In accordance with Article 2 of the Financial Regulations,
the financial period consists of two consecutive
calendar years beginning with an even-numbered year.
The consolidated financial statements are prepared on
an annual basis.
Presentation and Functional Currency
The presentation currency of the consolidated
reporting entity is the United States (US) dollars which
is also the functional currency of UNESCO, parent of
the group. Further information on functional currency
of the consolidated components of the group can be
found in Note 2.2 below.
2.2 CONSOLIDATION
UNESCO
Included within the scope of consolidation for the
preparation of the UNESCO financial statements are
UNESCO headquarters, field offices, liaison offices,
a centre, one Maison de la Paix and nine Category  1
Institutes.
Institutes
Category 1
UNESCO’s nine Category  1  Institutes are an integral
part of UNESCO, and strengthen the capacity of
Member States – particularly in developing countries.
These Institutes are governed by governing boards as
stipulated in their respective statutes. The Institutes’
overall programmes and priorities form an integral
part of UNESCO’s Programme and Budget and are
governed by UNESCO’s Financial Regulations. Their
source of funding consists of the regular budget
allocation provided by UNESCO, in addition to
voluntary contributions raised by them. The Governing
Boards of most Institutes approve the budget of the
Institute on an annual basis. They are considered to
constitute standalone entities. Category  1 Institutes
meet the definition of a controlled entity under IPSAS
and therefore are consolidated in the UNESCO financial
statements.
Category 1 Institutes consolidated in the financial
statements along with their locations and functional
currencies are as follows:
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FUNCTIONAL
INSTITUTE LOCATION
Paris (France), Buenos
UNESCO International Institute for
Aires (Argentina) and
Educational Planning (IIEP)
Dakar (Senegal)
UNESCO International Bureau of Geneva
Education (IBE) (Switzerland)
UNESCO Institute for Lifelong Hamburg (Germany)
Learning (UIL)
UNESCO Institute for Information Moscow (Russian
Technologies in Education (IITE) Federation)
UNESCO International Institute for Addis Ababa
Capacity-Building in Africa (IICBA) (Ethiopia)
UNESCO International Institute for Caracas (Venezuela)
Higher Education in Latin America
and the Caribbean (IESALC)
International Centre for Theoretical Trieste (Italy)
Physics (ICTP)
UNESCO Institute for Statistics Montreal (Canada)
(UIS)
Mahatma Gandhi Institute
of Education for Peace and New Delhi (India)
Sustainable Development (MGIEP)
The controlled entities are fully consolidated from the
date on which control is transferred to UNESCO. They
are de-consolidated from the date that such control
ceases. Inter-UNESCO transactions, balances and
unrealized gains and losses on transactions between
members of the UNESCO group are eliminated in full.
The accounting policies of the controlled entities are
consistent with the policies adopted by UNESCO.
The Category 1 Institutes are consolidated within the
Segment “Programme Fiduciary Funds” (PFF). Their
financial information is included in the statements of
financial position and performance of PFF segment as
presented under Note 26.
Non-consolidated entities
Category 2 Institutes and Centres
Category 2 Institutes and centres are not legally part
of the Organization. These Institutes and centres are
associated with UNESCO through formal arrangements
approved by the General Conference (171 EX/18, page
17). They are selected upon proposal by Member
State(s), based on the strength of their specialization
in one of UNESCO’s fields of competence. Through
capacity-building, knowledge sharing, and research,
they provide a valuable and unique contribution to
the implementation of UNESCO’s strategic programme
objectives for the benefit of Member States. Category
2 Institutes do not meet the definition of a controlled
38
entity under IPSAS and therefore are not consolidated
CURRENCY in UNESCO’s financial statements.
UNESCO Staff Savings and Loan Service (USLS)
USD
The USLS was created in 1954 as UNESCO’s credit
union. It is established as a Trust Fund under Article 6.5
USD
of UNESCO’s Financial Regulations, for the benefit of
its members, who may be members of the UNESCO
EUR Secretariat, staff members of other organizations of the
United Nations system whose duty station is in France,
USD and employees of the auxiliary services of UNESCO in
Paris. The objective of USLS is to provide the possibility
USD to its members, on a mutualist basis, of investing their
savings and of borrowing money for suitable purposes.
USD
The Trust Fund is composed of the deposits of its
members, as well as the capital and other assets accruing
to it from its financial operations. Its assets represent
EUR
€419 million with about 3,600 members’ accounts
managed by a small team of 9-10 staff. Its operating
USD
budget (including staff costs) is funded through
income on its investments of members’ deposits and
loan portfolios. The net profit remaining after providing
USD
for its reserve is allotted to the payment of interest to
the depositors. A statutory reserve is established for the
purpose of compensating for any loss sustained in the
operations of USLS, in accordance with USLS Rules and
Regulations. USLS reserves mainly include a statutory
reserve as well as interest stability reserve, which have
been progressively increasing over years.
In accordance with Article 11.5 of USLS Rules and
Regulations, any surplus or deficit upon liquidation
shall be shared by the members of the USLS in
proportion to the amount of their deposits on the date
of termination of operations. UNESCO is considered
to exercise significant influence in relation to USLS,
notably through its representation on the Board of
Management, and its right of veto over decisions of
the Board of Management. A Supervisory Committee,
composed of five members, verifies the operations
of the USLS and may request to be provided with the
administrative and accounting documents of the USLS
for examination at any time. The General Assembly of
the Members approves the financial statements of
USLS and establishes its general management policies.
UNESCO does not control USLS, has no quantifiable
interest and is not responsible to compensate any
operating losses encountered by the Fund. UNESCO
has not used its right of veto in 2021. No interest in
USLS is recorded in the UNESCO consolidated financial
statements.

2.3 FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions carried out during the
financial year are converted into US dollars using the
United Nations Operational Rate of Exchange (UNORE)
prevailing at the date of the transaction. The UNORE
approximate market rates as they are set once a month,
and revised mid-month if there are significant exchange
rate fluctuations relating to individual currencies. Non-
monetary items that are measured in terms of historical
cost or fair value in a foreign currency are translated
using the UNORE prevailing at the date of the initial
transaction or when the fair value was determined.
Monetary assets and liabilities that are denominated in
foreign currencies are translated into US dollars at the
exchange rate prevailing on the date of the statement
of financial position. Foreign exchange gains and losses
resulting from the settlement of such transactions and
from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign
currencies are recognized in the Statement of Financial
Performance.
Foreign exchange gains and losses resulting from the
consolidation of controlled entities with a different
functional currency are recognized as a separate
component of net assets.
2.4 SEGMENT REPORTING
A segment is a distinguishable activity of UNESCO for
which it is appropriate to separately report financial
information. At UNESCO, segment information is based
on the sources of financing of the Organization. As such,
UNESCO reports separate financial information for four
segments: the General Fund (GEF), Other Proprietary
Funds (OPF), Programme Fiduciary Funds (PFF) and
Staff Fiduciary Funds (SFF).
Each segment is defined as follows:
2.4.1 General Fund (GEF) includes both the General
and Working Capital Funds set up in accordance with
Financial Regulations 6.1 and 6.2. This segment has
been established for the purpose of accounting for
the expenditure of the regular budget appropriation
voted by the General Conference of UNESCO for a given
financial period.
2.4.2 Other Proprietary Funds (OPF) include revenue
generating activities, Headquarters and management
costs related special accounts, the Staff Compensation
Fund and the Terminal Payments Account. These funds
have been established in accordance with Financial
Regulation 6.5 and normally are governed by individual
Financial Regulations.
This segment has the following main categories:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• Revenue generating
Public Information Liaison and Relations
Account – to foster activities to stimulate public
interest and mobilize public opinion in support of
the aims and work of UNESCO. This special account
covers activities such as the UNESCO Coupons
Programme and any other programme and public
relations activities, notably through UNESCO gift
shop and sales website, consistent with the purpose
of this fund.
Publication, Auditory and Visual Material
Account – to manage the sale of UNESCO’s
publications, auditory and visual material and
royalties derived from copyright
Branding and Merchandising Partnerships
Account – to record the activities related to
enhancing the visibility and protection of UNESCO’s
brand as well as supporting public information
activities through income generated from the
commercial use of UNESCO’s brand.
Headquarters Utilization Account – to
accommodate income and expenditure relating to
the use of Headquarters’ premises. It includes rental
to permanent delegations, rental of conference
rooms, Headquarters premises and related services.
Interpretation Services Account – to record the
receipts and payments relating to the interpretation
services provided by UNESCO.
Document Production Account – to receive
funds and incur expenditures for services such as
translation, copy preparation, transcription, printing
and reproduction, word-processing operations,
graphic design, layout, printing, mailing and
distribution, for activities within the competence of
the Organization.
Field Office Income Account – to accommodate
income and expenditure relating to the sub-
letting of field office premises, the recovery of
common charges and the organization of meetings,
conferences and other events.
Management of Information and Communication
Technology (ICT) Infrastructure and Related
Services Account – to account for activities
and services relating to the management and
maintenance of the Organization’s ICT infrastructure.
Management Costs Account – to record revenue
and expenses related to the support provided by the
management services. The revenue includes transfer
from regular budget the proportionate share of the
total costs, charge to voluntary contribution as a
fixed rate as approved by the Executive Board as
well as interest income.
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• Staff Related Accounts
Terminal Payments Account – to finance the
settlement of after service indemnities and
termination benefits of staff funded from sources
other than the regular budget. It is financed by way
of a charge on salary cost of staff members funded
from sources other than the regular budget.
Language Courses Account – associated with
the language courses organized by UNESCO,
as a supplement to funding provided for in the
framework of the regular budget, and with the
educational materials necessary for such courses.
Staff Compensation fund – to account for staff
annuity and any other compensation.
After-Service Health Insurance – to generate
the necessary reserves to cover the future costs
associated with providing health insurance benefits
to existing retirees and current staff upon retirement.
Current financing mechanism of the long-term
future liability is through a charge on Voluntary
contributions’ staff cost as well as appropriation of
the regular budget.
• Other accounts
Cost Recovery Special Account – to record the
recovery of actual staff time of regular budget Staff
involved in the implementation of projects funded
from voluntary contributions.
United Nations Laissez Passer Account – to
accommodate income and expenditure relating to
Laissez Passer and Fuel charges.
Evaluation Work Account – to finance independent
external evaluation of UNESCO and record funds
received and expenses incurred for this purpose.
UNESCO Courier Account – to support and
relaunch the UNESCO Courier – an online magazine
to promote UNESCO’s ideals, maintain a platform for
the dialogue between cultures and provide a forum
for international debate.
UNESCO Premises Security Account – to
accommodate funds available for strengthening the
security of UNESCO premises worldwide.
Renovation and Premise Maintenance Account
– to record the funds available for the restoration
and improvement of UNESCO irrespective of their
source.
Environmental Action Account – to account for
the activities undertaken to reduce or compensate
the negative impact on the environment from
40
programme activities and operations of the
Organization.
Capital and Strategic Investments (CSI) Account
– to be the vehicle to provide the long-term
sustainable funding for the Organization’s long-
term funding needs.
2.4.3 Programme Fiduciary Funds (PFF) includes
Category 1 Institutes, special accounts and trust funds
set up in accordance with Financial Regulation 6.5.
This segment carries out programme activities in
accordance with the respective agreements signed
between UNESCO and donors or other legal authority
in accordance with approved Integrated Budget
Framework. The resources of each fund in this segment
can only be used for the purposes for which the
respective fund has been established.
2.4.4 Staff Fiduciary Funds (SFF) has been
established for the benefit of UNESCO’s staff members
and includes the Medical Benefits Fund (MBF) and the
UNESCO Day Nursery and Children’s Club (UNC). The
resources of each fund in this segment can only be used
for the purposes for which the respective fund has been
established.
2.5 FINANCIAL ASSETS
UNESCO’s financial assets include: cash and cash
equivalents, investments; accounts receivable from
exchange and non-exchange transactions and other
receivables.
Financial assets within the scope of IPSAS 29 Financial
Instruments: Recognition and Measurement are
classified as financial assets at fair value through surplus
or deficit, loans and receivables, held-to-maturity
investments or available-for-sale financial assets, as
appropriate. UNESCO determines the classification of
its financial assets at initial recognition.
The subsequent measurement of financial assets
depends on their classification. The classification
depends on the purpose for which the financial assets
are acquired, and is determined at initial recognition
and re-evaluated at each reporting date.
a. Financial assets classified as loans and receivables
(L&R) are non-derivative financial assets with fixed
or determinable payments that are not quoted in
an active market. They are initially measured at
fair value plus transaction costs and subsequently
recorded at amortized cost using the effective
interest rate method.
b. Fair value through surplus or deficit financial
assets (FVTSD) include financial assets classified

as held for trading, derivatives and financial assets
designated on initial recognition by management
as at fair value through surplus or deficit. At initial
recognition, they are measured at fair value and
any transaction costs are expensed. Subsequently,
they are measured at their fair values at each
reporting date and the resulting gains or losses on
re-measurement are recognized in the Statement
of Financial Performance.
c. Held-to-maturity financial assets (HTM) consist
of financial assets with fixed or determinable
payments and fixed maturity that UNESCO has the
intention and ability to hold to maturity. After their
initial recognition at fair value plus transaction
costs, they are measured at amortized cost using
the effective interest rate method.
The following table presents the classification and
measurement of UNESCO’s financial assets:
SUBSEQUENT
FINANCIAL ASSETS CLASSIFICATION MEASUREMENT
Cash and cash equivalents L&R Amortized cost
Fair value or
Investments L&R, FVTSD, HTM
Amortized cost
Accounts receivable from
L&R Amortized cost
exchange transactions
Accounts receivable from
L&R Amortized cost
non-exchange transactions
Other receivables L&R Amortized cost
Impairment of financial assets at amortized cost
UNESCO assesses at each reporting date whether there
is objective evidence that a financial asset is impaired. A
financial asset or a group of financial assets is deemed to
be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events, occurring
after the initial recognition of the asset, have an impact
on the estimated future cash flows of the financial asset
or the group of financial assets that can be reliably
estimated. The carrying amount of the asset is reduced
through the use of an allowance account and the
amount of the loss is recognized in surplus or deficit.
If, in a subsequent year, the amount of the estimated
impairment loss increases or decreases because of an
event occurring after the impairment was recognized,
the previously recognized impairment loss is increased
or reduced by adjusting the allowance account. If a
write-off is later recovered, the recovery is credited to
revenue in surplus or deficit.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.6 FINANCIAL LIABILITIES
UNESCO’s financial liabilities include Accounts payable
and accruals, borrowings, interest payable to donors
and other liabilities.
The measurement of financial liabilities depends on
their classification.
(a) Financial liabilities at fair value through surplus
or deficit include financial liabilities classified
as held for trading and financial liabilities
designated upon initial recognition as at fair
value through surplus or deficit.
(b)
Financial liabilities classified as amortized
cost are, after initial recognition, measured
at amortized cost using the effective interest
method. Gains and losses are recognized
in surplus or deficit when the liabilities are
derecognized as well as through the effective
interest method amortization process.
Amortized cost is calculated by taking into
account any discount or premium on acquisition
and fees or costs that are an integral part of the
effective interest rate.
UNESCO has classified all its financial liabilities as
amortized cost and are therefore, measured at
amortized cost with the exception of derivatives,
included in other liabilities, which are classified as fair
value through surplus or deficit.
2.7 CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash in hand and
short-term, highly liquid investments that are readily
convertible to known amounts of cash and subject
to an insignificant risk of changes in value. Cash and
cash equivalents held in a fiduciary capacity (Other
Proprietary Funds, Programme Fiduciary Funds and
Staff Fiduciary Funds) that can only be used for a
specific purpose are considered as restricted. Financial
instruments classified as cash equivalents include saving
accounts and short-term deposits with a maturity of
three months or less from the date of investment.
2.8 ACCOUNTS RECEIVABLE FROM
NON‑EXCHANGE TRANSACTIONS,
ACCOUNTS RECEIVABLE FROM EXCHANGE
TRANSACTIONS AND OTHER RECEIVABLES
Receivables are initially measured at fair value and
then, their carrying value adjusted for any allowance
for estimated irrecoverable amounts. An allowance is
established when there is objective evidence, based
on a review of outstanding amounts at the reporting
date, that UNESCO will not be able to collect all
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
amounts due according to the original terms of the
receivables. In establishing the allowance for assessed
contributions, the fair value of receivables is calculated
as the estimated discounted cash flows arising from
receivables to be collected in the future. The level of
accounts receivable related to voluntary contribution
does not require discounting.
Receivables are classified into current and non-current
on the basis of the expected amounts to be received.
In the case of assessed contributions receivables, they
are classified as current unless the Member States
enter into an arrangement to defer the payment of the
receivable amount.
2.9 ADVANCE PAYMENTS AND ADVANCE
RECEIPTS
Advance payments
UNESCO advances funds to third parties under non-
exchange contracts for the delivery of UNESCO’s
programmes and activities. Such transfers to third
parties are treated as Advance Payments if the
conditions on the transferred assets are not fulfilled at
the reporting date.
Advance receipts
A liability is recognized for amounts received from
donors where no binding agreement is yet in place
at the time of the receipt of the asset from the donor.
This is mainly common under Framework Agreements
and other voluntary contributions where funds can be
received before agreement is reached on the allocation
of the contribution received from the donor. Assessed
contributions received prior to the commencement of
the relevant specified budget year are recorded as an
asset and a corresponding liability is recognized as an
advance receipt.
2.10 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment (PP&E) is carried at
cost less accumulated depreciation and impairment.
Heritage assets are not recognized in the financial
statements, but appropriate disclosure is made in the
notes to the consolidated financial statements.
Additions
The cost of an item of PP&E is recognized as an asset if
it is probable that future economic benefits or service
potential associated with the item will flow to UNESCO
and the cost of the item can be measured reliably. When
an asset is donated, its initial cost is measured as the fair
value of the asset as at the date of acquisition.
42
Disposals
Gains and losses on disposal are determined by
comparing the proceeds with the carrying amount of
the asset, and are included in the Statement of Financial
Performance.
Subsequent costs
Costs incurred subsequent to initial acquisition
are capitalized only when it is probable that future
economic benefits or service potential associated with
the item will flow to UNESCO and the cost of the item
can be measured reliably.
Depreciation
Depreciation is provided on a straight-line basis on all
PP&E other than land, at rates that will write off the cost
of the assets over their useful lives. The useful lives of
major classes of assets have been estimated as follows:
CLASS OF PROPERTY, PLANT AND DEPRECIATION PERIOD
EQUIPMENT
Communications and IT equipment 4 years
Vehicles 5 years
Furniture and fixtures 5 years
Other equipment 5 years
Buildings 15-50 years
Land N/A
Buildings are analysed by components and different
depreciation periods are applied as follows: foundations
and walls – 50 years; other structural components
– 30 years; fittings – 15 years; technical installations –
25 years. The residual values and useful lives of assets
are reviewed and adjusted, if applicable, at each
financial year-end.
Impairment
The carrying amount of fixed assets are reviewed for
impairment if events or changes in circumstances
indicate that the carrying amount of the asset may not be
recoverable. If such an indication exists, the recoverable
amount of the asset is estimated in order to determine
the extent of impairment loss, if any. Any impairment loss
is recognized in the Statement of Financial Performance.
A previously recognized impairment loss is reversed only
if there has been a change in the assumptions used to
determine the asset’s recoverable amount since the last
impairment loss was recognized. For this purpose, all
property, plant and equipment assets are considered as
non-cash generating assets.

2.11 INTANGIBLE ASSETS
UNESCO currently only recognizes software as
intangible assets, as it is not considered probable that
significant future economic benefits from copyrights
and intellectual property will flow to UNESCO.
Intangible assets are carried at cost less accumulated
amortization and impairment. Intangible assets are
capitalized in the consolidated financial statements if it
is probable that expected future economic benefit or
service potential will flow to UNESCO and the amount
can be measured reliably. UNESCO currently only
recognizes software as intangible assets, as copyrights
and intellectual property do not meet the criteria above.
Software acquisition and development
Acquired computer software licenses are capitalized
based on costs incurred to acquire and bring to use
the specific software. Costs that are directly associated
with the development of software for use by UNESCO
are capitalized as an intangible asset. Direct costs
include the software development employee costs and
overhead which can be directly attributed to preparing
the asset for use.
Amortization
Amortization is provided on a straight-line basis on all
intangible assets of finite life, at rates that will write off
the cost or value of the assets over their useful lives. The
useful lives of major classes of intangible assets have
been estimated as follows:
CLASS OF INTANGIBLE ASSET AMORTIZATION PERIOD
Software acquired separately 5 years
Software internally developed 5 years
2-6 years (or period of
Licenses and rights
license or right if shorter)
2.12 EMPLOYEE BENEFITS
UNESCO recognizes the following categories of
employee benefits:
Short-term employee benefits
Short-term employee benefits are expected to be
settled within 12 months of the reporting date
and are measured at their nominal values based
on accrued entitlements at current rates of pay.
Short-term employee benefits comprise first-time
employment benefits (assignment grants), regular
monthly benefits (wages, salaries, allowances) and
other benefits (education grant, home leave, etc.). An
expense is recognised when employees render service
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
to the Organization and a liability is recognised for an
entitlement that has not been settled at the reporting
date.
Post-employment benefits
Post-employment benefits are employee benefits that
are payable after the completion of employment.
UNESCO is a member organization participating in
the United Nations Joint Staff Pension Fund (UNJSPF
or “the Fund”), which was established by the United
Nations General Assembly to provide retirement,
death, disability and related benefits to employees.
The Fund is a funded, multi-employer defined benefit
plan. As specified in Article 3(b) of the Regulations of
the Fund, membership in the Fund shall be open to the
specialized agencies and to any other international,
intergovernmental organization which participates in
the common system of salaries, allowances and other
conditions of service of the United Nations and the
specialized agencies.
The Fund exposes participating organizations to
actuarial risks associated with the current and former
employees of other organizations participating in the
Fund, with the result that there is no consistent and
reliable basis for allocating the obligation, plan assets
and costs to individual organizations participating
in the plan. UNESCO and the UNJSPF, in line with the
other participating organizations in the Fund, are not in
a position to identify UNESCO’s proportionate share of
the defined benefit obligation, the plan assets and the
costs associated with the plan with sufficient reliability
for accounting purposes. Hence, UNESCO has treated
this plan as if it were a defined contribution plan in line
with the requirements of IPSAS 39 Employee Benefits.
UNESCO’s contributions to the plan during the financial
year are recognized as staff costs in the Statement of
Financial Performance.
In addition, UNESCO provides health insurance
coverage to retired staff and their dependents (After
Service Health Insurance). The right to benefit for such
coverage (ASHI) is acquired and accumulated during
the retirees’ active service in the Organization. The
liability recognised for this plan is the present value of
the defined benefit obligations at the reporting date.
The liability is calculated by an independent actuary
using the Projected Unit Credit Method. Interest
cost and current service costs are recognized on the
consolidated statement of financial performance as
a component of staff costs. Actuarial gains or losses
arising from changes in actuarial assumptions or
experience adjustments are directly recognized in net
assets.
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other long-term employee benefits
Other long-term employee benefits are benefits which
are expected to be settled more than 12 months after the
end of the reporting period and relates to repatriation
grants, compensated absences (accumulated leave)
and Italian end-of-service. The liability recognized for
this other long-term benefits is the present value of the
defined benefit obligations at the reporting date. These
liabilities are calculated by an independent actuary
using the Projected Unit Credit Method. Interest cost,
current service costs and actuarial gains or losses arising
from changes in actuarial assumptions or experience
adjustments are recognized on the consolidated
statement of financial performance.
2.13 PROVISIONS AND CONTINGENT LIABILITY
Provisions are recognized for future expenditure of
uncertain amount or timing when there is a present
obligation (either legal or constructive) as a result of
a past event, it is probable that expenditure will be
required to settle the obligation and a reliable estimate
can be made of the amount of the obligation. Provisions
are not made for future operating losses. Provisions
are measured at the present value of the expenditures
expected to be required to settle the obligation. The
increase in the provision due to the passage of time is
recognized as interest expense.
Contingent liabilities are disclosed where a possible
obligation is uncertain but can be measured, or where
UNESCO has a present obligation but cannot reliably
measure the possible outflow of resources.
2.14 REVENUE RECOGNITION
Revenue from non-exchange transactions
Revenue from non-exchange transactions is measured
based on the increase in net assets recognized. The
revenues from non-exchange transactions are as follow:
• Assessed contributions
Assessed contributions are assessed and approved
for a two-year budget period. The amount of these
contributions is then apportioned between the two
years for invoicing and payment. Assessed contributions
are recognized as revenue at the beginning of the
apportioned year in the relevant two-year budget
period.
• Voluntary contributions
Voluntary contributions and other transfers which are
supported by enforceable agreements are recognized
as revenue at the time the agreement becomes
44
binding and when control over the underlying asset is
obtained, unless the agreement establishes a condition
on transferred assets that requires recognition of a
liability. Conditions are imposed by donors on the
use of contributions, and include both a performance
obligation to use the donation in a specified manner,
and an enforceable return obligation to return the
donation if it is not used in the specified manner. The
amount recognized as a liability is the best estimate
of the amount that would be required to settle the
obligation at the reporting date. As UNESCO satisfies
the conditions on voluntary contributions through
performance in the specified manner, the carrying
amount of the liability is reduced and an amount of
revenue equal to that reduction is recognized.
Voluntary contributions such as pledges and other
promised donations which are not supported by
binding agreements are recognized as revenue when
received.
• In-kind contributions
In-kind contributions of goods that directly support
approved operations and activities and can be reliably
measured, are recognized and valued at fair value. These
contributions include the use of premises and utilities.
In the case of the use of premises, the contribution
value is based on the commercial rate for renting the
building.
In-kind contributions of services, such as the services of
volunteers, are not recognized.
Revenue from exchange transactions
Other sources of revenue from exchange transactions
are measured at the fair value of the consideration
received or receivable and are recognized as goods
and services are delivered. UNESCO generates revenue
primarily from rental of its premises, conference room
rentals and exhibitions as well as provision of services
such as interpretation.
2.15 EXPENSES
Expenses are defined as decreases in economic benefits
or service potential during the reporting period in
the form of outflows or consumption of assets or
incurrences of liabilities that result in decreases in net
assets. Expenses are recognized when the transaction or
event causing the expense occurs, and the recognition
of the expense is therefore not linked to when cash or
its equivalent is received or paid.
Expenses from non-exchange funding agreements
are recognized when the funding is legally in force,

except where the agreement establishes a condition
on transferred assets. In such cases, expenses are
recognized as services are performed and the condition
on transferred assets fulfilled consistent with the terms
of the agreement. Advance payments are amortized
based on objective evidence to reflect the risk of
non-recovery. Where revenue is recognized from in-
kind contributions, a corresponding expense is also
recognized in the consolidated financial statements.
2.16 ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES
Accounts payable are financial liabilities for goods
and services that have been received by UNESCO and
invoiced but not yet paid by the reporting date.
Accrued liabilities are financial liabilities for goods and
services that have been received by UNESCO and which
have neither been paid for nor invoiced to UNESCO at
the reporting date.
2.17 INTEREST PAYABLE TO DONORS
Voluntary contributions agreements entered into may
accrue interest on amounts provided by donors. Accrued
interest payable to donors are either authorized to be
used for project implementation, refunded to donors
upon request or completion of the project.
2.18 LEASES
Lease agreements entered into for equipment or office
premises are classified as operating leases as these
arrangements do not transfer substantially all of the
risks and rewards of ownership.
2.19 REGULAR BUDGET
UNESCO’s budget and accounting basis differ. Though
UNESCO presents an Integrated Budget Framework, the
appropriated Regular Budget component under the
General Fund is considered as the Approved Budget for
purposes of Statement V under UNESCO’s consolidated
financial statements, and in line with IPSAS 24.
Appropriations are available for obligation during the
budget financial period to which they relate and for a
further twelve months.
The budget is approved on a modified cash basis,
whereby receipts are budgeted when it is planned that
cash will be received and expenditures are budgeted
when it is planned that payments will be made.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3
ACCOUNTING ESTIMATES, ASSUMPTIONS AND
JUDGEMENTS
The preparation of consolidated financial statements
in accordance with IPSAS requires the Organization
to make judgments, estimates and assumptions that
affect the reported amounts of revenues, expenses,
assets and liabilities, and the disclosure of contingent
liabilities, at the end of the year. However, uncertainty
about these assumptions and estimates could result
in outcomes that require a material adjustment to the
carrying amount of the assets or liabilities affected in
future periods.
The areas where estimates, assumptions or judgement
are significant to UNESCO’s consolidated financial
statements include, but are not limited to: employee
benefits, fair value of financial instruments, and the
useful lives of property, plant and equipment. Changes
in estimates are reflected in the year in which they
become known.
In early March 2020, the World Health Organization
declared the COVID-19 coronavirus outbreak to be
a pandemic, which continued to affect the global
economic and operating environment in 2021.
Responses to the spread of COVID-19 have resulted
in a significant increase in economic uncertainty and
volatility (i.e.: interest rates, foreign exchange rates,
government/partner budgets, etc.). The impact on
UNESCO estimates, assumptions and judgements is
presently limited, but it remains difficult to reliably
estimate the length or severity of the pandemic, which
could have further financial impacts. For fiscal year
2021, COVID-19 impact has been limited to a decrease
in finance revenues as well as increased volatility in
foreign exchange rates.
Judgements
UNESCO Staff Savings and Loan Services (USLS) is
excluded from the UNESCO consolidated financial
statements. Management’s judgement is that USLS is
not considered to be a controlled entity, as UNESCO
does not govern the financial and operating policies
of USLS, does not benefit from its activities and is not
exposed to its losses.
UNESCO leases the land for its headquarters sites
at Place de Fontenoy and Rue Miollis from the host
government. Under the lease agreements, the lease
terms are for 99 years, and can be renewed for unlimited
subsequent periods of 99 years. UNESCO pays a nominal
amount in rent for the use of the land. Given that the
agreements effectively grant UNESCO the right to use
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
the land at the two sites in perpetuity for a nominal rent,
it is considered appropriate to recognize the land as an
asset in UNESCO’s consolidated financial statements
– see Note 10 Property, Plant & Equipment. The land
was accounted for as a non-exchange transaction. The
lease is subject to restriction which the Organization
considers unlikely to occur as the UNESCO has no plans
to change locations. This Management judgement
has a significant impact on the consolidated financial
statements.
Estimates and assumptions
UNESCO based its assumptions and estimates
on parameters available when the consolidated
financial statements were prepared. However,
existing circumstances and assumptions about future
developments may change due to market changes or
circumstances arising beyond the control of UNESCO.
Below is a list of key assumptions:
(a) Fair value estimations – Financial instruments
Where the fair value of financial assets and financial
liabilities recorded in the statement of financial
position cannot be derived from active markets,
their fair value is determined using valuation
techniques including the discounted cash flow
model. The inputs to these models are taken from
observable markets where possible, but where this
is not feasible, judgment is required in establishing
fair values. Judgment includes the consideration of
inputs such as liquidity risk, credit risk and volatility.
Changes in assumptions about these factors
could affect the reported fair value of financial
instruments. More details on fair values of financial
instruments are disclosed at Note 23.
(b) Useful lives of Property, plant and equipment
The useful lives of Property, plant and equipment
are assessed using the following indicators to
inform potential future use, value from disposal and
impairment:
• The condition of the asset based on the
assessment of experts employed by UNESCO;
• The nature of the asset, its susceptibility and
adaptability to changes in technology and
processes;
• The nature of the processes in which the asset is
deployed;
• Availability of funding to replace the asset; and
• Changes in the market in relation to the asset
46
Note 2.10 provides information on the determined
current useful lives.
(c) Provisions for litigation
Provisions were raised and management determined
an estimate based on the information available.
Provisions are measured at the management’s best
estimate of the expenditure required to settle the
obligation at the reporting date, and are discounted
to present value where the effect is material.
(d) Employee benefits
Employee benefits (ASHI, RG, AAL and SPS) are
determined using actuarial valuation, which
involves making various assumptions on financial
and non-financial elements that may differ
from actual developments in the future such as
determination of the discount rate, future salary
increases, mortality rates and future cost increases.
The employee benefit liability is highly sensitive
to the variation of these assumptions and some of
them are reviewed at each reporting date. Details
about employee benefits are provided in Note 12.
NOTE 4
ACCOUNTING STANDARDS ISSUED
Accounting standards adopted during the year
• IPSAS 2 - Cash flows – Changes in Liabilities
Arising from Financing Activities: the amendment
to this standard is effective for annual reporting
years beginning on or after 1 January 2021. The
amendment establishes the disclosure principles
that enable users of the financial statements to
evaluate changes in liabilities arising from financing
activities, including both changes arising from cash
flows and non-cash changes. The new disclosure
can be found in Note 16.
Accounting standards issued and to be adopted at a later
date
• IPSAS 41 – Financial Instruments: the standard is
effective for annual reporting year beginning on
or after 1 January 2023. The standard establishes
the principles for financial reporting of financial
assets and financial liabilities for the assessment of
the amounts, timing and uncertainty of an entity’s
future cash flows. UNESCO has not yet assessed the
impact of the adoption of the standard. UNESCO
plans to adopt this standard as of the effective date.
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• IPSAS 42 – Social Benefits: the standard is NOTE 5

effective for annual reporting year beginning on CASH AND CASH EQUIVALENTS
or after 1 January 2023. The standard establishes
principles and requirements on the recognition, Expressed in ‘000 US dollars 2021 2020
measurement and presentation of Social Benefits
Cash
in the consolidated financial statements. UNESCO
has assessed that the adoption of the standard will Cash in hand 41 30
not have any impact on the consolidated financial Current accounts 29,717 42,415
statements. 29,758 42,445
• IPSAS 43 – Leases: the standard is effective for annual Cash Equivalents
reporting year beginning on or after 1  January Sight/Saving accounts 97,170 78,415
2025. The standard establishes the principles for Short term deposits 42,374 133,943
the recognition, measurement, presentation and
139,544 212,358
disclosure of leases in the consolidated financial
statements. UNESCO has not yet assessed the Total cash and cash equivalents 169,302 254,803
impact of the adoption of the standard.
As at 31 December 2021, $119.2 million (2020 – $181.7
million) of cash and cash equivalents is considered
restricted cash.

NOTE 6
INVESTMENTS

NON
  CURRENT CURRENT    
INTERNALLY INTERNALLY 2021 2020
EXTERNALLY MANAGED FUNDS TOTAL
MANAGED MANAGED
Expressed in ‘000 US PORTFOLIO PORTFOLIO PORTFOLIO
dollars A B C

Loans and
receivables
Term deposits 508,897 - - - 508,897 - 508,897 444,111
Term accounts 27,026 - - - 27,026 40,890 67,916 67,679
Fair value through surplus or deficit
Treasury Bills and Bonds 1,135 42,476 68,852 73,791 186,254 640 186,894 108,813
Fixed Income ETFs - - - - - 14,953 14,953 14,351
Equity ETFs - - - - - 20,881 20,881 14,566
Held to Maturity
Bonds 10,151 - - - 10,151 - 10,151 28,112
Total 547,209 42,476 68,852 73,791 732,328 77,364 809,692 677,632

47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Investments classified under loans and receivables are
mainly term deposits with an initial maturity of more
than three months but less than one year and term
accounts which are investments that may be realized
within 12 months. These financial instruments are held
with international banking groups which are assigned
deposit ceilings in accordance with the Investment
Policy of UNESCO.
Investments classified under fair value through surplus
or deficit consist of the following:
• The UNESCO Brasilia Office (UBO) invests in floating-
yield Brazilian Government Treasury Bills (“Letra
Financeiro do Tesouro”) with a maturity up to 365
days through a dedicated fund in accordance with
the Investment Policy of UNESCO.
• The investment portfolio of the After-Service
Health Insurance (ASHI) Programme is invested
in accordance with the UNESCO ASHI Fund
Investment Policy Statement. Investments are made
in Exchange Traded Funds (ETFs). Although these
investments are designated for this purpose, and
are not available for funding current operations,
the investments are not subject to separate legal
restrictions and do not qualify as Plan Assets as
defined in IPSAS 39, Employee Benefits.
• The investments of the externally managed portfolio
are designated upon initial recognition at fair value
through surplus or deficit and are classified as
short-term investments where the investment time
NOTE 7
ACCOUNTS RECEIVABLE FROM NON-EXCHANGE TRANSACTIONS
Expressed in ‘000 US dollars
Assessed contributions (current)
Assessed contributions (non-current)
Gross assessed contributions
Allowance for assessed contributions (current)
Allowance for assessed contributions (non-current)
Net assessed contributions
Voluntary contributions (current)
Voluntary contributions (non-current)
Total accounts receivable (non-exchange transactions)
Current portion
Non-current portion
Net accounts receivable (non-exchange transactions)
48
horizon objective of these portfolios is less than
or equal to one year. For short-term investment
reasons, such as views on the future path of interest
rates, the external manager of the portfolio may
from time to time decide to lengthen temporarily the
average duration of the portfolio to slightly longer
than one year using derivatives such as futures.
This will not change the short-term classification
of these financial assets unless the investment time
horizon objective of the portfolio and the duration
of its benchmark have been changed to more than
one year. Derivatives such as currency swaps may
also be used to hedge non-USD investments.
• The investment portfolio of the Nessim Habif Trust
Fund is invested in bonds and a Corporate Bond ETF.
The bonds are categorized under the current and
non-current portions depending on the residual
maturity of each bond; while the Corporate Bond
ETF consists only of long term bonds. In accordance
with the Financial Regulation concerning the
Nessim Habif Fund (61 EX/38), the capital of the fund
should be invested in industrial securities either in
Switzerland or in the United States of America. On
31 March 2021, assets with a value of $3.16 million
at amortized cost were reclassified to fair value with
a value of $3.20 million. The reclassification was due
to a change in the management model of the fund
from a passive allocation in bonds held to maturity
to also include ETF’s that are actively managed.
2021 2020
670,454 669,322
7,501 8,950
677,955 678,272
(640,139) (632 827)
(5,852) (6,930)
31,964 38,515
5,955 1,477
- -
37,919 39,992
36,270 37,972
1,649 2,020
37,919 39,992
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Assessed contributions receivable represent
uncollected revenues committed to UNESCO by
Member States and Associate Members for completion
of the programme of work. Non-current assessed
contributions are those contributions which are
due more than 12  months after the reporting date.
These relate to payment plans agreed upon with the
Members. The allowance for assessed contributions is
calculated by providing against the entire balance of
unpaid instalments already due under payment plans.
Outstanding assessed contributions from current and
past years as well as deferred amounts under payment
plans are discounted to their present value based on
the year in which they are expected to be received.  

Expressed in ‘000 US dollars  2021 2020

Arrears not under payment plans:
1988-2009 2,822 2,822
2010-2011 72,585 72,585
2012-2013 162,664 162,664
2014-2015 162,829 162,829
2016-2017 150,244 151,305
2018-2019 77,581 86,136
2020-2021 36,820 -
665,545 638,341
Other current assessed contributions 4,909 30,981
Gross assessed contributions (current) 670,454 669,322
Allowance for unpaid contributions (current) (640,139) (632,827)
Net assessed contributions (current) 30,315 36,495
Gross assessed contributions (non-current) 7,501 8,950
Allowance for unpaid contributions (non-current) (5,852) (6,930)
Net assessed contributions (non-current) 1,649 2,020
Total net assessed contributions 31,964 38,515

The allowance for unpaid contributions includes an
amount of $621.7 million for two States (Israel and
the United States of America) who have withdrawn as
Member States of UNESCO effective 31 December 2018.
A Member State’s outstanding assessed contributions
are never written-off even if the Member State
withdraws from the Organization. As of 31 December
2021, the allowance for assessed contribution is
calculated on the outstanding assessed contributions
due from 64  Member States and nine Associate
members (2020: 84  Member States and five Associate
members).

NOTE 8
ADVANCE PAYMENTS

Expressed in ‘000 US dollars 2021 2020

Advances to staff 3,198 3,719
Activity financing advance payments 1,030 377
Implementing partner advances 22,744 12,767
Participation Programme advance payments 11,262 4,338
Other advance payments 4,299 2,608
Total advance payments 42,533 23,809

Advance payments on non-exchange contracts relate to transfers made to third parties where the
(Financing Activity Contracts, Implementation conditions on the transferred assets are yet to be
Partnership Agreements/Intergovernmental Body accepted by UNESCO as fulfilled as at 31 December
Allocation contracts and Participation Programme). 2021.

49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9
OTHER RECEIVABLES

Expressed in ‘000 US dollars  2021 2020

VAT receivables 7,172 4,586
Accrued interests 641 1,177
Other 4,725 3,974
Gross other current assets 12,538 9,737
Allowance for doubtful accounts (2,892) (2,892)
Net other receivables 9,646 6,845

NOTE 10
PROPERTY, PLANT AND EQUIPMENT (PP&E)

CAPITAL
FURNITURE PROJECTS
COMMS & IT AND OTHER (WORK IN
Expressed in ‘000 US dollars LAND BUILDINGS EQUIPM'T VEHICLES FIXTURES EQUIPM'T PROGRESS) 2021
1 January 2021
Cost 254,713 386,724 28,800 10,874 3,116 7,862 - 692,089
Accumulated depreciation - (151,235) (23,320) (7,645) (2,586) (6,643) - (191,429)
Carrying amount 254,713 235,489 5,480 3,229 530 1,219 - 500,660
Movements 12 months to
31 December 2021
Additions - 1,695 2 442 869 316 790 5,232 11,344
Disposals - (753) (2,589) (775) (352) (902) - (5,371)
Disposals depreciation - 418 2,398 734 311 835 - 4,696
Depreciation - (13,974) (2,385) (982) (219) (354) - (17,914)
Movements 12 months to 31
- (12,614) (134) (154) 56 369 5,232 (7,245)
December 2021
31 December 2021
Cost 254,713 387,666 28,653 10,968 3,080 7,750 5,232 698,062
Accumulated depreciation - (164,791) (23,307) (7,893) (2,494) (6,162) - (204,647)
Carrying amount 254,713 222,875 5,346 3,075 586 1,588 5,232 493,415

50
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FURNITURE
COMMS & IT AND OTHER
Expressed in ‘000 US dollars LAND BUILDINGS EQUIPM'T VEHICLES FIXTURES EQUIPM'T 2020

1 January 2020
Cost 254,713 386,469 27,860 9,572 3,115 7,962 689,691
Accumulated depreciation - (137,289) (22,504) (7,116) (2,518) (6,753) (176,180)
Carrying amount 254,713 249,180 5,356 2,456 597 1,209 513,511
Movements 12 months to
31 December 2020
Additions - 255 3,204 1,694 122 297 5,572
Disposals - - (2,264) (392) (121) (397) (3,174)
Disposals depreciation - - 2,134 387 - 364 2,885
Depreciation - (13,946) (2,950) (916) (68) (254) (18,134)
Movements 12 months to 31
- (13,691) 124 773 (67) 10 (12,851)
December 2020
31 December 2020
Cost 254,713 386,724 28,800 10,874 3,116 7,862 692,089
Accumulated depreciation - (151,235) (23,320) (7,645) (2,586) (6,643) (191,429)
Carrying amount 254,713 235,489 5,480 3,229 530 1,219 500,660

In 2021, cash payments of $11.2 million were made in The carrying value of UNESCO buildings is detailed in
relation to fixed assets acquisition. the following table:
As at 31 December 2021, UNESCO holds fully
depreciated PP&E which is still in use for a gross value
of $27.4 million (2020: $29.3 million).

DEPRECIATION ADDITIONS DISPOSAL WORK IN

Expressed in ‘000 US dollars 2020 FOR PERIOD FOR PERIOD DEPRECIATION DISPOSAL PROGRESS 2021
     
7 Place Fontenoy 129,426 (7,727) 1,516 341 (615) - 122,941
1 Rue Miollis 93,734 (5,760) 51 77 (138) 4,564 92,528
Apartment, place Vauban 4,542 (116) - - - - 4,426
IBE building, Geneva 5,657 (270) - - - - 5,387
Ocampo Villa, Buenos Aires 1,170 (30) - - - - 1,140
IIEP Building 616 (47) 60 - - - 629
ICTP Building 344 (24) 34 - - - 354
Kinshasa Building - - 34 - - - 34
Beirut building - - - - - 613 613
Total 235,489 (13,974) 1 695 418 (753) 5,177 228,052

Heritage assets
UNESCO also has a significant number of “Works of considerable intrinsic value. These assets have not been
Art” (also referred to as heritage assets), including capitalized in the consolidated financial statements.
paintings, statues and various other objects, which
At 31 December 2021, UNESCO has $3.8 million in
have been mainly donated by governments, artists
commitments related to purchases of property, plant
and other partners. An internal fund has been set up to
and equipment.
cover accidental damage to these works, which have a

51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11
INTANGIBLE ASSETS

SOFTWARE SOFTWARE
INTERNALLY EXTERNALLY SOFTWARE WORK IN
Expressed in ‘000 US dollars DEVELOPED DEVELOPED PROGRESS 2021
1 January 2021
Cost 16,305 896 481 17,682
Accumulated amortization (16,305) (630) - (16,935)
Carrying amount - 266 481 747
Movements 12 months to 31
December 2021
Additions 481 103 293 877
Amortization (8) (118) - (126)
Total movements 12 months 473 (15) 293 751
31 December 2021
Cost 16,786 999 774 18 559
Accumulated armotization (16,313) (748) - (17 ,061)
Carrying amount 473 251 774 1 498

As at 31 December 2021, UNESCO holds fully amortized intangibles assets which are still in use for a gross value of
$16.6 million (2020:$16.6 million).

SOFTWARE SOFTWARE
INTERNALLY EXTERNALLY SOFTWARE WORK
Expressed in ‘000 US dollars DEVELOPED DEVELOPED IN PROGRESS 2020
1 January 2020
Cost 16,305 896 392 17,593
Accumulated amortization (16,305) (517) (16,822)
Carrying amount - 379 392 771
Movements 12 months to 31 December 2020
Additions - - 89 89
Amortization - (113) - (113)
Total movements 12 months - (113) 89 (24)
31 December 2020
Cost 16 ,305 896 481 17,682
Accumulated amortization (16,305) (630) - (16,935)
Carrying amount - 266 481 747

52

NOTE 12
EMPLOYEE BENEFITS
 
Expressed in ‘000 US dollars  ACTUARIAL VALUATION
Payroll and reimbursements
After Service Health Insurance 13,666
Accumulated annual leave 27,286
Repatriation benefits 930
Italian end of service benefit 9,199
Employee benefits (current) 51,081
After Service Health Insurance 606,585
Repatriation benefits 30,809
Employee benefits (non-current) 637,394
Total employee benefits 688,475
(i) Employee benefits – current
Current employee benefits include payroll and
allowances, education grant, home leave, accumulated
annual leave (AAL), Italian end-of service benefit (SPS),
as well as the current term portion of the After-Service
Health Insurance and repatriation grants.
Notwithstanding that AAL and SPS are fully included as
current as required by the standards since UNESCO does
not have an unconditional right to defer settlement of
the liability for a least 12 months.
Accumulated annual leave (AAL) – UNESCO staff can
accumulate unused annual leave up to a maximum of 60
working days. Due to COVID-19, in 2020, it was decided
that staff could carry forward up to an additional 15
days (above the existing 60 days), to be used by end
of March 2022. Upon separation, staff members are
entitled to receive a sum of money for AAL that they
hold up to 60 days.
Italian end-of-service benefit (SPS) – The Italian end-of-
service benefit (known as “liquidazione”) is a separation
lump sum payable to local General Service staff working
for UNESCO in Italy. The amount of the payment is
based on the number of completed years of service at
the time of separation from UNESCO.
(ii) Employee benefits – non-current
Non-current employee benefits relate to post-
employment and other long-term employee benefits.
These include After-Service Health Insurance and the
long-term portion of repatriation benefits.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2021
UNESCO
VALUATION TOTAL 2020
- 10,101 10,101 10,068
- 13,666 14,087
(3) 27,283 23,311
- 930 983
- 9,199 10,153
10,098 61,179 58,602
- 606,585 764,662
19 30,828 29,008
19 637,413 793,670
10,117 698,592 852,272
After-Service Health Insurance (ASHI) – UNESCO
provides health insurance coverage to retired staff
and their dependents (After-Service Health Insurance),
which accrues during the retirees’ active service in
the Organization. Under the scheme, staff retiring
from UNESCO, who have reached their fifty-fifth
birthday and who have completed at least ten years of
participation in the Medical Benefits Fund as at the date
of their separation, may opt to remain (indefinitely) in
that Fund as an associate participant with UNESCO
continuing to participate in the funding of their
contributions. UNESCO performs annually both a long-
term projection and an actuarial valuation of the ASHI
scheme to measure its employee benefits obligation.
The UNESCO finances its ASHI liability on a pay-as-
you-go basis. The Programme and Budget for 2020-21
includes an Appropriation Line of $11.1 million related
to this health insurance liability.
In accordance with IPSAS-39, no plan assets have been
offset against the liability. An amount of $36.5 million
was designated ($29.6 million as at 31 December 2020)
to cover future liabilities in the ASHI Special Account.
Repatriation benefits – A staff member who has
completed one year of continuous service outside
the country of his/her recognized home is entitled
upon separation from UNESCO to a repatriation grant
payable on the basis of completed years and months
of qualifying service outside the country of his/her
recognized home. For eligible staff members hired after
1 July 2016 the grant is payable starting on five years of
expatriate service according to the current scale. Staff
members are also entitled to travel and removal costs for
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

repatriation on separation from UNESCO. In accordance (iii) Actuarial valuation

with IPSAS-39, no plan assets have been offset against
the liability, however, an amount of $13.1 million has
been accumulated by the UNESCO in the Terminal
Payments Fund ($12.1 million as at 31 December 2020)
to partially cover the repatriation grant.
An actuarial valuation was carried out to calculate
UNESCO’s estimated liability related to AAL, SPS, ASHI
and repatriation grants. The following assumptions and
methods have been used to determine the value of
these benefits as at 31 December 2021:

Assumptions used for ASHI Plans, annual leave, repatriation grant and Italian end of service benefit
2021 2020
Discount rate The rate used is based on the Mercer Yield Curve 1.15% 0.70%
Annual Leave, Repatriation Grant (maturity (maturity
and Italian end of service benefit around 11.5 years) around 10 years)
Discount rate The rate used is based on the Mercer Yield Curve. 2.05% 1.80%
ASHI (maturity (maturity
The discount rate for ASHI has been determined for each major currency in
around 22.4 years) around 22 years)
which UNESCO incurs liabilities (USD and euros).
The final rate was then determined by averaging the different discount rates,
weighted by the benefit payments in the different currencies.
Discount rate After Medical The rate used is based on the Mercer Yield Curve 1.50% 1.20%
Insurance Plan (maturity around 21 (maturity around 21
(AMIP) years) years)
Inflation rate For all benefits 1.75% 1.75%
Pre-retirement Mortality 2019 United Nations in-service mortality table for annual leave, repatriation
Tables before the retirement grant and ASHI;
age assumption
A62D ISTAT table for Italian end-of-service benefit
Post-retirement Mortality Updated 2017 UN Generational mortality tables for ASHI/AMIP.
Tables as from the
retirement age assumption
Salary increase rate - 2.00% per year 2.00%
Annual leave
Salary increase rate - 2.50% 2.50%
Italian end-of-service benefit
Salary increase rate - 2.00% per year Linear increase between
Repatriation grant 2020 and 2030 from
1.21% to 1.75% rate
per year from 2030 and
beyond 1.75%

Assumptions used for ASHI Plans, annual leave, repatriation grant and Italian end of service benefit (continued)
2021 2020
Pension and salary increase - ASHI 2.00%
Medical Healthcare trend -ASHI The rate is a weighted average based on claim costs 3.95% 3.95%
Medical Healthcare trend – After The rate is defined as the sum of long-term inflation and medical inflation 4.85% 4.45%
Medical Insurance Plan (AMIP) in Italy
Repatriation Travel and Removal trend For staff members without dependent $5,916 $5,916
For staff members with at least one dependent $7,718 $7,718
Retirement Age 65 65
Withdrawal tables Based on a study of UNESCO’s turnover rates from 2017 and 2021
Take up rate – Repatriation benefits Staff eligible for repatriation benefits on leaving to actually claim their 75% 75%
entitlement
Take up rate – ASHI Staff eligible for ASHI benefits on leaving to actually claim their 100% 100%
entitlement
Take up rate – Accumulated leave Staff eligible for accumulated annual leave to actually claim their 100% 100%
entitlement at separation

54
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As noted in Note 3, assumptions used to assess the
employee benefits are reviewed annually. In 2021, while
the mortality tables remained unchanged, the actuarial
valuation refined the application of these tables for
active participants using namely, pre-retirement
mortality table before retirement age assumption and
post retirement mortality table as from the retirement
age assumption. The impact of this refinement is a
decrease in employee future benefits liability of $79
million, which was recognized as an actuarial gain in
the consolidated statement of changes in net assets.
The following tables and text provide additional
information and analysis on employee benefit liabilities
calculated by actuaries:
From the total actuarial gains of $178.8 million, the
actuarial gain of $186.6 million relating to ASHI were
recognized through net assets in the Statement of
Financial Position and in the Statement of Changes in
Net Assets.
The other actuarial losses of $7.8 million were recognized
through the Statement of Financial Performance.
The expected benefits payment by UNESCO in 2022
to the ASHI plan is $13.7 million. In addition, the
expected benefits payment by UNESCO in 2022 to the
accumulated annual leave, repatriation defined benefit
and SPS plans is respectively $0.9 million; $0.9 million
and $0.25 million.

REPATRIATION ITALIAN END OF

Expressed in ‘000 US dollars ASHI AAL BENEFITS SERVICE BENEFIT 2021
Defined benefit obligation beginning of
778,749 23,294 29,955 10,153 842,151
the year
Movement for period ended 31/12/2021
Service cost 23,808 962 747 704 26,221
Interest cost 13,749 163 210 66 14,188
(Actual gross benefits payments) (7,898) (1,905) (1,954) (460) (12,217)
Actuarial (gain)/loss (186,611) 5,451 2,855 (500) (178,805)
Foreign exchange difference (1,546) (679) (74) (764) (3,063)
Defined benefit obligation at year end 620,251 27,286 31,739 9,199 688,475

REPATRIATION ITALIAN END OF

Expressed in ‘000 US dollars  ASHI AAL BENEFITS SERVICE BENEFIT 2020
Defined benefit obligation beginning of
708,529 21,477 28,894 8,243 767,143
the year
Movement for period ended 31/12/2020
Service cost 21,546 921 748 625 23,840
Interest cost 14,995 214 287 87 15,583
(Actual gross benefits payments) (7,756) (1,116) (1,052) (817) (10,741)
Actuarial (gain)/loss 39,784 739 995 1,233 42,751
Foreign exchange difference 1,651 1,059 83 782 3,575
Defined benefit obligation at year end 778,749 23,294 29,955 10,153 842,151

The annual expense amounts recognized in the Statement of Financial Performance are as follows:

REPATRIATION ITALIAN END OF

Expressed in ‘000 US dollars ASHI AAL BENEFITS SERVICE BENEFIT 2021 2020

Service cost 23,808 962 747 704 26,221 23,840

Interest cost 13,749 163 210 66 14,188 15,583
Total expenses 37,557 1,125 957 770 40,409 39,423

55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Sensitivity analysis
Assumed healthcare cost trends and discount rate have a significant effect on the amounts calculated for the ASHI
liability and expenses. A 0.5 percentage point change for medical cost trend would have the following effects:

AFTER SERVICE HEALTH INSURANCE - MEDICAL MEDICAL MEDICAL

HEALTHCARE COST TRENDS (EXCLUDING ICTP) COST TREND RATE COST TREND RATE COST TREND RATE
Expressed in ‘000 US dollars 3.45% 3.95% 4.45%
Defined benefit obligation as at 31 December 2021 532,967 600,892 679,182
% Variation (11.3%) 13.0%
Normal cost 2022 16,732 20,147 24,239
% Variation (17.0%) 20.3%

AFTER MEDICAL INSURANCE PLAN - MEDICAL MEDICAL MEDICAL

HEALTHCARE COST TRENDS (ICTP) COST TREND RATE COST TREND RATE COST TREND RATE
Expressed in ‘000 EUR 4.35% 4.85% 5.35%
Defined benefit obligation as at 31 December 2021 14,450 15,661 17,006
% Variation (7.7%) 8.6%

A 0.5 percentage point change for discount rate would have the following effects:

AFTER SERVICE HEALTH INSURANCE -

DISCOUNT RATE (EXCLUDING ICTP) DISCOUNT RATE DISCOUNT RATE DISCOUNT RATE
Expressed in ‘000 US dollars 1.55% 2.05% 2.55%
Defined benefit obligation as at 31 December 2021 672,265 600,892 539,897
% Variation 11.9% (10.2%)
Normal cost 23,886 20,147 17,076
% Variation 18.6% (15.2%)

AFTER MEDICAL INSURANCE PLAN -

DISCOUNT RATE (ICTP) DISCOUNT RATE DISCOUNT RATE DISCOUNT RATE
Expressed in ‘000 EUR 1.0% 1.50% 2.0%
Defined benefit obligation as at 31 December 2021 17,372 15,661 14,173
% Variation 10.9% (9.5%)

United Nations Joint Staff Pension Fund (UNJSPF)
The Fund’s Regulations state that the Pension Board
shall have an actuarial valuation made of the Fund at
least once every three years by the Consulting Actuary.
The practice of the Pension Board has been to carry
out an actuarial valuation every two years using the
Open Group Aggregate Method. The primary purpose
of the actuarial valuation is to determine whether the
current and estimated future assets of the Fund will be
sufficient to meet its liabilities.
Pension Fund. Such deficiency payments are only
payable if and when the United Nations General
Assembly has invoked the provision of Article 26,
following determination that there is a requirement
for deficiency payments based on an assessment of
the actuarial sufficiency of the Fund as of the valuation
date. Each member organization shall contribute to
this deficiency an amount proportionate to the total
contributions which each paid during the three years
preceding the valuation date.

UNESCO’s financial obligation to the Fund consists of
its mandated contribution, at the rate established by
the United Nations General Assembly (currently at 7.9%
for participants and 15.8% for member organizations)
together with any share of any actuarial deficiency
payments under Article  26 of the Regulations of the
The latest actuarial valuation for the Fund was
completed as of 31 December 2019, and the valuation
as of 31 December 2021 is currently being performed. A
roll forward of the participation data as of 31 December
2019 to 31 December 2020 was used by the Fund for its
2020 financial statements.

56
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The actuarial valuation as of 31 December 2019 NOTE 13

resulted in a funded ratio of actuarial assets to actuarial INTEREST PAYABLE TO DONORS
liabilities, assuming no future pension adjustments, of
144.4%. The funded ratio was 107.1% when the current Expressed in ‘000 US dollars 2021 2020
system of pension adjustments was taken into account.
Interest payable to donors 13,298 15,263
After assessing the actuarial sufficiency of the Fund,
Total interest payable to donors 13,298 15,263
the Consulting Actuary concluded that there was no
requirement, as of 31 December 2019, for deficiency
payments under Article 26 of the Regulations of the The Director-General may make long-term investments
Fund as the actuarial value of assets exceeded the of moneys standing to the credit of Trust Funds,
actuarial value of all accrued liabilities under the plan. Reserve and Special Accounts as may be provided
In addition, the market value of assets also exceeded by the appropriate authority in respect of each such
the actuarial value of all accrued liabilities as of the fund or account. Accrued interest payable to donors
valuation date. At the time of this report, the General are recognized as earned.   Interest derived from
Assembly has not invoked the provision of Article 26. investments are credited as provided in the rules
relating to each special account or in line with clauses
Should Article 26 be invoked due to an actuarial in respective donor agreements for Trust Funds
deficiency, either during the ongoing operation
or due to the termination of the Fund, deficiency The average interest generated on the USD investments
payments required from each member organization of Programme Fiduciary Fund equalled 0.19% p.a. in
would be based upon the proportion of that member 2021 (2020: 1.1% p.a.).
organization’s contributions to the total contributions
paid to the Fund during the three years preceding the NOTE 14
valuation date. Total contributions paid to the Fund VOLUNTARY CONTRIBUTIONS WITH CONDITIONS
during the preceding three years (2018, 2019 and 2020)
amounted to $7,993.15  million, of which 2,22% was Expressed in ‘000 US dollars 2021 2020
contributed by UNESCO.
Monetary voluntary contributions with
158,647 142,686
During 2021, contributions paid to the Fund conditions (current)
amounted to $43.41  million (2020  $41.27  million). In-kind voluntary contributions with
5 7
Expected contributions due in 2022 are approximately conditions (current)
$42.98 million. Voluntary contributions with
158,652 142,693
Membership of the Fund may be terminated by decision conditions (current)
of the United Nations General Assembly, upon the In-kind voluntary contributions with
- 1
affirmative recommendation of the Pension Board. A conditions (non-current)
proportionate share of the total assets of the Fund at the Voluntary contributions with
date of termination shall be paid to the former member - 1
conditions (non-current)
organization for the exclusive benefit of its staff who
Total voluntary contributions with
were participants in the Fund at that date, pursuant to an 158,652 142,694
conditions
arrangement mutually agreed between the organization
and the Fund. The amount is determined by the United
Monetary voluntary contributions with conditions arise
Nations Joint Staff Pension Board based on an actuarial
when funds are received from a donor and UNESCO is
valuation of the assets and liabilities of the Fund on the
yet to meet the condition stipulated in the agreement.
date of termination; no part of the assets which are in
The in-kind relates to a loan given to UNESCO where the
excess of the liabilities are included in the amount.
donor pays the interest associated with the loan (details
The United Nations Board of Auditors carries out an are provided in Note 16 under Miollis Building V).
annual audit of the Fund and reports to the Pension
Board and to the United Nations General Assembly
on the audit every year. The Fund publishes quarterly
reports on its investments, and these can be viewed by
visiting the UNJSPF’s website.

57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15 The maturity analysis of the loans is as follows:

ADVANCE RECEIPTS
MIOLLIS
IBE MIOLLIS BUILDING V
Expressed in ‘000 US dollars 2021 2020 Expressed in BUILDING BUILDING BNP PARIBAS
Framework agreements 29,783 31,296 ‘000 US dollars LOAN V EIB LOAN LOAN 2021
Other voluntary contributions received in Within three
4,340 3,126 - 250 94 344
advance months
Assessed contributions received in Later than three
3,086 16,451 months and not
advance 21 751 283 1,055
later than one
Other advance receipts 659 634 year
Total advance receipts 37,868 51,507 Later than one
year and not
- 5,005 1,924 6,929
UNESCO recognizes as a liability amounts received later than five
years
under non-exchange contracts where a binding
agreement is not considered to be in place yet. This Later than five
- 7,772 3,321 11,093
years
is relevant to Framework Agreements, where funds
can be received before an agreement is reached on Total
21 13,778 5,622 19,421
the allocation of the contribution, and on voluntary borrowings
contributions received with restrictions.
IBE Building
NOTE 16 UNESCO received loans from the Property Foundation
BORROWINGS for International Organizations (FIPOI) of Switzerland
for the balance of CHF (Swiss francs) 4.4 million to partly
Expressed in ‘000 US dollars 2021 2020 finance the purchase of buildings for the UNESCO
IBE building loan 21 147 International Bureau of Education (IBE). Following a
renegotiation of the payment schedule in December
Phase II Belmont plan loan - 409
1997, it was agreed to fix the amount of the loan
BNP Paribas Miollis loan 377 394 outstanding as of 1  January 1998 at CHF 3.2 million
EIB Miollis loan 1,001 - ($2.3 million) repayable in equal annual instalments
Current portion of borrowings 1,399 950 of CHF  0.1  million from 1998 until 2021, with a final
payment of CHF 0.02 million in 2022.
IBE building loan - 21
BNP Paribas Miollis loan 5,245 - Phase II Belmont Plan
EIB Miollis loan 12,777 6,968 By 32 C/Resolution 74, the General Conference had
Long-term portion of borrowings 18,022 6,989 “authorized the Director-General to contract an interest-
free loan of €79.9 million with a lender chosen by him in
Total borrowings 19,421 7,939 cooperation with the Government of France and to take
into account the necessity of making provision in future
Borrowings are recognized in the consolidated financial budgets for the funds required for reimbursement
statements at amortized cost with values based on cash of the sums borrowed”. An agreement was signed on
flows discounted using a discount rate of 3.00% (IBE 23 March 2004 between UNESCO, the Caisse des Dépôts
building loan), 0.187% (Miollis building V EIB loan) and et Consignations (CDC) and the Government of France
0.68% (Miollis building V BNP Paribas loan). for the interest-free loan which would be drawn in five
yearly instalments from 2004 to 2008 and repaid over
eight biennia starting in 2006. The loan repayments are
fully guaranteed by the Government of France. The final
payment of the loan was made in March 2021.

58
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Miollis Building V Improvement of UNESCO Headquarters, pending the

In December 2019, UNESCO signed a financing contract
with the European Investment Bank (EIB). Under this
agreement, the EIB is lending €26.5 million to finance
part of the building V renovation cost in Miollis (Paris).
On 6 February 2020, UNESCO signed an additional
loan agreement of €15.3 million with BNP Paribas. The
total cost of the renovation is estimated to be €49.5
million (2020: €45.5 million), of which €41.8 million
are funded through borrowings, €3.7 million will be
covered by available funds in the Miollis sub-account
for the Restoration and Improvement of UNESCO
Headquarters in accordance with 40 C/Resolution 79,
and €4 million is guaranteed from the available funds
in the Bonvin sub-account for the Restoration and
approval by the General Conference to reimburse the
Bonvin sub-account.
These facilities are guaranteed by the French
Government. In addition, the French Government has
agreed to reimburse UNESCO the equivalent of the
interests paid on both facilities during the year.
The second tranche amounting to €6.8 million relating
to Miollis Building V EIB loan was received on 28
January 2021. The Miollis Building V BNP Paribas loan’s
first tranche of €5.2 million was received on 29 January
2021.
The table below shows the changes in liabilities arising
from financing activity.

NON-CASH
  2020 CASH MOVEMENT MOVEMENT 2021
FOREIGN EXCHANGE
Expressed in ‘000 US dollars INCREASE REPAYMENT GAIN/LOSS  
IBE building loan 168 - (145) (2) 21
Phase II Belmont plan loan 409 - (410) 1 -
Miollis Building V EIB loan 7,362 8,273 (778) (1,079) 13,778
Miollis Building V BNP Paribas loan - 6,310 (291) (397) 5,622

Total liabilities from financing activities 7,939 14,583 (1,624) (1,477) 19,421

NOTE 17
OTHER LIABILITIES

Expessed in ‘000 US dollars  2021 2020

Other
Unpaid claims from MBF 3,496 3,016
Outstanding invoices due to claim administrator 274 247
Return of funds to donors 2,180 2,261
Deferred income 1,530 1,243
Others 1,937 2,425
9,417 9,192
Unredeemed coupons 3,626 3,658
Provision for litigation 1,604 1,526
Other liabilities (current) 14,647 14,376
Total other liabilities 14,647 14,376

The UNESCO coupons programme provides private
individuals, institutions or Member States with the
possibility of buying, with their local non-convertible
currencies, coupons denominated in US dollars and
guaranteed by UNESCO. Coupons are used for the
purchase of books, publications and material for
educational, scientific or cultural purposes, and for paying
subscriptions to institutions and university registration
fees. UNESCO undertakes to reimburse suppliers
accepting these coupons in payment of their invoices.
If the recipient of the coupons does not use them, they

59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

can send them back for a cash reimbursement or for
exchange with coupons bearing a new validity date.
The current coupon validity period is 15 years, however
if expired unused coupons are sent to UNESCO,
replacement coupons will be issued. Since the coupons
are payable upon submission, they are considered as
current liabilities.

NOTE 18
NET ASSETS
DISTRIBUTION
OF ACTUARIAL
SURPLUS/ OTHER ADJUST- DISTRIBUTION GAINS/LOSSES
(DEFICIT) FOR MENTS TO OF EXCHANGE THROUGH
Expressed in ‘000 US dollars 2020 THE PERIOD RESERVES DIFFERENCE RESERVES 2021
General Fund Reserves (242,899) (59,397) 95 - 186,454 (115,747)
Working capital fund 31,223 - - - - 31,223
Restricted reserves 622,188 64,965 (2,397) (3,856) 157 681,057
Currency adjustments through
- - (3,856) 3,856 - -
reserve
Actuarial gains/losses through
- - 186,611 - (186,611) -
reserves
Net assets 410,512 5,568 180,453 - - 596,533

Reserves under the main operations of the Organization
mainly financed from Member States assessed
contributions are classified as General Fund reserves.
Working Capital Fund corresponds to advances
from Member States as determined by the General
Conference.
Restricted reserves refer to results from operations
under Programme Fiduciary Funds, Other Proprietary
Funds and Staff Fiduciary Funds. The use of such
reserves is either determined by specific Financial
Regulations or agreements signed with donors.
Currency adjustments are exchange differences
arising from the presentation into USD of the financial
statements of consolidated entities whose functional
currencies are different from USD and actuarial gains
and losses arise from the valuation of post-employment
employee benefits such as after-service health
insurance. These two adjustments are distributed
between the Restricted and General Fund reserves,
which constitute the Organisation’s main reserves.

60
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19
REVENUE

Expressed in ‘000 US dollars 2021 2020

Total assessed contributions 273,838 262,220
Voluntary contributions
Monetary voluntary contributions 341,141 302,805
Contributions from Other UN Organizations 31,621 30,278
In-kind voluntary contributions 13,455 12,694
Total voluntary contributions 386,217 345,777
Other revenue-producing activities
Revenue producing activities 630 595
Income from services rendered 10,515 10,227
Total other revenue-producing activities 11,145 10,822
Other/miscellaneous revenue
Other operating gains 2,530 1,530
Contributions to MBF 12,873 12,240
Total other/miscellaneous revenue 15,403 13,770
Foreign exchange gains - 12,309
Finance revenue 7,038 10,408
Total revenue 693,641 655,306

In-kind contributions include the use of Field Offices The $4.4 million of interest received under finance
and Institutes premises for no or nominal rent, and free revenue is included in the net cash flows provided by
utilities, maintenance and communications. In the case operating activities (2020 – $11 million).
of the use of premises, the contributions value is based
on the commercial rate for renting the building. In-
kind contributions for premises are estimated at $13.4
million (2020: $12.6 million).

61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20
EXPENSES
Expressed in ‘000 US dollars  2021 2020
Staff costs
International & National staff 267,562 247,971
Temporary staff 41,323 37,356
Other personnel costs 51,380 48,065
Total staff costs 360,265 333,392
Consultants, external experts and mission costs
Consultants 51,628 37,434
Staff mission costs 5,591 3,769
Delegates & external individuals missions 385 190
Other contracts 5,948 2,248
Total consultants, external experts and mission costs 63,552 43,641
External training, grants and other transfers
Financial contributions 8,454 16,898
Grants and fellowships 6,851 6,539
External training and seminars 11,468 7,330
Total external training, grants and other transfers 26,773 30,767
Supplies, consumables and other running costs
Communications 3,028 1,992
Equipment 18,936 7,362
Leases 19,068 17,378
Utilities 4,977 4,365
Maintenance and repairs 4,779 4,195
Other supplies 4,171 3,111
Total supplies, consumables and other running costs 54,959 38,403
Contracted services
Contracted research 2,242 1,862
Contracted seminars and meetings 1,637 639
Contracted document production 285 235
Other contracted services 138,685 103,338
Total contracted services 142,849 106,074
Depreciation and amortization
Depreciation 18,459 18,210
Amortization 126 113
Total depreciation and amortization 18,585 18,323
Total expense for assessed contribution allowance 6,233 4,631
Total other expenses 1,374 725
Total foreign exchange losses 11,485 -
Total finance costs 1,998 2,343
Total expenses 688,073 578,299

62

20.1 STAFF COST
International & National staff expenses include salaries,
post adjustments, entitlements and pensions and health
plan contributions for Professional and General Service
category staff. This line also includes movements in the
actuarial liability for Accumulated Annual Leave and
Repatriation Benefits. Temporary staff expenses include
all costs relating to the employment of temporaries
and supernumeraries. Other personnel costs include
reimbursement of medical claims and the movement
in the ASHI actuarial liability where this is recognized in
the Statement of Financial Performance. This line also
includes staff travel expenses which are not related to
mission costs (home leave, family visit, education grant,
interview, separation).
20.2 CONSULTANTS, EXTERNAL EXPERTS AND
MISSION COSTS
Consultants expenses represent the cost of contracting
consultants, including insurance and travel expenses.
Staff mission costs are the mission and training costs for
UNESCO staff, temporaries and supernumeraries. These
concern principally travel and per diem expenses.
Delegates & external individuals missions are expenses
for travel and per diem of representatives, delegates,
individuals and others (i.e. non-staff ). Other contracts
concern principally interpreter fees.
20.3 EXTERNAL TRAINING, GRANTS AND OTHER
TRANSFERS
Financial contributions include contributions made to
United Nations joint activities, publications, conferences
and programme activities. Grants and fellowships
include study grants, fellowships, subventions,
sponsorships and grant-in-aid. Expenses for external
training and seminars are mainly travel and per diem
costs for participants.
20.4 SUPPLIES, CONSUMABLES AND OTHER
RUNNING COSTS
Communications expenses concern mainly telephone
and postal/freight costs. Equipment expenses represent
equipment purchases and costs during the year, which
do not meet the criteria for capitalization as PP&E or
Intangible Assets. Leases represents primarily premises
rental cost. This line includes the expense which
corresponds to the in-kind voluntary contribution for
premises provided to UNESCO at no or nominal cost.
Maintenance and repairs expenses are mainly those
incurred in relation to UNESCO premises.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20.5 CONTRACTED SERVICES
Contracted services represent expenses where
UNESCO has engaged a third party to perform work on
behalf of UNESCO. Major categories of these types of
arrangements include research, seminars and meetings
and document production. Significant amounts
fall within the category other contracted services
which include, among others, implementing partner
agreements, activity financing contracts, contract for
services and other fees for contracted activities.
The detail under the other contract for services is as
follows:
Expressed in ‘000 US dollars 2021 2020
Other fee contracts’ activities 18,849 10,669
Implementation partners agreement 32,442 38,105
Contract for Services 71,253 40,011
Financing Activities Contract 3,318 1,409
Intergovernmental Body Allocation Contract 1,138 6,524
Translation, authors & data processing and
11,685 6,620
other services
Total Other Contracted Services 138,685 103,338
20.6 DEPRECIATION AND AMORTIZATION
Depreciation is the expense resulting from the
systematic allocation of the depreciable amounts of
property, plant and equipment (PP&E) over their useful
lives (see Note 10). This relates principally to UNESCO
buildings. Amortization is the expense resulting from
the systematic allocation of the amortizable amount of
intangible assets over their useful lives (see Note 11).
20.7 EXPENSE FOR ASSESSED CONTRIBUTION
ALLOWANCE
This amount corresponds to the allowance for unpaid
Member States contributions.
20.8 OTHER EXPENSES, FOREIGN EXCHANGE AND
FINANCE COSTS
Finance costs of $2 million include the payment of
investment interest to donors ($1 million) and bank and
service charges as well as loss on investments.
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21
CONTINGENT LIABILITIES, COMMITMENTS AND
CONTINGENT ASSETS
21.1 CONTINGENT LIABILITIES
UNESCO is subject to a variety of claims and suits that
arise from time to time in the normal course of business.
These claims can be related to third party or human
resource claims.
As at 31 December 2021, UNESCO has contingent
liabilities of $0.8 million (2020 – $0.9 million) for claims or
legal actions related to ILO Administrative Tribunal. No
allowance for loss has been provided as the outcome,
amount and timing of the outflow is uncertain. With
respect to these legal claims, UNESCO does not expect
the ultimate resolution of any of the proceedings to
which it is party to have a significant adverse effect on
its financial position, performance or cash flows.
21.2 COMMITMENTS
UNESCO enters into operating lease arrangements for
the use of field office and Institute premises, and for the
use of photocopying and printing equipment. Future
minimum lease rental payments for the following years
are:
Expressed in ‘000 US dollars 2021 2020
Within one year 1,934 2,175
Later than one year and not later than
4,451 2,813
five years
Later than five years 7,206 1,339
Total operating lease
13,591 6,327
commitments
Operating lease arrangements for field office premises
can generally be cancelled by providing notice of up
to 90 days. Individual operating lease agreements for
photocopiers at headquarters are generally made
under the auspices of the overall long term supply
agreements.
21.3 CONTINGENT ASSETS
In accordance with IPSAS 19 (Provisions, Contingent
Liabilities and Contingent Assets), contingent assets
will be disclosed for cases where an event will give rise
to a probable inflow of economic benefits. As at 31
December 2021, there are no contingent assets.
64
NOTE 22
REGULAR BUDGET
The General Conference set $534.6 million as the
appropriated regular budget for the 2020-2021
biennium.
For the year ended 31 December 2021, the allotment
including authorized transfers and additional
appropriations amounted to $301.8 million (see
Statement V).
The original budget of $263.3 million for the year is
adjusted for authorized transfers between the two
years of 2020 and 2021 ($0.5 million), 2020 budget
balance ($29.5 million) and additional appropriations
($8.5 million), to arrive at the final budget for the year.
22.1 BUDGET RECONCILIATION
UNESCO reports semi-annually to the Executive Board
on the status of the budget implementation through
the Financial Management Report.
A Consolidated Statement of Comparison of Regular
Budget and Actual Amounts for the General Fund is
provided in these consolidated financial statements
(see Statement V). Reconciliation between the actual
amounts on a comparable basis as presented in the
Consolidated Statement of Comparison of Regular
Budget and Actual Amounts and the actual amounts
in the consolidated financial statements for the twelve
months ended 31 December 2021 is presented in this
Note.
In order to reconcile the budget actual amounts to
the consolidated financial statements (Statement of
Cash Flow and Statement of Financial Performance),
differences between the budget scope and financial
statements scope, and budget reporting and financial
statements presentation have to be taken into account.
(a) Entity differences
The budget, as presented in the consolidated
financial statements, concerns receipts and
expenditures relating to the appropriated regular
budget only. The consolidated financial statements
include all UNESCO controlled entities, and as such
include results for all Funds, as well as the non-
budgetary result for the General Fund. Details of the
results of the Other Proprietary Funds, Programme
Fiduciary Funds and Staff Fiduciary Funds are shown
in Note 26 Segment Information.

(b) Basis differences
The budget and the accounting basis differ, the
most significant difference are described below:
(i) The statement of financial performance includes
receipts and expenditures of all programmes
(extrabudgetary funds, proprietary funds or staff
fiduciary fund) while the Budget includes only
transactions relating to the appropriated regular
budget.
(ii)
The consolidated financial statements are
prepared on a full accrual basis in compliance
with IPSAS requirements while the budget is
prepared on a modified cash basis.
The principal adjustments impacting the reconciliation
between the budget surplus under statement V and the
regular budget deficit under the Statement of Financial
Performance are as follows:
• Budgetary allotment adjustments ($6.4 million):
this amount represents the difference between the
budget allotted in 2021 and the revenue recognised
under the statement of financial performance in line
with the IPSAS standards.
• Some expenses and revenues, such as foreign
exchange gain and losses and accruals (non-
budgetary expenses/revenue), do not affect the
budget but are part of the General Fund accounting
deficit in line with IPSAS, resulting in a difference
between the budget surplus/(deficit) and the
surplus/(deficit) under the statement of financial
performance;
• Employee benefits ($31.8 million): Under accrual
accounting, employee benefit liabilities re
reported in the Statement of Financial Position,
and movements in liabilities impact the Statement
of Financial Performance, while from a budgetary
perspective only the expenses arising and paid out
in the financial period are reported;
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• Disbursements relating to the 38 C/5 surplus
allotted in 2019 ($3 million): the General Conference
approved the carry forward to the 2018-2019
financial period of the remaining available unspent
funds from the 2016-2017 biennium (Resolution 69).
The disbursements related to these carry forward
funds are not part of the 2021 approved budget
but they are included in the statement of financial
performance as expenses pertaining to the 2021
financial period, as this is when they were incurred;
• Fixed assets addition, depreciation and amortization
($14.1 million): capital expenditures are capitalized
and depreciated over useful life under accrual
accounting whereas they are recorded as current
year expenses in the budget;
• Renovation loans repayment ($2 million): the
reimbursements of the Phase II Belmont, IBE
building as well as Miollis building V renovation
loans consume the budget, whereas they are
considered as a reduction of liability under the
statement of financial position;
• Non-cash elements such as obligations ($15.4
million) are considered as basis difference.
Obligations, which are considered expenditures
under the budgetary reporting, reflect those
obligations which are in place as at the end of the
reporting period, which are expected to be received
within 12 months of the end of the reporting
period. Under accrual accounting, expenditures are
recognized at the time they are incurred, regardless
of whether there is a corresponding cash outflow;
(c) Timing differences
The budget and the consolidated financial
statements both represent the year to 31 December
2021. As such there are no timing differences in the
reconciliation.
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22.2 RECONCILIATION: FINAL BUDGET LESS ACTUAL EXPENDITURES ON MODIFIED CASH BASIS
Expressed in ‘000 US dollars 2021
Surplus per Statement of Financial Performance 5,568
a) Scope differences
OPF surplus (6,875)
PFF surplus (53,916)
SFF surplus (4,174)
Sub Total (64,965)
GEF deficit (59,397)
b) Adjustments
i. Accounting basis
Revenue
Budgetary allotment adjustment 6,360
Other non-budgetary income (16,004)
(9,644)
Expenses
Employee benefits 31,782
Foreign exchange losses 5,079
Other non-budgetary expenses 3,318
Allowance for unpaid Member States' contributions 6,233
Disbursement relating to 38 C/5 surplus allotted in 2021 2,983
Fixed assets addition, depreciation and amortization 14,105
Renovation loans repayment (2,034)
61,466
ii. Budget basis
Obligations (15,357)
2020 surplus 29,513
Total adjustments 65,978
Budget result on modified cash basis 6,581

66
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

22.3 RECONCILIATION: STATEMENT OF CASH FLOWS ON MODIFIED CASH BASIS

In order to reconcile the budgetary result to the obligations and non-received assessed contributions
Statement of Cash Flow, the non-cash elements such as are removed as basis differences.

OPERATING INVESTING FINANCING

Expressed in ‘000 US dollars ACTIVITIES ACTIVITIES ACTIVITIES 2021
Actual net surplus as per the Statement of
6,581 - - 6,581
Comparison of Budget and Actual Amounts
Basis differences (26,070) (9,879) 12,959 (22,990)
Entity differences 77,247 (141,348) - (64,101)
Actual amount in the Statement of Cash Flow 57,758 (151,227) 12,959 (80,510)

22.4 OBLIGATIONS
Expressed in ‘000 US dollars 2021 2020
General Fund
Commitment portion 12,982 12,418
Accrual portion 2,375 722
Obligations 15,357 13,140
Other Proprietary Funds
Commitment portion 3,872 4,306
Accrual portion 580 324
Obligations 4,452 4,630
Programme Fiduciary Funds
Commitment portion 91,083 80,016
Accrual portion 6,052 3,725
Obligations 97,135 83,741
Total Obligations 116,944 101,511

For budgetary purposes, obligations include both NOTE 23

budget commitments which have not yet given rise
to the delivery of a service at the reporting date, and
real accruals for goods and services received but not
yet invoiced/settled. Budget commitments are not
recorded in the consolidated financial statements
whereas real accruals are recognized in accordance
with IPSAS.
GEF obligations are included in the actual amounts of the
General Fund budget expenditure as at 31  December
2021 (Statement V). The table above provides the split
of obligations between commitments and accruals for
goods and services received not yet invoiced and travel
costs.
FINANCIAL RISK MANAGEMENT
Exposure to credit, liquidity, currency and interest
rate risk arises in the normal course of UNESCO’s
operations. The following presents information about
UNESCO’s exposure to each of the above risks, policies
and processes for measuring and managing risk, and
UNESCO’s management of capital.
In general, UNESCO’s risk management policies along
with its Investment Policy and Financial Rules and
Regulations aim to minimize potential adverse effects
on the resources available to UNESCO to fund its
activities.
The primary objective of UNESCO’s Investment
Policy is the preservation of the value of resources of
the Organization. Within this general objective the
principal considerations for investment management
are, in order of priority, security of principal, liquidity,
and rate of return. External asset managers with

67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

segregated mandates manage approximately $192
million on behalf of UNESCO. The strategic objective
of the externally managed portfolio A is to manage
funds against the Bank of America / Merrill Lynch
50% 3 months US T-Bill index and 50% US Corporate/
Government 1-3 year (rated A- and above) Index.
The portfolio must maintain, at minimum, weighted
average portfolio rating of AA-. The strategic objective
of the externally managed portfolio B is to manage
funds against the ICE BofAML US 6-Month Treasury
Bill Index (rated AAA). The portfolio must maintain, at
minimum, weighted average portfolio rating of AA-.
Portfolio C consists of sovereign securities of Brazil
managed against the Interbank Deposit Certificate rate
of Brazil.
The After-Service Health Insurance Special Account
is invested in accordance with the Investment Policy
Statement of the ASHI Fund which is based on the
results of an asset and liability management study.
The strategic objective of the investment portfolio
related to the After-Service Health Insurance is to
mitigate the volatility of the net liability in the long run.
23.1 FAIR VALUE OF FINANCIAL ASSETS AND
LIABILITIES
Fair values and fair value hierarchy
UNESCO uses the following valuation technique
hierarchy for determining and disclosing the fair value
of financial instruments:
• Level 1: Quoted (unadjusted) prices in active
markets for identical assets or liabilities.
• Level 2: Inputs other than quoted prices included
within Level 1 that are observable for the assets or
liabilities, either directly or indirectly; or
• Level 3: Techniques which used inputs that have a
significant effect on the reordered fair value that are
not based on observable market data.
The fair value of cash and cash equivalents, short term
investments, current receivables from exchange and
non-exchange transactions and other receivables
approximate their recorded carrying amount due to
their short-term nature.

UNESCO has an Investment Committee comprising
senior management representatives and external
member(s) that advise the Chief Financial Officer on
investment and cash management policy of UNESCO,
on overall investment strategy and on related risk
management.
The fair value of accounts payables, transfer payables
and other current liabilities and voluntary contributions
approximate their recorded carrying amount due to
their short-term nature.
The following table shows the carrying amounts and
fair values of investments and borrowings including
their levels in the fair value hierarchy:

CLASSIFICATION HIERARCHY CARRYING AMOUNT FAIRVALUE

Expressed in ‘000 US dollars 2021 2020 2021 2020
Financial assets
Investments L&R Level 1 576,813 511,790 576,813 511,790
Investments HTM Level 1 10,151 28,112 10,163 28,173
Investments FVTPL Level 1 135,139 110,760 135,139 110,760
Investments FVTPL Level 2 87,589 26,970 87,589 26,970
Total 809,692 677,632 809,704 677,693

Financial liabilities
Borrowings Amortized cost Level 2 19,421 7,939 19,421 7,939
Derivatives FVTPL Level 2 243 207 243 207
Total 19,664 8,146 19,664 8,146

Transfers between levels of the fair value hierarchy 23.2 CREDIT RISK
are recognized at the end of the reporting year
Credit risk is the risk of financial loss to the Organization
during which the change has occurred. There were no
if customers or counterparties to financial instruments
significant movements between levels in the fair value
fail to meet their contractual obligations. It mainly arises
hierarchy during the year.

68
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

from UNESCO’s cash and cash equivalents, financial
investments, and receivables.
Investments, cash and cash equivalent
UNESCO utilizes credit ratings from the three leading
credit rating agencies, Moody’s, Standard & Poor’s and
Fitch, to evaluate credit risk on its financial instruments.
UNESCO holds more than 150 bank accounts in
more than 50 countries that expose the organization
to default risk. To mitigate this risk, UNESCO has
internal guidelines such as minimizing the balances
on its current accounts and operating with strong
international banking groups whenever possible.
The investment management function is centralized
at UNESCO headquarters whereas field offices and
Institutes are not permitted to engage in investing.
In accordance with its Investment Policy, UNESCO
applies limits on investment counterparty exposures
to mitigate credit risk. This applies to both internally
managed funds and externally managed funds. These
limits are based on the several criteria including a
minimum long-term rating of A-, while internal bank
deposit counterparts must have a minimum short-term
rating of A-1 and should be established in a country
with a long-term rating of at least AA-. Credit ratings of
the investment counterparties are closely monitored
and prompt action is taken whenever an issuer no
longer complies with investment policy guidelines.
The Investment Policy provides an exception to the
aforementioned credit ratings for UNESCO Brasilia
with significant cash balance in Brazilian Real that
can be invested in Brazilian Government Treasury Bills
up to one year. The credit risk associated with these
investments is the sovereign risk of Brazil which is rated
BB- as at 31 December 2021.
Bond and equity ETF’s are invested based on the
guidelines in the Investment Policy Statement of the
ASHI Funds or Financial Regulations concerning the
Nessim Habif Trust Fund that do not have restrictions
on the financial ratings of the investments.

2021 2020
MONEY MARKET
INSTRUMENTS INVESTMENTS
CLASSIFIED AT FAIR VALUE
CASH & CASH AS LOANS & THROUGH SURPLUS BONDS HELD TO
CREDIT RATING EQUIVALENT RECEIVABLES AND DEFICIT MATURITY TOTAL
Expressed in ‘000 US dollars
AAA 6,374 60,000 56,716 10,151 133,241 137,581
AA 88,357 372,000 55,779 - 516, 136 495,732
A 68,555 144,813 42,823 - 256,191 230,444
BBB 4,573 - 2,770 - 7,343 9,410
<BBB 906 - 42,478 - 43,384 43,836
N/A 537 - 22,162 - 22,699 15,225
Total 169,302 576,813 222,728 10,151 978,994 932,228

Receivables The Organization ensures on the basis of cash flow

Receivables are mainly from sovereign Member States.
An allowance is established when there is objective
evidence, based on a review on outstanding amounts
at the reporting date that a State will not comply with
the original terms of the receivables.
The credit risk exposure related to receivables are
not material as contributions are primarily from
governments and related bodies.
23.3 LIQUIDITY RISK
Liquidity risk is the risk that UNESCO might not have
adequate funds to meet its obligations as they fall due.
forecasts that it has sufficient cash on demand to meet
expected operating expenses.
As at the year-end, UNESCO’s cash and cash equivalents
and short-term investments amount to $901.6 million
which is substantially more than the current liabilities
equalling $316.2 million. Therefore, the Organization is
not exposed to a significant liquidity risk.
23.4 CURRENCY RISK
Currency risk is the risk that the fair value or future
cash flows of a financial instrument fluctuates due to
changes in foreign exchange rates. UNESCO is exposed

69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

to foreign exchange risk on revenues and expenses Organization is mainly exposed to interest rate risk on
denominated in foreign currencies, predominately its financial interest-bearing assets.
Euros along with minor exposure to other currencies.
UBO’s Brazilian Treasury Bills are carried at fair value
A 1% increase/decrease in exchange rate would not
through surplus and deficit and are floating rate debt
have a material impact on the consolidated financial
securities. UNESCO’s surplus/deficit would be negatively
statements.
impacted in the event of decreasing BRL interest rates.
The Split Assessment system, whereby the Organization
Investments classified as held-to-maturity, cash
receives a portion of assessed contributions in Euros
equivalents and investments classified as loans and
in order to cover expenses which are denominated in
receivables are not marked to market. Therefore,
that currency, is a means of ensuring that most of the
surplus/deficit reported in UNESCO’s consolidated
exposure to exchange fluctuations between Euros and
financial statements is not impacted by immediate
US dollars is mitigated. On the other hand, the foreign
changes in interest rates. However, at maturity of these
exchange risk related to the assets of UNESCO’s Field
financial instruments, a lower re-investment rate may
Offices, centres and Institutes worldwide is mitigated
have a significant impact on the reported surplus and
by maintaining a minimum level of cash or other assets
deficit.
in local currencies at any time.
The external investment manager may use futures
Currency risk related to UNESCO’s extrabudgetary
contracts and interest rate swap contracts to manage
activities is managed through individual project budget
the interest rate risk of groups of securities within each
planning for foreign currency expenditure.
portfolio.
The currency risk on Brazilian Real is limited by the fact
that UNESCO Brasilia’s functional currency is Brazilian BOND FUTURES NO OF
Real and its revenue and expenditure are also in the (SHORT POSITIONS) EXCHANGE CONTRACTS
same currency. US 2 Year T-Note Contract March
CME 32
2022
The external investment manager uses forward and
US 5 Year T-Note Contract March
spot foreign exchange contracts to manage the CME 139
2022
currency risk of groups of securities within the portfolio.
The below table shows open forward foreign exchange
A 1% increase/decrease in interest rates would
contracts as at year end:
decrease/increase surplus by $1.1 million.
NET UNESCO is mainly exposed to re-investment risk.
NET SOLD AMOUNT LOCAL US DOLLAR UNREALIZED Therefore, a sensitivity analysis measuring the impact of
Expressed in ‘000 CURRENCY EQUIVALENT GAIN/(LOSS)
changing interest rates on surplus and deficit assuming
a change in interest rate levels as at the end of the
Canadian Dollars 19,130 14,922 (222)
reporting year would not show any significant risk.
Australian Dollars 1,517 1,093 (10)
The Investment Committee regularly follows up that
Singapore Dollars 1,000 730 (11)
the rate of return of investments is in line with the
benchmarks set up in the Investment Policy.
A 1% appreciation in the relative value of the USD
against the CAD or SGD would result in a net unrealized
23.6 CONCENTRATION RISK
loss of $74.3 thousand or $4.0 thousand respectively.
The concentration risk of UNESCO is mitigated by the
A 1% depreciation in the relative value of the $
counterpart and country limits established by the
against the CAD, AUD, or SGD would result in a net
Investment Policy of UNESCO.
unrealized loss of $405.9 thousand, $20.4 thousand or
$18.4 thousand respectively. The maximum exposure in the internal portfolio to any
single banking group is limited to 7% or 10% of UNESCO’s
A 1% appreciation in the relative value of the USD
internally managed investment portfolio depending on
against the AUD would result in a net unrealized gain
the financial rating of the counterpart. The exposure to a
of $1.3 thousand.
specific country should not exceed 25% of the portfolio,
except for France as the host country of the organization
23.5 INTEREST RATE RISK that has a limit of 35% with a condition that 10% of these
Interest rate risk arises from the effects of market 35% be allocated in instruments that are cashable within
interest rates fluctuations on the fair value of financial three business days.
assets and liabilities and/or on future cash flows. The

70

The external investment manager has specific
guidelines in place in order to mitigate concentration
risk. Depending on the country of risk, the maximum
exposure to a single country is up to 60% of the
portfolio size. At maximum, 5% of the portfolio may be
invested in a single issuer.
23.7 CAPITAL MANAGEMENT
UNESCO defines the capital that it manages as
the aggregate of its net assets which is comprised
of accumulated balances and reserves. UNESCO’s
objectives in managing capital are to safeguard its ability
to continue as a going concern to fund its asset base
and to fulfil its mission and objectives as established
by its Member States and donors. The UNESCO’s overall
strategy with respect to capital management includes
the balancing of its operating and capital activities with
its funding on a biennial basis.
UNESCO manages its capital structure in light of global
economic conditions, the risk characteristics of the
underlying assets and working capital requirements.
UNESCO manages its capital by reviewing on a regular
basis the actual results against the budgets approved
by Member States.
NOTE 24
RELATED PARTY DISCLOSURES
24.1 GOVERNING BODIES
UNESCO is governed by a General Conference,
consisting of the representatives of the Member States
of the Organization. Representatives of Member States
are appointed separately by the Government of each
Member State. They do not receive any remuneration
from the Organization and are not considered as key
management personnel of UNESCO as defined under
IPSAS. The President of the General Conference receives
a representation allowance during his/her term of office
as President.
ENTITLEMENTS
COMPENSA- (ALLOWANCES
NUMBER OF TION AND POST GRANTS AND PENSION AND TOTAL REMU- ENTITLEMENTS ED OUTSTANDING
INDIVIDUALS ADJUSTMENT SUBSIDIES) HEALTH PLANS NERATION 2021
Expressed in ‘000 US dollars
16 2,980 459 877
The UNESCO-owned apartment at the Place Vauban, Paris, France is put, rent-free, at the disposal of the Director-
General.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The General Conference elects the 58 Member States,
which form the Executive Board. The Executive Board
assures the overall management of UNESCO and meets
twice a year. The Organization pays for travel costs,
subsistence allowance and office expenses to cover
costs incurred by the representatives of the Member
States in the execution of their duties as Members.
The Chairman of the Executive Board receives a
representation allowance during his/her term of office
as Chairman.
24.2 KEY MANAGEMENT PERSONNEL
Key management personnel of UNESCO are the
Director-General, the Deputy Director-General and
the other members of the Strategic Advisory Board as
they have the authority and responsibility for planning,
directing and controlling the activities of UNESCO.
The aggregate remuneration paid to key management
personnel includes: net salaries, post adjustment,
entitlements such as representation allowances and
other allowance, grants and subsidies, and employer
pension and health insurance contributions.
Key management personnel qualify also for post-
employment benefits, such as after-service health
insurance, repatriation benefits and payment of unused
annual leave. The actuarial assumptions applied to
measure such employee benefits are disclosed in
Note 12.
Key management personnel are ordinary members
of UNJSPF with the exception of one staff member
who does not participate in the Fund. Amounts paid
by UNESCO in lieu of contributions to the plan, which
represents 15.8% of the pensionable remuneration,
are included in total remuneration. Advances are
those made against entitlements in accordance with
Staff Rules and Regulations. Loans granted to key
management personnel are those granted under Staff
Rules and Regulations. Advances against entitlements
and loans are widely available to all UNESCO staff.
OUTSTANDING AD-
VANCES AGAINST REIMBURSE-
MENT OF US
GRANT LOANS INCOME TAX
4,316 152 - -
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 25
AMOUNTS WRITTEN-OFF AND EX-GRATIA PAYMENTS
There were no ex gratia payments in 2021 ($13,000 in 2020).
A total of $4,000 was approved as write-off for 2021 relating to two check payments to a vendor cashed by
fraudulent beneficiaries ($52.2 thousand in 2020).

72
 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 26
SEGMENT INFORMATION
26.1 FINANCIAL POSITION BY SEGMENT - 2021
INTER-FUND
Expressed in ‘000 US dollars GEF OPF PFF SFF BALANCES TOTAL UNESCO
ASSETS
Current Assets
Cash and cash equivalents 50,140 50,198 57,503 11,461 - 169,302
Investments 415 60,000 653,431 18,482 - 732,328
Accounts receivable from non-exchange
29,240 - 7,030 - - 36,270
transactions
Accounts receivables from exchange
58 1,629 395 171 - 2,253
transactions
Inventories - 311 14 - - 325
Advance payments 17,120 728 23,817 868 - 42,533
Other receivables 7,645 3,870 1,936 501 (4,306) 9,646
Total current assets 104,618 116,736 744,126 31,483 (4,306) 992,657
Non-current assets
Accounts receivable from non-exchange
1,649 - - - - 1,649
transactions
Investments - 34,501 11,054 31,809 - 77,364
Property, plant and equipment 486,582 1,521 5,203 109 - 493,415
Intangible assets 796 - 702 - - 1,498
Total non-current assets 489,027 36,022 16,959 31,918 - 573,926
TOTAL ASSETS 593,645 152,758 761,085 63,401 (4,306) 1,566,583
LIABILITIES
Current Liabilities
Accounts payable and accruals 8,320 1,401 17,006 845 - 27,572
Employee benefits 34,915 6,481 19,717 66 - 61,179
Interest payable to donors - - 13,298 - - 13,298
Vonluntary contributions with conditions 5 - 158,647 - - 158,652
Advance receipts 4,521 142 32,694 511 - 37,868
Borrowings 1,399 - - - - 1,399
Other liabilities 4,130 4,095 7,028 3,700 (4,306) 14,647
Total current liabilities 53,290 12,119 248,390 5,122 (4,306) 314,615
Non-current Liabilities
Employee benefits 606,857 8,169 22,387 - - 637,413
Voluntary contributions with conditions - - - - - -
Borrowings 18,022 - - - - 18,022
Total non-current liabilities 624,879 8,169 22,387 - - 655,435
TOTAL LIABILITIES 678,169 20,288 270,777 5,122 (4,306) 970,050
NET ASSETS (84,524) 132,470 490,308 58,279 - 596,533

73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL POSITION BY SEGMENT - 2020

INTER-FUND
Expressed in ‘000 US dollars GEF OPF PFF SFF BALANCES TOTAL UNESCO
ASSETS
Current Assets
Cash and cash equivalents 73,130 43,316 115,267 23,090 - 254,803
Investments 430 60,000 546,010 - - 606,440
Accounts receivable from non-exchange
35,503 - 2,469 - - 37,972
transactions
Accounts receivables from exchange
38 1,494 548 182 - 2,262
transactions
Inventories - 319 22 - - 341
Advance payments 9,100 692 14,065 896 (944) 23,809
Other receivables 4,065 6,273 2,684 13 (6,190) 6,845
Total current assets 122,266 112,094 681,065 24,181 (7,134) 932,472
Non-current assets
Accounts receivable from non-exchange
2,020 - - - - 2,020
transactions
Investments - 28,917 7,909 34,366 - 71,192
Property, plant and equipment 493,457 2,221 4,907 75 - 500,660
Intangible assets 76 671 - - 747
Total non-current assets 495,553 31,138 13,487 34,441 - 574,619
TOTAL ASSETS 617,819 143,232 694,552 58,622 (7,134) 1,507,091
LIABILITIES
Current Liabilities
Accounts payable and accruals 3,131 763 9,021 557 (944) 12,528
Employee benefits 33,630 5,454 19,397 121 - 58,602
Interest payable to donors - - 15,263 - - 15,263
Vonluntary contributions with conditions 7 - 142,686 - - 142,693
Advance receipts 17,992 95 32,890 530 - 51,507
Borrowings 950 - - - - 950
Other liabilities 3,464 4,404 9,432 3,266 (6,190) 14,376
Total current liabilities 59,174 10,716 228,689 4,474 (7,134) 295,919
Non-current Liabilities
Employee benefits 763,330 6,715 23,625 - - 793,670
Voluntary contributions with conditions 1 - - - - 1
Borrowings 6,989 - - - - 6,989
Total non-current liabilities 770,320 6,715 23,625 - - 800,660
TOTAL LIABILITIES 829,494 17,431 252,314 4,474 (7,134) 1,096,579
NET ASSETS (211,675) 125,801 442,238 54,148 - 410,512

74
26.2 FINANCIAL PERFORMANCE BY SEGMENT - 2021
INTER-FUND TOTAL
Expressed in ‘000 US dollars GEF OPF PFF SFF TRANSACTIONS UNESCO
REVENUE
Assessed contributions 269,821 - 4,017 - - 273,838
Voluntary contributions 17,487 2,086 367,689 - (1,045) 386,217
Revenue producing activities 108 10,044 759 338 (104) 11,145
Other / miscellaneous revenue 718 4,116 1,211 25,404 (16,046) 15,403
Foreign exchange gains - - - - -
Finance revenue 87 4,210 2,670 71 - 7,038
Inter-segment transfers 4,230 60,727 12,467 171 (77,595) -
Total revenue 292,451 81,183 388,813 25,984 (94,790) 693,641
EXPENSES
Staff costs 198,622 52,337 106,991 18,488 (16,173) 360,265
Consultants, external experts and mission
20,999 5,878 40,842 - (4,167) 63,552
costs
External training, grants and other
22,632 406 16,038 - (12,303) 26,773
transfers
Supplies, consumables and other running
24,717 5,158 30,838 17 (5,771) 54,959
costs
Contracted services 26,521 7,714 109,003 22 (411) 142,849
Depreciation and amortization 15,754 1,057 1,760 14 - 18,585
Expense for assessed contributions
6,233 - - - - 6,233
allowance
Other expenses 983 302 - 95 (6) 1,374
Foreign exchange losses 5,079 1,404 1,703 3,174 125 11,485
Finance costs 201 33 1,764 - - 1,998
Inter-segment transfers 30,107 19 25,958 - (56,084) -
Total expenses 351,848 74,308 334,897 21,810 (94,790) 688,073
SURPLUS (DEFICIT) FOR THE
(59,397) 6,875 53,916 4,174 - 5,568
PERIOD

Note that some internal activities lead to accounting transactions that create inter-segment assets, liabilities, revenue and expenses. Inter-segment transactions are reflected in the Financial Position by Segment
and Financial Performance by Segment to accurately present these segment disclosures.

75
 FINANCIAL PERFORMANCE BY SEGMENT - 2020

INTER-FUND TOTAL
Expressed in ‘000 US dollars GEF OPF PFF SFF TRANSACTIONS UNESCO
REVENUE
Assessed contributions 258,203 - 4,017 - - 262,220
Voluntary contributions 15,749 1,734 329,168 - (874) 345,777
Revenue producing activities 132 9,901 618 171 - 10,822
Other / miscellaneous revenue 675 3,689 388 24,203 (15,185) 13,770
Foreign exchange gains 5,098 1,551 1,889 3,894 (123) 12,309
Finance revenue 296 6,169 3,663 280 - 10,408
Inter-segment transfers 56 51,566 12,266 184 (64,072) -
Total revenue 280,209 74,610 352,009 28,732 (80,254) 655,306
EXPENSES
Staff costs 184,869 47,734 99,598 16,510 (15,319) 333,392
Consultants, external experts and mission
9,687 3,615 32,093 - (1,754) 43,641
costs
External training, grants and other
29,327 357 13,334 - (12,251) 30,767
transfers
Supplies, consumables and other running
19,175 4,154 18,691 20 (3,637) 38,403
costs
Contracted services 13,174 6,188 86,796 21 (105) 106,074
Depreciation and amortization 15,618 1,186 1,513 6 - 18,323
Expense for assessed contributions
4,631 - - - - 4,631
allowance
Other expenses 316 261 65 83 - 725
Foreign exchange losses - - - - - -
Finance costs 302 20 2,019 2 - 2,343
Inter-segment transfers 27,393 103 19,692 - (47,188) -
Total expenses 304,492 63,618 273,801 16,642 (80,254) 578,299
SURPLUS (DEFICIT) FOR THE
(24,283) 10,992 78,208 12,090 - 77,007
PERIOD
Note that some internal activities lead to accounting transactions that create inter-segment assets, liabilities, revenue and expenses. Inter-segment transactions are reflected in the Financial Position by Segment
and Financial Performance by Segment to accurately present these segment disclosures.

76
 Bureau of Financial Management
United Nations Educational,
Scientific and Cultural Organization
7, place de Fontenoy,
75352 Paris 07 SP, France