Contents
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VII. Constitutional and administrative matters
A. Statutory report on status of conventions
and agreements, and amendments thereto
B. Other constitutional and legal matters
C.
Audited accounts
D. Scale of contributions 1984-85
E. Other administrative and financial matters
A. Statutory report on status of conventions and agreements, and amendments thereto
323. Pursuant to Rule XXI of the General Rules of the Organization, and in accordance with established practice, the Director-General submitted to the Conference the biennial Statutory Report reflecting the present status of conventions and agreements concluded within the framework of FAO, of other multilateral treaties concluded outside its framework in respect of which the Director-General acts as Depositary, and of the Convention on the Privileges and Immunities of the Specialized Agencies as applied to FAO. The Conference accepted the Statutory Report, which was contained in documents C 83/10 and C 83/10-Sup.1, as updated orally during the Conference Session.
324. With reference to the International Plant Protection Convention the Conference recalled that, when approving the amendments to the Convention at its Twentieth Session (November 1979) by Resolution 14/79, it had urged the parties to the Convention to accept the revised text at the earliest possible time and that at its Twenty-first Session (November 1981) it had reiterated its appeal to States that had not yet become parties to the revised text to do so as soon as possible. The Conference noted, however, that only 33 acceptances had so far been received and that at least a further 22 acceptances were still required for the entry into force of the revised text. In view of the importance of the Convention in strengthening international action against the spread of pests attacking plants and plant products, especially in the context of international trade, the Conference reiterated once more its anneal to States that had not yet accepted the revised text of the Convention to deposit an instrument of acceptance as soon as possible.
B. Other constitutional and legal matters
Change in title of the region from "Latin America" to "Latin America and the Caribbean", and similar changes in the title of the regional conference and the regional office
Amendment to rule XXXIX-3 of the general rules of the organization
325. The Conference was informed that the Seventeenth Regional Conference for Latin America (1982) endorsed a proposal to change the name of the Region, the Regional Conference and the Regional Office, from "Latin America" to "Latin America and the Caribbean". The Council, at its Eighty-second Session (November-December 1982), agreed to the proposed changes and invited the Conference to endorse them.
326. The Conference endorsed the change in the title of the Region. The Region will thus be known as "Latin America and the Caribbean"; the Regional Conference, "Regional Conference for Latin America and the Caribbean"; the Regional Office, "Regional Office for Latin America and the Caribbean". In this connection some countries proposed that, in due course, the distribution of Council seats for the Latin America and the Caribbean region should be consistent with the increased membership of the Region.
Amendment to rule XXXIX-3 of the general rules of the organization
327. The Conference was informed that the Director-General was empowered under Rule XXXIX-3 of the General Rules of the Organization to amend the Staff Regulations to give effect to decisions of the International Civil Service Commission (ICSC), but that this authority did not extend to recommendations of the ICSC. The Council, however, had decided that the Director-General should be empowered to apply to staff in the professional and higher categories certain ICSC recommendations. These recommendations were those relating to salaries and allowances that had been approved by the General Assembly of the United Nations. The Council considered that the Director-General should report his action or reasons for not taking immediate action to the Finance Committee and, as necessary, to the Council.
328. Following a review of the question by the Committee on Constitutional and Legal Matters (CCLM), the Council at its Eighty-fourth Session (November 1983) had recommended an amendment to Rule XXXIX-3 of the General Rules of the Organization and a consequential amendment to Staff Regulation 301.122, in order to empower the Director-General to apply ICSC recommendations in the circumstances envisaged by the Council, without delay and without the administrative complications that arose out of retroactive application of new provisions.
329. In view of the above information the Conference approved the recommendation of the Council, and adopted the following Resolution:
AMENDMENT TO RULE XXXIX-3 OF THE GENERAL RULES OF THE ORGANIZATION
THE CONFERENCE,
Recalling that by Resolution 17/73 adopted at its Seventeenth Session (November 1973) it had amended the General Rules of the Organization, thereby authorizing the Director-General to promulgate Staff Regulations to give effect to decisions of the International Civil Service Commission,
Noting that the Council, at its Eighty-second Session (November-December 1982), endorsed the Finance Committee's view that the Director-General should be authorized to apply immediately, at his discretion, to staff in the professional and higher categories (including the Deputy Director-General), recommendations of the International Civil Service Commission relating to salaries and allowances which had been approved by the General Assembly of the United Nations,
Noting further that with a view to giving the Director-General the authority referred to above, the Council, at its Eighty-fourth Session (November 1983), endorsed a draft amendment to Rule XXXIX-3 of the General Rules of the Organization prepared by the CCLM,
I
Decides to amend Rule XXXIX-3 of the General Rules of the Organization to read as follows:
"The Director-General, with the approval of the Council, shall promulgate such general staff regulations as may be necessary, including the requirement of a declaration of loyalty to the Organization. The Director-General shall have authority to promulgate Staff Regulations to give effect to decisions of the International Civil Service Commission, as well as to give effect to recommendations of the International Civil Service Commission which have been approved by the General Assembly of the United Nations with regard to the salaries and allowances of the staff in the professional and higher categories. He shall report the promulgation of such Staff Regulations to the Finance Committee and the Council."
II
Noting that the amendment to Rule XXXIX-3 calls for a consequential amendment to Staff Regulation 301.122,
Decides that the following sentence shall be added at the end of Staff Regulation 301.122:
"The Director-General may also amend the Staff Regulations to give effect to recommendations of the International Civil Service Commission which have been approved by the General Assembly of the United Nations and relate to the salaries and allowances of the staff in the professional and higher categories."
(Adopted 22 November 1983)
330. The Conference appreciated the quality of the External Auditor's Reports, which it considered well reasoned and pertinent.
331. The Conference considered the recommendations of the External Auditor and it endorsed the measures that the Director-General had already taken to deal with them.
332. The Conference adopted the following Resolution:
AUDITED ACCOUNTS
THE CONFERENCE,
Having considered the report of the Eighty-second Session of the Council,
Having examined the following audited accounts and the External Auditor's Reports thereon:
| Regular programme 1980-81 | C 83/5; C 83/5-Corr.1 |
| United Nations Development Programme 1981 | C 83/6 |
| World Food Programme 1981 | C 83/7 |
Adopts the above audited accounts.
(Adopted 22 November 1983)
D. Scale of contributions 1984-85
333. The Conference took note of the recommendation of the Eighty-third Session of the Council that the FAO Scale of Contributions for 1984-85 should be derived directly from the UN Scale of Assessments. This practice had been adhered to by the Organization without exception following the decision of the Eighth Session of the Conference in 1955, which had been reconfirmed by the Eighteenth Session of the Conference in 1975.
334. The Conference was informed that the FAO Scale for 1984-85 proposed by the Council had been derived directly from the UN Scale of Assessments in force for the three-year period 1983-85, as adopted by General Assembly Resolution 37/125 of 17 December 1982, and had been adjusted to take account of the four new Member Nations admitted at this Session of the Conference.
335. Several members expressed serious reservations on the criteria on which the current UN Scale had been based because they felt that it was not correlated with the present economic conditions of many countries. These reservations had already been considered by the Council at its Eighty-third Session. The Conference, noting the disagreement of several members with the current UN Scale and consequently with the FAO Scale derived directly from it, concurred with the view of the Council that the UN Committee on Contributions was the most qualified body for assessing the Member Nations real ability to pay. The Conference also agreed with the observations of the Council that departure from the practice of deriving the FAO Scale directly from the UN Scale would lead to duplication of the work of the UN Committee on Contributions, would have undesirable repercussions throughout the UN System and would lead to Governing Bodies of FAO dedicating an inordinate amount of time on this administrative matter in efforts to develop a viable alternative.
336. In conclusion, the Conference therefore adopted the following Resolution:
Scale of Contributions 1984-85
THE CONFERENCE,
Having noted the recommendations of the Eighty- third Session of the Council,
Confirming that as in the past FAO should follow the United Nations Scale of Assessments subject to adaptation for the different membership of FAO,
1. Decides that the FAO Scale of Contributions for 1984-85 should be derived directly from the United Nations Scale of Assessments in force in 1983.
2. Adopts for use in 1984 and 1985 the Scale as set out in Appendix F to this report.
(Adopted 22 November 1983)
E. Other administrative and financial matters
Headquarters accommodation
Immunities of the organization
Status of contributions
Amendment to the financial regulations (external audit certificates)
337. The Conference considered the sections of the reports of the Eighty-third and Eighty-fourth Sessions of the Council dealing with the issues of Headquarters accommodation In particular, it emphasized the gravity of the problem arising out of: (a) the high cost of renting office accommodation; (b) the cost of duplicating certain essential services; and (c) the cost of staff time lost in travelling between the two locations (estimated to exceed 2 500 man-days or US$200 000 per month). The Conference agreed that this was a serious impediment to reducing further the expenditure on administrative services.
338. As regards the construction of 70 rooms on the eighth floor of Building D, the Conference welcomed the positive step taken by the Minister of Foreign Affairs of the Host Government in requesting the Ministry of Public Works to adopt the "urgency procedure" in the contract award process. It also appreciated the announcement of the Representative of the Host Government that the "urgency procedure" was almost certain to be adopted and that, consequently, construction was expected to be initiated in January 1984.
339. On the question of the proposal to construct a new wing adjacent to the main buildings, the Representative of the Host Government confirmed to the Conference that a first report on the excavations undertaken by the Superintendency of Archaeology was expected before the end of December 1983.
340. The Conference expressed its serious concern that no meeting had yet taken place between the President of the Council of Ministers and the Working Party appointed by the Conference in November 1981 (Resolution 14/81). It decided to extend the mandate of the Working Party by a further two years and reiterated its request to the Host Government that the meeting of the Working Party with the President of the Council of Ministers should take place as soon as possible. The Representative of the Host Government informed the Conference that the President of the Council of Ministers had already agreed to meet the Working Party and was confident, therefore, that such meeting would take place at an early date.
341. The Conference endorsed the Director-General's line of action with respect to Headquarters Accommodation and expressed its appreciation for his continuing efforts. It urged the Director-General to pursue his efforts with the Italian Authorities with a view to accelerating progress on the construction projects. The Conference also expressed its appreciation for the positive way in which the Representative of the Host Government was handling the problem.
Immunities of the organization
342. The Conference was informed that, in 1982, the Corte di Cassazione - the supreme judicial authority in Italy - had decided that the Organization did not enjoy immunity from legal process in respect of an action brought against it under a lease that FAO had concluded with the landlords of Building F. The court's denial of the Organization's immunity was couched in very broad terms which implied that most types of transactions that the Organization might enter into in Italy would be subject to review by the Italian Courts. The background relating to the circumstances leading up to this judgement and the examination of its legal, administrative and financial implications by the CCLM and the Finance Committee and by the Council at its Eighty-second, Eighty-third and Eighty-fourth Sessions are set out in detail in Appendix G to this report.
343. The Representative of the host country explained that the principle of immunity as conceived by the Italian Corte di Cassazione reflected a doctrine and jurisprudence well known in the courts of this country and in some judicial fore or countries with a similar legal tradition. He added that it was difficult to imagine a modification or adaptation of Italian law which could guarantee more explicitly the immunity of States or of intergovernmental organizations, since the Corte di Cassazione would uphold that doctrine in any interpretation which it would be called on to give of an internal law or of an international treaty designed to vary or clarify the scope of immunity. With regard to possible measures of execution, the Representative of the host country renewed his Government's assurances that such measures would not be enforced.
344. In order to explore all possible means of resolving the problems that had arisen, a suggestion was made that if a solution could not readily be found through discussions or negotiation between FAO and the Host Government, consideration should be given by the Council, with the advice of the CCLM, to the desirability of either having recourse to arbitration, as envisaged in Section 35 of the Headquarters Agreement, regarding the interpretation of Section 16 of that Agreement or, alternatively, to requesting an advisory opinion from the International Court of Justice on the interpretation of that provision.
345. The Conference expressed its serious concern at and strong dissatisfaction with the current situation. It accordingly urged the Host Government to take expeditious measures to give effect to the Resolutions adopted by the Council and, especially, to ensure that the Organization's immunity from all forms of legal process was safeguarded in the future. Following assurances given by the Representative of the Host Government, the Conference noted with satisfaction that FAO would at least be immune from measures of execution.
346. The Conference noted that the rate of receipts from Member Nations during 1983 to date had generally been at a higher level than in the previous two years, but that neither the position of Member Nations' payments at 21 November 1983 (as listed in Appendix H to this Report) nor the patterns of payments of Member Nations during the course of the year could be considered satisfactory. All Member Nations were obligated under Financial Regulation 5.5 to pay their contributions in full within 30 days of receipt of the Director-General's notification of the amount due, or as of the first day of the calendar year to which it relates, whichever is the later, but on 21 November 1983 only 85 had paid their contributions in full. Forty Member Nations had made no payment to date against their 1983 assessed contributions. The Conference also observed that several of the largest contributors which did not have major financial difficulties had only recently remitted contributions to the Organization,
347. The Conference shared the view of the Council, that those Member Nations which delayed payment of their contributions were indirectly reducing the total amount of Miscellaneous Income which could be earned from interest on investments, while at the same time they would enjoy the eventual benefits of an "unearned" share of Miscellaneous Income produced from the contributions of the Member Nations which paid promptly.
348. The Conference endorsed the appeal of the Council to all Member Nations to remit their 1984 assessed contributions in accordance with the timing foreseen in the Financial Regulations, to ensure that the Organization would have adequate available cash resources for execution of the approved programme, and to avoid inequitable treatment to the disadvantage of the Member Nations which paid on time.
- Payment of Contributions - Comoros
349. The Conference, noting, on the basis of information received from the Government of Comoros that its failure to pay contributions had been due to conditions beyond its control, considered the proposal of the Government that it liquidate its arrears of contributions over a ten-year period commencing in 1983, in addition to paying each current contribution in the calendar year of assessment.
350. The Conference adopted the following Resolution:
PAYMENT OF CONTRIBUTIONS - COMOROS
THE CONFERENCE,
Noting that the Government of Comoros had made a proposal that it liquidate its arrears of contributions over a period of ten years commencing in 1983, in addition to paying each current contribution in the calendar year of assessment,
Decides that:
1. Notwithstanding Financial Regulation 5.5, the arrears of contributions of Comoros totalling $70 078.00 shall be settled through the payment of ten equal annual instalments of $7 007.80;
2. The first instalment together with the contribution assessed for 1983 shall be payable in 1983;
3. The annual payment of the instalments referred to above, together with the payment of each current contribution in the calendar year of assessment and any advances to the Working Capital Fund, shall be considered as fulfillment of Comoros' financial obligations to the Organization.
(Adopted 11 November 1983)
- Payments of Assessed Contributions for the 1984-85 Biennium
351. The Conference was informed of the possibility of a substantial shortfall in the receipt of contributions during the 1984-85 biennium which could arise as the result of delays in payments or in some cases as the result of legislative difficulties, and would prevent timely payment in full of assessed contributions to the budget of the Organization. In the worst case, the magnitude of the shortfall would far exceed the amounts in the Working Capital Fund and the Special Reserve Account available to meet normal shortfalls in contributions, especially taking into account the amounts which might be used from or would need to be kept available in these Accounts to meet emergencies, unbudgeted inflation or adverse currency conditions. Although the worst case was undoubtedly a pessimistic assumption, the Director-General had considered it prudent to propose taking measures to ensure that sufficient funds would be available to implement in full the Programme of Work and Budget for 1984-85 as approved by the Conference.
352. In this connection, the Conference recalled that the Council had previously granted to the Director-General the authority to borrow, in case of need, monies to finance the implementation of the approved Programme of Work and Budget pending receipt of delayed contributions. No use of the authority to borrow had been required during the 1982-83 biennium. Use of the authority was, however, considered only a last resort, since borrowing had two highly undesirable consequences. These were that the debt would have to be repaid in due course and should contribution income be insufficient to repay the debt, additional assessments on all Member Nations could be required, and secondly that borrowing would also burden the Organization with heavy interest charges.
353. The Conference was also informed that after deducting the shortfall of contribution income for the biennium a cash surplus estimated to be around $30 million would probably arise from the 1982-83 biennium. The cash surplus would result mainly from Miscellaneous Income in excess of the forecast (due mainly to high interest earnings), high currency gains, and some programme savings. The release and application of this cash surplus to Member Nations would normally be effected on 1 January 1985 following audit of the final accounts of the biennium.
354. In these circumstances, the Director-General had proposed that the Conference delegate authority to the Council at its session in November 1984 if necessary to authorize the Director-General, notwithstanding the provisions of Financial Regulation 6.1 (b), to withhold any cash surplus which may arise from the 1982-83 biennium, and to set such surplus aside to be available as required to finance approved expenditure under approved budgetary appropriations.
355. Several members considered that insufficient notice had been given of the Director-General's proposal bearing in mind its importance and its possible implication in other United Nations Organizations. Others recalled however that the possibility of a serious shortfall in contributions had been raised at the Joint Session of the Programme and Finance Committee in September 1983 and the Eighty-fourth Session of the Council and that the Director-General had delayed submitting his proposal until it was clear that certain legislation was most likely to be adopted by the parliamentary authorities of certain major contributors. Action by the Conference, however short the notice, was essential if the cash surplus were to be kept available, since only the Conference had the authority to set aside a Financial Regulation. The Conference could delegate that authority to the Council and establish criteria within which the Council could, in the light of circumstances at the time the Council considered the matter, decide that all or part of the cash surplus be withheld and used as a source of funding to ensure implementation of the approved Programme of Work and Budget for 1984-85.
356. The Conference considered at length the question of whether it would be appropriate, in case of a foreseen shortfall in contribution income, for a cash surplus to be withheld and utilized to meet financial requirements in implementing the approved Programme of Work and Budget. Several members opposed this as a matter of principle and could not support the proposal. Many however recognized that the Financial Regulations already foresaw that shortfalls in contributions were to be offset at the end of a biennium against availabilities in the General Fund before determination of any cash surplus for the biennium.
357. Several members emphasized that it was clear that certain large contributors had in fact always met their financial obligations to the Organization in full and that the withholding of distribution of a cash surplus was not therefore required. Many pointed out however that certain members had themselves drawn attention to legislative problems affecting contributions and could not give a guarantee that the worst case would not happen. They considered that the Director-General had the responsibility to take prudent steps to ensure that funds were available to implement the unanimously approved programme. Moreover, there should be no concern about granting this authority since if certain large contributors did meet their financial obligations in full during the biennium, the resolution would have no effect and could not be used.
358. In this connection, several members expressed their concern that a number of instruments had already been set up to deal with unexpected developments in contributions and stressed that full use should be made of the Working Capital Fund and Special Reserve Account to the extent that these are not encumbered or likely to be committed during 1985 before any resort was made to other possible sources.
359. Several members considered that withholding some or all of a cash surplus to meet a foreseen shortfall in contributions from certain Member Nations would encourage Member Nations not to meet promptly their financial obligations to the Organization, and in fact could be cited by governments as a reason for deferring payments, on the basis that the Organization could implement its programme without prompt receipt of the contribution. Others, however, considered that the possible use of the cash surplus in these circumstances was unavoidable and that Member Nations should not be affected by such action. Other Member Nations pointed out that those who met their financial obligations to the Organization promptly and in full, notwithstanding that these Member Nations were not in any way responsible for the problem, would be penalized by not receiving their proper share of the cash surplus, whereas on the contrary those responsible for creating or adding to the problem of large shortfalls in contributions would in fact benefit from a distribution of the cash surplus created by the prompt payments by others. It was suggested that means should be devised to ensure that those who paid promptly and in full should receive their full share of the eventual cash surplus.
360. A number of points were raised in discussion concerning the criteria or conditions which could be established for use by the Council to respond to the concerns of the numerous delegations which had expressed views on this matter. The Conference was assured that assets in the Working Capital Fund and Special Reserve Account would be used, to the extent prudent, before a proposal would be made to the Council regarding use of the cash surplus. In this connection, it was noted that the Director-General would report fully on the status of income and expenditure and of the Working Capital Fund and Special Reserve Account at the Spring and Autumn sessions of the Finance Committee in 1984 and would thereafter submit updated information to the Council before making any recommendation, if at that point it seemed necessary to him to do so, concerning the possible use of the cash surplus.
361. It was further proposed that the Conference should lay down certain criteria under which the need to use all or part of the cash surplus would be conditioned by the percentage amount of total contributions received at that date and also under which any use of the cash surplus could be reimbursed if or when contributions were subsequently received, thus ensuring eventual distribution of the cash surplus in full to Member Nations who were not in arrears for previous biennia.
362. It was also noted that if the Council authorized withholding of any amount of the cash surplus, the Director-General would place the amount withheld in a special account. Drawings would be made on the special account within the conditions established by the Conference, and by the Council under its delegated authority. Contributions subsequently received would be credited to this account, from which a further distribution of cash surplus within the terms of the resolution could then be made. Such further distributions could occur during 1985 and/or subsequent years.
363. A number of members noted that the problem of late payments and arrears was unfortunately of a long-term nature. They requested that the Finance Committee consider appropriate long-term solutions and report its findings to the Council.
364. After the discussion, the Conference adopted the following Resolution:
FINANCING OF 1984-85 BUDGETARY APPROPRIATIONS
THE CONFERENCE,
Noting with concern the increase in arrears of a number of Member Nations in 1982-83,
Recognizing the severe impact on the cash flow that would result from increases in arrears, possible partial or non-payment of contributions by many Member Nations, and late payments by major contributors,
Considering the necessity to maintain sufficient cash flow to cover obligations and ensure full implementation of the approved programme of work,
Bearing in mind that the Director-General keeps the Finance Committee regularly informed of the financial situation, including the cash flow and status of contributions,
Noting that the Council had granted to the Director-General the authority to borrow but that no use of the authority to borrow was made during 1982-83 and the Council was so informed in November 1983,
Recognizing that borrowing should only be used as a last resort,
Considering that further measures might be necessary and desirable to ensure implementation in full of the approved Programme of Work and Budget 1984-85,
1. Requests the Director-General to continue to keep the Finance Committee fully informed of the financial position of the Organization, and to submit to the Council at its Eighty-sixth Session in 1984 and as appropriate to subsequent Council sessions, full information concerning the status of assessed contributions, as well as that of the Working Capital Fund and the Special Reserve Account;
2. Requests the Council to examine at its Eighty-sixth Session in November 1984 the status of contributions, the status of the Working Capital Fund, and the status of the Special Reserve Account, with a view to using the balances in the Working Capital Fund and in the Special Reserve Account to the extent necessary and feasible, taking into account possible further commitments thereon during the remainder of the biennium, in order to enable the approved Programme of Work and Budget to be implemented;
3. Delegates to the Council the authority to decide, notwithstanding Financial Regulation 6.1 (b) and in accordance with the conditions set forth in subparagraphs (a) to (e) below, that, subsequent to consideration of Section 2 of this Resolution, any cash surplus which might arise from the 1982-83 biennium be withheld in full or in part, in order to ensure that sufficient funds are available to implement the approved Programme of Work and Budget in full:
(a) If receipts of contributions as of the date the Council reviews the matter equal or exceed 75 percent of assessed contributions for the year 1984, the authority delegated by the Conference to the Council shall be cancelled and any cash surplus arising from the 1982-83 biennium shall be distributed to all Member Nations in accordance with the provisions of Financial Regulation 6.1 (b) as normal;
(b) If receipts of contributions as of the date the Council reviews the matter equal or exceed 64 percent but are less than 75 percent of assessed contributions for the year 1984, the Council may decide that up to 50 percent (but not to exceed $15 million) of any cash surplus of the 1982-83 biennium shall be set aside in a fund to be drawn upon as required to finance approved expenditure under the Programme of Work and Budget 1984-85;
(c) If receipts of contributions as of the date the Council reviews the matter are less than 64 percent of assessed contributions for the year 1984, the Council may decide that up to the full amount of any cash surplus of the 1982-83 biennium shall be set aside in a fund to be drawn upon as required to finance approved expenditure under the Programme of Work and Budget for 1984-85;
(d) Any cash surplus which would eventually be distributed under (b) or (c) above, shall be in accordance with the following:
(i) any Member Nation which, on 1 January 1985, has paid all contributions due from it for the 1982-83 biennium and prior biennia shall receive its full share of the cash surplus being distributed;
(ii) any Member Nation which, on 1 January 1985, has paid part of the contribution due from it for the 1982-83 biennium and all contributions due from it for prior biennia, shall receive the appropriate share, i.e., a pro rata share of the cash surplus being distributed, calculated as a proportion of the amount of its contribution received as compared with the amount of its contribution assessed for the 1982-83 biennium;
(iii) upon receipt of the payment in full of outstanding contribution relating to the 1982-83 biennium and prior biennia from the Member Nations who received a pro rata share, the balance of the cash surplus being distributed will be released to them.
(e) If the Council at its Eighty-sixth Session decides, in accordance with (b) or (c) above, that part or all of any cask surplus of the 1982-83 biennium be withheld, the Council is requested to review the financial position of the Organization again at its Eighty-seventh Session and Eighty-eighth Session if necessary, with a view to its deciding to release the undistributed balance of the cash surplus, and apply it as provided in 3(d) above as soon as contribution income has been sufficient to permit replenishment of drawings from the fund referred to in (b) or (c) above.
(Adopted 23 November 1983)
Amendment to the financial regulations (external audit certificates)
365. The Conference reviewed the proposed amendments to the Additional Terms of Reference governing External Audit. It noted that these proposals had been made by the Panel of External Auditors to the United Nations and Specialized Agencies, in order to harmonize practices within the UN System and reflect more adequately modern auditing practices with regard to certification of financial statements.
366. The Conference, noting the comments of the Finance Committee and the Agreement of the Council with the External Auditors' recommendation which would modify Financial Regulation XII accordingly adopted the following Resolution:
AMENDMENT TO THE FINANCIAL REGULATIONS (EXTERNAL AUDIT CERTIFICATES)
THE CONFERENCE,
Recalling that Financial Regulation XII provides for the appointment of an External Auditor,
Recalling in particular that Financial Regulation 12.3 provides that the audit of the Organization shall be conducted in accordance with generally accepted common auditing standards, and, subject to any special directions of the Finance Committee, in accordance with the Additional Terms of Reference governing External Audit which are set out in Annex I to the Financial Regulations,
Noting that the Panel of External Auditors to the United Nations and Specialized Agencies has reviewed the scope and content of the certificate to the financial statements and has suggested amendments to reflect more adequately the modern audit approach to certification,
Noting the Report of the Eighty-fourth Session of the Council,
Decides that the Financial Regulations be amended as follows by deleting the words in square brackets and adding the words underlined:
Annex I
ADDITIONAL TERMS OF REFERENCE GOVERNING EXTERNAL AUDIT
Annex paragraph 5
[The External Auditor shall certify the financial statements in the following terms: "I have examined the financial statements of the Organization for the period ended 31 December... I have obtained all the information and explanations that I have required, and I certify, as a result of the audit, that, in my opinion, the financial statements are correct"; adding, should it be necessary, "subject to the observations in my report."]
The External Auditor shall express and sign an opinion on the financial statements in the following terms:
"I have examined the following appended financial statements, numbered... to... properly identified, and relevant schedules of the Organization for the financial period ended 31 December 19... My examination included a general review of the accounting procedures and such tests of the accounting records and other supporting evidence as I considered necessary in the circumstances."
and which states, as appropriate, whether:
(a) The financial statements present fairly the financial position as at the end of the period and the results of its operations for the period then ended;
(b) The financial statements were prepared in accordance with the stated accounting principles;
(c) The accounting principles were applied on a basis consistent with that of the preceding financial period;
(d) Transactions were in accordance with the Financial Regulations and legislative authority;
Annex paragraph 6
The report of the External Auditor to the Conference on the financial /statements/ operations of the period should mention:...
Annex paragraph 8
Whenever the External Auditor's scope of audit is restricted, or whenever he is unable to obtain sufficient evidence, the External Auditor shall refer to the matter in his opinion and report, making clear in the report the reasons for his comments, and the effect on the financial position and the financial transactions as recorded.
Annex paragraph 10
The External Auditor is not required to mention any matter referred to in the foregoing which, in his opinion, is insignificant in all respects.
(Adopted 23 November 1983)
Contents
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