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Draft Programme of Work and Budget, 1972–73 1

200. The Council noted that the Programme of Work and Budget for 1972–73 was the first to be presented on a programme-budget basis as proposed by the Director-General and endorsed by the Conference at its Fifteenth Session. It commended the Director-General on the excellent progress made in developing the new programme-budget presentation for the 1972–73 biennium in the relatively short period of time available, and urged him to continue to develop a programme planning and budgeting system along the lines proposed. It agreed with the Joint Report of the Programme and Finance Committees that the new programme-budget format would provide a much better basis for reviewing and adjusting programme and budget proposals and recognized that improvements in form and content would follow from additional experience. More complete information on goals, objectives, priorities, detailed estimates of costs and new programme elements would have been helpful in this budget, and the Council endorsed their inclusion at the earliest possible time. The Council felt that the information contained in the Annexes to the Programme of Work and Budget for 1972 was extremely useful in reviewing programme and budget proposals, and that the essential information included therein on structure, establishments, and objects of expenditure should continue to be provided.

201. The Council noted that an essential element in programme budgeting was flexibility in the use of resources (personnel, consultants, travel, documents, meetings, etc.) to attain programme objectives, and that object-of-expenditure controls would be replaced by programme controls. The Council stressed the advisability of making prudent use of this flexibility. It noted that the Director-General would still be required by the Financial Regulations to obtain the approval of the Finance Committee for transfers between chapters in the programme budget and to report within-chapter transfers as in the past, based on programme adjustments rather than transfers between objects of expenditure. It was informed that in cases where flexibility was exercised and resources shifted in such a way as to incur continuing commitments upon the Organization, the Director-General, as in the past, would be required to obtain prior approval of the Council.

202. The Council noted the need for the implementation of a Management Information System to provide basic data for effective planning, programming, and performance measurement. It welcomed information that the Director-General had already taken preliminary steps toward the development of such a system on an experimental basis during 1972, with a view to its full implementation earlier than previously planned.

203. The Council agreed with the recommendation of the Finance Committee that rigorous selection of high priority activities should be continued. It recognized that the Director-General had made certain efforts in that direction in formulating his proposals for 1972–73 by shifting resources totalling $ 1 634 585.

204. The Council supported the agreement between the Director-General of FAO and the Administrator of UNDP concerning the Senior Agricultural Advisers/FAO Country Representatives, which was pending approval by FAO and UNDP governing bodies 2. It noted that under the new arrangement they are to be recruited and appointed by FAO, will look to FAO for their career status, and will be responsible to FAO on matters relating to its technical competence. The Council welcomed the proposed conditions of the new agreement, and noted that they complied fully with the recommendations of the Programme and Finance Committees. It also noted the proposal for an increase in the number of Country Representatives to 62, and that the cost-sharing would be ⅔ by the UNDP and ⅓ by FAO, with an estimated saving of about $ 340 000 to FAO in the 1972–73 biennium.

1 CL 56/PV-2, CL 56/PV-7, CL 56/PV-8, CL 56/PV-10, CL 56/PV-15 and CL 56/PV-18.
2 See paras. 66–71 and 187, above.

205. The Council noted the wishes of many countries that the Director-General should draw up a long-term (10–15 years) forecast of the likely trends in demand for experts in agriculture, fisheries and forestry, for biennial review by the Council or Conference.

206. As regards the proposed establishment of a second post of Deputy Director-General in the 1972–73 Programme of Work and Budget, the Council analysed the alternative proposal made by the Programme and Finance Committees to establish an additional post of Assistant Director-General. It decided that for the moment, given the organizational implications of such a proposal and the need to reduce the costs of the Organization, and given the Director-General's statement that he would not press this proposal, it was not in a position to recommend the establishment of a new post of Assistant Director-General. Neverthless, the Council noted the statement made by the Chairman of the Finance Committee to the effect that the Director-General was subject to constant and increasing pressure, and that it would be necessary to take certain steps to remedy this situation.

207. The Council noted that the Programme of Work and Budget for 1972–73 included an increase for travel amounting to $ 424 354, and that, as shown in Table 11 of the Explanatory Notes, almost half of this increase ($ 206 300) was for the Investment Centre and almost ⅓ ($ 135 950) for the Regional Offices. It noted that the Director-General had proposed this increased travel provision, partly offset by reductions in meetings and documents, to make more effective use of existing staff resources and thus diminish the need for the creation of additional posts. While recognizing that under the new programme budget the action of the Conference would be based on proposals for the various programmes and sub-programmes rather than on objects of expenditure, the Council nevertheless agreed with the joint recommendation of the Programme and Finance Committees that travel should be kept under continuous surveillance at all levels of management, and felt that a system of central control should be maintained in the Director-General's Office. The Council expressed the hope that more effective controls over travel would yield substantial budgetary savings without having a negative effect on the programme of work.

208. The Council expressed appreciation of the generous offer made by the Italian Government by making an extraordinary contribution to FAO of $ 480 000 in 1971, and hoped for a similar contribution in 1972.

209. The Council noted that a working budget level of $ 87 090 000 was originally proposed in the Programme of Work and Budget, that the Programme and Finance Committees had recommended several adjustments reducing the budget by $ 405 800 to a level of $ 86 684 200, and that the Director-General was prepared to accept these. The Council noted that this reduced level represented a total increase over the 1970–71 approved budget of $ 16 116 200 (22.8 per cent), of which amount cost increases (mandatories) represented $ 14 367 240 (20.3 per cent) and programme increases $ 1 748 960 (2.5 per cent). It recognized that this would result in a revised assessment budget of $ 80 304 200, a 25.7 percent increase over the assessment budget for 1970–71.

210. The Council noted that about 90 per cent of the total increases proposed for 1972–73 were for the increased cost of maintaining the present level of activities, plus increases for FAO's legislative bodies and related interagency institutions of the UN family, which were included under cost increases as previously recommended by the Programme and Finance Committees. It noted that these increases were mainly the result of rapid inflation, and that consequent increases in post adjustments, salaries and wages were determined by a system largely beyond the control of the Director-General. It expressed concern however about the consequent effects on the level of the budget and on the growth of programme activities, and noted that as a result it had not been possible to comply with the recommendation contained in Resolution 9/69 of the Fifteenth Session of the Conference calling for “a real and substantive increase in the budget for 1972–73 which would allow a reasonable growth in the Organization's activities”. The Council noted that implementation of “full budgeting”, which had been partially applied in 1970–71 in accordance with the policy agreed to by the Consultative Committee on Administrative Questions, following the recommendations of the Ad Hoc Committee of Experts, accounted for nearly $ 2 million of the cost increases projected for 1972–73. It noted that the Chairman of the Finance Committee felt strongly that “full budgeting” should be retained in accordance with a previous Council decision, and in order also to avoid serious financial problems in the future.

211. The views of members on the level of the 1972–73 Programme of Work and Budget fell into four categories. Two categories of views were concerned with the extent of savings which might be used to reduce the level of the budget and the other two were interested in retaining the original budget level of $ 87 090 000 and using possible savings to increase programme activities. One category of views was that, in view of the increasing need of developing countries for the services and facilities provided by FAO within the Second Development Decade, the original budget level should be considered as a minimum, and the reductions of about $ 400 000 recommended by the Programme and Finance Committees should be utilized for programme expansion. A second group felt that, if the ratio between cost increases and programme increases were returned to the 1970–71 level and if the various reductions proposed were adopted, a programme increase of about 8 percent would be possible within the total of the budget as originally proposed.

212. A third category of views was that, while giving general support to the contents and balance of the budget proposals, felt that the budget should be approved at the reduced level of $ 86 684 200, giving effect to the indicated adjustments of about $ 400 000. The fourth category of views was that the level could be reduced further without affecting the Director-General's programme proposals of which they generally approved. Specific suggestions for possible reductions in addition to those previously indicated included: (1) elimination of cost increases expected to become effective in 1972–73, and included under “full budgeting”; (2) abolition of 100 General Service posts; (3) reduction or freezing of upgrading of posts, especially those at higher grades; (4) reduction or elimination of provision for contingencies; (5) reduction in the provision for travel and stronger control thereon; (6) elimination of increases proposed for Regional Offices; (7) use of the expected special contribution of the Italian Government to offset rental costs and thereby reduce assessments on Member Nations; (8) postponement of appointment of the additional 7 Senior Agricultural Advisors until the 1974–75 budgetary biennium.

213. A majority of members felt that the proposals of the Director-General for strengthening the Regional Offices and the reasons therefore were fully justified and should be maintained. Other members felt, as did the Finance Committee, “some doubts about the wisdom of increasing the number of posts in the Regional Offices, pending further study of the FAO field organization.” 1

214. The Council expressed concern about the effect of the promotions made and new posts proposed by the Director-General, which had the result of further distorting the desirable ratio between senior and junior professional posts.

215. The Director-General pointed out that he was fully aware that his proposals for additional funds in 1972–73 were necessarily modest, but that, in the long run, the Organization required a healthy rate of growth to meet its growing responsibilities in the UN system. He felt that the estimates of cost increases were realistic and that under the principle of “full budgeting” he was obliged to provide for expected post and wage adjustments in 1972–73. He pointed out that since the number of new posts included in the 1972–73 Programme of Work and Budget was relatively small, it would not be possible to absorb the increases mainly by postponing the filling of new posts as had been done in 1970–71.

216. The Director-General said that he was prepared to accept the reduction of $ 405 800 proposed by the Programme and Finance Committees, but felt that it would be very difficult to agree to some of the further reductions proposed by Council members, on which he made detailed comments 2.

217. With reference to the special contribution of the Italian Government, the Director-General expressed the view that this generous offer should not be considered as a possible budgetary saving, since it was his impression that the Italian Government expected that it would be used to help FAO expand its work rather than to reduce contributions from Member Nations.

1 CL 56/3, para. 181.
2 CL 56/PV-10.

218. The Director-General expressed the hope that he might eventually receive unanimous approval of his budget and indicated his willingness to undertake a further intensive review of the Council's comments and recommendations, with a view to determining whether additional reduction might be possible without hindering the limited programme expansion proposed.

219. The Council agreed that the Director-General should review his budgetary proposals in the light of the Council discussion. It requested the Director-General to develop revised proposals, together with a draft resolution, for consideration by the Programme and Finance Committees, and for presentation to the autumn sessions of the Council and Conference.

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