Organizational Performance
15. While the Programme Implementation Report draws information from the unaudited FAO financial accounts and the underlying accounting records, it is not intended to be an accounting document. Rather, the PIR includes a discussion of the sources and uses of resources during the biennium in relation to the delivery of products or services and achievement of outcomes. This section summarises the evolution of available resources, the cost of the field programme, and budgetary performance in general. In addition, there is continued reporting on the FAO language policy and the geographical distribution of FAO staff.
Evolution of total resources
16. Expenditure in 2004-05, as reported in the financial accounts for 2004-05 by source of funds, is presented in Table 1 under the two accounting categories of “General and Related Funds” and “Trust Funds and the United Nations Development Programme (UNDP)”:
16. Expenditure in 2004-05, as reported in the financial accounts for 2004-05 by source of funds, is presented in Table 1 under the two accounting categories of “General and Related Funds” and “Trust Funds and the United Nations Development Programme (UNDP)”:
- General and Related Funds encompass activities funded from the Regular Programme appropriation and associated sources, including jointly financed investment activities, support costs and other assorted items;
- Trust Funds and UNDP comprise activities funded from all other extrabudgetary resources.
Table 1: Expenditure Summary by Source of Funds (US$ million)
| Funding source | 2002-03 | 2004-05 | |
|---|---|---|---|
| General and Related Funds | |||
| Regular Programme appropriation (versus 2004-05 budget of US$749.1 million) | 651.1 | 748.2 | |
| Jointly financed investment activities | 29.4 | 26.7 | |
| Support cost reimbursements (Trust Fund/UNDP) | 32.6 | 41.5 | |
| TCP adjustments (Table below) | 15.7 | 25.6 | |
| Currency variance | 34.8 | 18.7 | |
| Expenditure funded from Arrears (Resolution 6/2001) | 3.5 | 31.3 | |
| Other* | 12.8 | 16.3 | |
| Subtotal | 779.9 | 908.3 | |
| Trust Funds and UNDP | |||
| Trust Funds (excluding emergency projects) | 284.3 | 380.0 | |
| Special relief operations (emergency projects) | 309.7 | 239.5 | |
| UNDP | 26.0 | 15.3 | |
| Subtotal | 620.0 | 634.8 | |
| Total expenditures | 1,399.9 | 1,543.1 | |
| *Includes items such as the financial services provided to WFP, the expenditure of the Information Products Revolving Fund and government cash counterpart contributions to country offices. | |||
17. Total expenditure in 2004-05 was US$ 1,543 million, US$ 143 million (10.2%) higher than 2002-03.
18. Expenditure under General and Related Funds, which increased by US$ 128 million (16.5%) over the previous biennium, showed significant changes between 2004-05 and 2002-03:
- the Regular Programme appropriation, while declining in real terms, had a 15% higher expenditure in 2004-05;
- jointly funded investment activities declined by US$ 2.8 million (9%) in 2004-05 compared to an increase of US$ 6.5 million (22%) in 2002-03;
- support cost reimbursements rose substantially, increasing by US$ 8.9 million (27%);
- the line entitled "TCP adjustments" includes the 2004-05 expenditure against the 2002-03 Technical Cooperation Programme (TCP) appropriation and the unspent TCP appropriation from 2004-05 deferred for expenditure in 2006-07. As shown in Table 2, there was a lower level of expenditure against the previous biennium TCP appropriation and a lower level of deferred TCP resources in 2004-05 than in 2002-03.
- the staff cost variance, which was US$ 5.4 million favourable in 2002-03 deteriorated to US$ 16 million unfavourable in 2004-05;
- the expenditure of US$ 31.3 million against arrears, relates to one-time expenditures approved by Conference Resolution 6/2001;
- the increase in expenditure under "Other" resulted from an increase in other sundry income as its components (financial services to WFP, the information products revolving fund and government cash counterpart contributions to country offices) declined in 2004-05.
Table 2: TCP Expenditure Adjustments (US$ million)
| Funding source | 2002-03 | 2004-05 | Change | |
|---|---|---|---|---|
| Expenditure against previous biennium's TCP appropriation | 77.7 | 62.0 | (15.7) | |
| Current biennium's appropriation deferred until subsequent biennium | (62.0) | (36.4) | 25.6 | |
| Total | 15.7 | 25.6 | 9.9 |
19. Under Trust Funds and UNDP, where overall expenditure increased by US$ 14 million (2.4%), there were also significant variations between the two biennia:
- expenditure on non-emergency trust funds increased by US$ 95.7 million (34%);
- emergency operations implementation declined by US$ 70.2 million (23%), mainly as the result of termination the Iraq Oil-for-Food Programme; and
- expenditure under UNDP dropped by US$ 10.7 million (41%).
20. With reference to the expenditure against arrears mentioned above, in late 2002 the Organization received from the major contributor a payment of arrears in the amount of US$ 100 million, the use of which was stipulated in Conference Resolution 6/2001. A description of the procedural and financial utilisation of these resources during the period 2003-2005 is discussed later in this section. Information on the substantive achievements resulting from utilisation of the arrears resources is included in the programme narratives in the next section on Summary of Programme Implementation and in Annex IV.
21. The following discussion concentrates on the resources and expenditure concerned with general and related funds comprising the programme of work. Activities linked to the field programme are discussed later in this section and under relevant areas of the Summary of Programme Implementation, particularly the Major Programmes 3.2: Support to Investment and 3.3 Field Operations.
22. The 2004-05 programme of work included the projected availability of resources from other income, which comprises voluntary contributions that are largely at the disposal of the Organization and managed closely with the Regular Budget appropriation. The inclusion of other income in the programme of work provides a more complete picture of the resources associated with the work being undertaken. However, changes in income versus the budgeted levels during programme implementation require corresponding changes in expenditures in order to conform to the approved budgetary appropriation, adding some uncertainty and complexity to the financial management of the budgetary appropriation.
23. The 2004-05 programme of work and the adjustments made during its implementation are shown in Table 3 entitled Programme of Work and Budgetary Transfers, 2004-05. Resources originally planned in the PWB 2004-05 totalled US$ 823.3 million, US$ 749.1 from the Regular Programme appropriation and US$ 74.2 million from other income. Adjustments are necessary because the implementation of the programme of work inevitably diverges from that planned as the result of factors such as unforeseen and unbudgeted inflation and other costs as well as shifts in priorities reflecting the changing external environment and the Organization’s efforts to respond to Members' most pressing needs.
24. The financial regulations of the Organization require that all transfers of the Regular Programme appropriation between chapters of the PWB have prior approval of the Finance Committee. Accordingly, at its session in September 2005, the Finance Committee approved transfers between budgetary chapters of up to US$ 6 million from Chapter 1: General Policy and Direction, Chapter 2: Technical and Economic Programmes and Chapter 5: Support Services in favour of Chapters 3: Cooperation and Partnerships (US$ 4.2 million) and Chapter 6: Common Services (US$ 1.8 million). The final transfers required were US$ 300,000 from Chapter 1, US$ 2,540,000 from Chapter 2 and US$ 50,000 from Chapter 5 in favour of Chapter 3 (US$1,540,000) and Chapter 6 (US$ 1,350,000). All transfers were within the levels previously approved by the Finance Committee. Overall, the final programme of work reflected an increase of US$ 7.3 million as the result of higher than planned income received during 2004-05.
25. Shifts between major programmes were largely due to the following factors:
- unfavourable staff cost variance, related to the strengthening of local currencies against the US dollar in decentralized offices, significant adjustments to the provisions for staff related liabilities following a new actuarial valuation and an increase in premiums of staff medical schemes;
- additional security requirements in the regional and subregional offices related to Minimum Operating Security Standards (MOSS);
- higher than anticipated headquarters building and maintenance expenditures.
26. FAO took decisive action during the biennium to ensure a safe and secure working environment for staff at all locations. Security expenditures totalled about US$ 19 million, more than double that of the previous biennium. The main actions taken in the field and at headquarters are reported in Summary of Programme Implementation under Programme 1.3.1, Major Programme 3.4, and Chapter 6.
27. Security budgets and expenditures in 2004-05 are spread among several chapters and organizational units, which weaken the financial management and control of this important area of expenditure. To strengthen the existing financial framework for planning, monitoring and accountability for security of staff and assets of the Organization, the Conference in November 2005 approved the Director-General’s proposal to establish a Security Expenditure Facility consisting of a separate budgetary chapter and a Security Account. Therefore, future PIRs will report on security expenditure and related activities in a unified manner.
28. Expenditures to implement the programme of work versus the 2004-05 final budget are shown in Table 4 entitled Budgetary Performance, 2004-05. Expenditure totalled US$ 829.8 million1 against a corresponding final budget of US$ 830.6 million. Income earned was US$ 81.5 million. Overall net expenditure against the Regular Programme appropriation of US$ 749.1 million was US$ 748.2 million.
29. The underlying causes requiring budgetary transfers between programmes are often beyond the control of the allottee and depend, for example, on income shortfalls, exchange rate variance on non-staff costs, decisions of the International Civil Service Commission (ICSC) on staff costs, and so on. Therefore, in the summary tables preceding each programme in the Summary of Programme Implementation section of the PIR, information is provided on expenditure against the final programme of work after budgetary transfers. A percentage of PWB resources subject to transfers is also given as a measure of the extent to which the actual programmes implemented departed, in financial terms, from those originally planned.
30. During the 2004-05 biennium, the unfavourable variance between actual and standard staff cost rates totalled nearly US$ 16 million and was, therefore, a significant factor in overall budgetary performance. The effect of staff cost variance by major programme has been included in Table 4.
Table 3: Programme of Work and Budgetary Transfers, 2004-05 (US$ '000)
| 2004-05 Programme of Work | 2004-05 Income | 2004-05 Net Appropriation/Income | ||||||||
| CH/ MP | Description | Programme of Work | Adjustments Arising out of Budgetary Transfers | Final Programme of Work | Income | Income Adjustments | Final Income | Net Appropriation | Approved Transfers | Final Appropriation |
| 11 | Governing Bodies | 19,598 | 775 | 20,373 | 0 | (85) | (85) | 19,598 | 690 | 20,288 |
| 12 | Policy, Direction and Planning | 28,236 | 1,710 | 29,946 | (2,100) | (170) | (2,270) | 26,136 | 1,540 | 27,676 |
| 13 | External Coordination and Liaison | 21,621 | (2,280) | 19,341 | 0 | (250) | (250) | 21,621 | (2,530) | 19,091 |
| 1 | General Policy and Direction | 69,455 | 205 | 69,660 | (2,100) | (505) | (2,605) | 67,355 | (300) | 67,055 |
| 21 | Agricultural Production and Support Systems | 102,927 | 890 | 103,817 | (2,980) | (2,140) | (5,120) | 99,947 | (1,250) | 98,697 |
| 22 | Food and Agriculture Policy and Development | 100,547 | (570) | 99,977 | (2,278) | (1,180) | (3,458) | 98,269 | (1,750) | 96,519 |
| 23 | Fisheries | 47,222 | 75 | 47,297 | (2,173) | 800 | (1,373) | 45,049 | 875 | 45,924 |
| 24 | Forestry | 35,374 | 775 | 36,149 | (697) | (685) | (1,382) | 34,677 | 90 | 34,767 |
| 25 | Contributions to Sustainable Development and Special Programme Thrusts | 52,640 | (280) | 52,360 | (1,447) | (225) | (1,672) | 51,193 | (505) | 50,688 |
| 2 | Technical and Economic Programmes | 338,710 | 890 | 339,600 | (9,575) | (3,430) | (13,005) | 329,135 | (2,540) | 326,595 |
| 31 | Policy Assistance | 29,653 | 410 | 30,063 | (861) | (230) | (1,091) | 28,792 | 180 | 28,972 |
| 32 | Support to Investment | 55,128 | (3,075) | 52,053 | (29,654) | 1,500 | (28,154) | 25,474 | (1,575) | 23,899 |
| 33 | Field Operations | 12,313 | (310) | 12,003 | (8,206) | 395 | (7,811) | 4,107 | 85 | 4,192 |
| 34 | FAO Representatives | 81,747 | 4,375 | 86,122 | (11,332) | (1,910) | (13,242) | 70,415 | 2,465 | 72,880 |
| 35 | Cooperation with External Partners | 11,790 | 480 | 12,270 | (1,945) | (230) | (2,175) | 9,845 | 250 | 10,095 |
| 39 | Programme Management | 2,288 | 150 | 2,438 | (147) | (15) | (162) | 2,141 | 135 | 2,276 |
| 3 | Cooperation and Partnerships | 192,919 | 2,030 | 194,949 | (52,145) | (490) | (52,635) | 140,774 | 1,540 | 142,314 |
| 41 | Technical Cooperation Programme | 98,645 | 0 | 98,645 | 0 | 0 | 0 | 98,645 | 0 | 98,645 |
| 42 | TCP Unit | 4,382 | 0 | 4,382 | 0 | 0 | 0 | 4,382 | 0 | 4,382 |
| 4 | Technical Cooperation Programme | 103,027 | 0 | 103,027 | 0 | 0 | 0 | 103,027 | 0 | 103,027 |
| 51 | Information and Publications Support | 18,064 | 297 | 18,361 | 0 | (60) | (60) | 18,064 | 237 | 18,301 |
| 52 | Administration | 48,074 | 885 | 48,959 | (6,723) | (1,172) | (7,895) | 41,351 | (287) | 41,064 |
| 5 | Support Services | 66,138 | 1,182 | 67,320 | (6,723) | (1,232) | (7,955) | 59,415 | (50) | 59,365 |
| 60 | Common Services | 52,486 | 2,985 | 55,471 | (3,692) | (1,635) | (5,327) | 48,794 | 1,350 | 50,144 |
| 6 | Common Services | 52,486 | 2,985 | 55,471 | (3,692) | (1,635) | (5,327) | 48,794 | 1,350 | 50,144 |
| 70 | Contingencies | 600 | 0 | 600 | 0 | 0 | 0 | 600 | 0 | 600 |
| 7 | Contingencies | 600 | 0 | 600 | 0 | 0 | 0 | 600 | 0 | 600 |
| TOTAL | 823,335 | 7,292 | 830,627 | (74,235) | (7,292) | (81,527) | 749,100 | 0 | 749,100 | |
Table 4: Budgetary Performance, 2004-05 (US$ '000)
| 2004-05 Final Budget | 2004-05 Expenditure | Variance: Budget less Expenditure/Income | ||||||||||
| CH/ MP | Description | Programme of Work | Income | Appropriation | Budget Rate Expenditure before Staff cost Variance | Staff Cost Variance | Budget Rate Expenditure | Income | Net Expenditure | Programme of Work (Over)/ Under | Income Over/ (Under) | Net Appropriation (Over)/ Under |
| 11 | Governing Bodies | 20,373 | (85) | 20,288 | 20,192 | 164 | 20,356 | (85) | 20,271 | 17 | 0 | 17 |
| 12 | Policy, Direction and Planning | 29,946 | (2,270) | 27,676 | 29,141 | 782 | 29,923 | (2,268) | 27,655 | 23 | 2 | 21 |
| 13 | External Coordination and Liaison | 19,341 | (250) | 19,091 | 19,027 | 274 | 19,301 | (247) | 19,054 | 40 | 3 | 37 |
| 1 | General Policy and Direction | 69,660 | (2,605) | 67,055 | 68,360 | 1,220 | 69,580 | (2,600) | 66,980 | 80 | 5 | 75 |
| 21 | Agricultural Production and Support Systems | 103,817 | (5,120) | 98,697 | 101,155 | 2,610 | 103,765 | (5,117) | 98,648 | 52 | 3 | 49 |
| 22 | Food and Agriculture Policy and Development | 99,977 | (3,458) | 96,519 | 97,733 | 2,195 | 99,928 | (3,452) | 96,476 | 49 | 6 | 43 |
| 23 | Fisheries | 47,297 | (1,373) | 45,924 | 46,187 | 1,076 | 47,263 | (1,367) | 45,896 | 34 | 6 | 28 |
| 24 | Forestry | 36,149 | (1,382) | 34,767 | 35,156 | 961 | 36,117 | (1,377) | 34,740 | 32 | 5 | 27 |
| 25 | Contributions to Sustainable Development and Special Programme Thrusts | 52,360 | (1,672) | 50,688 | 51,127 | 1,190 | 52,317 | (1,661) | 50,656 | 43 | 11 | 32 |
| 2 | Technical and Economic Programmes | 339,600 | (13,005) | 326,595 | 331,358 | 8,032 | 339,390 | (12,974) | 326,416 | 210 | 31 | 179 |
| 31 | Policy Assistance | 30,063 | (1,091) | 28,972 | 29,090 | 969 | 30,059 | (1,090) | 28,969 | 4 | 1 | 3 |
| 32 | Support to Investment | 52,053 | (28,154) | 23,899 | 49,942 | 2,103 | 52,045 | (28,146) | 23,899 | 8 | 8 | 0 |
| 33 | Field Operations | 12,003 | (7,811) | 4,192 | 11,629 | 373 | 12,002 | (7,810) | 4,192 | 1 | 1 | 0 |
| 34 | FAO Representatives | 86,122 | (13,242) | 72,880 | 84,566 | 1,553 | 86,119 | (13,242) | 72,877 | 3 | 0 | 3 |
| 35 | Cooperation with External Partners | 12,270 | (2,175) | 10,095 | 11,923 | 348 | 12,271 | (2,176) | 10,095 | (1) | (1) | 0 |
| 39 | Programme Management | 2,438 | (162) | 2,276 | 2,402 | 31 | 2,433 | (161) | 2,272 | 5 | 1 | 4 |
| 3 | Cooperation and Partnerships | 194,949 | (52,635) | 142,314 | 189,552 | 5,377 | 194,929 | (52,625) | 142,304 | 20 | 10 | 10 |
| 41 | Technical Cooperation Programme | 98,645 | 0 | 98,645 | 98,771 | 0 | 98,771 | (52) | 98,719 | (126) | (52) | (74) |
| 42 | TCP Unit | 4,382 | 0 | 4,382 | 4,188 | 120 | 4,308 | 0 | 4,308 | 74 | 0 | 74 |
| 4 | Technical Cooperation Programme | 103,027 | 0 | 103,027 | 102,959 | 120 | 103,079 | (52) | 103,027 | (52) | (52) | 0 |
| 51 | Information and Publications Support | 18,361 | (60) | 18,301 | 17,937 | 419 | 18,356 | (61) | 18,295 | 5 | (1) | 6 |
| 52 | Administration | 48,959 | (7,895) | 41,064 | 48,217 | 739 | 48,956 | (7,895) | 41,061 | 3 | 0 | 3 |
| 5 | Support Services | 67,320 | (7,955) | 59,365 | 66,154 | 1,158 | 67,312 | (7,956) | 59,356 | 8 | (1) | 9 |
| 60 | Common Services | 55,471 | (5,327) | 50,144 | 55,402 | 55 | 55,457 | (5,320) | 50,137 | 14 | 7 | 7 |
| 6 | Common Services | 55,471 | (5,327) | 50,144 | 55,402 | 55 | 55,457 | (5,320) | 50,137 | 14 | 7 | 7 |
| 70 | Contingencies | 600 | 0 | 600 | 14 | 0 | 14 | 0 | 14 | 586 | 0 | 586 |
| 7 | Contingencies | 600 | 0 | 600 | 14 | 0 | 14 | 0 | 14 | 586 | 0 | 586 |
| TOTAL | 830,627 | (81,527) | 749,100 | 813,799 | 15,962 | 829,761 | (81,527) | 748,234 | 866 | 0 | 866 | |
31. The total expenditure by PWB chapter is summarised in Figure 2.1. The technical work of the Organization accounted for 77% of expenditure in 2004-05, slightly lower than 2002-03, distributed as follows:
- 41% under Chapter 2: Technical and Economic Programmes;
- 24% under Chapter 3: Cooperation and Partnerships; and
- 12% under Chapter 4: Technical Cooperation Programme.
32. Chapter 1: General Policy and Direction, including the costs of governance and public information (Major Programme 5.1), amounted to a further 11%, leaving a balance of 12% for Major Programme 5.2 Administration and Chapter 6: Common Services.
33. The share of expenditure between headquarters and decentralized offices is shown in Figure 2.2. Headquarters accounted for 65% of total expenditures in 2004-05, up from 62% in 2002-03. Field programme expenditures funded from the Regular Programme for TCP and SPFS decreased slightly from 14% in 2002-03 to 13% in 2004-05 and regional offices decreased from 10% to 8%. FAORs remained at 10%, subregional offices at 3% and liaison offices at 1%. As these figures show, headquarters remains the dominant origin of expenditures for the Organization, despite the extensive decentralization that has taken place since 1994.
34. A breakdown of expenditure in relation to the final programme of work for Chapter 2: Technical and Economic Programmes is shown in Table 5. The chapter fully utilised the Regular Programme resources available during 2004-05, with expenditure within the chapter (US$ 339.4 million) nearly US$ 0.7 million higher than originally planned (US$ 338.7 million), following the overall chapter transfers authorised by the Finance Committee. Those areas receiving substantial additional Regular Programme resources, compared with the original biennial budgetary plans, included Programme 2.1.2: Crops (US$ 1.1 million); Programme 2.2.3: Food and Agricultural Monitoring, Assessments and Outlooks (US$ 485,000); Programme 2.3.2: Fisheries Resources and Aquaculture (US$ 370,000); Programme 2.4.1: Forest Resources (US$ 375,000); and Programme 2.4.3: Forestry Policy and Institutions (US$ 420,000). Those with significant decreases were Programme 2.1.1: Natural Resources (US$ 600,000); Programme 2.2.2: Food and Agricultural Information (US$ 980,000); Programme 2.3.3: Fisheries Exploitation and Utilization (US$ 325,000); and Programme 2.3.4: Fisheries Policy (US$ 325,000).
Table 5: Budgetary Performance for Chapter 2: Technical and Economic Programmes, 2004-05 (US$ '000)
| MP/ PR | Description | Programme of Work | Adjustments to Programme of Work | Final Programme of Work | Expenditure | (Over)/ Under Spending | Field Programme |
| 210 | Intra-departmental Programme Entities for Agricultural Production and Support Systems | 5,395 | 200 | 5,595 | 5,589 | 6 | 4,952 |
| 211 | Natural Resources | 17,392 | (600) | 16,792 | 16,781 | 11 | 81,210 |
| 212 | Crops | 27,745 | 1,160 | 28,905 | 28,894 | 11 | 207,363 |
| 213 | Livestock | 18,859 | (210) | 18,649 | 18,640 | 9 | 66,124 |
| 214 | Agricultural Support Systems | 15,905 | (105) | 15,800 | 15,794 | 6 | 35,315 |
| 215 | Agricultural Applications of Isotopes and Biotechnology | 5,682 | 280 | 5,962 | 5,956 | 6 | 780 |
| 219 | Programme Management | 11,949 | 165 | 12,114 | 12,111 | 3 | 0 |
| 21 | Agricultural Production and Support Systems | 102,927 | 890 | 103,817 | 103,765 | 52 | 395,744 |
| 220 | Intra-departmental Programme Entities for Food and Agriculture Policy and Development | 6,603 | (260) | 6,343 | 6,334 | 9 | 6,131 |
| 221 | Nutrition, Food Quality and Safety | 20,626 | 215 | 20,841 | 20,831 | 10 | 22,406 |
| 222 | Food and Agricultural Information | 33,917 | (980) | 32,937 | 32,924 | 13 | 15,549 |
| 223 | Food and Agricultural Monitoring, Assessments and Outlooks | 15,119 | 485 | 15,604 | 15,599 | 5 | 3,353 |
| 224 | Agriculture, Food Security and Trade Policy | 13,024 | (195) | 12,829 | 12,819 | 10 | 17,899 |
| 229 | Programme Management | 11,258 | 165 | 11,423 | 11,421 | 2 | 0 |
| 22 | Food and Agriculture Policy and Development | 100,547 | (570) | 99,977 | 99,928 | 49 | 65,338 |
| 231 | Fisheries Information | 7,573 | 175 | 7,748 | 7,740 | 8 | 1,571 |
| 232 | Fisheries Resources and Aquaculture | 12,358 | 370 | 12,728 | 12,718 | 10 | 14,305 |
| 233 | Fisheries Exploitation and Utilisation | 9,882 | (325) | 9,557 | 9,550 | 7 | 21,344 |
| 234 | Fisheries Policy | 11,406 | (325) | 11,081 | 11,074 | 7 | 23,984 |
| 239 | Programme Management | 6,003 | 180 | 6,183 | 6,181 | 2 | 0 |
| 23 | Fisheries | 47,222 | 75 | 47,297 | 47,263 | 34 | 61,204 |
| 241 | Forest Resources | 9,131 | 375 | 9,506 | 9,497 | 9 | 25,006 |
| 242 | Forest Products and Economics | 9,193 | (35) | 9,158 | 9,157 | 1 | 2,977 |
| 243 | Forestry Policy and Institutions | 5,788 | 420 | 6,208 | 6,202 | 6 | 13,933 |
| 244 | Forestry Information and Liaison | 5,457 | 25 | 5,482 | 5,474 | 8 | 4,162 |
| 249 | Programme Management | 5,805 | (10) | 5,795 | 5,787 | 8 | 0 |
| 24 | Forestry | 35,374 | 775 | 36,149 | 36,117 | 32 | 46,078 |
| 251 | Research, Natural Resources Management and Technology Transfer | 17,853 | 70 | 17,923 | 17,919 | 4 | 21,212 |
| 252 | Gender and Population | 6,058 | (250) | 5,808 | 5,794 | 14 | 13,841 |
| 253 | Rural Development | 8,580 | 75 | 8,655 | 8,647 | 8 | 23,220 |
| 256 | Food Production in Support of Food Security in LIFDCs | 11,644 | (210) | 11,434 | 11,425 | 9 | 52,988 |
| 259 | Programme Management | 8,505 | 35 | 8,540 | 8,532 | 8 | 0 |
| 25 | Contributions to Sustainable Development and Special Programme Thrusts | 52,640 | (280) | 52,360 | 52,317 | 43 | 111,261 |
| TOTAL | 338,710 | 890 | 339,600 | 339,390 | 210 | 679,625 |
35. The final column of Table 5 shows expenditure under the field programme, which comprises all technical assistance and emergency assistance activities funded through extrabudgetary sources, and Regular Programme-funded technical assistance and emergency projects under the TCP and SPFS. Attention is drawn to the distinction between extrabudgetary resources, which refer to all non-Regular Programme sources of funds and related expenditures in the financial accounts of the Organization, and the field programme, which refers to the expenditure relating directly to FAO's implementation of technical and emergency assistance projects. In this context, the World Health Organization (WHO) share of the Joint FAO/WHO Food Standards Programme (Codex Alimentarius) is part of extrabudgetary resources, but is not part of the field programme. Conversely, the TCP and the provision for the SPFS are funded from the Regular Programme, but are included as part of the field programme.
36. The ratios of 2004-05 expenditure of the field programme and the Regular Programme-funded programme of work for Chapter 2 are shown in Table 6. Field programme expenditures were twice those of the programme of work. However, there were significant differences between the major programmes. Major Programme 2.1: Agricultural Production and Support Systems accounted for 58% of total field programme expenditures in 2004-05 and had the highest ratio, with field programme expenditure 3.8 times that of the programme of work. Major Programme 2.5 Contributions to Sustainable Development and Special Programme Thrusts also had a relatively high ratio of 2.4, mainly due to greater emphasis being placed on project execution within the SPFS, rather than the programme providing a source of field programme funding. In this regard, SPFS resources within the field programme declined from US$ 8.8 million in 2002-03 to US$ 5.4 million in 2004-05. Programme 2.3: Fisheries and 2.4: Forestry, both had a ratio of 1.3. For Fisheries this was a major increase, mainly related to the field programme assistance provided for Tsunami relief and rehabilitation. Major Programme 2.2: Food and Agriculture Policy and Development was the only one in which field programme expenditures were less than the regular programme expenditure, being only about 70% that of the programme of work.
Table 6: Ratio of Field Programme and Programme of Work Expenditures under Chapter 2: Technical and Economic Programmes, 2004-05
| Major Programme | RP* programme of work US$ '000 | Field programme US$ '000 | Ratio of field to programme of work |
|---|---|---|---|
| 2.1 Agricultural Production and Support Systems | 103,764 | 395,744 | 3.8 |
| 2.2 Food and Agriculture Policy and Development | 99,929 | 65,338 | 0.7 |
| 2.3 Fisheries | 47,263 | 61,204 | 1.3 |
| 2.4 Forestry | 36,117 | 46,078 | 1.3 |
| 2.5 Contributions to Sustainable Development and Special Programme Thrusts* | 46,881 | 111,261 | 2.4 |
| Total | 333,955 | 679,625 | 2.0 |
| * To avoid distorting the ratio, the Regular Programme funded programme of work for Chapter 2 comprises all Regular Programme expenditure excluding SPFS project delivery, which amounted to US$ 5.4 million in 2004-05. SPFS delivery is included under the column headed Field programme. | |||
Split Assessments
37. The FAO Conference, at its 32nd session in 2003, adopted Resolution 11/2003 to amend Regulation V of the Financial Regulations to reflect introduction of the Split Assessment methodology for the Regular Programme commencing on 1 January 2004. The methodology involves the splitting of Regular Programme assessments between euro and the US dollar as a means of protecting the implementation of the programme of work from exchange rate fluctuations.
37. The FAO Conference, at its 32nd session in 2003, adopted Resolution 11/2003 to amend Regulation V of the Financial Regulations to reflect introduction of the Split Assessment methodology for the Regular Programme commencing on 1 January 2004. The methodology involves the splitting of Regular Programme assessments between euro and the US dollar as a means of protecting the implementation of the programme of work from exchange rate fluctuations.
38. The Conference established the 2004-05 Regular Programme appropriation at US$ 749.1 million based on an exchange rate of € 1= US$ 1.19. The proportion of the appropriation to be paid was set at 45% in US dollars and 55% in euros. After adjustments for the Miscellaneous Income, funding for the After-service Medical Coverage liability and tax equalization, the biennial assessed contributions amounted to US$ 341.6 million (payable in US dollars) and € 348.9 million (payable in euros).
39. The Conference at its 33rd session in November 20052 reviewed a report prepared at its request on the performance of the split assessment arrangement during the 2004-05 biennium. It agreed to exclude charges to the Special Reserve Account due to variances in headquarters staff costs arising from differences between the budget rate and UN operational rates of exchange, with effect from the 2004-05 biennium.
40. The experience in 2004-05 with processing call letters, statements and receipts in two currencies and in responding to Members' queries and requests for information indicates that Member Nations have adapted to the split assessment approach relatively easily. Most countries tended to pay both the dollar and euro assessments at the same time, although some Members were irregular with their payments, in contrast to others who were more consistent in payments during the same period each year. The high irregularity of receipt of payments continued to make it difficult for the Organization to accurately forecast its cash flow.
41. An analysis of actual expenditures during the 2004-05 biennium indicated that the proportional expenditure by currency was very close to the projected split, with a slightly higher US dollar proportion (46%) and lower euro proportion (54%) than the proportions approved for the 2004-05 PWB.
42. Overall, the experience in application of split assessments during 2004-05 was positive. Members seemed to adapt to the new arrangements relatively easily, but delays in the receipt of Members' contributions has caused exchange losses during the biennium, which could be largely eliminated through timely payment of assessments.
Cost of Field Programme Support
45. The provision of technical assistance is an important part of the Organization's mandate, specified under Article I 3 (a) of the Constitution, which states: "It shall also be the function of the Organization to furnish such technical assistance as governments request". Technical assistance is provided from the Regular Programme – as for TCP and SPFS – or from extrabudgetary sources under the GCP, UTFs, UNDP3 or other arrangements for voluntary contributions to the field programme.
46. The Organization makes a further significant contribution to technical assistance through its support to the field programme in the form of technical support services (TSS) and administrative and operational support (AOS) services.
47. Since 1992, the Organization has made concerted efforts to measure and transparently report the cost of supporting the field programme under these two headings. This is achieved through the Work Measurement Survey which involves the completion of a detailed questionnaire by close to 1,000 staff each year. This data has been used in a number of valuable ways:
- in the case of TSS to provide an estimate of the extent of staff time and cost dedicated to the provision of these services; and
- in the case of AOS to provide a proper basis for the establishment of project servicing cost (PSC) rates as well as to help direct actions aimed at reducing such costs.
48. FAO's field programme delivery reached US$ 723 million in 2004-05, as reported under Major Programme 3.1 and Table 3.3.1 in the Summary of Programme of Implementation section. The proportion of trust fund projects remained stable at 82%, while TCP projects rose from 15% to 16% and UNDP projects further declined to 2% of delivery. In reporting on the cost of field programme support below, total delivery is US$ 24.8 million higher than field programme delivery reported in Table 3.3.1, due to the inclusion of delivery on emergency, normative and technical assistance projects that do not directly contribute to activities in the field but attract TSS and AOS services.
Technical support services (TSS)
49. These are defined as:
49. These are defined as:
- project identification;
- design and formulation of projects;
- project appraisal services;
- technical backstopping at headquarters, regional offices or in the field, including attendance at project meetings and tripartite reviews; and
- project evaluation services.
50. The overall level of TSS is outlined in Table 7, which compares the 2004-05 result with the previous biennium. It should be noted that more detailed information on TSS is included in the programme tables later in the document under Summary of Programme Implementation.
Table 7: Technical Support Services
| Component | 2002-03 | 2004-05 | ||
| US$ million* | Percentage of total delivery** | US$ million | Percentage of total delivery | |
| Delivery | 725.6 | 747.9 | ||
| Project design and formulation | 12.8 | 1.8% | 16.1 | 2.1% |
| Project appraisal | 7.1 | 1.0% | 9.9 | 1.3% |
| Project monitoring | 18.8 | 2.6% | 26.2 | 3.5% |
| Project evaluation and audit | 5.2 | 0.7% | 6.9 | 0.9% |
| Project reporting | 5.1 | 0.7% | 7.6 | 1.0% |
| Project meetings | 8.6 | 1.2% | 9.9 | 1.3% |
| Total TSS | 57.6 | 8.0% | 76.6 | 10.1% |
| * The figures include the impact of staff cost variance so as to reflect actual costs at budget rate of exchange between euro and US$ | ||||
| ** Percentage of total delivery was recalculated as delivery including TSS | ||||
51. Total field programme delivery in 2004-05 increased by 3.1% from 2002-03, while the cost of technical support services increased sharply by US$ 19 million to US$ 76.6 million. As a result, TSS as a percentage of total delivery increased from 8.1% in 2002-03 to 10.2% in 2004-05. The composition in the percentage of total delivery for the TSS components increased proportionately from the level in 2002-03.
52. As a major portion of TSS is in the form of staff time, Table 8 shows the percentage of the cost of professional technical staff time dedicated to these purposes. Since average TSS remained around the same level (29%) as in the previous biennium, the increase in TSS cost can be attributed to the higher staff cost in 2004-05 combined with a higher effort for TCP projects and major emergencies (avian influenza, locusts, Tsunami.
53. Table 7 shows that TSS, largely in the form of staff time, costing US$ 76.6 million, were provided to projects during 2004-05. The reimbursement for this technical assistance totalled US$ 19.9 million, provided by extrabudgetary-funded projects (US$ 7.2 million), TCP and SPFS projects (US$ 12.7 million). The balance for TSS was incurred under the Regular Programme budget for technical divisions. Reimbursements from extrabudgetary projects increased by nearly 85% compared with the previous biennium, which is in line with efforts to budget for TSS in such projects. Funding from TCP projects rose significantly, by 21%, consistent with the increase in TCP delivery and reflecting the impact of improved monitoring of projects and the simplification in the reimbursement modality that encouraged technical divisions to more systematically claim reimbursement for the services provided.
Table 8: Proportion of Professional Staff Time Devoted to TSS to the Field Programme, 2004-05
| MP/PR | Description | Headquarters | Regional Offices | Subregional Offices | Total |
|---|---|---|---|---|---|
| 2.1.0 | Intra-departmental Programme Entities for Agricultural Production and Support Systems | 19 | 58 | 34 | 21 |
| 2.1.1 | Natural Resources | 33 | 54 | 54 | 40 |
| 2.1.2 | Crops | 30 | 48 | 40 | 34 |
| 2.1.3 | Livestock | 30 | 54 | 45 | 34 |
| 2.1.4 | Agricultural Support Systems | 35 | 57 | 41 | 41 |
| 2.1.5 | Agricultural Applications of Isotopes and Biotechnology | 27 | 0 | 0 | 27 |
| 2.1 | Agricultural Production and Support Systems | 31 | 53 | 44 | 36 |
| 2.2.0 | Intra-departmental Programme Entities for Food and Agriculture Policy and Development | 21 | 41 | 56 | 26 |
| 2.2.1 | Nutrition, Food Quality and Safety | 15 | 60 | 49 | 21 |
| 2.2.2 | Food and Agricultural Information | 10 | 40 | 56 | 13 |
| 2.2.3 | Food and Agricultural Monitoring, Assessments and Outlooks | 7 | 50 | 0 | 8 |
| 2.2.4 | Agriculture, Food Security and Trade Policy | 17 | 35 | 60 | 19 |
| 2.2 | Food and Agriculture Policy and Development | 12 | 45 | 53 | 16 |
| 2.3.1 | Fisheries Information | 5 | 42 | 38 | 9 |
| 2.3.2 | Fisheries Resources and Aquaculture | 28 | 46 | 34 | 29 |
| 2.3.3 | Fisheries Exploitation and Utilization | 27 | 36 | 37 | 28 |
| 2.3.4 | Fisheries Policy | 21 | 39 | 35 | 25 |
| 2.3 | Fisheries | 21 | 41 | 36 | 24 |
| 2.4.1 | Forest Resources | 33 | 47 | 32 | 35 |
| 2.4.2 | Forest Products and Economics | 13 | 47 | 35 | 17 |
| 2.4.3 | Forestry Policy and Institutions | 34 | 46 | 33 | 37 |
| 2.4.4 | Forestry Information and Liaison | 6 | 45 | 35 | 11 |
| 2.4 | Forestry | 23 | 46 | 34 | 27 |
| 2.5.1 | Research, Natural Resources Management and Technology Transfer | 29 | 46 | 54 | 33 |
| 2.5.2 | Gender and Population | 32 | 45 | 65 | 36 |
| 2.5.3 | Rural Development | 36 | 62 | 48 | 41 |
| 2.5.6 | Food Production in Support of Food Security in LIFDCs | 55 | 0 | 0 | 55 |
| 2.5 | Contributions to Sustainable Development and Special Programme Thrusts | 35 | 50 | 51 | 38 |
| 3.1 | Policy Assistance | 34 | 53 | 46 | 44 |
| Average | 24 | 50 | 44 | 29 |
54. The decentralization of primary responsibility for TSS to the regional and subregional offices and the increased emphasis on the field programme is evident from Table 8 and Figure 2.3. In the regional offices the time spent by professional technical staff on TSS to the field programme stood at 50% while the decline in subregional offices was offset by an increase in AOS. At headquarters TSS remained at 24% in 2004-05.
55. As shown in Figure 2.4, total field programme support exceeded 33% of staff time in all decentralized offices. Time spent by technical staff on TSS to the field programme varied between decentralized by region locations from 45% in the Near East region to 51% in Latin America and the Caribbean.
Administrative and operational support (AOS) services
56. AOS consist of variable indirect costs that can be associated with the delivery of direct project inputs. They include:
56. AOS consist of variable indirect costs that can be associated with the delivery of direct project inputs. They include:
- assembling proposals for donors and negotiating agreements and plans of operation with stakeholders;
- recruitment, briefing and servicing of project personnel;
- fellowships placement and servicing and formulation of study plans;
- selecting and procuring supplies and equipment;
- preparation and formalisation of contracts;
- preparation, monitoring and revision of budgets and control of project expenditures;
- receipt, custody and disbursement of funds;
- maintenance of project accounts, financial reporting and support to external and internal audits;
- location and recommendation of qualified personnel;
- coordination and supervision of project implementation.
57. The level of these costs over the last two biennia is shown in Table 9.
58. In the 2004-05 biennium, total AOS costs (incurred in TCE) have risen by US$ 34 million or, as a percentage of total project delivery, from 10% to 14.1%. Key factors in the rise in AOS costs are the higher share of TCP projects in total delivery (given the small size and relative complexity of TCP projects), the general increase in staff costs, an improved recognition of the work effort in country offices, and the changing nature of emergency assistance projects.
59. Table 9 shows direct operating costs on emergency assistance as a percentage of emergency project delivery increasing sharply from 2.4% to 6.5%. This is attributable to the proportional decline of the relatively lower-cost Iraq Oil-for-Food projects, which had a particular administrative and operational set up and fell from 64% of emergency delivery in 2002-03 to none in 2004-05, as operations closed in 2003. Although emergency project delivery decreased by some 27%, it still remained at high levels due to the increase in the number of emergency assistance projects, as further reported under Major Programme 3.3. The greater diversity of emergency operations undertaken during the biennium entailed proportionally higher support costs. This has been recognized by the Council in November 2005, which approved a change in the project support cost principle and reimbursement rate for emergency assistance projects.
Table 9: Administrative and Operational Support Costs
| Component | 2002-03 | 2003-04 | ||
|---|---|---|---|---|
| US$ million* | Percentage of component delivery** | US$ million | Percentage of component delivery | |
| Project personnel | 16.6 | 0.8% | 22.2 | 0.8% |
| Project procurement | 7.7 | 14.7% | 10.6 | 12.7% |
| Project subcontracts | 3.4 | 6.2% | 3.8 | 5.2% |
| Project training | 3.6 | 13.7% | 4.5 | 16.9% |
| Project non-technical monitoring | 16.4 | 4.4% | 23.9 | 4.8% |
| Project budgeting and accounting | 7.3 | 1.9% | 11.2 | 2.2% |
| Project budget holder responsibilities | 5.5 | 1.5% | 7.5 | 1.5% |
| Project secretarial | 3.0 | 0.8% | 5.8 | 1.1% |
| Emergency Operating Costs (incurred in TCE) | 8.1 | 2.4% | 16.1 | 6.5% |
| Total AOS | 71.6 | 10.0% | 105.5 | 14.1% |
| * The figures include the impact of staff cost variance so as to reflect actual costs at budget rate of exchange between euro and US$. Costs have been restated to include Incremental Indirect costs | ||||
| ** Percentage of component delivery was recalculated as delivery including TSS | ||||
60. AOS cost is partially covered by reimbursements from the projects through charges for PSC. Table 10 shows the extent of reimbursements for AOS services in total including from emergency projects and TCP/SPFS projects funded from the Regular Programme.
Table 10: Administrative and Operational Support Costs and Extent of Reimbursement Received from Field Programme
| US$ million | 2002-03 | 2004-05 | Variance |
|---|---|---|---|
| Administrative and operational support costs | 71.6 | 105.5 | 33.9 |
| Reimbursements | 47.3 | 78.4 | 31.1 |
| Under-recovery of support costs | (24.3) | (27.1) | (2.8) |
| Net percentage of cost recovered | 66.0% | 74.3% |
61. Total AOS costs increased by nearly US$ 34 million to US$ 105.5 million in 2004-05, while reimbursements received in the biennium increased by US$ 31 million to reach the unprecedented level of US$ 78 million level. On the one hand, recoveries related to TCP projects doubled because of the high levels of delivery, and recoveries from trust fund projects also increased. On the other hand, a distortion is created by the project support cost income credited to the Organization in 2004 for support provided in 2003 during the closure of the Oil-for-Food programme in executing contracts. Thus it is expected that recoveries will be at lower levels in 2006-07.
Efficiency Savings: Progress
63. Efficiency savings have been defined by the FAO Council as reductions in the costs of inputs without material negative impact upon the outputs. The vigorous pursuit of efficiencies has been under way in FAO since January 1994, and savings over the past five biennia are estimated at US$ 60 million per annum compared with 1994, arising from input-oriented measures (US$ 39 million per annum), process-oriented measures (US$ 19 million per annum) and cost-recovery measures (US$ 4 million per annum).
64. The Adjustments to the PWB 2004-05 outlined several areas where efficiency savings were expected to be achieved in the biennium, as well as other potential areas for savings under review.
Reduction in the Administrative Unit in the Office of the Director-General (ODGX)
65. Efficiency savings in the servicing units, MSS, OCDS, Regional MSUs and in parts of AFH and AFF were progressively achieved. The MSS absorbed many of the function of ODGX and, as a result, ODGX was substantially reduced, including abolition of four posts at a saving of US$ 535,000 per biennium.
65. Efficiency savings in the servicing units, MSS, OCDS, Regional MSUs and in parts of AFH and AFF were progressively achieved. The MSS absorbed many of the function of ODGX and, as a result, ODGX was substantially reduced, including abolition of four posts at a saving of US$ 535,000 per biennium.
Incentive-driven chargeback for publications distribution
66. In June 2005, a new internal charging mechanism was approved for the distribution and storage costs of all FAO publications and meeting documents. Previously, these costs were paid centrally by AFS, whereas from January 2006 the budget for these costs was placed with the internal client divisions which have some influence over the costs through their decisions on the quantity of publications to distribute and store. It is anticipated that savings of US$ 700,000 will eventually be realised as a result of the ensuing behavioural changes.
66. In June 2005, a new internal charging mechanism was approved for the distribution and storage costs of all FAO publications and meeting documents. Previously, these costs were paid centrally by AFS, whereas from January 2006 the budget for these costs was placed with the internal client divisions which have some influence over the costs through their decisions on the quantity of publications to distribute and store. It is anticipated that savings of US$ 700,000 will eventually be realised as a result of the ensuing behavioural changes.
Streamlining governance
67. The Organization has benefited from the support of governing bodies in this area and considerable reductions in the costs of running meetings have been achieved with estimated savings of approximately US$ 2 million per annum compared with 1994.
67. The Organization has benefited from the support of governing bodies in this area and considerable reductions in the costs of running meetings have been achieved with estimated savings of approximately US$ 2 million per annum compared with 1994.
68. Besides reducing the duration of the Conference from 9 to 7 days, as approved at the 32nd session of the Conference, in 2005 the length of the Committee on Commodity Problems (CCP) and the Committee on Agriculture (COAG) sessions was reduced and costs diminished by scheduling meetings back-to-back.
69. As reported under Major Programme 1.1, mailings of meetings documents were reduced due to increased downloading of documents from the Web site, and the word limit rule was more strictly applied. Notable improvements were the shorter Summary and Programme of Work and Budget (SPWB and PWB) documents for 2006-07 produced in 2005, as well as this more compact PIR.
70. In seeking to find innovative ways to generate further savings in governance, the Organization also looked at best practices in other UN agencies. The elimination, or more efficient production of verbatim records, which are expensive to produce, was one area of investigation. Verbatim records are a requirement of FAO’s Basic Texts, therefore, other less costly production methods were considered, such as audio/video recordings of governing body meetings. It was estimated that the implementation of such measures could generate savings of approximately US$ 300,000 per annum. In the meantime, tighter time management enabled the number of seconded staff involved in the production of verbatim records for Conference and Council sessions to be reduced by 30% compared to the previous biennium.
Restructuring of registries
71. A review of registries commenced in mid-2003 and resulted in significant changes to the methods of work with the introduction of digitization during 2004-05. The FAO records management process was modified to reflect the recommendations of the International Standards Organization (ISO) 15489 standard, which is an essential component of new accountability and quality management standards. In order to gain the full potential of efficiency savings in the registries, the Organization undertook an analysis of possible structural and staffing changes. Net savings of US$ 222,000 per year were realised in the 2004-05. Implementation of the next phase could yield further savings of US$ 260,000 per year in the 2006-07 biennium.
71. A review of registries commenced in mid-2003 and resulted in significant changes to the methods of work with the introduction of digitization during 2004-05. The FAO records management process was modified to reflect the recommendations of the International Standards Organization (ISO) 15489 standard, which is an essential component of new accountability and quality management standards. In order to gain the full potential of efficiency savings in the registries, the Organization undertook an analysis of possible structural and staffing changes. Net savings of US$ 222,000 per year were realised in the 2004-05. Implementation of the next phase could yield further savings of US$ 260,000 per year in the 2006-07 biennium.
Business process reviews, streamlining and work flow improvements
72. Since 1994, FAO administrative and financial procedures have undergone extensive review, taking into account relevant findings of the External Auditor and the Inspector-General, resulting in the revision of a large number of procedures, many of which were implemented under the Oracle financial and administrative system. During 2004-05, the Organization reviewed its human resource management processes in connection with the development of the Human Resources Management System (HRMS), which will have Organization-wide implications from 2007. Efficiency savings identified relate to the elimination of time-consuming steps in administrative processes and reduction of paper flows through, for example, on-line initiation of transactions by the requesting users directly in the system.
72. Since 1994, FAO administrative and financial procedures have undergone extensive review, taking into account relevant findings of the External Auditor and the Inspector-General, resulting in the revision of a large number of procedures, many of which were implemented under the Oracle financial and administrative system. During 2004-05, the Organization reviewed its human resource management processes in connection with the development of the Human Resources Management System (HRMS), which will have Organization-wide implications from 2007. Efficiency savings identified relate to the elimination of time-consuming steps in administrative processes and reduction of paper flows through, for example, on-line initiation of transactions by the requesting users directly in the system.
Ongoing structural changes: information technology
73. The Organization considered the outsourcing of administrative and information systems development and maintenance work or, alternatively, offshoring them to a lower cost Regional Office location. The latter option was pursued and an Offshore Systems Development and Support Centre (OSDSC) created in Bangkok in 2005 for the HRMS project. Extensions to the ICT services included in this type of offshoring will depend on the results of the Bangkok experience.
73. The Organization considered the outsourcing of administrative and information systems development and maintenance work or, alternatively, offshoring them to a lower cost Regional Office location. The latter option was pursued and an Offshore Systems Development and Support Centre (OSDSC) created in Bangkok in 2005 for the HRMS project. Extensions to the ICT services included in this type of offshoring will depend on the results of the Bangkok experience.
74. The mainframe computer environment was outsourced to the UN International Computing Centre (ICC) in Geneva in January 2004, where FAO’s mainframe systems operated on a dedicated computer at the ICC at a similar cost to in-house arrangements. The FAO systems were subsequently moved to a larger mainframe at the ICC, where resources are shared with applications from other UN agencies. The savings foreseen from 2006 onwards were anticipated to be approximately US$ 60,000 per year.
Joint FAO-IFAD-WFP action - procurement of electricity supply on the liberalised market
75. A review of the liberalised market of electricity supply, already started in 2003, was finalised in 2005 with signature of a competitive contract. Savings of US$ 183,000 were generated in 2005 and future savings are estimated at US$ 275,000 per year. The market analysis and tender were carried out jointly with IFAD and WFP, thus confirming the opportunity to achieve cost effective results through the common procurement of certain goods and services.
75. A review of the liberalised market of electricity supply, already started in 2003, was finalised in 2005 with signature of a competitive contract. Savings of US$ 183,000 were generated in 2005 and future savings are estimated at US$ 275,000 per year. The market analysis and tender were carried out jointly with IFAD and WFP, thus confirming the opportunity to achieve cost effective results through the common procurement of certain goods and services.
Improved support cost recovery
76. The performance of the support cost policy was monitored and reported annually to the Finance Committee. A proposal to update the policy for emergency assistance projects was approved by Council so as to fully recover the indirect variable costs of such projects.
76. The performance of the support cost policy was monitored and reported annually to the Finance Committee. A proposal to update the policy for emergency assistance projects was approved by Council so as to fully recover the indirect variable costs of such projects.
FAO Language Policy
77. In 1999, the 30th FAO Conference reaffirmed "the imperative of ensuring parity and balance in the use of all FAO languages and the need for supervision of the quality of translation and interpretation. In looking forward to further improvements in the future, the Conference agreed to the need for Members to monitor progress closely through periodic follow up and evaluation4".
FAO meetings
78. The number of sessions5 held in 2004-05 (see Table 11) remained similar to 2002-03 mainly as the result of the numerous unscheduled sessions that took place during the biennium, and a larger proportion of sessions funded by extrabudgetary resources.
78. The number of sessions5 held in 2004-05 (see Table 11) remained similar to 2002-03 mainly as the result of the numerous unscheduled sessions that took place during the biennium, and a larger proportion of sessions funded by extrabudgetary resources.
Table 11: Sessions Held at Headquarters and in Decentralized Locations
| Description | 2000-01 | 2002-03 | 2004-05 | |
|---|---|---|---|---|
| Sessions approved in PWB | 235 | 232 | 231 | |
| Cancelled Sessions, Regular Programme | 29 | 6 | 62 | |
| Unscheduled Sessions, Regular Programme | 22 | 26 | 27 | |
| Unscheduled Sessions, Trust Funds | 71 | 12 | 67 | |
| TOTAL | 299 | 264 | 263 | |
| Headquarters | 112 | 101 | 115 | |
| Decentralized locations | 187 | 163 | 148 | |
| TOTAL | 299 | 264 | 263 | |
| Percentage decentralized meetings | 63% | 62% | 56% |
79. An indicator of language balance for FAO meetings is the percentage of meetings held in all FAO languages (Figure 2.5). In 2004-05, the percentage of meetings held in five and four languages increased to 17% and 11%, respectively, while the percentage of meetings held in three languages remained constant, and the proportion of monolingual meetings dropped.
80. Although the number of meetings organised by FAO has diminished over the last two biennia, interpretation services provided to FAO meetings have remained relatively unchanged in 2004-05, as indicated in Figure 2.6 below6. This is related to the fact that the proportion of meetings held in more than three languages has increased.
81. Regarding translation, the overall total of 23.9 million words were translated in 2004-05 through the translation service, a volume that has been practically constant for the past three biennia. There were increases in translation into Arabic (16%), Chinese (4%) and English (18%), and a decrease in volume for French (7%) and Spanish (4%). As shown in Figure 2.7, the translation of meeting documentation has increased steadily reaching 15.7 million words in 2004-05, compared with 13.8 million in 2002-03 and 11.6 million in 2000-01. During this same period, translation of publications declined from 7.5 million words in 2000-01 to 2.3 million in 2004-05. However, this volume represents official translation undertaken by internal translation services and does not take into account translation of non-official documents outsourced directly by technical services.
Publications
82. Publication in FAO’s official languages continues to be a major priority for the Organization. All flagship titles were made available in the five languages with language versions of more technical titles being published in languages appropriate to market needs.
82. Publication in FAO’s official languages continues to be a major priority for the Organization. All flagship titles were made available in the five languages with language versions of more technical titles being published in languages appropriate to market needs.
83. There were some small changes in the language distribution of titles published compared with the previous biennium as shown in Figure 2.8. There was an increase in the percentage of titles published in English (46% in 2004-2005 as against 41% in 2002-2003), while titles issued in French, Spanish and Chinese remained relatively constant (at 19, 18 and 14% respectively). The number of titles published in Arabic decreased (7% in 2002-2003 to 4% in 2004-2005); however, a significant number of publications prepared in Arabic under the 2004-05 special allocation will be issued in the early part of the 2006-07 biennium, positively affecting the overall balance.
Electronic material (WAICENT and the FAO Internet site)
84. The World Agricultural Information Centre (WAICENT) continued to take advantage of new technologies to improve its language coverage. Through document scanning and OCR7 activities, additional content in Arabic and Chinese was added to the Corporate Document Repository (CDR) and the proportion of information disseminated in those languages increased.
84. The World Agricultural Information Centre (WAICENT) continued to take advantage of new technologies to improve its language coverage. Through document scanning and OCR7 activities, additional content in Arabic and Chinese was added to the Corporate Document Repository (CDR) and the proportion of information disseminated in those languages increased.
85. A partnership was established between the National Chinese Academy of Agricultural Sciences (CAAS) to map the Chinese Agricultural Thesaurus to the Multilingual Thesaurus of Agricultural Terminology (AGROVOC), resulting in increased correspondences between multilingual perspectives and enriching both thesauri in terms of domain and language coverage.
86. Resources for Web publishing activities within the "programme for improvement of language coverage" declined in 2004-05 and led to some decline in the total number of entries in the News and Events Management System (NEMS), as shown in Table 12. Since not all documents, Web sites, and news and events are reported through the Electronic Information Management System (EIMS) and NEMS, the actual number of items in each language was higher, particularly considering that many sites are managed outside of FAO headquarters.
Table 12: Number of Items by Language on the FAO Web site as Reflected in the Corporate Systems EIMS and NEMS
| English | French | Spanish | Arabic | Chinese | Total | ||
|---|---|---|---|---|---|---|---|
| 2002-03 | |||||||
| EIMS | 17,113 | 6,355 | 4,934 | 3,113 | 2,158 | 33,673 | |
| NEMS | 2,506 | 1,251 | 2,343 | 489 | 308 | 6,897 | |
| Total | 19,619 | 7,606 | 7,277 | 3,602 | 2,466 | 40,570 | |
| 2004-05 | |||||||
| EIMS | 14,925 | 7,187 | 6,311 | 4,194 | 2,230 | 34,847 | |
| NEMS | 2,467 | 1,160 | 1,295 | 633 | 426 | 5,981 | |
| Total | 17,392 | 8,347 | 7,606 | 4,827 | 2,656 | 40,828 |
Terminology and language support
87. In 2004-05, the FAOTERM terminology database increased to 70,000 records in English, French and Spanish, some 50,000 records in Arabic and Chinese, and about 10,000 records in Italian (Figure 2.9). Approximately 13,000 new terminology records were added to the database during the biennium. A new interface was developed to facilitate use of FAOTERM and enhance its dissemination and workflow management. This resulted in increased use by FAO staff, other international organizations and the general public (some 300,000 queries were made through the database each month, by an average of 12,000 users).
87. In 2004-05, the FAOTERM terminology database increased to 70,000 records in English, French and Spanish, some 50,000 records in Arabic and Chinese, and about 10,000 records in Italian (Figure 2.9). Approximately 13,000 new terminology records were added to the database during the biennium. A new interface was developed to facilitate use of FAOTERM and enhance its dissemination and workflow management. This resulted in increased use by FAO staff, other international organizations and the general public (some 300,000 queries were made through the database each month, by an average of 12,000 users).
88. Regarding translation and language support, computer-assisted translation technologies, in particular translation memories, multilingual document corporate tools and the corresponding adaptation of working methods, enabled the search and retrieval of past translations to improve consistency of FAO’s documentation and expedite delivery of meeting documentation.
Programme for the improvement of language coverage
89. Since the 2000-01 biennium, programme entity 222P5: Programme for the improvement of language coverage has provided central support for investments having an immediate impact for countries at relatively low cost; creating the infrastructure for permanent capacity in the five official languages; and correcting long-standing deficiencies in language coverage. Expenditures for these purposes totalled about US$ 1.1 million for the biennium and also covered the continuing arrangement for translation of documents into Chinese undertaken in cooperation with CAAS.
89. Since the 2000-01 biennium, programme entity 222P5: Programme for the improvement of language coverage has provided central support for investments having an immediate impact for countries at relatively low cost; creating the infrastructure for permanent capacity in the five official languages; and correcting long-standing deficiencies in language coverage. Expenditures for these purposes totalled about US$ 1.1 million for the biennium and also covered the continuing arrangement for translation of documents into Chinese undertaken in cooperation with CAAS.
90. Investments having an immediate impact included improved language coverage of FAO’s internal and external Web sites, audio and video productions and important publications, as well as language training. Investments in infrastructure included translation of the Project Cycle Overview Course into French and Spanish for used by decentralized offices in field programme development. Investments to correct long-standing deficiencies mainly concentrated on the translation of 40 additional titles into Arabic, continuing the effort initiated in the previous biennium.
Geographical Representation and Gender Balance of Professional Staff
Geographical representation of professional staff
95. The principles of geographic representation of Member Nations followed by the Organization were originally established by the 27th Session of the FAO Council in 1957. The FAO Conference, at its Thirty-second Session held in November-December 2003, adopted a revised formula for the calculation of geographic distribution which was based on the formula implemented in the UN Secretariat and several organizations of the UN common system. Under the new methodology 40% of posts are distributed on the basis of membership, 5% on the basis of member country population, and 55% in proportion to the Scale of Assessments. The implementation of the new methodology was effective from 1 January 2004. The application of the new formula resulted in a significant increase in the number of equitably-represented countries.
95. The principles of geographic representation of Member Nations followed by the Organization were originally established by the 27th Session of the FAO Council in 1957. The FAO Conference, at its Thirty-second Session held in November-December 2003, adopted a revised formula for the calculation of geographic distribution which was based on the formula implemented in the UN Secretariat and several organizations of the UN common system. Under the new methodology 40% of posts are distributed on the basis of membership, 5% on the basis of member country population, and 55% in proportion to the Scale of Assessments. The implementation of the new methodology was effective from 1 January 2004. The application of the new formula resulted in a significant increase in the number of equitably-represented countries.
96. Summary tables showing the countries that were not within the range of equitable representation under the old formula as at 31 December 2003 (123 of 183 Member Nations) and under the new formula as at 31 December 2005 (59 of 187 Member Nations), are shown in Annex II: Geographical Representation of Professional Staff.
97. At the end of 2005, there were 11 countries that exceeded the top of their range under the new formula, compared to 77 at the end of 2003 under the old formula; 17 under-represented countries at the end of 2005, compared to 16 at the end of 2003; and 31 non-represented countries at the end of 2005, compared to 30 at the end of 2003. High priority is given to placement of professional staff from non-represented countries and, 6 of the 30 non-represented countries at the end of 2003, were represented at the end of 2005. However, 24 of the non-represented countries at the end of 2003 were also non-represented at the end of 2005. Of the 31 non-represented countries at the end of 2005, 4 were countries that became new Members in November 2003.
Gender balance of professional staff
98. Increasing the proportion of female staff in the professional category is one of the main human resources policy objectives of the Organization. Efforts during the last five biennia have resulted in the steady increase of women in professional posts at headquarters from 21% at the beginning of 1996 to 32% at the end 2005 and an increase in all locations from 18 to 29% (Figure 2.10). These percentages are based upon the total number of professional staff with fixed-term or continuing contracts at headquarters and other established offices.8 While the percentage of women in professional posts in offices outside of Rome is significantly below headquarters, the rate of increase has been relative high, growing from 8% in 1996 to 16% in 2005.
98. Increasing the proportion of female staff in the professional category is one of the main human resources policy objectives of the Organization. Efforts during the last five biennia have resulted in the steady increase of women in professional posts at headquarters from 21% at the beginning of 1996 to 32% at the end 2005 and an increase in all locations from 18 to 29% (Figure 2.10). These percentages are based upon the total number of professional staff with fixed-term or continuing contracts at headquarters and other established offices.8 While the percentage of women in professional posts in offices outside of Rome is significantly below headquarters, the rate of increase has been relative high, growing from 8% in 1996 to 16% in 2005.
99. The number of female and male staff by grade at the end of 2005 is shown in Table 13. Overall women make a half (50%) of the Organization's total staff, comprising 66% of general service staff (G1 - G7), 31% of professional officers (P1 - P5), 32% of other professionals (National Professional Officers and Associate Professional Officers) and 14% of director and higher-level staff (D1 - DDG). Within the director and higher level, about 16% of both ADG and D-2 level staff are women. Within the professional officers the proportion of females varies from nearly 50% of P-2/P-1 officers and 46% of P-3 officers to 19% of P-5 officers. The greater number of women at the P-1 to P-3 grade levels reflects the increasing number of qualified young women in the technical fields of the Organization that allows them to effectively compete for middle- and entry-level professional positions. As older staff retire, it is expected that many of these women will move into the senior officer positions vacated. The basis for improvement in gender balance at higher-grade levels, which should show significant results over the coming years has, therefore, been put in place.
Table 13: Female and Male Staff by Grade
| Grade | Female | Male | Total | % Female |
|---|---|---|---|---|
| DDG | 0 | 1 | 1 | 0% |
| ADG | 2 | 10 | 12 | 17% |
| D-2 | 7 | 39 | 46 | 15% |
| D-1 | 17 | 105 | 122 | 14% |
| DIRECTOR | 26 | 155 | 181 | 14% |
| P-5 | 62 | 261 | 323 | 19% |
| P-4 | 104 | 320 | 424 | 25% |
| P-3 | 123 | 143 | 266 | 46% |
| P-2 | 58 | 54 | 112 | 52% |
| P-1 | 4 | 5 | 9 | 44% |
| PROFESSIONAL | 351 | 783 | 1,134 | 31% |
| NPO | 15 | 69 | 84 | 18% |
| APO | 34 | 36 | 70 | 49% |
| OTHER PROFESSIONAL | 49 | 105 | 154 | 32% |
| G-7 | 38 | 18 | 56 | 68% |
| G-6 | 171 | 65 | 236 | 72% |
| G-5 | 356 | 77 | 433 | 82% |
| G-4 | 418 | 131 | 549 | 76% |
| G-3 | 211 | 149 | 360 | 59% |
| G-2 | 57 | 170 | 227 | 25% |
| G-1 | 4 | 23 | 27 | 15% |
| GENERAL SERVICE | 1,255 | 633 | 1,888 | 66% |
| Total | 1,681 | 1,676 | 3,357 | 50% |
Arrears
101. In late 2002, the Organization received from the major contributor a payment in the amount of US$ 100 million against arrears of Assessed Contributions, the Special Reserve Account (SRA) and the Working Capital Fund (WCF). The use of these funds was stipulated in Conference Resolution 6/2001 for defined purposes and expenditure items of a one-time nature.
102. Resolution 6/2001 authorised expenditures up to US$ 50.7 million under Operative Clause 4, while the resources available were US$ 44.9 million. Hence, it was necessary to realign proposed expenditures to the lower amount9.
103. Further demands were also placed upon the arrears through the decisions of the Finance Committee and FAO Conference which agreed in principle to the use of arrears for the one-time expenditure in 2002-03 and 2004-05 on field security requirements and to cover one-time redeployment and separation costs associated with the implementation of the 2004-05 budget reduction. However, the Organization was requested to make every effort to absorb these costs within the Regular Programme, and this is what was done.
104. The eight substantive areas specified in the Resolution 6/2001, Operative Clause 4, and the adjusted level of resources available and final expenditures related to each are shown in Table 14.
Table 14: Arrears Budget and Expenditure (US$ 000)
| Item | Total Resources | 2002-03 Expenditure | 2004-05 Expenditure | Total Expenditure | Variance (Over)/Under) |
|---|---|---|---|---|---|
| 1 - Biotechnology and Biosecurity | 3,360 | 369 | 2,995 | 3,366 | (6) |
| 2 - Natural resource assessment and conservation, with particular emphasis on Forestry | 3,472 | 437 | 3,021 | 3,451 | 21 |
| 3 - Enhanced Language coverage through translation of reference texts into official languages including Codex Alimentarius | 1,775 | 245 | 1,545 | 1,790 | (15) |
| 4 - Multilateral trade | 2,274 | 124 | 2,082 | 2,206 | 68 |
| 5 - Statistical data - improvements in quality and coverage | 1,575 | 73 | 1,415 | 1,488 | 87 |
| 6 - Fisheries and Other Plans of Action | 1,918 | 173 | 1,792 | 1,966 | (48) |
| 7 - Information Technology (IT) infrastructure to support technical and other work of the Organization | 7,664 | 1,391 | 6,429 | 7,820 | (156) |
| 8 - Corporate administrative systems | 18,803 | 718 | 11,991 | 12,713 | 6,090 |
| 9 - Contingency amount for possible use related to security and redeployment and separation | 4,071 | 0 | 0 | 0 | 4,071 |
| Total | 44,912 | 3,530 | 31,270 | 34,800 | 10,112 |
105. Arrears expenditures in all technical areas (Items 1 – 7) were close to the resources available. The only significant under spending as at 31 December 2005 was in the area of corporate administrative systems, particularly concerning the ongoing consolidation of implemented modules of Oracle Financials and development of the replacement payroll and human resources management modules.
106. As authorised by the Finance Committee at its September 2005 session and approved in the Revised PWB 2006-07, the unused balance of arrears resources under Resolution 6/2001 as at 31 December 2005, amounting to US$ 10.1 million, was transferred to the Capital Expenditure Facility for its effective operation.
107. Information on selected arrears projects is included in the next section, Summary of Programme Implementation. More complete information on implementation of individual arrears projects is provided in Annex IV on the FAO Web site at www.fao.org/pir/2004/.
1
Expenditure of US$ 829.8 million against the final 2004-05 budget compares with US$ 908.3 million reported as General and Related Funds expenditure in the draft financial accounts (see also Table 1 Expenditure Summary by Source of Funds above). The figures in the Table 4 Budgetary Performance, 2004-05 comprise only those items of expenditure in the financial accounts that are chargeable to the 2004-05 PWB. Specifically: i) it excludes US$ 1.4 million of expenditure incurred by the Information Products Revolving Fund as a separate fund is established for this purpose under Financial Regulation 6.9; ii) it excludes US$ 31.3 million one-time expenditures funded from arrears, as approved by Conference Resolution 6/2001; and iii) it adjusts the expenditure of the TCP so that the entire 2004-05 appropriation of Chapter 4 is assumed to be spent, since unutilised balances will remain available for obligations in 2006-07, in accordance with Financial Regulation 4.3.
2
C 2005/16
1
Technical Cooperation Programme (TCP); Special Programme for Food Security (SPFS); FAO/Government Cooperative Programme (GCP); Unilateral Trust Funds (UTFs); United Nations Development Programme (UNDP)
4
C 99/REP, paragraph 94
5
FAO meeting categories are Category 1: intergovernmental meetings; Category 2: technical sessions attended by experts designated by Members; Category 3: committees and panels of experts composed of individuals selected in a personal capacity by FAO; Category 4: seminars, training courses and workshops. Under any of the categories, meetings can be convened either for statutory bodies, if they have been established, or on an ad hoc basis.
6
The percentages indicated in the Figure have been weighted in Arabic and Chinese, in order to correct for the fact that these languages are covered by teams of three interpreters in each booth for all the meetings (compared to two for the other languages).
7
Optical character reader
8
Excludes field project staff and staff with contracts of less than 12 months.
9
FC 107/15