Rome, 13 - 17 September 1999
PROGRAMME AND BUDGETARY TRANSFERS IN THE 1998-99 BIENNIUM
1. At its session in May 1999, the Finance Committee reviewed the Thirty-second Annual Report of Budgetary Performance and Programme and Budgetary Transfers (FC 92/4), which was subsequently endorsed by the Council at its Hundred and sixteenth Session in June 1999. The document tentatively indicated that transfers would be required principally in favour of General Policy and Direction (Chapter 1 - US$ 1 million), Development Services to Member Nations (Chapter 3 - US$ 4 million) and Common Services (Chapter 6 - US$ 3 million), with resources transferred from the technical programmes (Chapter 2).
2. While regretting the need to transfer resources from the technical programmes, where discretionary expenditure is greatest, the Committee recognized that this was a result of the factors outlined in the Annual Report of Budgetary Performance including under-budgeted costs in essential areas of the non-technical programmes, such as the development costs of Oracle.
3. This document provides updated estimates of the Chapter transfers foreseen in 1998-99, for approval by the Finance Committee in accordance with Financial Regulation (FR) 4.5.
4. Conference Resolution 7/97 on the Budgetary Appropriations for 1998-99 approved a budget of US$ 650 million, and FR 4.1(a) authorizes the Director-General to incur obligations up to the amount voted.
5. Full utilization of the 1998-99 appropriation is foreseen. In this connection, it is recalled that:
6. The Thirty-second Annual Report of Budgetary Performance and Programme and Budgetary Transfers (FC 92/4) noted that the extent of the transfers would be influenced by factors including changes in accounting policies resulting from the implementation of Oracle, initial Oracle roll-out costs, Year 2000 compliance costs, and the modalities and timing of the transfer of telecommunications functions from AFS to AFI.
7. The 1998-99 transfers sought in this paper are consistent with the amounts previously foreseen except that approval is also sought to transfer up to US$ 3.0 million into Chapter 5, with the resources being transferred from Chapter 2.
8. It had been forecast that Chapter 5 expenditure could be held to the budget ceiling as the under-budgeted amounts, primarily for Oracle, were offset by the transfer of staff and non-staff costs for maintenance and the provision of voice and data services from AFI Chapter 5 to AFS Chapter 6. However, the sum of the additional allocations to Oracle development costs (US$ 3.3 million), the decline in support cost income (i.e. US$ 2 million for AOS from projects and reimbursements from WFP) and some lesser transfers within GI from Chapter 1 to Major Programme 5.2 have caused the situation to deteriorate and thus approval is sought for additional transfers. It is noted that Oracle operational costs commencing in 1999 have not significantly affected Chapter 5 (i.e. less than US$ 100 000) as the operational costs for Oracle will be charged to the AFI Computer Pool, and are thus distributed across all programmes.
9. Except for recent developments under Chapter 5, described above, the explanations of the required transfers by chapter were provided in the Thirty-second Annual Report of Budgetary Performance and Programme and Budgetary Transfers (FC 92/4), which the Finance Committee reviewed in May 1999. A summary of the main influencing factors concerning chapters requiring additional resources is provided below:
10. In accordance with FR 4.5, the Finance Committee is requested to endorse the transfer of up to US$ 11 million from Chapter 2 Technical and Economic Programmes, to Chapter 1 General Policy and Direction (US$ 1 million), Chapter 3 Development Services to Member Nations (US$ 4 million), Chapter 5 Support Services (US$ 3 million) and Chapter 6 Common Services (US$ 3 million). The precise amounts transferred can only be determined in the light of the Regular Programme accounts for 1998-99, to be finalized in early 2000. Given the the additional complexities involved in the financial management of resources in the current biennium arising from the incorporation of Other Income into the 1998-99 Programme of Work, the implementation of a new financial system during the biennium and related changes in financial procedures and possible changes in administrative structures, the Committee may wish to note that there could be some variation to the figures given at the present time and agree that the Director-General would report to the Finance Committee at its first session in 2000, the exact amounts transferred.
1 Other Income comprises voluntary contributions that are largely at the disposal of the Organization, and/or resources that are managed closely with the Regular Budget Appropriation.