Director-General's Foreword
The Programme Implementation Report (PIR) informs the membership about the work carried out by the Organization during the past biennium. As part of the established suite of accountability documents, it provides information on the Organization’s financial performance and what it achieved in terms of outputs and outcomes. It covers resources and activities both under the Regular Programme appropriation and extrabudgetary funding.The 2006-2007 biennium was marked by several challenges: a budget level approved by the preceding FAO Conference well below zero real growth, coupled with unfavourable financial developments beyond the control of the Organization; the phased implementation of reforms within the constraints of this budget level; and at the same time the need to implement an increased portfolio of emergency and non-emergency field activities financed by voluntary contributions.
In effect, the 2006-07 approved budget level of USD 765.7 million embodied a nominal increase of USD 16.6 million over the previous biennium, but a shortfall of USD 39 million in estimated costs increases resulting in a 5.2% decline in real terms. This required that the originally formulated Programme of Work be subjected to cuts, while progressively putting in place organizational measures for further efficiency savings and improved cost recovery.
The Programme of Work was also impacted during implementation by the emergence of underbudgeted costs of USD 38 million. In addition, in 2006, the Organization faced a severe liquidity shortage due to delays in payment of Members' contributions and was obliged to resort to extensive borrowing.
Sixty years after the founding of FAO in 1945, I proposed a new vision to match evolving priorities and requirements of the membership and to capitalise on new opportunities, including wide-ranging reform proposals. The implementation of Conference and Council approved reforms proceeded throughout the 2006-2007 biennium. Changes to the PWB chapter structure and the results of substantial reformulation of programme entities were presented in the Revised PWB 2006-07 approved by the Programme and Finance Committees in May 2006. Other highlights included: the newly approved Security Expenditure Facility allowing for integrated management of all security related expenditures; organizational changes at headquarters; a consolidated Shared Services Centre at headquarters effective January 2006; subsequent initiation of off-shoring of the same Shared Services Centre to Budapest; and first steps in further decentralization in Africa and Central Asia in 2007, as authorised by the governing bodies.
I am pleased to report that voluntary contributions increased significantly in the 2006-07 biennium, reaching USD 849 million, representing nearly half of total FAO expenditures. Most of the increase was for emergency activities, which therefore reached an important proportion of the field programme.
In November 2005, the Conference endorsed the recommendation of the Council to launch an Independent External Evaluation of FAO (IEE). The findings and recommendations of the IEE were examined by Conference in 2007, which established a Conference Committee for Follow-up to the IEE that is fully active at the time of writing. Supporting the IEE team in its research was a significant duty of the Secretariat in all locations during the past biennium.
Turning to the specific contents of this document, it will be noted that efforts have been made to make it compact, and where pertinent to put it in a more dynamic style. While the Programme Implementation Report draws on information from the unaudited financial accounts and the underlying accounting records, it is not intended to be an accounting document. However, Members expect to be apprised about the origin and effective use of the resources put at the disposal of the Organization during the biennial period and to see them in relation to the main products and services delivered to constituents.
Hence, Section 1 provides an overview of FAO resources, and highlights selected programme achievements, including enhanced analysis of the effectiveness and efficiency of the Technical Cooperation Programme, as requested by Conference. It also addresses the regional dimensions of programme delivery. A holistic approach is adopted, covering activities funded by both the Regular Budget and voluntary contributions.
Most noteworthy in respect of the control of transboundary animal and plant pests and diseases were successes in addressing Avian Influenza outbreaks and desert and migratory locust infestations. Work on climate change was also very prominent, with FAO continuing to raise awareness at all levels about how agriculture both drives climate change and can be negatively affected by it. On a more practical plane, methods and policy options that can reduce greenhouse gas emissions or assist adaptation, were put forward.
While support to investment kept its status of well-established priority, illustrations are given of assistance to specific countries in relation to improved land tenure arrangements and enhanced access to arable land by impoverished rural families. The design and implementation of national programmes for food security received due attention, including such features as the use of Farmer Field Schools and the mainstreaming of food security and nutritional improvement objectives in the health and education sectors.
Section 2 presents a summary of corporate initiatives in the biennium and specific features of programme delivery, covering in particular: the implementation of approved reform proposals, with focus on decentralization; the cost of supporting the field programme and activities in direct support to the Regular Programme; the use of the capital and security expenditure facilities; the implementation of FAO language policy and key information relating to geographical and gender balance in staff.
The Annexes provide more details on programme implementation, including a summary report on the completion of outputs in Annex 2, and a comprehensive report of expenditure and achievements by programme entity in Annex 4.
I trust that the information provided in this PIR will give further corroboration to the membership of the returns from a collective investment they make through the Organization.
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| Jacques Diouf |
| Director General |
EXECUTIVE SUMMARY
1. The structure and contents of this PIR are explained in the preceding Director-General’s Foreword. The main reported achievements and figures are summarised below.
Overview of resources
2. Total expenditure incurred by the Organization in 2006-07 was USD 1,775 million, nearly 232 million (13%) higher than in 2004-05. Expenditure under the rubric General and Related Funds increased by USD 17.3 million (2.1%), while overall trust funds and UNDP expenditures increased by USD 214.2 million (33.7%), coming close to representing half of total resources. Expenditure on non-emergency trust funds increased by 18.6% while operations linked to emergencies rose dramatically by 60.6%, mainly as the result of the Avian Influenza crisis, the Tsunami and other natural disasters.
2. Total expenditure incurred by the Organization in 2006-07 was USD 1,775 million, nearly 232 million (13%) higher than in 2004-05. Expenditure under the rubric General and Related Funds increased by USD 17.3 million (2.1%), while overall trust funds and UNDP expenditures increased by USD 214.2 million (33.7%), coming close to representing half of total resources. Expenditure on non-emergency trust funds increased by 18.6% while operations linked to emergencies rose dramatically by 60.6%, mainly as the result of the Avian Influenza crisis, the Tsunami and other natural disasters.
3. Expenditures to implement the Programme of Work totalled USD 877.8 million, against budgeted resources of 856.8 million. Income stood at USD 113.6 million, i.e. an increase of USD 22.5 million as the result of higher than planned revenue during 2006-07. The total net expenditure against the Regular Programme appropriation of USD 765.7 million approved by the 2005 Conference was USD 764.2 million. It was affected by two large unbudgeted items, namely a significant unfavourable staff cost variance (USD 23.3 million) and redeployment costs for incumbents of abolished posts (USD 11.5 million).
4. The search for further efficiency savings continued vigorously in the biennium. Changes in support cost policy, together with increased delivery, resulted in higher reimbursements to the General Fund of about USD 13 million. An interdepartmental working group identified 55 opportunities for streamlining administrative procedures which were put into effect. The Organization also further streamlined decision-making by eliminating layers of management through the reduction of 21 Director-level and associated General Service posts at headquarters. Savings in this respect amounted to some USD 9 million in 2006-07. Complex business process changes were set in motion with respect to the full implementation of the Shared Services Centre (SSC), with savings of USD 8 million anticipated after a period of transition during the 2008-09 biennium.
5. Total field programme delivery, along with extrabudgetary support to the Regular Programme, increased by 24% over the previous biennium. This was mainly due to increased use of GCP, UTF and FAO partnership programmes modalities and – as stressed earlier – a quite dramatic jump in emergency and rehabilitation activities. The top twenty donors financed 79% of extrabudgetary delivery. Multi-donor funding of specific programmes or large projects more than tripled compared to 2004-05, to become the second largest modality. The number of non-traditional donor countries increased, in particular through the UN Central Emergency Fund.
6. However, TCP delivery declined by nearly half the 2004-05 level, mainly due to the severe liquidity shortage experienced by the Organization, but also as a result of the high percentage of projects approved during 2004-05 and delivered in that period. The shift in emphasis of the Special Programme for Food Security (SPFS) from small pilot projects to designing and implementing national and regional programmes for food security resulted in a decline in delivery for RP funded SPFS projects.
7. Continued attention was given to ensuring a safe and secure working environment for staff at all locations. Security related budgets and expenditures were consolidated into the PWB Chapter 9: Security expenditure, resulting in expenditures of USD 8.3 million for headquarters and USD 11.0 million for decentralized locations and the field programme. The Organization also successfully implemented many of the projects foreseen under the Capital Expenditure Facility (PWB Chapter 8). Expenditures amounted to some USD 12.5 million, with USD 2.8 million transferred to the Capital Expenditure Account for use in a subsequent financial period. The HRMS project was the top priority, accounting for more than two-thirds of the budget under Chapter 8.
Corporate initiatives and selected features of programme delivery in the 2006-07 biennium
8. The Organization was actively engaged in the implementation of reforms approved by the governing bodies in two main phases, i.e. by the 33rd Session of the Conference in November 2005 and the 131st Session of the Council in November 2006. After some initial changes introduced in early 2006, the new organizational structure for headquarters approved by the Council was implemented as of 1 January 2007. It includes the new departments for Natural Resources Management and Environment and for Knowledge and Communication. Changes to the PWB chapter structure and the results of significant reformulation of programme entities were presented in the Revised PWB 2006-07.
8. The Organization was actively engaged in the implementation of reforms approved by the governing bodies in two main phases, i.e. by the 33rd Session of the Conference in November 2005 and the 131st Session of the Council in November 2006. After some initial changes introduced in early 2006, the new organizational structure for headquarters approved by the Council was implemented as of 1 January 2007. It includes the new departments for Natural Resources Management and Environment and for Knowledge and Communication. Changes to the PWB chapter structure and the results of significant reformulation of programme entities were presented in the Revised PWB 2006-07.
9. The first phase of decentralization reforms took place in Africa and Central Asia. New subregional offices were established for Central Africa in Libreville, Gabon and for Eastern Africa in Addis Ababa, Ethiopia. The Subregional Office for Western Africa was established in Accra, Ghana, which continued to host the Regional Office for Africa. The reconfigured Subregional Office for Southern Africa remained in Harare, Zimbabwe. The new Subregional Office for Central Asia was established in Ankara, Turkey. In the second phase, the Regional Office for Europe was transferred from FAO headquarters in Rome to Budapest, Hungary.
10. As a result of subsequent decisions of governing bodies, reforms have been extended to Latin America and the Caribbean. A Subregional Office in Panama was established, a multidisciplinary team in Santiago was set up and the Subregional Office in Barbados was restructured. In November 2007, the Council also approved the creation of a new Subregional Office for the Gulf Cooperation Council States and Yemen located in the United Arab Emirates.
11. Following on the 2005 Conference approval of the Independent External Evaluation (IEE) of FAO, the Organization was actively engaged at all levels in supporting the work of the IEE team. During the later phases of the process, factual data contained in the draft IEE Report was reviewed and assistance provided to identify in a preliminary manner the costs and savings associated with the numerous recommendations.
12. Due emphasis was given to pursuing FAO language policy. In 2006-07, the percentage of meetings held in five languages decreased to 14%, while the percentage of meetings in four languages increased to 14%. The percentage of meetings held in three languages increased to 25%. Overall, meetings in more than two languages increased to 52%, from 50% in 2004-05. Publication of documents in FAO’s languages continued to be a major priority. All flagship titles were made available in the five languages with versions of more technical titles being published in languages appropriate to the needs of key target audiences.
13. Geographical and gender balance in staff was also kept under scrutiny. At the end of 2007, there were 10 countries that exceeded the top of their range; 19 under-represented countries; and 38 non-represented countries, but efforts are continuing to reduce the latter number. Increasing the proportion of female staff in the professional category is also one of the main human resources policy objectives. Efforts during the last six biennia have resulted in the steady increase of women in professional posts at headquarters from 21% at the beginning of 1996 to 34% at the end 2007 and an increase in all locations from 18% to 30%.
Programme information and selective highlights
14. FAO units had identified outputs for implementation under all programmes in the 2006-07 Programme of Work and Budget. As is customary, in the course of the biennium some modifications had to be made to planned outputs, while others had to be postponed or cancelled. New outputs have had to be introduced to meet evolving contexts and specific new requests. As shown in Annex 2, delivery of outputs was on the whole quite satisfactory. The technical programme delivered 93% of adjusted planned outputs, while non-technical programmes delivered 97%. More detailed reporting on programme entities is provided in Annex 4 posted on FAO's Web site (http://www.fao.org/pir).
14. FAO units had identified outputs for implementation under all programmes in the 2006-07 Programme of Work and Budget. As is customary, in the course of the biennium some modifications had to be made to planned outputs, while others had to be postponed or cancelled. New outputs have had to be introduced to meet evolving contexts and specific new requests. As shown in Annex 2, delivery of outputs was on the whole quite satisfactory. The technical programme delivered 93% of adjusted planned outputs, while non-technical programmes delivered 97%. More detailed reporting on programme entities is provided in Annex 4 posted on FAO's Web site (http://www.fao.org/pir).
15. The printed version of this PIR addresses selectively the outcomes of FAO’s work in twelve areas under the three substantive chapters of the Programme of Work: Chapter 2: Sustainable Food and Agricultural Systems; Chapter 3: Knowledge Exchange, Policy and Advocacy; and Chapter 4: Decentralization, UN Cooperation and Programme Delivery. The examples and corresponding narratives seek to convey the key role that capacity building, partnerships and the TCP have played in the achievement of sustainable outcomes at country, regional and global levels in twelve programme areas: transboundary animal and plant pests and diseases; food safety; the IPPC; work on climate change; genetic resources for food and agriculture; fisheries and aquaculture; forestry (especially work on forest fires); commodity markets analysis and projections; investment in agriculture; support to national programmes for food security assistance linked to natural disasters and complex emergencies; the TCP, including analysis of the catalytic role of TCP projects and their relation to FAO’s programmes including through capacity building.
16. Similarly, an overview is provided of FAO’s achievements in each region (Africa, Asia and the Pacific, Europe and Central Asia, Latin America and the Caribbean, and the Near East) by programme area under all sources of funds, including TCP and external financing for investment.