VII. Financial matters
A. Scale of contributions
Working capital fund
309. The Conference took note of the fact that the General Assembly had adopted, as a base for the United Nations scale of contributions, a moving average of the national income statistics for the three consecutive preceding years. The Conference decided to adopt the average of the years . 195O, 1951 and 1952 as the basis for the FAO scale of contributions for 1954 and 1955.
310. A number of delegations felt strongly that information concerning the data and Procedures used by the United Nations Statistical Office in preparing the estimates of national incomes should be made available to Member Governments, and the Director-General was asked to approach the United Nations with a request to this effect.
311. It was noted that the per caput contributions of several Member Governments in the scales for 1954 and 1955 were higher than that of the largest contributor. This situation could be changed either by-redistributing the excess of per caput contributions of these members among the contributors whose contribution is neither the minimum nor the maximum, or by raising the level of the maximum contribution. It was recalled that at discussions of the maximum limit of contributions at previous Sessions of the Conference it had been thought desirable by some delegations to approach uniformity among the United Nations and the Specialized Agencies in respect of this maximum limit or " ceiling". After full discussion of this matter and other aspects of the relationship between the FAO and the United Nations scales of contributions, the Conference decided to request the Council to examine the FAO scale and to report to the Conference at its next Session on its findings concerning any factors the Council might consider relevant, including the United Nations method of computation, the minimum and maximum limits and the per caput incidence of contributions.
312. The Conference considered a request from the Government of Korea for relief of its contribution for the year 1954. It was decided unanimously to grant this request.
313. The Conference was informed by the Director-General that the Government of Peru had deposited on 17 July 1952 an instrument of acceptance of the Constitution of FAO and that Peru would thus be included in the normal manner in the scale of contributions for 1954 and 1955.
314. Scales for 1954 and 1955 adjusted as described above and including the three new Members admitted to the Organization during the current Session, were approved and are attached to this report as Appendix E The delegations of Canada, Israel and Spain wished to record the reservations of their governments with regard to those scales.
315. The Conference adopted the following resolutions:
Resolution No. 59
Scale of Contributions
Approves the scales of contributions for 1954 and 1955 based on the average of national income statistics for 1950 1951 and 1952, as presented by the Director-General, subject to the following adjustments:
(i) the assessments of the three new Members admitted to the Organization during the Seventh Session of the Conference, namely Iran, Libya and Yemen, shall be incorporated;
(ii) temporary emergency relief shall be granted to Korea;
Accordingly adopts for use in 1954 and 1955 the scales set out in Appendix E to this report which incorporate the above adjustments.
Resolution No. 60
Calculation of Future Scales of Contributions
Noting that the General Assembly of the United Nations has approved the calculation of scales of contributions based on a moving average of the national income statistics for the three latest years in respect of which such statistics are available;
Endorses the use of that basis for the calculation of the FAO scale of contributions;
Requests the Council to examine fully and report to the Eighth Session of the Conference on all factors involved in the calculation of the FAO scale, with special reference to the United Nations method of computation, the maximum and minimum limits and the per caput incidence of contributions;
Requests the Director-General to calculate, for submission to the Council in its midyear session of 1955, scales for use in 1956 and 1957 based on the Council's recommendations as the result of it; examination; also,
Requests the Director-General to circulate these scales, as endorsed or amended by the min-1955 Council session, to Member Nations 60 days before the date fixed for the opening of the regular Session of the Conference in 1955.
Resolution No. 61
Data and Procedure Used in Calculating Scales of Contributions
Noting the concern expressed by some Member Nations with regard to the data on which the Statistical Office of the United Nations bases its calculations of national income statistics, and to the procedure used in making such calculations;
Considering that it is of the highest importance for Member Nations to have full knowledge of, and confidence in, the validity of these data and procedures;
Instructs the Director-General to request the United Nations to make available through him to any interested Member Nation of FAO Which so wishes, all relevant information concerning the preparation by the United Nations of the national income statistics of the nation concerned.
Working capital fund
316. The Conference considered the level of the Working Capital Fund, and concurred in the recommendation of the Committee on Financial Control that the level should remain at $1,750,000. The matter should however be kept under review by the Council which may wish to refer it to the Committee on Financial Control. The Conference stressed the importance of Member Nations making their contributions to the Organization as promptly as possible, in order to avoid depletion of the Working Capital Fund during the early months of the year.
317. Consequent upon its decision that the level of the Fund should remain at $ 1,750,000 the Conference noted that surplus credits in the Working Capital Fund would now be released under Financial Regulation 6.5 (b). The Conference was of the opinion, however, that Financial Regulation 6.5 (b), which gives Member Nations the option of either applying released surplus credits against contributions payable in future years or of receiving a cash refund, should be amended so that no cash refund may be made to a nation which has not paid its current contribution. Surplus credits should be released in accordance with Financial Regulation 6.5 (b) as amended, after certification of the accounts by the External Auditor, but without waiting for formal approval of the accounts by the Conference.
318. The Conference suggested to the Council that the Committee on Financial Control might wish, before the Eighth Session of the Conference, to examine the Financial Regulations, especially those governing the operations of the Working Capital Fund with a view to determining whether amendments were necessary or simplification possible.
319. The Conference adopted the following resolutions:
Resolution No. 62
Level of the Working Capital Fund
Having considered the recommendations of the Seventeenth Session of the Committee 0n Financial Control,
Decides that the level of the Working Capital Fund shall remain at $ 1.750,000.
Resolution No. 63
Release of Surplus Credits in the Working Capital Fund
Having considered the amendment suggested by the Seventeenth Session of the Committee on Financial Control to Financial Regulation 6.5 (b), with a view to ensuring that cash refunds should not be made to Member Nations from whom contributions are due,
Decides to amend Financial Regulation 6.5 (b) as follows:
6.5 (b) Unless the Conference decides otherwise, any excess of monies over the established amount of the Working Capital Fund at the close of any financial year, as shown in the audited accounts, shall be released. Any funds so released shall be applied in the case of each Member Nation to its contribution in arrears, or, in the absence of such arrears, shall, at the option of the Member Nation, be applied either to current and future contributions [payable in future years], or as a cash refund [to the Member Nation]. Such a refund shall be made in the currencies in which that Nation's advances and/or contributions were paid, and shall be made as soon as the current contribution of that Nation is paid. Funds released shall be charged to the equities of Member Nations in proportion to their respective excess credits in the Working Capital Fund.
B. Foreseeable receipts
320. It was the sense of the Conference that since the Organization's budget is approved on the assumption that all Member Nations will pay their contributions promptly, the term "foreseeable receipts" used in Fin. Reg. 4.1 (a) and 6.3 (a) should be construed by the Director-General as referring to such amount, within the limit of the authorized budget, as he may reasonably foresee or expect to be collected in such year after having taken into account any factors which cast substantial doubt on this assumption.
321. The Director-General having used due prudence and judgment in the establishment of an amount of "foreseeable receipts" for the purpose of planning the implementation of the program of work for the ensuing financial year, and having exercised care in carrying out such plans during the course of the year, any expenditures in excess of the receipts may be covered by an advance from the Working Capital Fund pending receipt of contributions in arrears in sufficient amounts to cover such advance. However, total expenditures should not exceed the total amount of the approved budget.
322. The Conference wished to bring to the attention of all Member Governments the difficulties with which the Director-General is confronted when governments do not pay their contributions annually as they become due. This practice means that the funds available to the Director-General fluctuate considerably from one year to the next and makes it impossible for him to plan his program with the maximum efficiency. Member Governments are urgently requested to do everything within their power to pay their contributions promptly, regularly and on an annual basis to avoid possible impairment of the program.
323. Resolution No. 64
Audited Accounts for 1951 and 1952
Having examined the Audited Accounts for the periods ended 31 December 1951 and 31 December 1952, and the Auditor's deports thereon, together with the comments of the 15th and 17th Sessions of the Committee on Financial Control.
Approves the Audited Accounts and the above-mentioned periods.
C. Expenses of members of the Coordinating Committee and of experts on panels
324. The Conference felt that since members of the Coordinating Committee and experts serving on panels are appointed in their individual capacities, the cost of their attendance should be borne by the Organization. Therefore, after consideration of the Report of the Sixteenth Session of the Council regarding expenses of the Members of the Coordinating Committee, the Conference passed the following resolution:
Resolution No. 65
Expenses of Members of the Coordinating Committee
Resolves to amend Rule XXVI-3 (h) of the Rules of Procedure by substituting for it the following text:
Members of the Coordinating Committee shall be reimbursed for the cost of their travel expenses and shall also be paid a subsistence allowance while attending Sessions of the Committee in accordance with the Organization's travel regulations.
325. Furthermore, on the recommendation of the Committee on Financial Control and the Council, the Conference adopted the following resolution:
Resolution No. 66
Expenses of Experts on Panels
Agrees to amend Resolution No. 25 of the Sixth Session of the Conference by deleting the provision whereby governments were required to cover the attendance costs of experts at the meetings convened in pursuance of that resolution; and
Decides that whenever individuals are invited by the Organization to participate in technical meetings and panels the travel and subsistence expenses of these experts shall be borne by the Organization.
326. The Conference noted that the present arrangements concerning the expenses of consultants were satisfactory and confirmed its understanding that the expenses of experts designated by governments to attend technical meetings in specialized fields arranged by the l Director-General should be home by Member Governments sending experts to such meetings.
D. Financing of home leave costs
327. The Conference approved the resolution suggested by the 17th Session of the Committee on Financial Control whereby funds budgeted for home leave in 1954, if not expended in that year, can be carried over into 1955 and be available for expenditure on home leave during that year.
Resolution No. 67
Home Leave Costs
Recognizing the special budgetary difficulties which arise from the fact that the estimates of home leave costs can only be based on the entitlement of individual staff members, and that staff members may, or may be required to, postpone their home leave to a subsequent financial year in the budget for which the cost is not included;
Urges that administrative arrangements he made to ensure that postponement of home leave in future be permitted only for exceptional end essential reasons;
Authorizes the Director-General, notwithstanding Financial Regulation 4.2, to carry over into 1955 the unexpended balance of the sum included for home leave in the 1954 budget and to expend this carried over balance on home leave costs in 1955, in addition to the sum included for home leave in the budget of that year:
Instructs the Director-General after consulting with the Committee on Financial Control to report to the 1955 Session of the Conference on the efficacy of this arrangement.
328. The Conference requested the Director-General to examine the present rules governing the granting of home leave with a view to ensuring that, as far as possible, staff members whose home countries are at a long distance from their duty stations should not he at a disadvantage where taking home leave is concerned.
E. Repatriation grant
329. The Conference approved the recommendation of the 17th Session of the Committee on Financial Control for the establishment of a Repatriation Grant Equalization Fund and adopted the following resolution:
Resolution No. 68
Repatriation Grant Equalization Fund
Recognizing FAO's accumulating liability in respect of the Repatriation Grant payable to staff members upon separation under Staff Regulation 301.164:
Noting that the sum of $42,000 has been included in respect of this Grant by the Director-General in the budget for each of the financial years 1954 and 1955:
Authorizes the Director-General
(i) To include in each annual budget for the four years commencing with 1956 the sum of $50,000 or such larger sum as seems to him appropriate in the light of experience, for the item " Repatriation Grant ";
(ii) To establish a Repatriation Grant Equalization Fund under Financial Regulation 6.8;
(iii) At the end of each of the six financial years commencing with 1954:
(a) to transfer any unobligated balance in the repatriation grant item to the Repatriation Grant Equalization Fund, and
(b) to charge to the Repatriation Grant Equalization Fund any expenditures incurred in a financial year which exceed the budgetary provision for the Repatriation Grant item for that year:
Instructs the Director-General to attach to the annual accounts a special statement showing the status of the Repatriation Grant Equalization Fund.
F. Publications Revolving Fund
330. The Conference approved amendments to the Financial Regulations providing for the establishment of a Publications Revolving Fund. These amendments had been prepared by the Director-General at the request of the Committee on Financial Control as a result of the endorsement by the Seventeenth Session of the Council of that Committee's recommendation that a Publications Revolving Fund be established to meet the direct costs of reprints of publications and films, excluding the salaries and allowances of the staff concerned.
331. The Conference approved the following changes in the Financial Regulations:
Addition of a new item to Regulation 7.1 "Other Income" as follows:
I .7.1 All receipts other than:
(a) contribution to the budget;
(b) direct refunds of expenditures made during the financial year:
(c) advances to the Working Capital Fund or deposits to Trust and Special Funds and other receipts directly related to those funds: and
(d) proceeds of sales of publications end films shall be classed as Miscellaneous Income, for credit to the General Fund. Interest or other income derived from any Trust or Special Fund accepted by the Organization shall be credited to the fund to which it relates, unless provided for otherwise by the terms of the applicable trust or special fund agreement. "
Adoption of a new Regulation 6.9 as follows:
"There shall be established a Publications Revolving Fund to which shall be credited all proceeds from the sale of publications and films. The use of the Fund shall be limited to the cost of reprinting those FAO publications and films for the sale of which there is a demand."
G. Cost of living differential
Appreciation of work of the committee on financial control
332. The Director-General, in accordance with Resolution No. 67 of the Sixth Session of the Conference, reported to the current Session on the various problems involved in the application of cost of living differentials. The Conference tool; note of his report and endorsed the adoption by the Organization of the principles proposed by the Administrative Committee on Coordination. The Conference agreed that the Council was authorized to approve such modifications in differential as might be desirable to continue full agreement and uniformity among the United Nations and the Specialized Agencies.
333. The Conference approved the suggestion of the Committee on Financial Control, which had been endorsed by the Council, with regard to the operation of the Staff Commissary and adopted the following resolution:
Resolution No. 69
Noting that by the end of 1953 the Commissary Revolving Fund would be ad equate to meet currently the operating cash needs of the Commissary and to support any presently foreseeable enlargement of the Commissary operations,
(i) That as of 1 January 1954, an amount equivalent to 1%,. of the total sales of the Staff Commissary be paid, as an expense of the Commissary operation, into the General Fund of the Organization in reimbursement for facilities and indirect services made available to the Commissary; and
(ii) That the net profits of the Commissary earned after 31 December 1953 be placed in a special fund for the establishment of a Staff Welfare Fund for use in accordance with policies and procedures to be developed jointly by the Director-General and the staff.
Departure of Mr. Norris E. Dodd
334. The Conference determined that the expenses in connection with the departure from the Organization of the Director-General, Mr. Norris E. Dodd, should be a legal obligation of the 1953 financial year, regardless of the actual date of his departure.
Appreciation of work of the committee on financial control
335. The Conference found that its consideration of the budgets for 1954 and 1955 and of all other budgetary and financial matters was very greatly facilitated by the carefully prepared and clearly expressed reports submitted to it by the Committee on Financial Control through the Council. The Conference wished to express its appreciation of the work done by the Committee on Financial Control during 1952 and 1953.