Finance Committee

INTRODUCTION

1. The programme and budgetary proposals in the Programme of Work and Budget (PWB) 2000-01¹ were developed at US dollar/Lira exchange rate of Lira 1800 to the dollar, as previously endorsed by the Council in June 1999. The distribution of the 2000-01 appropriations by Chapter approved by the Thirtieth Session of the Conference in November 1999² was based on the published Zero Nominal Growth scenario of the PWB 2000-01 even though the Conference adopted it at an exchange rate of Lira 1875 to the US dollar.

2. As indicated to the Conference, the weaker US Dollar/Lira exchange rate at which the budget was approved implied a reduction in the cost increase estimate because of the decline in the US dollar cost of lire based salaries and entitlements. This allowed some re-programming of resources with consequent adjustments to the distribution of the appropriation by Chapter. This document provides the distribution of the appropriations by Chapter following the re-programming of resources for approval by the Finance Committee under Financial Regulation 4.5.

ADJUSTMENTS TO THE DISTRIBUTION OF RESOURCES BY CHAPTER

3. As described in paragraphs 70 to 77 of the PWB 2000-01, US$ 14.9 million in reductions to programmes and other activities had been required to achieve a ZNG budget level at a US Dollar - Lira rate of 1800. However, in accordance with the established methodology, the budgetary requirements to meet salary costs of Rome-based staff are reduced by US$ 9.7 million as a result of the adoption of the budget at Lira 1875 versus Lira 1800 with corresponding reductions in the appropriations.

4. In accordance with the priorities expressed by Member Nations and in line with the Director-General's advice to the Governing Bodies of the intended application of this favourable adjustment, the Organization has applied these savings to partially restore funding to areas that had suffered reductions under the published ZNG scenario. Specifically, in arriving at the Revised Appropriation, the following changes to the programme of work are proposed:

• All professional posts in technical units at Headquarters that had been identified for reduced funding under the published ZNG scenario are reinstated to full funding, restoring US$ 3.3 million to the appropriations;
• US$ 3.7 million of travel and consultancy resources identified for curtailment under the published ZNG scenario are reinstated; and
• US$ 2.7 million out of the total US$ 4.7 million savings budgeted from rationalization measures in Regional Offices are restored. This recognizes the need for prudence in this area of major process change and the desirability of implementing its most difficult aspects after the restructuring of the Management Support Structure (MSS) at Headquarters has been finalized.

5. The table below provides a summary by Chapter of the 2000-01 Revised Appropriation as a result of the re-programming of the savings arising from the more favourable US Dollar - Lira exchange rate.

DECISION SOUGHT

6. The Finance Committee is requested to approve the budgetary transfers that result from the savings on exchange and the subsequent re-programming of such savings.

7. The Committee is further requested to note that the 2000-01 Appropriations revised to take into account the budgetary transfers approved by the Finance Committee would become the basis for future reporting of the 2000-01 appropriations in the following areas:

• the financial statements of the Organization;
• the annual reports on budgetary performance to the Finance Committee for 2000 and 2001;
• further requests for budgetary transfers between Chapters, if required; and
• the base budget for the Programme of Work and Budget 2002-2003.

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1  C 99/3

2  Conference Resolution 3/99