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B. Financial regulations - part I (annex I to the rules of procedure)

Regulation I
Committee on Financial Control

1. There shall be a standing Committee on Financial Control which shall exercise the functions assigned to it by these Regulations and shall deal with any special matter referred to it by the Conference or the Director-General.

2. In accordance with the provisions of Rule XXVI, paragraph 1 (b), of the Rules of Procedure of the Food and Agriculture Organization of the United Nations, the functions of this Committee shall, unless and until the Conference decides otherwise, be exercised by the Executive Committee.

Regulation II
Currency
1. The budget and accounts of the Organization l shall be compiled in the currency of the country in which the Organization has its seat.
Regulation III
Preparation of Annual Budget
1. The financial year of the Organization shall be from July 1 to June 30.

2. The expenditure proposed in the draft annual budget shall be divided into two parts, covering General Expenditure and the Working Capital Fund, respectively, and shall be subdivided into appropriate chapters. A summary of chapters shall precede the detailed text of the budget.

3. The budgetary proposals shall be explained by schedules showing, in such detail as may be practicable, the estimates for (a) the various functions or purposes for which funds are proposed to be expended, and (b) the salaries, travel, and other operating costs involved. The sum voted for the current financial year, and the sum voted and the amount actually expended for, and commitments incurred in respect of, the preceding year, shall for comparison be indicated under each heading comprising such schedules.

4. The Director-General shall arrange for the draft annual budget to be submitted to the Committee on Financial Control on or about July 1.

5. The Committee shall discuss the draft budget with the Director-General and formulate for his consideration any recommendations pertaining thereto which it may consider advisable. The Committee may if it so desires, send to the
Conference a report relative to such recommendations.

6. The Director-General shall transmit the budget to Member governments so as to reach them not later than 60 days in advance of the opening of the regular session of the Conference.

Regulation IV
Supplementary Estimates
1. If, between the time of the transmission of the draft budget to Member governments and the opening of the session, the Director-General considers it necessary to submit to the Conference estimates for the ensuing financial year supplementing the estimates contained in the draft budget, he may do so. The form in respect of such supplementary estimates shall correspond as nearly as may be possible to that prescribed for the annual budget in Regulation III and if time permits the supplementary estimates shall be submitted to the Committee on Financial Control and transmitted to Member governments before the opening of the session.
Regulation V
Consideration of Budget by the Conference
1. At each regular session of the Conference, the Director-General shall, in pursuance of Article XVIII, paragraph 1, of the Constitution, submit to the Conference a draft budget covering the anticipated receipts and expenditures of the Organization for the ensuing financial year.

2. The draft budget, together with any supplementary estimates, shall be referred to the appropriate commission of the Conference for report and recommendations. The Committee on Financial Control shall, through its Chairman or any members authorized to act on its behalf, have the right to submit orally or in writing its views relating to the draft budget and may be represented at all discussions in the commission.

3. The annual budget, as finally approved by the Conference, shall take the form of a single document in which any supplementary estimates shall have been incorporated.

Regulation VI
Apportionment of Contributions
1. The proportionate contributions of Member governments for the first financial year, as set forth in Annex II to the Constitution, shall remain in force for the Member governments referred to therein until the contributions have been redetermined by the Conference. Such redetermination shall take into account, in particular, the admission of new Members, the failure of any of the governments referred to in the said Annex II to accept membership of the Organization, and the withdrawal of any Members.

2. The apportionment of contributions shall be considered at any regular session of the Conference if the Committee on Financial Control should recommend any revision thereof or if a Member government should present a request in accordance with Rule XXI, paragraph 1 (d), of the Rules of Procedure of the Organization.

3. It shall be the duty of the Committee on Financial Control to review from time to time the apportionment of contributions in force and to recommend for the consideration of the Conference any revision thereof which it may deem to be advisable.

Regulation VII
Determination of Contributions of New Members
1. When a government applies for membership in the Organization in accordance with Rule XX of the Rules of Procedure, the Committee on Financial Control shall propose to the Conference a proportionate contribution to be paid by the proposed Member, if the application is received in time for the Committee to consider the matter in advance of the opening of the Conference. The Conference, in fixing in accordance with Rule XX, paragraph 3, of the Rules the proportionate contribution of the proposed Member, shall' take account of the proposals of the Committee on Financial Control. The proportionate contribution fixed by the Conference for the proposed Member government shall be communicated to that government at the same time as the communication informing it that its application for admission has been accepted.

2. If the proposed Member government then formally accepts membership, its contribution shall be payable in respect of the whole of the current year in which its acceptance of the Constitution is deposited unless the Committee on Financial Control should otherwise decide. The Director-General shall inform the Member government of the amount due from it in the currency of the country in which the Organization has its seat, and this amount shall, subject to Regulation VIII, paragraph 2, be payable in full within 30 days of the communication from the Director-General.

Regulation VIII
Payment of Contributions
1. As soon as possible after the budget is adopted by the Conference, the Director-General shall inform each Member government of the amount of its contribution in terms of the currency of the country in which the Organization has its seat.

2. Contributions payable by each Member government in respect of each annual budget shall be payable in full within 30 days of the receipt of the communication of the Director-General referred to in paragraph 1 or of the first day of the financial year, whichever is the later.

3. Unless otherwise agreed between a Member government and the Director-General, contributions shall be paid in the currency of the country in which the Organization has its seat. Any Member government may propose another method of payment to the Director-General and the Director-General may, after consulting the Committee on Financial Control if necessary, agree to any method of payment which is not prejudicial to the financial interests of the Organization.

4. If, at the expiration of the first quarter of the financial year, the payment of the contributions of any Member government is still outstanding, the Director-General shall notify such governments of the amounts of their outstanding contributions. Should such payments be still outstanding at the end of the second or third quarters of the year, the Director-General shall issue further notifications.

5. At the expiration of each quarter of the financial year the Director-General shall submit to the Committee on Financial Control a statement of all contributions received and outstanding. The Committee on Financial Control may advise the Director-General as to any steps that ought to be taken in order to expedite payment of contributions. The Committee may submit to the Conference such recommendations in this regard as it may consider appropriate.

6. At each regular session of the Conference the Director-General shall make a public statement indicating (a) the position of each Member government in respect of the fulfillment of the payment of its contributions, and (b) the steps which he has taken to secure payment in full of an! contributions unpaid. The Conference may take such action on this statement as it may deem appropriate.

Regulation IX
Gifts
1. Gifts which may directly or indirectly involve financial liability for Member governments or for the Organization itself may be accepted only after the authorization by the Conference or, between sessions of the Conference, by the Executive Committee.

2. Gifts not involving any financial liability for Member governments or for the Organization may be accepted by the Director-General if such acceptance is not in conflict with policies established by the Conference and if in his opinion such gifts would not undesirably affect the aims or activities of the Organization. The Director-General shall, however! report promptly to the Executive Committee the acceptance of all such gifts.

3. All gifts of money not allocated by the donors for any special purpose shall be dealt with under Regulation X below.

Regulation X
Receipt of Funds
1. All receipts of money by the Organization (other than gifts allocated for specific purposes) shall be credited to the general revenue of the Organization.
Regulation XI
Working Capital Fund
1. The unspent and uncommitted balance of the budget voted for the first financial year shall, in accordance with the provisions of Annex II of the Constitution, constitute the nucleus of a working capital fund.

2. The unspent balances of the budgets for later years may be allocated by the Conference to the Working Capital Fund or to reducing the next budget.

3. The Committee on Financial Control shall make regulations governing the maintenance, administration and expenditure of this Fund.

Regulation XII
Special Funds
1. The Organization may create other funds for special purposes and the Committee on Financial Control may make recommendations to the Conference for this purpose.

2. If such special funds are created, the Committee on Financial Control shall make appropriate Regulations for their maintenance and administration.

Regulation XIII
Depositories
1. The Director-General shall, with the approval of the Committee on Financial Control, designate as depositories for the safekeeping of the funds and other financial assets of the Organization a bank or banks of internationally recognized standing.

2. Funds, including the Working Capital Fund, not immediately required for use shall be placed on deposit at interest at the designated depositories.

Regulation XIV
Expenditure of Funds
1. The Director-General is authorized, for a period not to exceed six months after the beginning of the financial year, to incur expenditures at the same rate and for similar functions and purposes as were approved in the budget for the preceding financial year. The approval of a budget by the Conference shall constitute an authorization to the Director-General to incur expenditure during the financial year to which the budget relates for the purposes for which funds have been voted up to, but not exceeding, the amounts so voted.

2. Transfers from one purpose to another within the same chapter of the budget, and the expenditure of any sum (or part thereof) which may have been voted in the budget to cover unforeseen contingencies may be effected by the Director-General on his own authority, provided that the reasons for such transfer or expenditure are promptly reported in detail to the Committee on Financial Control.

3. Transfers from one chapter of the budget to another may be authorized only by a vote of the Committee on Financial Control on the recommendation of the Director-General.

4. The Director-General shall submit to the Committee on Financial Control quarterly reports on all receipts and expenditures of the Organization.

Regulation XV
Preparation of Annual Accounts
1. The Director-General shall in each year prepare the annual accounts in such a manner as to
(a) indicate the receipt of all funds and the sources from which they are derived;

(b) show commitments and expenditures in such detail as may be necessary to reflect the purposes and objects for which the funds where used; and

(c) include a complete statement of the assets and liabilities of the Organization.

2. He shall also give such other information as is possible to indicate the current financial position of the Organization.
Regulation XVI
Internal Audit
1. The Director-General shall maintain an internal audit of accounts which shall provide for an effective current examination or review of fiscal transactions in order to ascertain (a) the regularity of the receipt, deposit, and custody of all funds and other financial resources of the Organization, (b) the conformity of all expenditure with the budget and with the fiscal policy of the Organization, and (c) uneconomic use of funds.
Regulation XVII
External Audit
1. The Conference shall, upon the recommendation of the Committee on Financial Control, appoint or employ a qualified person, agency, authority, or firm, in no way connected with the Organization, to make annually, and at such other times as may be necessary for special purposes, an independent audit of the funds, assets, and accounts of the Organization.
Regulation XVIII
Examination of Audited Accounts by Committee on Financial Control
1. Not later than three months after the close of the financial year, the results of the annual audit shall be communicated directly by the auditor to the Committee on Financial Control, which shall submit a report thereon to the Conference at its next regular session. The audited accounts and the report thereon shall show (a) the financial position of the Organization, and (b) the regularity of its financial transactions, and shall include an appraisal of the effectiveness of its financial methods and management, including recommendations with regard to any improvement. A copy of the results of the audit shall also be transmitted by the auditor to the Director-General, who shall present to the Committee on Financial Control such comments thereon as he may desire to make.
Regulation XIX
Action by Director-General on Auditor's Report
1. The Director-General shall inform the Conference of the action he has taken with regard to any criticism or recommendation affecting financial management contained in any annual audit report. This information shall be given either at the same session at which the report is being considered or at the next following session.
Regulation XX
Consideration of Annual Accounts by the Conference
1. Not later than 30 days in advance of the opening of the regular session of the Conference, the Director-General shall transmit to Member governments copies of the annual accounts as audited and the report of the Committee on Financial Control.

2. The annual accounts, together with the report, shall be referred to the appropriate commission of the Conference for report and recommendation. The Committee on Financial Control shall, through its Chairman or any members authorized to act on its behalf, have the right to submit orally or in writing to such commission its views relating to these accounts and shall be represented at all discussions thereon in the commission.

3. The Conference may disallow any item in the annual accounts which it considers improper and direct the corresponding amendment of the accounts. If it disallows any item, the Conference shall decide what steps shall be taken to deal with the matter.

4. The Conference shall approve the accounts with any modification which may be made in accordance with paragraph 3 of this Regulation.

Regulation XXI
Indemnification against Loss
1. The Director-General shall make suitable arrangements under which the Organization will be protected against loss on account of the conduct of officials who may be entrusted by him with the custody and disbursement of funds of the Organization.
Regulation XXII
Instruction of the Director-General
1. The Director-General shall communicate to the Committee on Financial Control the instructions which he has issued for the purpose of carrying out the provisions of these Regulations.
Regulation XXIII
Amendments
1. These Regulations may be amended in the same manner as is provided for the amendment of the Rules of Procedure of the Organization. If, however, the Committee on Financial Control should decide that some alteration or addition is urgently required, the Committee may provisionally put into effect such alteration or addition subject to confirmation by the Conference at its next regular session.
C. Financial regulations - part II (Temporary)

Regulation I
First Financial Year

1. The first financial year of the Organization shall be from October 16,1945, to June 30,1946.
Regulation II
Currency
1. While the Organization is established in the United States of America, the budget and accounts shall be compiled in United States dollars.
Regulation III
Preparation of Budget for First Financial Year
1. The Director-General is authorized to incur expenditures not to exceed the amounts contributed in accordance with the budget for the first financial year set forth in Annex II of the Constitution.

2. The expenses of the Interim Commission and of the inaugural session of the Conference shall be included in the budget for the first financial year.

3. The Director-General shall present to the Committee on Financial Control, not later than January 31, 1946, a detailed budget for the first financial year in the form required by Regulation III, paragraphs 2 and 3, of Part I of the Financial Regulations.

4. After discussion of the budget with the Committee it shall be sent by the Director-General to Member governments not later than March 31. 1946

5. The budget for the first financial year shall be reported to the next regular session of the Conference for its information.

Regulation IV
Preparation of the Budget for the Second Financial Year
1. The Director-General shall present to the Committee on Financial Control, not later than May 1, 1946, a provisional detailed budget for the second financial year in the form required by Regulation III, paragraphs 2 and 3, of Part I of the Financial Regulations.

2. After discussion with the Committee, the provisional budget shall be sent by the Director-General to Member governments not later than July 1, 1946.

3. The budget for the second financial year shall be considered by the next regular session of the Conference which shall approve it in accordance with Regulation V, paragraphs 2 and 3, of Part I of the Financial Regulations.

4. Pending adoption of the budget at the next regular session of the Conference, the Director-General is authorized to continue expenditures after June 30, 1946, for the functions and purposes approved in the detailed budget for the first financial year, and to make expenditures in preparation for the next regular session of the Conference.

Regulation V
Contributions for the First Financial Year
1. The contributions payable by each Member government for the first financial year, in accordance with Annex II of the Constitution, shall be due and payable at the close of the First Session of the Conference or of the deposit of its instrument of acceptance of the Constitution, whichever be the later.

2. These contributions shall be payable in the amounts shown by Table l on page 58 of this Report.

3. Each Member government may deduct from its contributions the amount contributed by it to the Interim Commission or to the expenses of the Organization for the holding of the First Session of the Conference.

4. Unless otherwise agreed between a Member government and the Director-General, contributions shall be payable for the first financial year in United States dollars. Any Member government may propose any other method of payment to the Director-General and the Director-General may, after consulting the Committee on Financial Control if necessary, agree to any method of payment which is not prejudicial to the financial interests of the Organization.

5. If, at the expiration of three months after the close of the First Session of the Conference, the payment of the contributions of any Member governments is outstanding, the Director-General shall notify such governments of the amounts of their outstanding contributions. Should such payments be still outstanding after the lapse of six months from the close of the First Session, the Director-General shall issue further notifications.

Regulation VI
Contributions for the Second Financial Year
1. The apportionment of contributions of Member governments for the second financial year shall be that indicated in Table 2 on page 59 of this Report.

2. Each Member government shall, within the period provided for the payment of contributions by Regulation VIII, paragraph 2, of Part I of the Financial Regulations, pay not less than four fifths of the contribution apportioned to it.

3. With regard to the payment of the remainder of the contributions, the Conference, at its next regular session, may adjust the apportionment of contributions between Member governments, and shall determine the date when the payment of the balance of contributions shall be due.

Note: The intention of the Conference in adopting this provision is to permit negotiations arising out of the initiative of the Members whose apportionments are increased for the second financial year. It is understood that if Member governments should desire to make representations regarding the apportionment of the contributions allotted to them, the Director-General and the Executive Committee shall take such representations into consideration and report to the next regular session of the Conference their recommendations with a view to the adoption of a final scale of contributions for the second financial year. The provision was considered necessary because it was found that certain members of the First Session of the Conference were unprepared to accept a new scale of contributions for the second financial year without consultation with their governments.

Regulation VII
Examination of Audited Accounts by the Committee on Financial Control
1. Not later than August 31, 1946, the results of the audit for the first financial year shall be communicated directly by the auditor to the Committee on Financial Control, which shall submit a report thereon to the next regular session of the Conference in accordance with Regulation XVIII, paragraph 1, of Part I of the Financial Regulations.

2. The Director-General shall inform the next regular session of the Conference of the action he has taken with regard to any criticism or recommendation affecting financial management contained in the audit report.

3. Not later than September 30, 1946, the Director-General shall transmit to Member governments copies of the audited accounts for the first financial year and the report of the Committee on Financial Control thereon.

4. The Conference shall consider the annual accounts and the report in accordance with Regulation XX, paragraphs 2 and 4, of Part I of the Financial Regulations.


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