FC 109/1-Add.1

Finance Committee

Hundred and Ninth Session

Rome, 9 - 13 May 2005

Provisional Annotated Agenda


1. Adoption of Provisional Agenda and Timetable (docs. FC 109/1, FC 109/1 Add.1 and
FC 109/INF/1)


  for decision
In accordance with the Committee’s internal working procedures, the Provisional Timetable provides to the extent possible for discussion at the beginning of the meeting of those items on which the Committee is required to make decisions or recommendations to the Council.
2. Election of Vice Chairperson


  for decision
In accordance with the Rules of Procedure of the Committee, at the first session of each calendar year the Committee shall elect a Vice Chairperson


3. Annual Report on Budgetary Performance and Programme and Budgetary Transfers (doc. FC 109/3)



for discussion

In accordance with Financial Regulation 4.6(b) the Committee will receive, for its review, the Report on Budgetary Performance for 2004. Any comments the Committee may wish to make will be submitted to the Council at its forthcoming session. The Annual Report will be appended to the Report of the Committee.
4. Financial Highlights and Status of Current Assessments and Arrears (doc. FC 109/4)



for discussion

The Financial Highlights Report is designed to show, at a summary level, the financial situation of the Organization. In terms of the structure of the report, there are three groupings of data: income and expenditure by source of funds, the plan (budget) for particular sources of funds and balances for the comparative period in the previous biennium. Also included is the report on “Collection of Current Assessments and Arrears,” which presents the status of member nation contributions to the Regular Programme as at 31 December 2004.
5. Report on Investments 2004 (doc. FC 109/5)


  for information
In accordance with Financial Regulation 9.2 and General Rule XXVII 7(i), the Committee will receive for its information a report on investments currently held in respect of the various funds of the Organization. In addition, in order to facilitate the Committee’s review of the long-term portfolio, this paper also contains some comparative information on the portfolio structures and performance of organizations with similar staff-related liabilities, as was requested by the Committee at its 108th session (September 2004).
6. Incentive Scheme to Encourage Prompt Payment of Contributions – Analysis of Impact of Zero Discount Rate (doc. FC 109/6)


  for decision
At its 108th Session, the Committee requested that an analysis be made against past behaviour of the effect of a discount rate of zero on members’ timing of payments in early 2005 in order to reveal whether the incentive scheme had any relevance. The Committee will further review various alternative measures and additional sanctions which could be introduced to improve collection with a view to making a comprehensive recommendation to the June 2005 Session of the Council.
7. Scale of Contributions 2006-2007 (doc. FC 109/7)


  for decision
The Committee will be provided with the proposed scale of contributions for the 2006-2007 biennium, together with a draft resolution to be submitted through the Council to the Conference.


8. Extension of the Appointment of the External Auditor (doc. FC 109/8)


  for decision
During its 107th Session in May 2004, the Committee confirmed the appropriateness of the External Auditor being appointed for a period of four years (two biennia) with possible extension for a further two year period (one biennium), following which the contract for external audit must be re-tendered. In this paper, the Committee will find a proposal for a resolution to the Council in the case in which the Committee decides to recommend an extension of the appointment.
9. 2004 Annual Activity Report of the Office of the Inspector-General (doc. FC 109/9)


  for information
In accordance with the practice established at the 87th Session, this report is provided to the members of the Finance Committee for their review.
10. Appointment of the Auditor General of a Member Nation as External Auditor
(Financial Regulation 12.1) (doc. FC 109/10)



for discussion

With regard to the possibility of extending the invitation to bid for the external audit of FAO, not only to Auditors General of all member nations, but also to large private sector audit firms, the Committee, at its 108th Session, requested that, in view of the intrinsically inter-agency nature of the subject, the Director-General refer the matter to the United Nations System Chief Executives Board for Coordination for additional information. The paper provides an update on this request.
11. Progress Report on Implementation of the External Auditor’s Recommendations
(doc. FC 109/11)


  for information
As requested by the Committee, a report will be provided on actions taken in respect of recommendations made by the External Auditor in his report on the 2002-2003 accounts, as well as on a number of recommendations brought forward from previous biennia. This paper also includes, according to the Committee’s request at its 108th session, a summary table highlighting the total number of recommendations made and how many of these had been implemented and how many were still under consideration.
12. Structure of the FAO and WFP Internal Audit Committees (doc. FC 109/12)


  for information
This paper, requested by the Committee at its 108th Session, identifies the salient features of the respective committees and provides details on their structure, composition and main functions.
13. Internal Controls Reporting (doc. FC 109/13)



for discussion

At the 107th Session,the Committee requested that a paper be presented to a future session of the Finance Committee outlining current best practice in internal control reporting, the issues involved in introducing such reporting within the Organization and likely costs and potential timetable of such introduction. At the 108th Session it was decided that the secretariat would prepare such a written report for presentation at the next session.
14. Reports of the UN Joint Inspection Unit

for discussion

a) Review of the Headquarters Agreements concluded by the Organizations of the United Nations System: Human Resources Issues Affecting Staff (JIU/REP/2004/2) (doc. CL 128/INF/8)
b) Joint Inspection Unit Reports on Managing for Results in the United Nations System (JIU/REP/2004/5, 6, 7, 8) (doc. CL 128/INF/10)

for discussion

c) Report on Follow-up to Joint Inspection Unit Recommendations
(doc. PC 93/9 – FC 109/14c))

for information

These documents will be provided to the Committee for any comments it may wish to make to the Council.
15. Report of External Audit Review of Official Travel in FAO (doc. FC 109/15)



for discussion

16. Report of External Audit Review of Local Contracts in Headquarters of FAO (doc. FC 109/16)



for discussion

Further to earlier discussions, the Committee at its 107th session confirmed its request that the External Auditor submit his Value-for-Money reports to the Committee in a sequential manner during the course of the biennium. Subsequently, these reports would be consolidated into the single end-of-audit report (together with the Audited Accounts) for the consideration of Council and Conference. These will be the first such reports submitted under this new reporting regime.


17. Funding of the After Service Medical Costs Liability (doc. FC 109/17)



for discussion

The purpose of this paper is to respond to the Committee’s request at its 108th session for preparation of a document with proposals and options available on the funding of the After Service Medical Costs Liability, to assist the Committee in arriving at a recommendation to Council on the amount of funding to be included in the 2006-07 budget appropriation.
18. Status Report on HLCM Working Group on Accounting Standards (doc. FC 109/18)


  for information
At its 107th session (May 2004), the Committee, while noting the importance of the work being performed by a Task Force within the UN system in relation to accounting standards and in view of the timetable foreseen for presentation of recommendations on accounting standards, proposed that updated information on the matter be included in the agenda for the May 2005 session of the Finance Committee. The present report is submitted in response to that proposal.
19. Liability of the Organization and its Member States for Staff Pensions (doc. FC 109/19)


  for information
This paper is a follow-up on document FC 108/11b) Cost Analysis of Staff Remuneration and Benefits, presented at the Committee’s 108th session.


20. Summary Programme of Work and Budget 2006-2007 (doc. CL 128/3)



for discussion

In accordance with General Rules XXVII 7(a) and XXVIII the Committee will review the Summary of the Director-General’s proposals for the Programme of Work and Budget for 2006-2007. It is expected that the Finance Committee will consider the financial aspects of the Summary Programme of Work and Budget, such as financial framework, budgetary framework (including cost increases, impact of exchange rates, lapse factor, etc.) and Chapters 5 and 6, without concerning itself with the merits of the Programme. Further, the outcome of the exercise on Efficiency Savings will be incorporated into the Summary Programme of Work and Budget 2006-07. The comments of the Committee will be forwarded to the Council together with those of the Programme Committee.


21. Requirements to Compete Effectively for a Post in FAO (doc. FC 109/21)


  for information
In response to its request at the 108th session the Committee will be provided with a report advising member countries on the appropriate means for their nationals to compete effectively for a position with FAO.
22. Issuance of Work Permits for Expatriate Spouses at Headquarters (doc. FC 109/22)



for discussion

The Committee will receive further information from the Legal Counsel about the developments regarding the practice followed by the host government concerning the issuance of work permits to spouses of expatriate staff members.
23. Statistics on Human Resources (doc. FC 109/23)


  for information
In line with normal practice, the Committee will be provided with its annual report on the number of established posts and other personnel services as at 31 December 2004.
24. Decisions of the General Assembly on International Civil Service Commission and UN Joint Staff Pension Board (including Changes in Salary Scales and Allowances (doc. FC 109/24)


  for information
In accordance with standard practice, the Committee will be informed of any developments which took place at the General Assembly and the UN Joint Staff Pension Board which are of interest to the Organization, as well as an updated report on changes in salary scales and allowances.
25. Comparative Study of General Service and Professional Staffing in other UN Organizations (doc. FC 109/25)


  for information
In response to its request at the 108th session the Committee will be provided with a comparative study on the ratio between staff members in the general service and professional categories serving at the Headquarters of other UN organizations.


26. Follow-up to the Independent Evaluation of FAO’s Decentralization    for discussion
(docs. PC 92/6a) - FC 108/18 re-issued and PC 93/7 – FC 109/26)
The secretariat will present a more detailed management response to the Independent Evaluation of FAO’s Decentralization, including a time-bound action plan for implementation of its recommendations.
27. Progress Report on Administrative Information Systems (doc. FC 109/27)


  for information
In response to its request for regular progress reports, the Committee will be provided with updated information on the status of the various elements of the “Oracle” Project.
28. Review of the Payment of the European Community to cover Administrative and Other Expenses arising out of its Membership in the Organization (doc. FC 109/28)


  for decision
This paper is a follow-up to a document presented at the 108th Session (FC 108/26c)) that contains a proposal for a new methodology in the calculation of the EC contribution to FAO covering administrative and other expenses arising out of its membership in the Organization. The proposal, together with any comments that the Committee may have, will then be presented to the Conference in November 2005.
29. Translation Services in FAO (doc. FC 109/29)



for discussion

In order to understand the problems and the procedures of the translation process the Chairperson has requested that the Financial Committee be informed about translation services in FAO, in particular, the number of translators working for FAO, their duties, fees, schedules, problems that they face, if the programmes at FAO are able to use their services, etc.


Matters that have been considered at the First Meeting of the WFP Executive Board
(31 January – 2 February 2005)


  for information
30. Business Process Review: Working Capital Financing (doc. FC 109/30)
On the basis of progress in implementing business process improvements and the demonstrated positive impact of working-capital financing in five pilot projects, the WFP secretariat requested the Executive Board to approve two financial policy changes that would enable WFP to improve on-time availability of food aid.
31. Financial Framework for Strategic Priority 5 Implementation (doc. FC 109/31)
The document examined the potential legal mechanisms for making contributions to WFP and for receipt by WFP of contributions targeted to help build country and regional capacities. Once established, the legal framework would provide the starting point for the design of an effective resource mobilization strategy for all five strategic priorities.
32. Funding Arrangements for United Nations Staff Safety and Security (doc. FC 109/32)
This document (i) provided an update on WFP’s security costs for 2004–2005, including funding of its share of the budget of the Office of the United Nations Security Coordinator for 2004–2005, and (ii) proposed a revised funding mechanism for staff safety and security-related costs for the 2004−2005 biennium for approval by the Board.
33. Definition of Special Operations (doc. FC 109/33)
The Board was requested to approve an amended definition of the special operations programme category in the General Rules.
34. Proposed Programme of Work of the External Auditor for the 2004-2005 Biennium
(doc. FC 109/34)
The document provides an overview of the External Auditors planned work for the audit of WFP’s financial statements and activities for the 2004-2005 biennium.
35. Report of the External Auditor on Financial Reporting Standards for the World Food Programme (doc. FC 109/35)
The report provides a review of WFP’s financial reporting standards and sets out the implications and benefits of WFP adopting independent international accounting standards.
36. Follow-up on the Recommendations of the External Auditor (doc. FC 109/36)
The report covered the remaining seven items from the 2000–2001 Long-Form Report, which had all been completed and the status of implementation of the 2002–2003 audit recommendations.
37. Update on the WFP Management Plan for 2004-2005 (doc. FC 109/37)
This document provided the third update on implementation of the Management Plan 2004–2005 requested by the Board at its October 2003 session.
Matters to be considered at the Annual Meeting of the WFP Executive Board
(6–10 June 2005)



for discussion

38. Consolidated Financial Report (doc. FC 109/38)
The Consolidated Financial Report provides financial information on the financial statements for 2004, the utilisation of resources and waivers, and cash and investment management for 2004.
39. Update on the Business Process Review (doc. FC 109/39)
In March 2003, the WFP secretariat began a business process review designed to improve efficiency in WFP. It had two objectives: (i) to maximize the utilization of resources destined to a project, and (ii) to improve on-time availability of food aid. The document will provide an update on the progress of the review.
40. Follow-up on the Recommendations of the External Auditor (doc. FC 109/40)
The report will provide an update on the status of implementation of the 2002–2003 audit recommendations.
41. Strategic Plan (2006-2009) (doc. FC 109/41)
The Strategic Plan is the one of the governance tools agreed in 2000 to be submitted to the Executive Board for comment and approval. As required by the amendment to General Rule VI.1 the Strategic Plan covers a four–year period and highlights the main features of the Programme’s work during the ensuing financial period. The Plan is submitted on a rolling basis every two years.
42. Report of the External Auditor on Management Matters (doc. FC 109/42)
Further to a similar report considered at a previous session, the document will present the additional Report(s) of the External Auditor on Management Matters carried out during the biennium 2004-2005.
43. Update on the WFP Management Plan for 2004-2005 (doc. FC 109/43)
This document will provide the fourth update on implementation of the Management Plan
2004–2005 requested by the Board at its October 2003 session.


44. Working Methods of the Finance Committee (no document)



for discussion

In accordance with the standard practice of the Committee, members will be given an opportunity to comment on the functioning of the session and to make suggestions for future improvements.
45. Date and Place of the Hundred and tenth Session


  for information
The Committee will be informed of arrangements for its next session.
46. Any Other Matters