RESTRICTED

(95-0950)

ADMINISTRATIVE AND FINANCIAL QUESTIONS

Final Position of the 1994 Budget

1. In accordance with the CONTRACTING PARTIES' standing instructions regarding reporting on the results at the end of the financial period, the Director-General's proposals for dealing with any savings or deficits, the financial position concerning the transfer of credits between sections of the budget and any advances made from the Working Capital Fund, the Director-General submits the following information.

I. EXPENDITURE BUDGET

2. The Council, acting on behalf of the CONTRACTING PARTIES appropriated Sw F 94,140,000 for the financial year 1994 in the context of the regular budget (C/M/267) and the Council authorized additional expenditure not to exceed Sw F 3,706,000 under a supplementary budget (C/M/275). Obligations incurred in 1994 under the regular budget amounted to Sw F 93,502,010 leaving a positive balance of Sw F 637,990. Under the supplementary budget, a net amount of Sw F 2,630,951 was expended (see paragraph 16 below). Total expenditure under both budgets thus amounted to Sw F 96,132,961.

3. Under the regular budget, the balance of Sw F 637,990 is the net result of savings of Sw F 1,533,548 as detailed in paragraphs 4 to 9, reduced by the excess expenditure of Sw F 895,558 referred to in paragraphs 10 to 14 below.

4. Savings occurred on the following sections: Sw F

Section 1 - Fiftieth Session of the CONTRACTING PARTIES 3,852

Section 3 - Salaries 109,353

Section 4 - Common Staff Costs 285,739

Section 7 - Common Services 958,974

Section 8 - Printing 5,793

Section 9 - Representation and Hospitality 2,960

Section 12 - Trade Policy Training Courses 166,877

Total 1,533,548

5. Under Section 1 (Fiftieth Session of the CONTRACTING PARTIES), the savings resulted mainly from a reduced requirement for freelance interpreters.

6. Under Section 3 (Salaries), the savings resulted mainly from the salary increases being lower than anticipated for Professional staff (0.54% against the 2.0% foreseen) and from the rate of exchange for the dollar being lower than foreseen (US$1/Sw F 1.37 against US$1/Sw F 1.41). These savings were partially offset on the increase of General Service staff salaries which was slightly more than anticipated (4.68% against 4.0%). Savings also occurred as some posts were filled at a lower level.

7. With regard to Section 4 (Common Staff Costs), the net overall savings is the result of various under and over-expenditures in the various sub-items. The most significant under expenditure was with regard to: (i) the contribution to the United Nations Joint Staff Pension Fund where the dollar influence mentioned above, and (ii) the increase in pensionable remuneration for Professional staff for which the increase was less than had been foreseen. Other under expended sub-items concerned installation grants and travel on home leave. Over-expended sub-items included educations grants, which was the object of an unforeseen changes to the staff entitled to education grants and separation payments, where certain staff members took early retirement.

8. Under Section 7 (Common Services), there were also over or under expenditures on various sub-items. The main over-expenditures were on (i) rental of offices outside the Centre William Rappard (CWR) as a result of the fact that the move to the South Wing of the CWR was not effected in 1994. Consequently the renting of annexes had to be maintained, and (ii) on telecommunications. Under expenditures were also primarily the result of the delayed takeover of the South Wing, largely in the costs of rental for the CWR as well as in contractual cleaning and telephone rental. In addition, the parking site foreseen in the budget was not required in 1994 as the lease of the present parking area was again extended on a month by month basis.

9. Under Section 12 (Trade Policy Training Courses), savings resulted from a host government paying the travel costs associated with the study tour to its country and from one course having one fewer trainee than anticipated. In addition, the costs related to trainees' subsistence allowances were lower than had been foreseen.

10. Over-expenditure of Sw F 895,558 against the approved appropriations of the regular budget was incurred on the following sections:

Sw F

Section 2 - Meetings of the Council and other meetings 26,983

Section 5 - Missions 201

Section 6 - Dispute Settlement Panels 13,500

Section 10 - Permanent Equipment 695

Section 13 - Uruguay Round 706,354

Section 14 - Trade Policy Review Mechanism 147,028

Section 15 - Replacement of system for simultaneous interpretation

in meeting rooms 797

Total 895,558

11. Under Section 2 (Meetings of the Council and other meetings), over-expenditure was due to the fact that, as a result of the number of meetings, in particular meeting held simultaneously, more freelance interpreters were required than had been foreseen in the budget.

12. Noting the unforeseeable demand placed on Dispute Settlement Panels, the over-expenditure of the allocation under Section 6 reflected the increasing use of panels by the Contracting Parties.

13. Various under and over-expenditures on sub-items led to an overall excess of expenditure versus appropriation under Section 13 (Uruguay Round). The major element of over-expenditure relates to rental of offices outside the CWR as additional offices were required for eleven months to accommodate freelance translators needed as a result of the unforeseen and unusually heavy workload. Other sub-items where over-expenditure was incurred statutory common staff costs, telecommunications, etc. On the other hand, savings were possible under travel and removal, home leave travel, separation payments, and unutilized rental provision for the CWR (see paragraph 8 above).

14. Under Section 14 (Trade Policy Review Mechanism), a similar phenomena as under Section 13 occurred. The most significant over-expenditure occurred under the sub-item related to rental outside the Centre William Rappard (see paragraph 8 above). Other over-expended sub-items were primarily related to payments for statutory common staff costs due mainly to unforeseen departures. Conversely, savings were made under temporary assistance, telephone rental, and rental of the CWR, printing, etc.

15. Transfers between budgetary sections of Sw F 895,558 are necessary in order to cover excess expenditure over approved appropriations on the sections mentioned in paragraph 10 by savings on other sections as mentioned in paragraph 4. Authority is sought to increase these appropriations accordingly, as follows:

Sw F

Transfers from:

Section 1 - Fiftieth Session of the CONTRACTING PARTIES 3,852

Section 3 - Salaries 109,353

Section 4 - Common Staff Costs 285,739

Section 7 - Common Services 320,984

Section 8 - Printing 5,793

Section 9 - Representation and Hospitality 2,960

Section 12 - Trade Policy Training Courses 166,877

Total 895,558

Transfers to:

Section 2 - Meetings of the Council and other meetings 26,983

Section 5 - Missions 201

Section 6 - Dispute Settlement Panels 13,500

Section 10 - Permanent Equipment 695

Section 13 - Uruguay Round 706,354

Section 14 - Trade Policy Review Mechanism 147,028

Section 15 - Replacement of system for simultaneous interpretation

in meeting rooms 797

Total 895,558

16. With regard to the supplementary budget, additional expenditure not to exceed Sw F 3,706,000 was authorized, as mentioned in paragraph 2 above. Against this authorization, actual expenditure amounted to Sw F 2,730,951. According to a decision of the COUNCIL (C/M/275 paragraph 11) this sum was financed as follows: (i) the utilization of Sw F 100,000 for unforeseen expenditure (Section 16), (ii) previous balance of the 1993 Surplus Account Sw F 556,143, (iii) budgetary savings for 1994 of Sw F 637,990, (iv) excess of miscellaneous income over revised estimated Sw F 1,369,015 and (v) withdrawal from the Working Capital Fund of Sw F 67,803.

17. The primary reason why the total additional expenditure was not required was the fact that contrary to expectations, no additional staff had taken up their function in 1994. Consequently no expenditure was incurred in their respect against the items for salary and statutory common staff costs for new staff, both in the Professional and General Service categories. On the other hand, the additional provision related to common services (reproduction of documents and electronic data processing) was fully utilized. The expenditure under the Uruguay Round was less than authorized primarily as a result of lower than anticipated costs for the Ministerial Meeting.

18. Total overall expenditure amounted to Sw F 96,680,652. This was reduced by expenditure incurred against a 1993 provision (i.e Sw F 226,038 advance disbursement made in 1993 and Sw F 321,653 being the final disbursement made in 1994), leaving 1994 budgetary expenditure of Sw F 96,132,961 of which Sw F 93,502,010 was under the regular budget and Sw F 2,630,951 under the supplementary budget.

II. INCOME BUDGET

19. Amounts totalling Sw F 96,555,781 were credited as budgetary income in 1994, which exceeded the approved estimate by Sw F 2,415,781.

(Shortfall)/

Approved Income Excess of

estimates credited income

Sw F Sw F Sw F

Contributions assessed on contracting parties 92,900,000 92,900,000 -

Contributions assessed on contracting

parties subsequent to the adoption

of the scale of contributions - 1,046,766 1,046,766

Miscellaneous income 1,240,000 2,609,015 1,369,015

Total 94,140,000 96,555,781 2,415,781

20. Miscellaneous income exceeded the revised estimated figure by Sw F 1,369,015, details of which are outlined below:

Estimated Actual Balance

Sw F Sw F Sw F

Sale of Publications 300,000 716,484 416,484

Profit or (loss)on exchange (45,000) 64,960 109,960

Savings on previous year's outstanding obligations 95,000 280,311 185,311

Refund of staff costs for staff employed at Centre

William Rappard on behalf of UNHCR 500,000 1,046,467 546,467

Overhead on Trust Funds 20,000 - (20,000)

Rental of Meeting rooms and office space at

Centre William Rappard 25,000 19,670 (5,330)

Contributions of Observer countries 210,000 134,011 (75,989)

Interest on Current Account 75,000 78,442 3,442

Various 60,000 268,670 208,670

Total 1,240,000 2,609,015 1,369,015

21. Various miscellaneous income included refund of priors year's expenditure (Sw F 42,712), work done for delegations and others (Sw F 207,640) and miscellaneous income from paper recycling, photocopies, etc. (Sw F 18,318).

22. As shown in Annex A, at 31 December 1994 the total contributions in arrears from contracting parties amounted to Sw F 21,119,841, of which Sw F 4,621,203 represented the arrears for the year 1994.

III. SURPLUS ACCOUNT

23. The Surplus Account, reproduced in Annex B, shows an accumulated deficit of Sw F 790,843 at 31 December 1994, due to:

This was offset by:

IV. EARLY PAYMENT ENCOURAGEMENT SCHEME

24. Pursuant to the Council's approval (C/M/226) of the Budget Committee's recommendation (L/6384) to introduce a system to encourage payment of contributions, interest earned on the current year's contributions is refunded to contracting parties on the basis of calculations which take account of the amount and date of payment. Annex C shows the apportionment of the amount of Sw F 645,184 earned as interest in 1994. The apportioned amounts will be deducted from the relevant contracting parties'/members' contributions for 1996.

V. WORKING CAPITAL FUND

25. With the interest of Sw F 239,118 and advances of new Contracting Parties of Sw F 423,800 credited to the Working Capital Fund, the principal of the Fund at 31 December 1994 amounted to Sw F 6,555,111. Of this amount, Sw F 790,843 were transferred to offset the accumulated 1994 deficit.

POINT FOR DECISION: Paragraph 15

Pages 6-9 missing (contributions)

ANNEX B

Surplus Account for the year ended 31 December 1994

(in Swiss francs)

DEBITS CREDITS

Increase of provision for Balance as at 1 January 1994 556,143

contributions in arrears 1,827,783

Unutilized provision for the correction of

Write-off of irrecoverable invoices 370 General Service category salary scales

58,347

Excess income over expenditure:

Contributions assessed on contracting parties subsequent

to the adoption of the 1994 scale of contributions:

Angola 74,320

Bahrain 102,190

Brunei Darussalam 46,450

Djibouti 27,870

Fiji 27,870

Grenada 27,870

Guinea 27,870

Guinea-Bissau 27,870

Honduras 20,234

Liechtenstein * -

Papua New Guinea 37,160

Paraguay 27,412

Qatar 74,320

Saint Kitts and Nevis 27,870

Slovenia 23,670

Solomon Islands 27,870

United Arab Emirates 445,920 1,046,766

1994 budgetary deficit:

Positive balance regular budget 637,990

Supplementary budget expenditure (2,630,951) (1,992,961)

Excess of actual miscellaneous income over estimated

miscellaneous income 1,369,015 422,820

Transfer from Working Capital Fund:

Financing of the 1994 supplementary budget 67,803

_______ Accumulated deficit on 1994 regular activities 723,040 790,843

1,828,153 1,828,153

* The original assessment on Switzerland was divided between Switzerland (Sw F 1,855,429 and Liechtenstein (Sw F 21,151) when the latter became a contracting party on 29 March 1994 (L/7483, paragraphs 30-31).

ANNEX C/ ANNEXE C/ ANEXO C

1994 EARLY PAYMENT ENCOURAGEMENT SCHEME: INTEREST TO BE DISTRIBUTED/

1994 PLAN VISANT A ENCOURAGER LE PAIEMENT RAPIDE DES CONTRIBUTIONS:

INTERETS A RISTOURNER/ 1994 PLAN DE INCENTIVOS PARA EL PRONTO PAGO

DECONTRIBUCIONES: INTERESES A SER REEMBOLSADOS