Background

1.     At its 33rd session in November 2005, the FAO Conference considered the proposed Programme of Work and Budget (PWB) for the 2006-07 biennium, including reforms submitted by the Director-General. It adopted two Resolutions on Budgetary Appropriations for 2006-07 and on Reforms in the Organization, the full texts of which are reproduced in Annexes I and II respectively. The Conference also approved as a new feature the establishment of a Security Expenditure Facility in Chapter 9 of the PWB.

2.     The approved level of FAO’s Regular Budget for 2006-07 is US$ 765.7 million. While this figure embodies a nominal increase of US$ 16.6 million over the 2004-05 budget of US$ 749.1 million, of this amount US$ 10.6 million is to meet escalating security costs. The balance of US$ 6 million can only partially cover anticipated cost increases of US$ 44.6 million. Therefore, US$ 38.6 million must be absorbed through further efficiency savings and programme cuts. This is equivalent to a real reduction of 5.2% over the biennium.

3.     In this light, the Conference requested in operative paragraph 2 of the Appropriations Resolution, that a revised PWB document be submitted to the present sessions of the Programme and Finance Committees. This document reflects a biennial programme of work adjusted to the approved budget level of US$ 765.7 million. It describes and quantifies changes which are within the authority of the Director-General or in the main operative paragraphs and Annex of the Resolution on Reforms in the Organization which:

• authorised a first stage of changes to the organizational structure at headquarters;
• acknowledged the need for strengthened decentralization and requested as a first step the implementation of reform proposals in one region and one additional subregional office;
• supported streamlining of administrative and financial processes and authorised the establishment of the Shared Services Centre (SSC).

Scope of document

4.     Accordingly, this document presents:

• an overview of main steps affecting implementation over the whole biennium. This includes organizational restructuring measures and actions for achieving efficiency savings and productivity gains, and indications of further restructuring to be proposed for consideration by the governing bodies later in the year;
• key budgetary dimensions of the revised PWB, consistent with the approved budget for 2006-07 and the reform proposals already endorsed by the Conference;
• the programme of work for the biennium, including modified programme entities under the new chapter structure approved by the Conference and attendant budgetary provisions, going down to programme entity level.

5.     The printed document contains the above information, including programme-level narratives, resource tables by organizational unit, and organigrammes of headquarters and decentralized offices. More detailed supportive information is made available on the FAO’s Web site ( www.fao.org/pwb/2006 ), covering:

• List of scheduled sessions
• Regional resource tables
• Establishment of posts by organizational unit
• Mapping of 2004-05 programme entities
• Programme entity formulations

Action required by the Committees

6.     Endorsement is sought of the revised programme of work within the respective mandates of the two Committees, and ultimately of the Joint Meeting.

7.     The Programme Committee may wish to address the results of extensive reformulation of the programme of work under the new budgetary Chapters 2, 3 and 4, down to programme entity level, as reflected in Section IV and Annexes IV, IX and X. The Finance Committee may wish to do the same for budgetary Chapters 1, 5, 8 and 9.

8.     The Finance Committee is more specifically requested to approve the following budgetary transfers as per Financial Regulation 4.5b.

Table 1: Approved budget level

9.     In relation to the above changes at chapter level, which are not extensive in relative terms, it may be useful to recall that the original figures in the Appropriation Resolution were very much the result of extrapolation from amounts at the real growth level included in the PWB 2006-07 documentation presented to the Conference. The proposed new figures in the revised budget reflect the result of detailed programming of requirements at programme entity level to reach the chapter totals tabulated above.

10.     In addition, the advice of the Committees is sought regarding the preparation of a Medium Term Plan 2008-13 (cf. explanations in the following Section II).