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At its recent session held in August last, the Council had before it a report of the Committee on Financial Control dealing primarily with the audited accounts of the Second Financial Year and with the draft budget for 1949, but which also included, in the Council's own terms, “a very comprehensive and satisfactory presentation of the financial situation of the Organization”. This report has been circulated to the Conference under No. C48/4.

There were, however a number of other financial questions which had been referred to the Council for further study by the last session of the Conference on which the Council itself wished to obtain the views and recommendations of the Committee on Financial Control before reporting to the Conference. They included the scale of contributions the currency of payment of contributions, staff salaries, Staff Pension Plan, and various matters of financial procedure.

These questions having been considered fully by the Committee on Financial Control, the Council now adopts for submission to the Conference the second report of the Committee thereon. (C48/14).

1. Revision of the Scale of Contributions and Currency of Payment

The last session of the Conference had requested the Council “to undertake a further study of the scale of contributions in the light of the scales at present in force in the United Nations and in the other specialized agencies, and of other relevant factors; furthermore, to include in its report a comparative statement of the contributions in all other United Nations organizations, with a recommendation upon possible readjustments of the scale of contributions.” This study was to take full account of the observations made by a number of during the Third Session of the Conference.

Such investigations have been carried out and the report of the Committee contains not only its views on the various factors and considerations of principle affecting a determination of new contribution rates, but also a number of annexed tables comparing the FAO with those of other organizations and submitting a number of alternative methods for readjustment.

The Council feels that this exhaustive presentation of the problem will enable the Conference to make whatever determinations it thinks fit, particularly on matters of principle. A number of delegates expressed concern that the Committee had not felt it possible to propose a specific revised scale that would involve reductions in their respective annual contributions and they draw attention to the difficulties they are now facing in obtaining the currency in which payments must be made.

The Council, however feels the force of the arguments put forward by the Committee regarding the need for reaching prior decisions on major factors and principles which will necessarily affect any overall review of the existing scale. It believed that the Conference in the light of all the information now available will be in a position to make such decisions as appear to it to be required.

2. Staff Salaries and Staff Pension Plan

The Committee's report also contains a detailed comparison of the salaries and allowances paid to FAO personnel with pay and allowances paid to the members of other international organizations. This documentation is being submitted in compliance with a request made by the last Conference.

The Council wishes to draw the attention of the Conference to the stage now reached regarding the admission of FAO in the Pension Scheme of the United Nations. The Council recommends that the Conference approve of the suggested arrangements for FAO's participation in the scheme.

3. International Rice Council

At its Second Session, held in April, 1948, the Council endorsed the recommendation of the Rice Conference held at Baguio whereby an International Rice Council should be set up, and recommended that “the expense incurred by FAO to assist the functioning of such Council, shall be determined within the limits of the existing budget, by the Director-General, after consultation with the Committee on Financial Control.”

This recommendation has been complied with, and the report of the Committee on Financial Control contains an estimate of the financial implications involved which the Conference no doubt will wish to take into consideration when making a decision upon the setting up of the International Rice Council. It was understood that in agreeing to the Committee's findings being forwarded to the Conference, the members of the Council were in no way prejudging their governments positions regarding the setting up of this new body. The draft Constitution for the Council has to be approved by the Conference for submission to Member Governments in accordance with Rule XXII.

4. Financial Procedures

Several members of the Council felt it difficult to agree with the suggested amendment to Regulation 14 of the Financial Regulations (Page 13 of the Committee's Report). They were of the opinion that other methods should be found for dealing with emergency situations than to authorize the Director-General to make transfers from one chapter to another after consultation and approval of the Committee on Financial Control. However, the majority of the Council supported the proposal as they held the view that other methods of making provisions for dealing with emergency situations, such as, for instance, the setting up of a substantial reserve for contingencies, would result in giving far more powers to the Director-General than was contemplated in the proposed amendment.

5. Transfers

The Council records its approval of the two transfers from Chapter VIII to Chapters V and VI, respectively, which are recommended by the Committee (Page 14 of its report).

6. Vote of Thanks to Dr. Barton

The Council has received with regret the resignation of Dr. Barton from the Chairmanship of the Committee on Financial Control. It wishes to express to him its high appreciation of his untiring activity and outstanding contribution in the post that he is now relinquishing. The Council also feels indebted to all the members of the Committee for the assistance that they have given to Dr. Barton, and wishes to record its appreciation of the Committee's valuable reports.

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