CHAPTER 2: ORGANIZATIONAL PERFORMANCE

21. In setting out key information on resources and expenditures under both the Regular Programme and extra-budgetary funding, it may be noted that the PIR is not intended to be an accounting document. For more complete financial information for the 1996-97 biennium, reference should be made to the Audited Accounts of the Organization. Information is also provided on the cost of Field Programme Support, the extent of support provided to the Field Programme by FAO technical officers and a synthesis of independent evaluations of selected field projects. Because of the major restructuring of the programmes in 1996-97, it has not been possible to provide meaningful time series information at the programme and major programme levels.

22. In keeping with the specification of outputs for the technical programmes in the PWB 1996-97, an analysis of the implementation of these outputs is provided in this Chapter and tabular information provided at programme level in Chapter 3. However, in order to keep the PIR concise, most output information is provided at a summary level. To supplement this, information on all of the outputs in the PWB 1996-97 and their implementation status has been placed on the FAO Internet site (http://www.fao.org/unfao/bodies/pir/) together with a link to the responsible division, so that more detailed information on programme implementation can be obtained, if desired.

EVOLUTION OF TOTAL RESOURCES

23. The total resources of the Organization comprise the Regular Programme Appropriation, henceforth referred to as the "Regular Programme", extra-budgetary resources and within the latter, support cost income. Attention is drawn to the distinction between "Extra-budgetary Resources", which refers to all non-Regular Programme sources of funds or related expenditures, and the "Field Programme" which refers to the income and expenditure relating directly to FAO's execution of technical assistance projects. In this regard, the World Bank share of the FAO/World Bank Cooperative Programme (CP) is part of extra-budgetary resources, but is not part of the field programme. Conversely, the Technical Cooperation Programme (TCP) and the PWB provision for the SPFS are funded from the Regular Programme and are therefore not extra-budgetary, but are included as part of the field programme.

24. Expenditures by source of funds is provided in Table 2.1 and illustrated in Chart 2.1. Regrettably, one can observe a significant decline since 1992-93. Expenditures under Extra-budgetary and Support Costs were 24 percent less in 1994-95 than in 1992-93, and were down by a further 10 percent in 1996-97. For the Regular Programme, the reduction between 1992-93 and 1996-97 was about 4 percent. Total expenditures by the Organization in 1996-97 were 18 percent less than those in 1992-93 in nominal terms.
 

 
25. The decline in Extra-budgetary and Support Cost resources has reduced their share of total expenditures as shown in Chart 2.2. As a result, the Regular Programme has assumed increasing importance, accounting for 56 percent of total expenditures in 1996-97, while prior to 1992-93 the Regular Programme generally accounted for less than 40 percent.

26. The share of Regular Programme expenditures between Headquarters and the decentralized offices is shown in Table 2.2. The reduction in Headquarters expenditures was partly due to the budget cuts in both 1994-95 and 1996-97, but also due to the decentralization of staff and resources to the regional and sub-regional level. The strengthening of the Regional Offices led to an 8 percent increase in their 1994-95 expenditure, from the level in 1992-93, and a further 18 percent in 1996-97. While the decision to establish Sub-regional Offices was taken by the 106th Session of the FAO Council in 1994, these offices required some time to become fully operational as reflected in the increase in expenditure from US$ 2 million in 1994-95 to nearly US$ 10 million in 1996-97. The Liaison Offices were also expanded with the establishment of the Liaison Office with the European Union and Belgium (LOBR) and the Liaison Office with Japan (LOJA). Related expenditures were 6 percent higher in 1994-95 than in 1992-93 and increased a further 27 percent in 1996-97. Concurrently with the strengthening of FAO's network of offices in the regions, the decision was taken to phase out the joint agricultural divisions and thus expenditures in this regard decreased from US$ 6.3 million in 1992-93 to zero in 1996-97. In the FAO Representative (FAOR) offices efficiency measures allowed expenditures to decline in both 1994-95 and 1996-97 while country coverage was expanded through the use of joint accreditation and national correspondents.
 

 
27. The expenditures/commitments in relation to the original approved 1996-97 Regular Programme Budget and approved transfers are shown in Table 2.3. Expenditures under the Regular Programme totalled US$ 645.2 million against a budget of US$ 650 million, with the residual amount of US$ 4.8 million being used to partially offset the US$ 7.5 million deficit in Support Cost income for the biennium. Budgetary transfers between chapters totalled US$ 13.3 million and were mainly from Chapter 2: Technical and Economic Programmes and Chapter 3: Development Services to Member Nations into Chapter 5: Support Services and Chapter 6: Common Services. The main factors contributing to these transfers were the adverse staff cost variance, the need to cover the cost of encumbered abolished posts during redeployment efforts and the implementation of the new financial framework for publications and documents. A more detailed explanation of transfers and their eventual programme implications is provided in Chapter 3 as part of the summary of implementation for each programme.
 

 
28. Extra-budgetary expenditures (excluding Support Costs) are also shown in Table 2.3 and relate predominately to the technical and economic programmes and development services. Extra-budgetary resources under Chapter 1: General Policy and Direction were partly to support work on legal services and evaluation. Extra-budgetary support under Chapter 6 includes the Italian Government contribution to buildings and maintenance at Headquarters and similar host country contributions in some of the decentralized offices.

29. The total of Regular Programme and extra-budgetary expenditures/commitments under the main Chapters of the PWB are summarized in Chart 2.3. Thus, substantive programmes accounted for 83 percent of expenditure in 1996-97, with 61 percent of the total under Chapter 2: Technical and Economic Programmes, 14 percent under Chapter 3: Development Services to Member Nations and 8 percent under Chapter 4: Technical Cooperation Programme. Extra-budgetary expenditures were concentrated under Chapter 2 (88 percent) and Chapter 3 (9 percent). Extra-budgetary resources relating to technical and economic programmes covered both normative and field activities, while under Chapter 3 these resources mainly related to investment activities.

30. A more detailed breakdown of expenditures/commitments and approved transfers in relation to Chapter 2: Technical and Economic Programmes is shown in Table 2.4. Transfers between programmes within the Chapter totalled US$ 7.1 million, while transfers to other Chapters totalled US$ 9.1 million. In aggregate, the expenditures and commitments were US$ 3.4 million less than the modified budget, and US$ 12.5 million (4.2 percent) less than targets foreseen in the original budget. The implications of these reductions on planned outputs and activities are elaborated in Chapter 3, as part of the summary of implementation for each programme.

Table 2.4: Report of Budgetary Performance for Chapter 2: Technical and Economic Programmes, 1996-97

 
31. The respective shares of Regular Programme and Extra-budgetary expenditures within Chapter 2 are shown in Table 2.5. The Major Programmes on Agricultural Production and Support Systems and Food and Agricultural Policy and Development each accounted for about 30 percent of the Regular Programme expenditure within Chapter 2, while Forestry accounted for close to 10 percent. A different picture emerges for Extra-budgetary expenditure, i.e. Agricultural Production and Support Systems with over 50 percent, followed by Forestry with nearly 19 percent. Combining Regular Programme and Extra-budgetary expenditures, Agricultural Production and Support Systems accounted for over 40 percent of the total and Fisheries less than 10 percent, with the other three Major Programmes accounting for between 14 and 17 percent each.

Table 2.5: Share of Regular Programme and Extra-budgetary Expenditures in Chapter 2, 1996-97 (Percentage)

COST OF FIELD PROGRAMME SUPPORT

32. Support costs and their relation to Field Programme delivery are shown in Table 2.6. The methodology and use of detailed questionnaires adopted in 1992 continued to be applied. The decline in support costs has closely paralleled the decline in project delivery. Although there have been fluctuations, largely as a result of movements of the US Dollar in relation to the Italian Lira, the Organization has generally been successful in keeping support costs in line with delivery through the reduction of posts financed by support cost reimbursement income and further cost reduction efforts. Thus, support costs remained within the range of 28.3 to 29.5 percent over the biennia 1992-93 through 1996-97 despite programme delivery dropping by over 27 percent during this period. The capacity to adjust costs to match income is limited in the short term, although considerable effort has been made, through streamlining of procedures and decentralization, to bring the cost of field programme support down. The slight increase in support costs in relation to delivery from 28.3 percent in 1994-95 to 29.5 percent in 1996-97 appears to be largely due to field activities being increasingly composed of small projects, which proportionally require more technical, administrative and operational support than larger projects.

Table 2.6: Support Costs in Relation to Programme/Project Delivery

¹ Programme/Project delivery represents the value of inputs delivered and therefore subject to support services under the methodology of the survey.
² Excludes services to WFP

33. The cost of Field Programme support compared with effective reimbursement income is shown in Table 2.7. The costs include technical and administrative support provided by the Organization to UNDP, Trust Fund and TCP projects, as well as to SPFS in 1994-95 and 1996-97. Both support costs and reimbursement have shown a steady decline since 1992-93. However, since support costs declined by about 9 percent in 1996-97 while reimbursement dropped 13 percent, the percentage of effective reimbursement declined from nearly 40 percent in 1994-95 to 36 percent in 1996-97.

Table 2.7: Support Costs and Extent of Reimbursement Received

 
34. In examining the shortfall in reimbursements of US$ 94.1 million, there are a number of points to be made. The first is that approximately US$ 50 million is attributable to technical support services. While this figure is probably over-stated as the then existing accounting systems did not allow easy identification of reimbursements through secondments of staff time, it would still represent the major cause of the shortfall. On the other hand, it is this utilization of staff time that is the essence of the synergy between the normative and operational programmes wherein technical staff can get the practical experience of the field work to be fed back into prescriptive methodologies and norms.

35. The shortfall under administrative and operational support amounts to approximately US$ 40 million and reflects the difference between the actual cost incurred and the average percentage recovered from delivery of programmes. Great efforts are being made to narrow this gap.

36. Finally, it needs to be recognised that this "shortfall" is not a net loss of resources to the Organization. In practice, it generated delivery of over US$ 500 million and, while a substantial portion of this was in the form of technical assistance, a great deal of it was in support to normative work or in support of the institution through schemes such as Associate Experts which are clearly to the benefit of the Organization. When combined with the qualitative benefits for normative work, it is suggested that the current level of extra-budgetary support is of significant net benefit to the Organization and its Members.

PROFESSIONAL STAFF INPUTS TO SUPPORT THE FIELD PROGRAMME

37. The time of technical professional officers devoted to Field Programme Support is shown in Table 2.8. Headquarters professional staff spent about 18 percent of their time backstopping the Field Programme, with Major Programme 2.1: Agricultural Production and Support Systems, Major Programme 2.5: Contributions to Sustainable Development and Special Programme Thrusts and Major Programme 3.1 Policy Assistance exceeding 25 percent. The proportion of Headquarters professional staff time devoted to Field Programme support continued to decline from the past levels which generally exceeded 30 percent. While part of this decline relates to the overall decrease in the size of the Field Programme, equally important was the increasing support to the Field Programme provided by the decentralized offices. Professional staff in the Regional Offices spent about 14 percent of their time on Field Programme Support, up from less than 10 percent in the past, while the level in the Sub-regional Offices exceeded 25 percent. This trend will be encouraged with a view to reducing Headquarters input and increasing the level of support provided by the decentralized offices.

Table 2.8: Proportion of Technical Professional Staff time devoted to Field Programme Support 1996-97 (percent)

 
38. The effect of the decentralization of primary responsibility for Field Programme Support to the Regional and Sub-regional Offices is even more evident from Chart 2.4. While there was significant variation between regions, Field Programme Support exceeded 25 percent of staff time in the Sub-regional Office for Southern and East Africa (SAFR), and was over 30 percent for the Sub-regional Offices for the Caribbean (SLAC) and for North Africa (SNEA). There appeared to be some "natural" balancing of Field Programme Support workloads between the Regional and Sub-regional Offices within regions, in that higher levels of support in the Regional Offices were generally accompanied by relatively lower levels of support in the corresponding Sub-regional Offices (i.e. Europe and Asia and the Pacific) while lower levels of support in the Regional Offices were accompanied by relatively higher levels of support in the Sub-regional Offices (i.e. Latin America and the Caribbean and the Near East and North Africa). However, this analysis needs to be interpreted with caution since there were a significant number of professional staff vacancies in these offices during the biennium.

SYNTHESIS OF TRIPARTITE PROJECT EVALUATIONS

39. Technical assistance projects operated by FAO are normally evaluated at least once during implementation, either at mid-term or towards the end of the implementation period if the project budget exceeds US$ 1.0 million or its duration is more than three years. Evaluations are tripartite with participation of the funding agency, the host country and FAO. The findings and recommendations of the evaluations are used by the three parties to draw lessons for the future, as an accountability tool and for making in-course corrections and deciding on follow-up actions.

40. Each evaluation mission submits a report and completes a questionnaire containing coded ratings on various aspects of the project design, implementation and results. The synthesis below is based on the questionnaires, which are maintained in a database by the Programme, Budget and Evaluation Service (PBEE). The database is also used to provide feedback for project preparation and implementation and the preparation of periodic synthesis reports. Beginning in 1997, annual evaluations of selected thematic clusters of TCP projects were commenced, with the first cluster of 22 TCP projects dealing with food quality control.

41. During 1996-97, a total of 110 projects were evaluated by tripartite missions, as shown in Table 2.9. UNDP projects made up the majority, although the number and proportion of Trust Fund (TF) projects increased from 1994-95 levels. Over three-quarters of the projects evaluated were located either in Africa (41 percent) or in Asia and the Pacific (37 percent), broadly reflecting the geographical distribution of the overall field programme. The 110 project evaluations were split almost equally between mid-term and terminal evaluations. The main technical areas addressed by the projects were agriculture (47 percent), forestry (29 percent), fisheries (10 percent), food and agricultural policy and statistics (5 percent), and others, including gender and environmental information management, (9 percent). The values of project budget ranged from a minimum of US$ 213,000 to a maximum of US$ 14 million, with a median of US$ 1.7 million.

Table 2.9: Project Evaluations

42. The overall assessment ratings in terms of project design, implementation and results for 1994-95 and 1996-97 are shown in Table 2.10. "Poor" ratings declined across all six criteria (to 10 percent or less of projects except for the quality of project design: 17 percent), with the proportion of projects rated "good" increasing substantially for all the criteria, except quantity of outputs, where it remained unchanged. Project implementation performance and the results (outputs and effects produced) were, therefore, broadly satisfactory (adequate or good). The score for sustainability needs to be viewed with caution, because it is a complex criterion on which judgement can be highly subjective, particularly at the time of mid-term evaluation.

Table 2.10: Assessment of Project Design, Implementation and Results ¹

43. Table 2.11 provides a more detailed picture of the ratings given by evaluation missions on selected elements of project design and implementation during 1996-97. While generally confirming the overall positive assessment of project design indicated above, it highlights the need for better integration of the individual projects in national development plans, as well as, the importance of improved definition of project objectives and targets, more realistic workplanning, and especially more systematic identification of prerequisites for project success together with risks. Regarding implementation, it underscores concerns about the support and contribution by the host Government, as well as the need for improved work planning and more effective functioning of external project management mechanisms (such as project steering committees).

Table 2.11: Overall Assessment of Key Aspects of Project¹

44. The sustainability of projects' results and benefits is a basic concern and, as shown in Table 2.10 above, the assessment of evaluation missions in this regard have indicated a considerable improvement in 1996-97, with half of the projects evaluated being rated as having good prospects of sustainable effects and impact. Table 2.12 provides sustainability ratings relating to different project purposes. In this regard, the sustainability of results of projects for investment follow-up seemed more difficult to achieve than for other categories. This underscores the importance of integration of such projects with national development plans, as well as coordination with the national authorities and donors concerned with follow-up action.

Table 2.12: Sustainable Effects and Impact in Relation to Project Objectives, 1996-97¹

45. While the assessment pattern for the projects evaluated during 1996-97 was generally positive and indicated substantial improvements, a number of areas were identified where further improvements are required, especially for achieving sustainable results. As highlighted in Table 2.13, the corrective measures must overcome, in particular, weaknesses in national institutions (mentioned in 51 percent of the cases), project design (40 percent), insufficient national financial resources to follow-up on the projects (37 percent), project supervision and adjustment (28 percent) and project implementation and management (27 percent). The first three elements mentioned are interrelated, and since national weaknesses are usually known at the time of selecting and designing projects, it is through project design that such weaknesses must be addressed. In this connection, the evaluation missions highlighted the lack of realism in terms of project duration (noted for 45 percent of the projects), the desirability of expanded involvement of the private sector and NGOs (38 percent and 30 percent, respectively) and more training at the national level (34 percent).

Table 2.13: Project Sustainability - Areas with greatest need for Improvement, 1996-97¹

IMPLEMENTATION OF PROGRAMME OF WORK AND BUDGET OUTPUTS

46. As indicated earlier, the PWB 1996-97 identified specific outputs for implementation under the Technical and Economic Programmes. During programme implementation it was necessary for modifications to be made in some outputs and others to be postponed or cancelled. In addition, a number of new outputs were introduced to meet changing circumstances and specific requests. An overview of the implementation of the various types of outputs is provided in Table 2.14.

Table 2.14: Implementation of Outputs, 1996-97

47. In interpreting the above figures care needs to be taken in that the quantitative value either in terms of cost or output value is not homogeneous. Therefore, while the number of outputs has been shown, they must be seen as indicative. A total of 1 538 outputs were included in the PWB and 513 new outputs were introduced during programme implementation, while 451 outputs were cancelled or postponed. The total number of outputs delivered was 1 600, about 4 percent more than the original number. Many of the unplanned outputs introduced during programme implementation related to direct services to countries, which depend on specific requests from Member Nations and could not be identified when the programme of work was being formulated. With regard to publications, changes were made in specific publications produced in order to respond to changing priorities and circumstances, but the number of new publications introduced was about the same as the number of publications cancelled or postponed. Delivery of methodologies and guidelines was about 17 percent less than the level planned in the PWB, while training outputs were 9 percent less. Within total output delivery, 90 percent of outputs were implemented as planned and 10 percent implemented with some modifications.

48. Major Programme 2.1 Agricultural Production and Support Systems had the largest delivery of outputs with 32 percent of the total, as shown in Chart 2.5. It accounted for 62 percent of outputs on methodologies and guidelines, 49 percent of training outputs and 33 percent of information system outputs. The share of outputs in the other major programmes was between 11 and 15 percent of the total. Major Programme 3.1 Policy Assistance, was an important source of direct services to countries accounting for 33 percent of the total, the Policy Assistance Groups in the Regional and Sub-regional Offices making an important contribution in this regard.

 

49. The distribution of outputs delivered by type is shown in Chart 2.6. Direct services to countries and publication each accounted for about 25 percent of total outputs. This was followed by methodologies and guidelines and meeting outputs, each accounting for about 15 percent of the total. Information systems and training outputs formed the smallest components of output delivery with 11 percent and 8 percent respectively.

 

50. Publications outputs were spread evenly over the Major Programmes varying from 16 percent in Major Programme 2.5 Contribution to Sustainable Development and Special Programme Thrusts to 19 percent in Major Programme 2.1 Agricultural Production and Support Systems, except for Major Programme 3.1 Policy Assistance with 9 percent of the publications delivered.

51. The distribution of the publications by target group is shown in Chart 2.7. While it is difficult to delineate the boundaries between the respective categories, about 47 percent of the documents produced by the technical programmes were aimed at policy makers (policy oriented publications with no specialised technical content) and 33 percent at technical specialists and researchers (publications with a mainly specialized content). A further 15 percent of the printed words related specifically to meeting documentation and about 5 percent was oriented towards the general public.

 

52. As shown in Chart 2.8, Africa was the largest recipient of training assistance with 27 percent of all training activities being held in that region. Latin America and the Caribbean and Asia and the Pacific were recipients of 19 percent and 16 percent of training activities respectively, followed by the Near East with 13 percent and Europe with 11 percent. A number of training activities were of a more general nature, with 14 percent being global or inter-regional in scope.

53. The venue for meetings organized by the Organization is shown in Chart 2.9. FAO Headquarters is often the preferred location for meetings as it simplifies logistics and assures effective secretariat support. During 1996-97, over 35 percent of the meetings were held at Headquarters. The Asia and the Pacific Region was the venue for 21 percent of the meetings, followed by Europe with 19 percent, and Africa with 11 percent.