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Financial Matters

195. The Council had before it the reports of the Twelfth Session of the Program Committee and of the Seventeenth Session of the Finance Committee, together with the Joint Report of both Committees (CL 48/6). It endorsed these reports and took necessary action with regard to the following items:

Financial Position of the Organization

196. The Council considered the Report of the Seventeenth Session of the Finance Committee (Document CL 48/6) covering the financial matters on the Council Agenda, as brought up to date in Document CL 48/28.

197. Status of Contributions and Contributions in Arrears. The Council noted that up to 16 June 1967, the following amounts had been received:

 1967Comparative figures 1966
Current Contributions10,070,51810,425,441
Arrears Contributions     912,137     400,349

198. The Council, noting that arrears of contributions at 16 June 1967 amounted to $669,000, appealed to those Member Nations concerned to liquidate their obligations at the earliest possible moment.

199. The Council was particularly concerned to note that as the arrears due from Bolivia, Haiti, Paraguay, Uruguay and Yemen exceed the contributions due from them for the two preceding calendar years, these countries were in danger of losing their voting rights at the forthcoming session of the Conference, in accordance with Article III-4 of the Constitution. The Council urgently appealed to them to regularize their position before the next session of the Conference.

200. The position of the arrears of these countries is as follows:

Uruguay-----7,99226,647 30,979  

201. With regard to the amount due from Bolivia the Council noted that, inclusive of its 1967 assessment, $24,227.86 was now owing in accordance with the terms of the special arrangement proposed by the Government of Bolivia for the settlement of its obligations, which proposal had been approved by the Thirteenth Session of the Conference (Resolution 33/65). Of this amount $11,802,86 was payable as from 1966.

Audited Accounts - World Food Program, 1965

202. The Council noted that at its Tenth Session (Rome - 31 October to 8 November 1966) the Inter-Governmental Committee of the World Food Program approved the Audited Accounts for 1965, together with the External Auditor's certificate and report thereon.

203. The Council examined the Accounts and forwarded them to the Conference in terms of the following resolution:


Audited Accounts of the World Food Program for 1965


Having examined the audited accounts of the World Food Program for the financial year 1965 and the External Auditor's report thereon;

Adopts the audited accounts for the above-mentioned period.

Scale of Contributions 1968–69

204. By resolution 42/55 the Conference, at its Eighth Session, decided that the FAO Scale of Contributions would in future be derived directly from the UN Scale of Assessments as in force during the calendar year of the Conference Session, and that such scale would be applicable to the two following years.

205. The Council noted that the principal changes arising at this time were the re-introduction of the assessment of Indonesia into the scale and the attainment of full member status by Botswana, Guyana, and Lesotho. An FAO scale for the 1968/69 biennium prepared on the basis of the foregoing is attached as Appendix D to this report.

206. The Council therefore recommended that the Conference adopt the Scale set out in Appendix D, subject to any changes that may arise due to the admission of new members at the forthcoming session of the Conference.

Review of Financial Regulations Governing Transfers in the Budget

207. The Council recalled that at its Forty-Seventh Session it requested the Program and Finance Committees to review the conditions under which the Director-General may transfer funds appropriated by the Conference. It also requested that the Committees should in this respect consider and comment upon the recommendations of the Ad Hoc Committee of Experts to examine the finances of the United Nations and the Specialized Agencies.

208. The Council noted the report of the Program and Finance Committees (paras. 78–82 of CL 48/6) with respect to the Committees' review of the Financial Regulations. It noted that the Committees had obtained a legal opinion from the Legal Counsel of FAO (the substance of which is reported in para. 79 bis). The Council agreed with the opinion of the Committees that the Financial Regulations with respect to financial transfers were adequate and need not be changed.

209. With regard to the recommendation of the Ad Hoc Committee of Experts, on possible subdivision of an individual “appropriation line” which represents a large percentage of the total budget, the Council also agreed with the conclusion of the Committees that there was no need to divide Chapter VI of FAO's Program of Work and Budget into separate chapters. On the other hand some Members felt that since Chapter VI represented about 50 percent of the Regular Budget, the Organization should follow the recommendation of the Ad Hoc Committee.

Financial Adjustments 1

210. The Council considered paragraphs 33 to 37 of Document CL 48/6. The Joint Report of Program and Finance Committees, referring to adjustments made by the Director-General in 1967 chiefly regarding the Indicative World Plan, but also in respect of other program items. The Council recalled that it had already given approval in earlier sessions to some of the program adjustments proposed by the Director-General. The Council approved in this respect program adjustments and reallocation of funds.

Administrative Matters

Headquarters Accommodation

211. The Council noted that Building D, presently occupied by the Italian Ministry of Post and Telecommunications, was not expected to be available until 1973, and that the Director-General was in communication with the Italian Government to determine if other solutions could be found to meet the present needs for additional space resulting from the expansion of the Organization.

212. The Council, while registering its appreciation to the Italian authorities for the co-operation given by them in the provision of accommodation, concurred in the recommendation of the Finance Committee to renew the appeal to the Italian Government it had formulated at its Forty-Fourth Session to allocate Building D to the Organization as early as possible. The Council decided furthermore to address an urgent appeal to the Italian Government for assistance in alleviating the accommodation problem pending the release of Building D.

213. The Observer for Italy assured the Council that the Government of Italy, while regretting the delay in turning over Building D to FAO, fully recognized its responsibility towards FAO for the provision of accommodation and would make every effort to meet these obligations. The Observer for Italy informed the Council that his Government was endeavouring to submit concrete proposals to the Director-General in time to permit him to inform the Fourteenth Session of the Conference. It was hoped that at the same time it would be possible to give the probable date of release of Building D to FAO.

214. Two Members suggested that when making plans for future accommodation the need of the resident representatives and delegations for a certain amount of office space in the premises of the Organization should be considered.

Definition of Legal Obligations 2

215. The Council was informed that it is occasionally necessary for the Director-General to enter into commitments of an administrative nature which extend into future financial periods, before the Conference has voted the appropriations for such periods. It understood that such commitments relate to existing leases for premises, to contracts for office supplies and equipment and for cleaning of premises, insurance, etc.

216. The Council noted that the present text of Financial Regulation 4.1 authorises the Director-General to incur obligations against appropriations voted by the Conference, but that there is no legal basis for entering into commitments against budgets which have not yet been voted.

1 Agenda Item 32.
2 Agenda Item 33.

217. The Council agreed that it is desirable for the efficient management of the Organization that the Director-General be authorized to enter into certain administrative commitments before the budgetary appropriations for the period to which such commitments relate have been voted by the Conference. The Council therefore submitted the following amendment to the Financial Regulations to the Conference for adoption:

  1. re-number Financial Regulation 4.1 to read 4.1 (a);

  2. add a new Financial Regulation 4.1(b) reading;

    The Director-General may also incur obligations against future periods before appropriations are voted when such obligations are necessary for the continued effective functioning of the Organization, provided such obligations are restricted to administrative requirements of a continuing nature not exceeding the scale of such requirements as authorized in the Budget of the current financial period.”

Recovery of Overhead Costs on Funds-in Trust Agreements 1

218. The Council agreed with the Program and Finance Committees that the charge (normally 12 percent) levied by the Organization to cover technical and administrative services on Trust Fund projects does not constitute adequate reimbursement of the cost of such services, and that as a consequence the Regular Program budget bears an undue portion of such costs.

219. The Council agreed that the Director-General should, in line with other UN agencies, increase the charge to 14 percent of the expert component of new Trust Funds administered by the Organization. As regards existing Trust Funds (including Associate Expert Trust Funds) there should be a gradual transition from 12 percent to 14 percent aiming at a uniform application of the 14 percent rate by the end of the 1968/69 biennium. The Council also agreed:

  1. that for Trust Funds established primarily for the procurement of equipment, the rate of 5 percent should apply; and

  2. that, at the Director-General's discretion, where Trust Funds represent special contributions to implement certain aspects of the Organization's Program of Work, the charge may, in exceptional circumstances, be reduced or waived.

220. Some Members expressed concern that an upward change in the present rate might have a discouraging effect on some recipient countries obtaining technical assistance on the basis of Trust Funds. It was, however, pointed out that the Council had consistently maintained that the Organization should receive adequate funds to cover the administrative costs of all programs it is called upon to operate.

Developments in Post Adjustments 1

221. The Council was informed that the latest cost-of-living index figures from the International Labour Office for international staff in Rome indicated that the Rome index stood in December 1966 at 115.2. Under the present system the index must reach 120 and remain at that level for four consecutive months before a change from Class 3 to Class 4 can become effective for post adjustment purposes for Rome staff in the Professional category and above.

1 Agenda Item 33.

222. The results of comprehensive survey of the relative cost-of-living of Professional staff in Rome and Geneva conducted on behalf of the Director-General by ILO, were considered by the Expert Committee on Post Adjustment (ECPA), which met recently in Rome. The purpose of the survey was twofold: to provide a new place-to-place comparison between Rome and Geneva (the base city of the post adjustment system), and to update the basic data for the Rome time-to-time index series administered by ILO.

223. The ILO report revealed a significant difference between the cost-of-living figure for Rome derived from the continuing time-to-time index, and the figure which resulted from the new Rome/Geneva comparison. The Council was informed that ILO was making available to FAO the background information and calculations which may serve to explain the reasons for this discrepancy. As soon as the results of the consultations were known, they would be brought to the attention of the next Council session, following a review by the Finance Committee session scheduled for the second half of October 1967. At that time the Director-General would also submit whatever proposals were necessary, resulting from the situation.

Review of the Organization's General Structure - Estimate and Coverage of Costs of the Review Team 1

224. The Council noted from the report of the Finance Committee (CL 48/6, paragraphs 352 to 355) that the Ad Hoc Committee had recommended that an appropriate provision be made for estimated additional costs of the Review amounting to $35,000.

225. The Council was now informed that in view of some re-scheduling of meetings of the Review Team, as well as of their final joint session with the Ad Hoc Committee, it was foreseen that further additional costs would arise. It also noted that the Finance Committee had decided to consider this matter at its next session, when the full cost of the review would be known.

Retirement of Mr. Frank Weisl 1

226. The Council noted the appreciation expressed by the Finance Committee in the report of its Seventeenth Session of the invaluable services rendered to the Committee and to the Organization by the retiring Assistant Director-General (Administration and Finance), Mr. Frank Weisl. The Council wished to be associated with this expression of appreciation and, recognizing the exceptional nature of such a tribute, unanimously agreed to place on record its gratitude to Mr. Weisl for his unique contribution to the efficient administration of the Organization during his many years of service.

1 Agenda Item 33.

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