CL 120/3-Sup.2


Hundred and Twentieth Session

Rome, 18 - 23 June 2001



1. The cost increase calculations contained in the Summary Programme of Work and Budget (SPWB) 2002-031 were based on actual cost changes through to the end of 2000 and projections of cost movements thereafter.


2. The cost increase calculations are normally refined and updated in the full Programme of Work and Budget. However, a recent development concerning professional salaries of Rome-based staff will require a significant increase in the provision for cost increases in 2002-03 and the purpose of this supplementary document is to provide further details in this regard.

3. At the outset, it is noted that the salaries of staff in the professional and higher categories are made up of two main elements: a base/floor salary and a post adjustment, both expressed in US dollars. The base/floor salary scale is applied worldwide and is established by the General Assembly on the recommendation of the International Civil Service Commission (ICSC). The ICSC is also responsible for determining the post adjustment level (multiplier) to ensure that professional salaries have the same purchasing power at all duty stations. It is recalled that FAO accepted the statute of the ICSC in March 1975.

4. The level of the post adjustment is determined by periodic place-to-place cost-of-living surveys conducted by the ICSC secretariat every four to five years. The purpose of these surveys is to determine the cost-of-living relationship between the surveyed duty station and New York, the base of the post adjustment system. The results of the survey are then updated monthly to reflect changes due to inflation and exchange rate fluctuations.

5. Such a survey was carried out by the ICSC secretariat in Rome in October 2000. The survey covered price data collection and index calculations for a basket of goods and services. In addition to the price collection, all international officials in grades P-1 to D-1 were requested to report on their housing and domestic service costs.

6. The purpose of the housing survey was the collection of data for the establishment of duty station specific weights for rents and housing costs and the calculation of rental subsidy thresholds. This information was derived from a questionnaire that was distributed to 1233 staff members. A total of 444 questionnaires or about 36 percent were received. The questionnaires also provided the costs and weights for domestic services.

7. Additionally, a sample of international officials in grades P-1 through D-1 was requested to report on their household expenditures. A second questionnaire was distributed for this purpose to a random sample of 722 staff members located in Rome. A total of 217 questionnaires or about 30 per cent were received. The expenditure data was used in the calculation of common weights for the seven UN headquarters duty stations.

8. The report on this survey was reviewed by the Advisory Committee on Post Adjustment Questions (ACPAQ) in March 2001 and submitted to the ICSC for final approval at its session in June 2001. The result of the place-to-place survey is normally implemented in the month after the ICSC approval.

9. As noted in paragraph 104 of the SPWB 2002-03, a likely 5% increase in professional salaries was foreseen at Headquarters from July 2001 following this place-to-place survey. This provision was also intended to take into account the annual cost of living adjustment for Rome-based staff. It was considered to be consistent with adjustments made in previous place-to-place surveys, which have only yielded minor adjustments to professional salary levels.

10. The results of the place-to-place survey were reviewed and confirmed by the ACPAQ after the SPWB document went to print. The ACPAQ recommended an increase in the Headquarters post adjustment of approximately 12 percent as of the base date of the survey (October 2000) and at the exchange rate prevailing at the time (Lira 2 186 to the US Dollar). This recommendation is expected to be confirmed by the ICSC at its June session and will result in a significant increase in the professional salaries in Rome, from July 2001, which has not been foreseen in the SPWB 2002-03.

11. In addition, the expected professional salary levels for Rome-based staff will also be influenced by the annual change to the post adjustment that would normally be implemented in May. This is expected to amount to approximately 2 percent.

12. In view of the above, the caption entitled Basic Professional Salaries and Post Adjustment in the table following paragraph 103 of the SPWB 2002-03 understates the provision for cost increases by approximately US$ 22 million, and the revised estimate for cost increases is as follows:

Summary of Cost Increases for 2002-03 (All amounts in US$ 000)

  2000-01 Programme of Work @ Lira 1875 Biennialization Inflation Total Increase for 2002-03

Personnel Services                
a) Basic Professional Salaries and Post Adjustments 199,100   23,274   5,578   28,851  
b) General Service Salaries 124,080   2,226   1,843   4,069  
c) Pension Fund Contributions 65,563   2,745   1,355   4,100  
d) Social Security 12,306   3,756   0   3,756  
e) After Service Medical 13,681   (4,961)   3,002   (1,959)  
f) Dependency Allowances 6,519   602   420   1,022  
g) Education Grant, Travel and other Allowances, Recruitment and Separation Costs 58,080   (1,365)   1,275   (89)  
h) General Service Separation Scheme 6,830   0   0   0  
Total Personnel Services 486,159   26,277   13,473   39,750  

Goods and Services                
i) Other Human Resources 132,479   0   4,252   4,252  
j) Travel on Official Business 29,891   0   1,444   1,444  
k) General Operating Expenses 74,904   0   2,807   2,807  
l) Furniture, Equipment and Vehicles 16,155   0   606   606  
Total Goods and Services 253,429   0   9,109   9,109  

GRAND TOTAL - Gross Budget 739,588   26,277   22,582   48,859  

13. Adjustments are made to the provision for cost increases to reflect the exchange rate as at the day the Appropriations Resolution is put before the Conference. Depending on the prevailing exchange rate in November 2001, the budget as proposed in the SPWB 2002-03 would be financed as follows:


Funding of Programme of Work and Budget (All amounts in US$ 000)
  2000-01 PWB            2002-03 Proposed PWB        
    At Lira 1875 At Lira 1950 At Lira 2050 At Lira 2150

Programme of Work






Less: Other Income






Net Requirements (at 2000-01 Cost Levels)






Add: Estimated Cost Increases   48,859 39,289 28,435 20,870
Net Appropriation


733,932 724,362 713,508 705,943

Less: Miscellaneous Income






Assessed Contributions


727,032 717,462 706,608 699,043

Percentage Increase in Assessed Contributions versus 2000-01

13.05% 11.56% 9.87% 8.70%


14. The ICSC has also conducted a comprehensive salary survey for staff in the general service category and will review the relevant report at its June session. It is confirmed that, on the basis of the data collected, the final result will range between 3 and 5 per cent as previously indicated.


1 CL 120/3, paragraphs 100 to 119 refer