| FAO Regulations | UN Regulations | Reasons for Divergency | ||
| 3.4 | The Director-General shall submit to the regular session of the Conference a detailed budget estimate for the ensuing first financial year, and a budget estimate for the ensuing second financial year with has much detail as practicable. The estimate shall be dispatched to all Member Nations not less than 60 days before the date fixed for the opening of the session. | 3.4 | The Secretary-General shall submit to the regular session of the General Assembly budget estimates for the following financial year. The estimates shall be transmitted to all Member States at least five weeks prior to the opening of the regular session of the General Assembly. | In view of the system of biennial Conference sessions, the FAO regulation must provide for the presentation of the two following years to the Conference. |
| 3.6 | The Council shall prepare a report to the Conference on the estimates submitted by the Director-General. This report [which may contain alternative estimates] shall be transmitted to all Member Nations at the same time as the estimates. | 3.6 | The Advisory Committee shall prepare a report to the General Assembly on the estimates submitted by the Secretary-General. This report shall be transmitted to all Member States at the same time as the estimates. | If the proposed amendment is adopted there will be no divergency. |
| 3.7 | The budgets for the ensuing two financial years shall be adopted by the Conference at its regular session after due consideration of the estimates. | 3.7 | The budget for the following financial year shall be adopted by the General Assembly after consideration and report on the estimates by the Administrative and Budgetary Committee of the Assembly. | Due to the system of biennal Conference sessions, the FAO regulation must provide for the adoption by the Conference of the budgets for the ensuing two financial years. |
| 3.8 | Supplementary estimates to cover unforeseen and extraordinary expenses in accordance with regulation 6.3 (b) may be submitted by the Director-General when and as he may deem necessary. | 3.8 | Supplementary estimates may be submitted by the Secretary-General whenever necessary. | In view of its small budget and limited Working Capital Fund, the FAO regulation restricts presentation of supplementary estimates to unforeseen and extraordinary expenditures only. |
| 4.1 | (a) The appropriations voted by the Conference for the ensuing first financial year shall constitute an authorization to the Director-General to incur obligations and make payments for the purposes for which the appropriations were voted and up to the amounts so voted, but limited to the foreseeable receipts in that financial year. | 4.1 | The appropriations voted by the General Assembly shall constitute an authorization to the Secretary-General to incur obligations and make payments for the purposes for which the appropriations were voted and up to the amounts so voted. | In view of the system of biennial Conference sessions, the FAO regulation provides for the Council's further examination of the budget for the ensuing second year on the basis of additional details furnished by the Director-General, and prior to the beginning of such financial year. |
| (b) The appropriations voted by the Conference for the ensuing second financial year shall be reviewed by the Council at a session before the beginning of the second financial year in the light of all necessary details to be furnished by the Director-General and any recommendations he might desire to make. The appropriations thus examined with any readjustments made on the basis of the Council's recommendations, shall constitute an authorization to the Director-General to incur obligations and make payments for the purposes for which the appropriations were voted by the Conference and up to the adjusted amounts, but limited to the foreseeable receipts in that financial year. | Owing to the small budget of FAO and its limited Working Capital Fund, the Special Session of the Conference (1950) determined that the financial stability of FAO should be ensured by restricting expenditures to foreseeable receipts in the relevant financial year. | |||
| 4.2 | Appropriations shall be available for obligation during the financial year to which they relate. Unobligated appropriations at the close of the financial year shall be surrendered. | 4.2 | Appropriations shall be available for obligation during the financial year to which they relate. | It is considered that FAO Regulations 4.2 and 4.3 together are substantially comparable to UN Regulations 4.2 and 4.3. |
| 4.3 | Such portion of appropriations as is required to meet the outstanding legal obligations as at 31 December of that year shall remain available for twelve months following the end of that year. | 4.3 | Appropriations shall remain available for twelve months following the end of the financial year to which they relate to the extent that they are required to discharge obligations in respect of goods supplied and services rendered in the financial year and to liquidate any other outstanding legal obligation of the year. The balance of the appropriations shall be surrendered. | |
| 4.5 | Notwithstanding the provisions of Regulation 4.2, the Conference may authorize the carry-over of credits in appropriations voted for meetings of the Conference. | 4.5 | No transfer between appropriation sections may be made without authorization by the General Assembly. | This regulation was introduced by the Conference to provide for the carry-over of credits in appropriations from one year to another for amounts voted for Conference Sessions and so avoid substantional fluctuations in the annual budget available for program purposes. |
| 4.6 | (a) Transfer from one article 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 Council. (b) Transfers from one chapter of the budget to another may be authorized by the Council on the recommendation of the Director-General. Should emergencies arise, transfers between chapters may be authorized by the Committee on Financial Control on the recommendation of the Director-General, provided that the reasons for such transfers are promptly reported in detail to the Council. (c) Any savings which accrue during the operations of a financial year may be transferred by the Director-General to the Contingency Reserve Fund at any time. The transfer of savings from the Contingency Reserve Fund shall, however, be subject to the provisions of Regulation 4.6 (b). | FAO appropriations are made in accordance with a budgeted presentation which provides in considerable detail for the distribution of appropriated funds to particular articles and particular chapters in the budget. In view of the limited budget on which the Organization is working these items are sometimes small and provide little flexibility to meet conditions as they develop from time to time. It is therefore considered desirable to provide flexibility for good administration by permitting the Director-General to make necessary transfers within chapters, provided he reports such transfers to the Council. Such flexibility will meet most situations; however, extraordinary cases infrequently arise which require transfers between chapters to meet urgent and necessary expenditure, and it is thus deemed desirable to provide for such transfers subject to prior approval by the Council, and in emergency by the Committee on Financial Control. Transfer authority in FAO is also desirable since, except in very restricted cases, there is no authority for submission of supplementary estimates such as are provided for in the UN Regulations. | ||
| 5.2 | In the assessment of the contributions of Member Nations, adjustments shall be made to the amount of the appropriations approved by the Conference for the following financial year in respect of: | 5.2 | In the assessment of the contributions of Member States, adjustments shall be made to the amount of the appropriations approved by the General Assembly for the following financial year in respect of: | No divergency. |
| (a) debits or credits in the Working Capital Fund resulting from the application of Financial Regulation 6.5 (a) or (b); | There is no similar provision in the UN Financial Regulations. The FAO regulation is necessary because of the FAO procedure for the passing of the surpluses or deficits on the year's accounts through the Working Capital Fund. | |||
| (b) estimated Miscellaneous Income for the year in respect of which the assessment of contributions is being made; | (b) Miscellaneous income for which credits have not previously been taken into account, and any adjustments in estimated miscellaneous income previously taken into account. | The regulations are comparable in taking into account estimated miscellaneous income, and the divergency is to the extent to which miscellaneous income exceeds the estimated income used in the adjustment. The reason for that divergency is that FAO procedure provides for passing any surplus through Working Capital Fund which surplus may or may not result from actual income exceeding estimated income. | ||
| (c) supplementary appropriations for which contributions have not previously been assessed on the Member Nations. | (a) Supplementary appropriations for which contributions have not previously been assessed on the Member States. | No divergency. | ||
| (c) Contributions resulting from the assessment of new Member States under the provisions of Regulations 5.8. | A comparable regulation is not necessary in FAO in as much as the assessment against new members is incorporated in the scale of contributions for the year before such scale is approved by the Conference. | |||
| (d) Any balance of the appropriations surrendered under Regulations 4.3 and 4.4. | Under the FAO regulations, by which the Director-General is instructed to keep his expenditure within the limits of foreseeable income, the unobligated appropriations which are surrendered at the end of the financial year are, in fact, taken into account in determining the surplus or the deficit for the year in question. Consequently, the adjustement in Members' contributions provided for in the UN Regulations is effected by FAO, but through the Working Capital Fund (see Regulation 6.3 (d). | |||
| 5.5 | (A decision regarding the form of this Regulation will be taken at the Sixth Session of the Conference.) | 5.5 | Annual contributions and advances to the Working Capital Fund of the United Nations shall be assessed and paid in U.S. dollars. | FAO Regulations 5.5 and 5.6 are in conformity with UN Regulation 5.5 and will remain se for the current year, but in the light of the removal of headquarters will be reviewed for succeeding years. |
| 5.6 | Advances to the Working Capital Fund shall be assessed in U.S. dollars, and shall be payable in U.S. dollars. | 5.6 | Payments made by a Member State shall be credited first to the Working Capital Fund and then to the contributions due in the order in which the Member was assessed. | FAO does not have any such regulation. The Special Session of the Conference in 1950 considered a specific proposal for application of assessments and contributions and rejected the proposal because the Conference was of the opinion that the Organization would have to apply contributions and Working Capital Fund advances in accordance with directions given by paying members ; particularly where such funds have been specifically appropriated by the legislature of the paying member. |
| 5.7 | Obligations of Member Nations, including arrears of contribution, shall remain payable in the currency of contribution of the year in which they were due. | The necessity for this regulation for FAO arises out of the possibility of collection of future contributions in currencies other than U.S. dollars. The Special Session of the Conference ruled that all past obligations shall continue to be payable in the currencies in which they were due. | ||
| 5.8 | Any nation admitted to membership in the Organization shall pay a contribution to the budget for the financial year in which the membership becomes effective. Such contribution shall be in an amount [equivalent to the remaining portions of its assessment for the year, prorated on a quarterly basis, beginning] determined by the Conference, and shall begin with the quarter in which the [instrument of acceptance was deposited and computed on its percentage share of the scale of contributions] application was approved. All new Member Nations shall be required to make advances to the Working Capital Fund in accordance with Regulation 6.2 (b). | 5.8 | New Members shall be required to make a contribution for the year in which they become Members and provide their proportion of the total advances to the Working Capital Fund at rates to be determined by the General Assembly. | If the proposed amendement is adopted, the FAO regulation will be substantially the same as that of UN. However experience shows that a definite system of assessment of a new member nation's contribution for the year of admittance to membership is desirable. |
| 5.9 | The Director-General shall submit to the Council at the expiration of each quarter a statement of all contributions received and outstanding. The Council at any of its sessions may advise the Director-General as to any steps that ought to be taken in order to expedite the payment of contributions. The Council may submit to the Conference such recommendation in this regard as it may consider appropriate. | 5.7 | The Secretary-General shall submit to the regular session of the General Assembly a report on the collection of contributions and advances to the Working Capital Fund. | Because of the inadequacies of the Working Capital Fund in past years and the relatively limited budget under which the Organization must operate, the Conference considered it desirable to have the Council keep under constant surveillance the status of collections of member's contributions. It is believed desirable that such a review be continued specifically in view of the policy adopted at the last Conference that expenditure of the Organization be kept within foreseeable receipts. In connection with such review the Council will be able to lend appropriate assistance to the Director-General in effecting collections, thus enabling the Organization to carry out its approved budget. |
| 5.9 | States which are not Members of the United Nations but which become parties to the Statute of the International Court of Justice or treaty bodies financed from United Nations appropriations shall contribute to the estimated expenses of such bodies at rates to be determined by the General Assembly. Such contributions shall be taken into account as miscellaneous income. | There appears to be no foreseeable need for such regulation in FAO. If a future need arises, there will be ample time for the Conference to consider appropriate action. | ||
| 6.2 | (a) There shall be maintained a Working Capital Fund in U.S. dollars in such amount as the Conference shall determine from time to time for: (i) advancing monies to the General Fund to finance budgetary expenditures pending receipt of contributions to the budget ; (ii) advancing monies to the General Fund to finance unforeseen or extraordinary expeditures not provided for in the current budget; (iii) making reimbursable loans for such purposes as the Council may authorize in specific cases. Advances made by the Working Capital Fund for these purposes shall be considered as forming part of the Fund. | 6.2 | There shall be established a Working Capital Fund in an amount and for purposes to be determined from time to time by the General Assembly. The source of monies of the Working Capital Fund shall be advances from Member States, and these advances, made in accordance with the scale of assessments as determined by the General Assembly, for the apportionment of the expenditures of the United Nations, shall be carried to the credit of the Member States which have made such advances. | There are a number of reasons for the divergencies between the FAO Regulations and the UN Regulations for a Working Capital Fund. The UN regulation is a very general one and apparently serves only as a basic authority for General Assembly action periodically as given circumstances arise. Conversely, the FAO regulation has been written as an operating authority to meet not only continuing conditions but to provide basic authority for extraordinary action as developments require. Such specification by regulation is considered desirable in FAO in view of the limited financial resources available to the Organization as compared with those available to UN and the flexibility that results from such larger resources. |
| (b) The amount of the Working Capital Fund thus determined shall be provided by Member Nations in U.S. dollars. Member Nations' advances to the Fund shall be in the same ratio as the Scale of Contributions to the budget and shall be subject to modification upon a revision or change in such scale, or upon Conference determination changing the total amount of the Fund. | As the Conference will be meeting only once every two years and cannot therefore make current decisions as can UN, there is a further need for continuing authority in FAO prescribed by regulation. In this connection it is important to note that under UN policy and procedure the Secretary-General has considerable latitude in withdrawals of funds from the Working Capital Fund which is restored annually by supplementary estimates approved by the General Assembly. Such procedure is not possible in FAO because of the policy that expenditure shall be restricted to foreseeable receipts and because of the prohibition against supplementary estimates except in extreme emergencies as explained in connection with Regulation 4.6. | |||
| 6.3 | (a) Withdrawals from the Working Capital Fund for financing budgetary expenditures under Regulation 6.2 (i) shall not exceed an amount equivalent to foreseeable receipts in that financial year in accordance with Regulation 4.1. | |||
| (b) Withdrawals from the Working Capital Fund for financing extraordinary or unforeseen expenditures shall be limited to extreme emergencies and shall be approved in advance by the Council. | The FAO Working Capital Fund is available primarily for advancing cash to finance budgetary expenditure pending the receipt of contributions, whereas the Working Capital Fund of UN is available for more general uses. | |||
| (c) Payments of arrears of contributions for a past year received during the current year shall be caried to the credit of Member Nations in the Working Capital Fund in accordance with the scale of contributions applicable to the financial year in which the contributions were due. | The present FAO regulations provide for the maintenance of the Working Capital Fund in U.S. dollars. However, the question of currency of payment of both contributions and Working Capital Fund assessment is still under consideration and, if, in the light of final recommendations, amendments are necessary they will be submitted in a separate document. | |||
| (d) Any cash surplus in the General Fund at the close of any financial year shall accrue to the Working Capital Fund. | ||||
| 6.4 | (a) Monies provided by each Member Nation under Regulation 6.2 (b) shall be carried to the credit of that Member Nation in the Working Capital Fund. | (See page 47) | ||
| (b) If the balance of the Working Capital Fund at the close of any financial year falls short of the total of the advances paid by Member Nations under Regulation 6.2 (b), the net amount of withdrawals shall be carried as a charge in the Fund to all Member Nations in accordance with the scale of contributions applicable to the financial year in which the amount was withdrawn. | ||||
| (c) If the balance of the Working Capital Fund at the close of any financial year exceeds the total of the advances paid by Member Nations under Regulation 6.2 (b), the excess shall be carried as a credit in the Fund to all Member Nations in accordance with the scale of contributions applicable to the financial year in which the surplus accrued. | ||||
| 6.5 | (a) The Conference shall determine the method of reimbursement of any net withdrawal from the Working Capital Fund at the close of any financial year. If the Conference determines that such net withdrawal is to be reimbursed by additional assessment on Member Nations, payment made on such additional assessment by each Member Nation shall be carried to its credit in the Working Capital Fund. | 6.3 | Advances made from the Working Capital Fund to finance budgetary appropriations during a financial year shall be reimbursed to the Fund as soon as and to the extent that income is available for that purpose. | |
| 6.4 | Except when such advances are recoverable from some other source, advances made from the Working Capital Fund for unforeseen and extraordinary expenses or other authorized purposes shall be reimbursed through the submission of supplementary estimates. | |||
| 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 shall be released. Any funds so released shall be applied in the case of each Member Nation to its contributions in arrears or, in the absence of such arrears, shall, at the option of the Member Nation, be applied either to contributions payable in future years or as a cash refund to the Member Nation. Funds released shall be charged to the equities of Member Nations in proportion to their respective excess credits in the Working Capital Fund. | |||
| 6.6 | (a) Income derived from the investment of the Working Capital Fund shall be credited to the Miscellaneous Income of the Organization, and shall accrue to the General Fund. | 6.5 | Income derived from investments of the Working Capital Fund shall be credited to income. | The additional reference to the General Fund is to make clear that income derived from investments of the Working Capital Fund shall accrue to the general funds and be available for operating purposes. It is considered that the FAO regulation provides greater clarity. |
| (b) If a Nation withdraws its membership in the Organization any credit it may have in the Working Capital Fund shall be used toward liquidation of any financial obligation such Nation may have the Organization. Any residual balance shall be refunded to the withdrawing Nation under such terms and conditions as the Conference may determine after adoption of the audited accounts for the financial year in which such membership is terminated. | The FAO regulation makes provision for the treatment of the equity of a nation withdrawing from membership. This regulation has no counterpart in the UN regulations. | |||
| 6.7 | [Subject to later approval by the Council and the Conference] Trust and Special Funds may be established by the Director-General to cover monies made available to the Organization for special purposes and such funds shall be reported to the Council The purpose and limits of each such fund shall be clearly defined by the appropriate authority. Unless otherwise provided by the Conference, such funds shall be administered in accordance with the Financial Regulations of the Organization. | 6.6 | Trust Funds, Reserve and Special Accounts may be established by the Secretary-General and shall be reported to the Advisory Committee on Administrative and Budgetary Questions. | If the proposed amendment is adopter, there will be no divergency with respect to special and trust funds. In view of the fact that the establishment of special reserves may create additional obligations for Member Nations, it is considered desirable that special reserves be established only after approval by the Conference. |
| 6.7 | The purpose and limits of each Trust, Reserve and Special Fund shall be clearly defined by the appropriate authority. Unless otherwise provided by the General Assembly, such funds shall be administered in accordance with these regulations. | |||
| 6.8 | Reserve funds may be established by the Conference. | |||
| 7.5 | (a) Miscellaneous Income shall be estimated at the beginning of each financial year in connection with the formulation of the budget, and such estimated income shall be applied as an adjustment to the appropriation before the application of the scale of contributions for determination of Member Nations' assessments. (b) If the actual Miscellaneous Income estimated for the year either exceeds or is less than the Miscellaneous Income estimated for the adjustement above described, such excess or such shortfall shall be treated as a part of the operating surplus or deficit of that financial year, and shall be handled in accordance with Regulation 6.3 (b) and (d). | It is felt that this regulation is necessary to avoid all ambiguity with regard to the handling of miscellaneous income. | ||
| 8.1 | The Director-General shall designate the bank or banks in which the funds of the Organization shall be kept and report all such depositories to the Council. | 8.1 | The Secretary-General shall designate the bank or banks in which the funds of the Organization shall be kept. | The Conference considered it good practice that the Council be kept advised of the designated depositories and location of the assets of the Organization. |
| 10.5 | The Director-General may, after full investigation, authorize the writing off of losses of cash, stores and assets other than arrears of contributions due from Member Nations, provided that a statement of all such amounts written off shall be submitted to the auditors with the annual accounts. | 10.4 | The Secretary-General may, after full investigation, authorize the writing off of losses of cash, stores and other assets, provided that a statement of all such amounts written off shall be submitted to the auditors with the annual accounts. | It is considered that the FAO regulation is substantially the same as that of UN but it is felt that the FAO regulation provides greater clarity. |
| 11.2 | The statement of accounts of the Organization shall be presented in U.S. dollars, provided however that the Director-General shall include in the annual accounts a statement showing the currencies in which contributions were received from Member Nations and such other information on other currencies as the Director-General may deem necessary. The books of account may be kept in such currency or currencies as the Director-General may deem necessary. | 11.2 | The annual accounts of the Organization shall be presented in U.S. dollars. Accounting records may, however, be kept in such currency or currencies as the Secretary-General may deem necessary. | It is felt that the FAO regulation provides more informative statements than is provided under the UN regulations. |
NOTE: Words in brackets are to be deleted. New wording underlined.
