FC 108/1-Add.1


Finance Committee

Hundred and eighth Session

Rome, 27 September – 1 October 2004

Provisional Annotated Agenda

1. Adoption of Provisional Agenda and Timetable (docs. FC 108/1, FC 108/1 Add.1, FC 108/INF/1)

for decision
In accordance with the Committee’s internal working procedures, the Provisional Timetable provides to the extent possible for discussion at the beginning of the meeting of those items on which the Committee is required to make decisions or recommendations to the Council.

FINANCIAL AND BUDGET REPORTS

2. Financial Highlights and Status of Current Assessments and Arrears (doc. FC 108/2)

for discussion
The Financial Highlights Report is designed to show, at a summary level, the financial situation of the Organization. In terms of the structure of the report, there are three groupings of data: income and expenditure by source of funds, the plan (budget) for particular sources of funds and balances for the comparative period in the previous biennium. Also included is the report on “Collection of Current Assessments and Arrears,” which presents the status of member nation contributions to the Regular Programme as at 30 June 2004.
3. AFF Abolished Posts and Effect on Internal Controls (doc. FC 108/3)

for discussion
At its Hundred and Seventh Session, during discussion of document FC 107/14 Adjustments to the Programme of Work and Budget 2004-05 in connection with Finance Division (AFF), the Finance Committee expressed “concern that the abolition of the five general service posts in AFF could put the Organization’s internal control at risk and requested that these posts be restored as the first call against additional efficiency savings if and when they became available”. The document is prepared at the Committee’s request to provide an update on the status of the posts, information on the types of posts abolished and the work performed, and comments on the effect of the abolition of the posts on the internal controls over the processing of financial transactions.
4. Analysis of Contributions Received and Proposals for Improvement (doc. FC 108/4)

for discussion
This paper is presented in accordance with the request made by the Committee at its 107th Session in May 2004 when discussing a general decline in the rate of receipt of contributions in recent years. The secretariat was requested to prepare an analysis of receipts from Member Nations together with any recommendations to improve the rate of receipts.
5. Incentive Scheme to Encourage Prompt Payment of Contributions – Determination of Discount Rate (doc. FC 108/5)

for decision
The Committee will receive details of the impact of the Incentive Scheme during the first quarter of 2004 and proposed discount rate to be used in applying credits to 2004 assessments.
6. Audited Accounts

i) FAO 2002-2003 (docs. C 2005/5 A and C 2005/5 B)    for discussion
ii) FAO Credit Union 2003 (doc. FC 108/6(ii)                     for decision
iii) FAO Commissary 2003 (doc. FC 108/6(iii)                    for decision

The Committee will receive the audited accounts of the Organization for 2002-2003, together with the Report of the External Auditor. In addition, the audited accounts of the Credit Union and the Commissary will be provided for 2003.
7. Report on Support Costs Expenditure and Recoveries (doc. FC 108/7)

for decision
Following the endorsement of the new support cost reimbursement policy by the Council in November 2000 and the approval of reporting arrangements by the Finance Committee, this paper provides updated information on the implementation of the new policy as well as on the Decentralized Cooperation Programme (DCP).
 

OVERSIGHT MATTERS

8. Private Sector Participation in the Competition for External Auditor (doc. FC 108/8)

for discussion
The Finance Committee, at its 107th Session in May 2004, considered a number of matters relating to the process of selecting and appointing the External Auditor and requested that background information on the rationale of Financial Regulation 12.1 and a comparative study of the practices of other UN agencies be provided by the secretariat in order that such matters could be discussed in more detail at the 108th Session.
9. Utilization of the Special Fund for Emergency and Rehabilitation Activities
(doc. FC 108/9)

for information
The Finance Committee, at its 102nd Session in May 2003, agreed to establish a new Special Fund, the Special Fund for Emergency and Rehabilitation Activities (SFERA), with a target funding level of US$2 million, to be provided from the donor community and the Emergency and Rehabilitation Division’s Direct Operating Cost (DOC) Recovery account. This is the first report on the utilization of the SFERA, as requested by the Committee.
10. FAO Audit Committee (Internal) Annual Report to the Director-General for 2003
(doc. FC 108/10)

for information
This is the first annual report of the Audit Committee following its establishment in April 2003. This report provides an overview of the Committee’s activities, the important issues that have arisen and the actions taken by AUD and other stakeholders involved in the audit processes.
 

FINANCIAL POLICY MATTERS

11. Staff Costs and Liabilitiesa) Staff-Related Liabilitiesi) Liabilities for After Service Medical Costs (doc. FC 104/10 re-issued)

for discussion
The Finance Committee at its 102nd session considered the proposal of the Director-General to provide US$14.1 million in the SPWB 2004-05 as the first of 12 biennial contributions aimed at funding the accumulated liability for after service medical care. Since this paper gives the history of the after service medical care liabilities, it was thought useful to provide this background to the new members of the Committee.
ii) Summary History on Staff-Related Liabilities (doc. FC 108/11a(ii)

 for discussion
This document contains the latest data, with emphasis on graphs, a brief narrative and some definitions on staff-related liabilities.
11. b) Cost Analysis of Staff Remuneration and Benefits (doc. FC 108/11b)

for discussion
The purpose of this paper is to respond to the Committee’s request at its 107th session for details on the financial aspects of staff emoluments including, in addition to salaries, all the other benefits. The document provides descriptions of the various elements of remuneration and benefits and a summary table of the related actual costs for the Regular Programme.
 

BUDGETARY MATTERS

12. Programme Implementation Report 2002-2003 (doc. C 2005/8)

for discussion
The Committee will review and provide its comments on this factual overview for the biennium of the resources committed, key activities undertaken and salient outputs produced under the Regular and Field Programmes.
13. Medium-Term Plan 2006-2011 (doc. CL 127/7)

for discussion
In approving the Strategic Framework 2000-2015 at its November 1999 session, the FAO Conference also set in motion implementation arrangements in which the rolling Medium Term Plan has a key role. In effect, the Plan is expected to provide the necessary bridge between the Corporate Strategies in the Framework and the biennial proposals in successive Programmes of Work and Budget. In developing the Plan, full attention has also been given to the requirements in the Strategic Framework for the application of the new programme model and its results-oriented approach, as well as for the essential emphasis on inter-disciplinarity.
14. Progress Report on Efficiency Savings (doc. FC 108/14)

for discussion
At its 107th session, the Committee noted that, in addition to the efficiency savings which had already been taken into account in the adjusted Programme of Work and Budget, additional efficiency savings had been tentatively put forward for further review and eventual action. The Committee looked forward to receiving a document, at its 108th session, on efficiency savings including updated information on progress, issues and options and comparisons to the experience of other organizations including, where possible, other UN agencies.
 

HUMAN RESOURCES MATTERS

15. Progress Report on Human Resources Management Issues (doc. FC 108/15)

for discussion
The Committee will be provided with a progress report on human resources management issues.
16. Recommendations and Decisions of the ICSC and UN Joint Staff Pension Board to the General Assembly (including Changes in Salary Scales and Allowances)
(doc. FC 108/16)

for information
In accordance with standard practice, the Committee will be informed of any developments which took place at the ICSC, the UN Joint Staff Pension Board and the General Assembly which are of interest to this Organization, as well as an updated report on changes in salary scales and allowances.
 

ORGANIZATIONAL MATTERS

17. Results of the Application of the New Methodology for Equitable Geographic Distribution (doc. CL 127/6)

for discussion
In December 2003 at its Thirty-second Session, the Conference decided to introduce a new methodology for the determination of equitable geographic distribution with effect from 1 January 2004. This methodology was based on that used in the United Nations and did not include any element to reflect the grade level of the posts covered by the geographic distribution formula. The Conference requested the secretariat to submit a report through the Finance Committee to the Hundred and Twenty-seventh Session of Council on the results of the application of the new methodology, including, for comparison purposes, information on the outcome of adding a grade-weighting factor to the system. This paper responds to that request and shows that the introduction of such a factor would have little impact on the overall geographic distribution.
18. Independent Evaluation of FAO’s Decentralization (doc. PC 92/6a – FC 108/18)

for discussion
Enhanced decentralization was a major pillar of the comprehensive package of reforms launched by the Director-General in 1994. The central aim of the decentralization was to increase the Organization’s relevance and ability to act in proximity to the problems of member countries. It was also seen as an opportunity to enhance the use of national capacities, to achieve economies in implementation, and to improve response time. Ten years later, this evaluation was commissioned by FAO Senior Management and the Programme Committee to make a comprehensive independent assessment of this decentralization and to put forward recommendations to enhance the future benefits of decentralization to member countries.
19. Progress Report on Administrative Information System (doc. FC 108/19)

for information
In response to its request for regular progress reports, the Committee will be provided with updated information on the status of the Oracle Project.
20. Procurement undertaken by FAO for the Regional Development Banks (doc. FC 108/20)

for discussion
This document requests the Finance Committee’s guidance on the issue of restrictions on the nationality of potential suppliers for procurement activities.
 

WORLD FOOD PROGRAMME

21. Report of the External Auditor on Management Matters (doc. FC 108/21)

for discussion
Three documents will be presented containing the External Auditor's reports on (i) Review of Corporate Governance at WFP, (ii) Review of WFP's Vulnerability Analysis and Mapping and (iii) Review of WFP’s Air Operations.
22. Follow-up on the Recommendations of the External Auditor (doc. FC 108/22)

for discussion
The document contains the report on the implementation of the External Audit Recommendations for the biennium 2002-2003 and the final report for the biennium 2000-2001.
23. Business Process Review: Second Pilot Update (doc. FC 108/23)

for information

The document is intended to provide the WFP Executive Board with an update of the pilot projects under the Business Process Review and is presented to the Finance Committee for information.
 

OTHER MATTERS

24. Working Methods of the Finance Committee

 for discussion
In accordance with the standard practice of the Committee, members will be given an opportunity to comment on the functioning of the session and to make suggestions for future improvements.
25. Date and Place of the Hundred and ninth Session

for information
The Committee will be informed of arrangements for its next session.
26. Any Other Matters
a) Update on the WFP Management Plan for 2004-2005 (doc. FC 108/26(a))

for information
This document is the second update report responding to the request of the Executive Board to be informed on the status of the implementation of the management Plan.
b) General Fisheries Commission for the Mediterranean (GFCM) – Financial Regulations and Related Matters (doc. FC 108/26(b))

for decision
This document is submitted to the Committee in order to review the status and implications of the entry into force of the 1997 amendments to the GFCM Agreement, relative to the autonomous budget and to adopt Financial Regulations for the autonomous budget.
c) Payment of the European Community to cover Administrative and Other Expenses arising out of its Membership in the Organization (doc. FC 108/26(c))

for information
At the request of the European Commission (EC), the Committee will be advised of its intention to seek the agreement of other Members to certain changes in the methodology used in the calculation of its contribution to FAO covering administrative and other expenses arising out of its membership of the Organization.