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The Council has had before it reports of the two sessions of its Committee on Financial Control which had been held since last November. (CL 2/3, CL 2/33). These reports include information and recommendations on the financial situation of the Organization, on budgetary and administrative problems, and on the work done or in progress to implement the instructions of the last Conference on financial and administrative matters.

The Council notes with satisfaction that because of the prudent action of the Committee and of the Director-General, expenditures were kept within the current income of the Organization during the second financial year (1947). This is the more commendable since the contributions received were substantially less than the receipts anticipated for that period.

The Council approves the principle that annual expenditures and receipts should balance and that every effort should be made to avoid drawing upon the reserves of the Organization.

In order, however, that FAO may conform with this principle and at the same time plan its work effectively, it must be able to depend upon receiving promptly the contributions from its Member Governments. The Council, therefore, draws the attention of Member Governments to the urgent necessity of meeting their financial obligations to the Organization without delay. In this connection, the Council notes that studies are under way, in the light of the last Conference's instructions, regarding the difficulties connected with hard currency problems, and requests the Committee on Financial Control to report thereon as soon as feasible.

In view of the amount of the income of FAO, even when all contributions are received in full, it is necessary, as has been pointed out earlier, to have a system of priorities in the work to be carried out by FAO. The financial implications of these priorities must also be scrutinized very closely, and the Council therefore requests the Director-General in preparing the 1949 budget to submit a detailed plan of priorities with provision for the work to be developed on a regional basis, and to place this plan before the Council at its next session. While this plan would naturally take account of the necessity for eliminating all unnecessary administrative expenditures, provision should be made, financially and otherwise, for ensuring reasonable security for the staff, in terms of remuneration, tenure of office, retirement benefits, etc.

The Council approves the recommendations made by the Committee on Financial Control in its reports and wishes to draw the attention of the members of that Committee and of the Director-General to the views expressed by members of the Council during the discussion of these reports.

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