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185 EX/FA/EG PARIS, 12 October 2010 Original: English/French

Executive Board Hundred and eighty-fifth session

2

REPORT OF THE GROUP OF EXPERTS ON FINANCIAL AND ADMINISTRATIVE MATTERS

6-8 OCTOBER 2010

(i)

TABLE OF CONTENTS Page

Introduction......................................................................................................................................1

Item 4 Report by the Director-General on the execution of the programme adopted by the General Conference .............................................................................2

Item 5 Report by the Director-General on the follow-up to decisions and resolutions adopted by the Executive Board and the General Conference at their previous sessions..............................................................................................6

Item 6 Reports by the Director-General on specific matters ....................................................7

Item 16 Report by the Director-General on the feasibility of establishing category 2 institutes and centres under the auspices of UNESCO.............................17

Item 17 Preliminary proposals by the Director-General concerning the Draft Programme and Budget for 2012-2013 (36 C/5).........................................................20

Item 19 United Nations General Assembly proposal to align planning cycles with the quadrennial comprehensive policy review of operational activities for development of the United Nations system.................................................................23

Item 20 Reducing the running costs of the General Conference .............................................23

Item 25 Financial report and audited financial statements of UNESCO for the period ended 31 December 2009 and report by the External Auditor .........................24

Item 26 Report by the Director-General on the implementation of International Public Sector Accounting Standards (IPSAS) and proposed amendments to the financial rules ....................................................................................................27

Item 27 Collection of Member States’ contributions .................................................................30

Item 28 Financial regulations of special accounts....................................................................31

Item 29 Report by the Director-General on the reform of the field network..............................32

Item 30 Report by the Director-General on the revised medium-term security plan for UNESCO Headquarters....................................................................33

Item 31 Report by the Director-General on the activities of the Advisory Committee for Works of Art .........................................................................................34

Item 32 External Auditor’s new audits ......................................................................................36

185 EX/FA/EG

INTRODUCTION

1. The Group of Experts on Financial and Administrative Matters of the Executive Board met from 6 to 8 October 2010.

2. The Group of Experts comprised the following twelve (12) members: Mr Fatih Bouayad-Agha (Algeria), Mr José Luis Fernández Valoni (Argentina), Ms Aylin Joo Liem (Chile), Mr Inusah Fuseini (Ghana), Mr Vinay Sheel Oberoi (India), Mr Giovanni Enfante (Italy), Mr Hideaki Kuramitsu (Japan), Mr Rolands Ozols (Latvia), Mr Mohamed Kabbaj (Morocco), Mr Nikolay Lozinskiy (Russian Federation), Ms Sylvia Shayo Temu (United Republic of Tanzania), and Ms Kathy Kavalec (United States of America).

3. Mr Fatih Bouayad-Agha (Algeria), Chairperson of the Group of Experts, opened the meeting. Ms Alissandra Cummins (Barbados), Chairperson of the Finance and Administrative (FA) Commission, addressed the meeting and recalled the mandate of the Group of Experts as stipulated in 183 EX/Decision 10. With reference to Item 40 on the “Composition of the Executive Board’s Group of Experts on Financial and Administrative Matters (FA/EG)” which was referred to the Group for information, and with its agreement, she invited Mr Giovanni Enfante (Italy) to participate in the work of the Group as its member designate. Mr Getachew Engida, Deputy Director-General, represented the Director-General.

4. Mr Mohamed Kabbaj (Morocco) was elected Temporary Chairperson.

5. During its work, the Group was assisted by the representatives of the Secretariat and benefited from the presence of Mr Georges Cabdeboscq, Ms Laurence Cérésa and Mr Nicolas Pehau, representatives of the External Auditor.

6. The Experts on financial and administrative matters expressed gratitude to the representatives of the External Auditor for their contribution to the debates, and to the representatives of the Secretariat for their efficient cooperation throughout the meeting.

7. The Group of Experts examined fourteen (14) out of nineteen (19) items listed on the provisional agenda of the Finance and Administrative Commission of the 185th session of the Executive Board, which were attributed to it following the decision of the Bureau of the Executive Board held on 5 October 2010. In addition, with the Bureau’s consent, it examined Item 19.

Item Title and document 4 Report by the Director-General on the execution of the programme adopted by the

General Conference

5 Report by the Director-General on the follow-up to decisions and resolutions adopted by the Executive Board and the General Conference at their previous sessions. Appropriation resolution for 2010-2011: reinforcement of priority programmes

6 Reports by the Director-General on specific matters

16 Report by the Director-General on the feasibility of establishing category 2 institutes and centres under the auspices of UNESCO

17 Preliminary proposals by the Director-General concerning the Draft Programme and Budget for 2012-2013 (36 C/5)

20 Reducing the running costs of the General Conference

185 EX/FA/EG – page 2

Item Title and document 25 Financial report and audited financial statements of UNESCO for the period ended

31 December 2009, and report by the External Auditor

26 Report by the Director-General on the implementation of International Public Sector Accounting Standards (IPSAS) and proposed amendments to the Financial Rules

27 Collection of Member States' contributions

28 Financial regulations of special accounts

29 Report by the Director-General on the reform of the field network

30 Report of the Director-General on the revised medium-term security plan for UNESCO Headquarters

31 Report by the Director-General on the activities of the Advisory Committee for Works of Art

32 External Auditor's new audits

8. One Observer took the floor during the discussions.

9. In line with its mandate, the Group of Experts agreed in principle not to propose any substantive amendments to the draft decisions. The Group also agreed that if any amendments were to be introduced to a draft decision, these would be indicated in the recommendations associated with that agenda item.

10. The Group of Experts was assisted by the Secretariat of the Finance and Administrative Commission: Mr Ingo Schroter, Secretary, Ms Irina Zoubenko-Laplante, Ms Eunice Ong and Ms Sabine Petetin.

Item 4 Report by the Director-General on the execution of the programme adopted by the General Conference

Part II Budget adjustments authorized within the Appropriation Resolution for 2010-2011 and

Management Chart for Programme Execution in 2010-2011 (35 C/5 Approved) Status as at 30 June 2010 (non-audited)

Document reference: 185 EX/4 Part II (Management Chart)

Item to be examined by: FA

Recommendation(s) by the Group of Experts: Yes

Decision required from the FA Commission: Yes (185 EX/4 Part II, para.15)

Rapporteur: Latvia


11. Presentation by the Secretariat

11.1 The representative of the Secretariat briefly introduced the item, explaining that document 185 EX/4 Part II, Section A presents the budget adjustments made or proposed by the Director-General as authorized by the Appropriation Resolution for 2010-2011, and includes: a list of donations and special contributions received since the beginning of the biennium, which amounted to US $2.2 million; a report on statutory staff costs increases of $6.5 million which arose from General Conference Resolution 35 C/92 on the recommendation of the International Civil Service Commission (ICSC) and which were approved by the Director-General in accordance with the Agreement of the United Nations with UNESCO of 6 December 1946; a report on the transfers made between appropriation lines in accordance with 35 C/Resolution 106 paragraph 2(e), of $0.8 million from the Major Programmes to BSP to support UNESCO’s preparation for the United Nations common country programming exercises; and a proposal to transfer funds between appropriation lines to reflect certain organizational restructuring (concerning the Division of Cooperation with Extrabudgetary Funding Sources and the Division of Gender Equality).

11.2 With regard to statutory staff costs increases, the representative of the Secretariat underlined that under normal circumstances and in accordance with 35 C/Resolution 106, paragraph 2(d), the Secretariat would customarily have requested the Executive Board’s approval to transfer the required funds from Part IV of the Appropriation Resolution for 2010-2011 to cover these costs at the current Executive Board session. However, in light of the relatively high level of staff cost savings accrued thus far, mainly due to posts remaining vacant during the transition period to a new senior management team, the Secretariat proposes to postpone the transfer of Part IV funds for these items, and would return to the Executive Board at its 186th session to request such transfers if necessary after further examining the expenditure trends.

11.3 Referring to Section B of document 185 EX/4 Part II which presents the “Management Chart” as at 30 June 2010, the representative of the Secretariat noted that efforts had been made to simplify the document, improve its clarity and avoid overlap with other Executive Board documents. It was further observed that in general, expenditure rates were in line with the theoretical time elapsed rates. However, in cases where the expenditure rates of regular programme activities exceeded 40% or were lower than 10%, explanations were provided as per 164 EX/Decision 3.1.1 and 160 EX/Decision 3.1.1.

12. Discussion by the Experts and replies by the Secretariat

12.1 During their deliberations on this item, several Experts requested the Secretariat to provide in writing additional details concerning the 4.75% statutory increase in the post adjustment for professional category and above at Headquarters, noting that this rate seemed particularly high given the relatively low inflationary trends currently observed in France and in the global economy. The representative of the Secretariat informed the Group that a written reply could be provided after consultation with the Bureau of Human Resources Management (HRM). An Expert questioned whether UNESCO was obliged to automatically adopt statutory increases determined by the ICSC. To this, the Chairperson of the Group, who is an expert on ICSC matters, confirmed that UNESCO like all other members of the United Nations system, is obligated to respect the decisions made by the ICSC in New York. It was made clear that although the Secretariat had identified the additional requirement of $6.5 million arising from statutory increases under staff costs as determined by the ICSC, a proposal to transfer funds from Part IV to cover these amounts is not requested at this session of the Board. In the proposed draft decision, the Board is expected only to take note of the information submitted to it on this matter.

12.2 With regard to the expenditure rate trends, one Expert commented on the consistently low expenditure rates of the Ethics Office. In response, the representative of the Secretariat informed the Group that the Office which had only recently been fully staffed had now begun to implement training activities, and therefore is expected to have a higher expenditure rate in the future. It was further noted that, for the UNESCO Institutes, half of the respective appropriations are transferred


to the Institutes’ special accounts at the beginning of each year, which in turn is reflected as a fixed expenditure rate of 50% in UNESCO’s budget reports throughout the first year.

12.3 Two Experts requested information concerning the low number of monetary contributions received by the Education Sector. In reply, it was pointed out that the list in the document provided information only on the donations under regular budget received since the beginning of the biennium, whereas large scale contributions were also received under extrabudgetary funds through either funds-in-trust or special accounts.

12.4 One Expert requested clarification as to whether the figures indicated in the document were expressed using the constant dollar rate or the current exchange rate. The representative of the Secretariat responded that as per the General Conference Resolution 35 C/Resolution 106.2(j), the regular programme budget figures are expressed using the constant dollar rate. However, extrabudgetary funds were expressed using the United Nations operational exchange rates. The Secretariat acknowledged that this inevitably affects the comparability of regular budget and extrabudgetary funds, and therefore efforts have been made in the budgetary reports not to sum the two. Several Experts noted that the constant dollar rate had not been revised for many years. One Expert requested to have information on the trends in the exchange gains/losses which resulted from using the constant dollar rate over such a period of time. The Secretariat took note of the request.

12.5 The representative of the Secretariat also took note of requests to have a further breakdown between actual expenditures (i.e. disbursements) and obligated funds (i.e. unliquidated obligations) in the Management Chart tables. In response to another Expert’s request to have more updated information, the representative highlighted that the cut off dates of the management charts (i.e. 30 June and 31 December) took into consideration the statutory deadlines for the submission of documents to Member States. However, the Secretariat noted that a summary table with more updated expenditure information could be provided in addition to the normal management chart tables at the 186th Executive Board session.

13. Recommendation on the draft decision

13.1 The Group of Experts recommends that the draft decision contained in paragraph 15 of document 185 EX/4 Part II be adopted as amended in order to make clear reference to the decisions of the General Conference on the basis of which the Director-General has approved the statutory increases for the staff costs and has made transfers between appropriation lines up to an amount of 1% of the initial appropriation, as well as requests the approval of transfers between appropriation lines of an amount greater than 1%.

The Executive Board,

1. Having examined the Director-General’s report on donations and special contributions received since the beginning of the biennium and appropriated to the regular budget, the transfers made between appropriation lines, as well as proposed transfers to reflect organizational restructuring, in accordance with 35 C/Resolution 106, paragraphs 2(b), (d) and (e), document 185 EX/4 Part II and the recommendations of its Finance and Administrative Commission thereon (185 EX/…),

I

2. Takes note that the Director-General has, as a consequence of these donations and special contributions, increased the appropriations to the regular budget by a total of $2,173,084 as follows:


$ Part II.A – Major Programme I 86,628 Part II.A – Major Programme II 685,402 Part II.A – Major Programme III 112,368 Part II.A – Major Programme IV 548,070 Part II.A – Major Programme V 324,309 Part II.B – Programme-related services (BSP) 25,620 Part III.A – External Relations and Cooperation 24,950 Part III.B – Field Management and Coordination 365,737 (indirect costs for field offices)

Total 2,173,084

3. Expresses its appreciation to the donors listed in paragraph 9 of document 185 EX/4 Part II;

II

4. Recalling 34 C/Resolution 80 and 35 C/Resolution 92 whereby the Director-General is authorized to continue to apply to the staff of UNESCO the measures affecting the salaries, allowances and other benefits that may be adopted either by the United Nations General Assembly or, by virtue of the authority conferred upon it, by the International Civil Service Commission (ICSC), and the provision of paragraph 2(d) of the Appropriation Resolution for 2010-2011 by virtue of which the Director-General is authorized, with the prior approval of the Executive Board, to make transfers from Part IV of the budget (Anticipated Cost Increases) to the relevant appropriation lines in Parts I to III for the purpose of meeting increases in staff costs,

5. Notes that certain staff cost statutory requirements have been identified which have a budgetary impact of $6,472,600 and which would normally be financed under Part IV of the budget;

III

6. Recalling the provision of paragraph 2(e) of the Appropriation Resolution for 2010-2011 by virtue of which the Director-General can make transfers between appropriation lines up to an amount of 1% of the initial appropriation, and inform Members of the Executive Board in writing at the session following such action, of the details of and reasons for these transfers,

7. Recalling the provision of paragraph 2(e) of the Appropriation Resolution for 2010-2011 by virtue of which transfers between appropriation lines which exceed the 1% limit may be made by the Director-General with the prior approval of the Executive Board,

8. Takes note that the Director-General has made transfers between appropriation lines in support of UNESCO’s participation in the United Nations common country programming exercises, as follows:


$ Major Programme I – Education (368,050) Major Programme II – Natural sciences (139,150) Major Programme III – Social and human sciences (90,400) Major Programme IV – Culture (120,845) Major Programme V – Communication and information (123,200)

Total, Part II.A (841,645) Part II.B – Bureau of Strategic Planning (BSP) 841,645

Total, Part II.B 841,645

8. Recalling the provision of the Appropriation Resolution by virtue of which transfers between appropriation lines which exceed the 1% limit may be made by the Director-General with the prior approval of the Executive Board,9. Approves transfers between appropriation lines of:

9. Approves transfers between appropriation lines:

(a) $976,800 concerning the transfer of the Division of Cooperation with Extrabudgetary Funding Sources (CFS) from Part III.A – External Relations and Cooperation (ERC) to Part II.B – Bureau of Strategic Planning (BSP);

(b) $1,016,700 related to the transfer of the Division of Gender Equality from Part II.B – Bureau of Strategic Planning (BSP) to Part I.B – Office of the Director-General (ODG);

10. Takes note of the revised Appropriation Table in Annex I of this document 185 EX/4 Part II.

Item 5 Report by the Director-General on the follow-up to decisions and resolutions adopted by the Executive Board and the General Conference at their previous sessions

Appropriation resolution for 2010-2011: reinforcement of priority programmes

Document reference: 185 EX/5 Add.2


Recommendation(s) by the Group of Experts: No

Decision required from the FA Commission: No

Rapporteur: Algeria


14.1 This item was introduced by the representative of the Director-General who presented to the Group an overview of measures undertaken by the Director-General to streamline business practices in the Organization with a view to enhance the delivery capacities of the Organization and achieve more efficiency in the participation in the common action of the United Nations system.


15.1 One Expert asked for more clarification on the transfer of two posts D-2 and D-1. The representative of the Director-General gave clarifications and notably explained the reasons of the


recent merging of the Bureau of Budget (BB) and the Bureau of Comptroller (BOC). The Expert suggested that the table should have indicated the transfers as a transfer of resources and not of posts.

15.2 Another Expert noted that the savings achieved on an annual basis might be recurrent. However, the Expert suggested a system for monitoring such savings, for instance registering them in a special account.

15.3 In reply to the question from an Expert about the new Chief Information Officer (CIO), the representative of the Director-General informed that the budget for this Office will be under Part II while the Chief Information Officer will report to ADG/ADM.

15.4 One Expert wanted to be reassured that the system of transfers would be easily implemented.

15.5. In reply to questions from the Experts, the representative of the Director-General indicated that reforming organizational design and management practices have also resulted in savings, including both staff costs and activity costs of the amount of $1.9 million and confirmed that, in line with 35 C/Resolution 106 and also 35 C/Resolution 107, these savings will be redeployed to priority programmes following an appropriate assessment of the most urgent programme needs.

15.6. Lastly, the representative of the Director-General emphasized that minimum levels of administrative/running costs are essential for delivering on mandated results and will always be required for the operation of the Organization.

16. No decision is requested for this item.

Item 6 Reports by the Director-General on specific matters

Part II Revised publication and distribution plan 2010-2011 and progress report on the implantation of 184 EX/Decision 6 (II)

Document reference: 185 EX/6 Part II and Add.




Rapporteur: Algeria


17.1 The representative of the Secretariat presented in his introduction the work carried out to reduce the number of publications and admitted that progress still needs to be made. He proposed the establishment of a Publications Board with strong representation of the sectors, institutes and field offices. He also recommended the establishment of a three-tier pricing policy that would take into account the purchasing power of developing countries. He went on to emphasize the need to focus on efforts relating to the production of environmentally friendly publications.

17.2 The representative of the Secretariat then moved on to the UNESCO Courier and proposed the option of a printed quarterly issue of 56 pages, with strong Internet support. He stressed, however, the need for extrabudgetary funds and for improved cooperation with national editions in close collaboration with National Commissions. Lastly, he mentioned a publication in Braille that was produced during the biennium.



18.1 In their statements, the Experts congratulated the Secretariat on the work done and expressed their satisfaction with the publication of the UNESCO Courier in print. The issue of respect for multilingualism was raised. The representative of the Secretariat shared the experts’ views, stressing that the linguistic balance is completely inadequate and should be subject to further efforts from the entire Organization. An improved initial selection of publication projects, which conforms to the criteria of relevance and quality, would reduce the number of publications while enhancing multilingualism.

19. Recommendations of the Group of Experts

19.1 The Group of Experts recommends several amendments to the draft decision contained in paragraph 12 of document 185 EX/6, Part II to be adopted by the FA Commission. The changes in paragraph 4, (namely addition, after the words “to continue reinforcing UNESCO’s publications policy to” of the phrase “improve the quality of the editorial production and ensure the”) are proposed in order to align it with 184 EX/Decision 6 (II), para. 4 which recognizes “the Director-General’s interest in implementing a new publication policy as a means to improve the quality of production and reinforce UNESCO’s visibility”.


1. Recalling 179 EX/Decision 31 (I), 180 EX/Decision 40 (I), 181 EX/Decision 39 and 184 EX/Decision 6 (II),

2. Having examined document 185 EX/6, Part II and Add.,

3. Takes note of the progress achieved thus far by the Director-General to implement both the External Auditor’s recommendations and the Board’s own decision at its 184th session;

4. Invites the Director-General to continue reinforcing UNESCO’s publications policy to improve the quality of the editorial production and ensure the visibility of the Organization;

5. Requests the Director-General to continue reporting to it regularly, within her general reporting, on progress in implementation of the UNESCO publications policy.

Part III Report by the Director-General on UNESCO’s post-earthquake response in Haiti: medium- and long-term cooperation strategy in coordination with other United Nations agencies (Financial and administrative aspects)

Document reference: 185 EX/6 Part III

Item to be examined by: FA/PX


Decision required from the FA Commission: Yes (185 EX/6 Part III, para.39)

Rapporteur: Italy


20.1 The representative of the Secretariat informed the Experts about the Action Plan for National Recovery and Development of Haiti adopted on 31 March 2010 in New York in consultation with the Haitian Authorities. The Plan outlines the importance of culture, including cultural heritage, in


the reconstruction efforts and stresses the necessity to reinforce UNESCO’s role in rebuilding the educational system.


21.1 The questions raised by the Experts were related to: (i) the existence of a plan on literacy; (ii) the status of execution of the recovery project to be financed partly with extrabudgetary funds; (iii) information about collaboration, if any, between the United Nations funds; the part of the regular budget that would be devoted to UNESCO’s activities in Haiti; (iv) the “integrated strategic framework” mentioned in paragraph 9 of the document which should have been available since last August.

21.2 The Secretariat informed that the funds which would be necessary to implement the above-mentioned Plan would amount to $5.2 billion of which some $3 million have been raised by UNESCO. The funds that the Organization has raised until now are not sufficient taking into account the volume of funds deemed necessary for UNESCO’s projects amounting to some $53.3 million spread over the next three years.

21.3 Two UNESCO projects have already been approved and their implementation is under way: the project to safeguard the National History Park – Citadel, Sans Souci, Ramiers, which are on the World Heritage List, in the context of international emergency assistance from the World Heritage Fund, and a project to relaunch the cultural economy of Jacmel which is on UNESCO’s World Heritage Tentative List, through support of craftworkers and other activities, including the restoration of the historic buildings in the city centre which have been severely damaged by the earthquake. However, the next projects will be focused on education and revitalization of Haitian cultural heritage.


22.1 The Group of Experts recommends some amendments to the draft decision contained in paragraph 39 of document 185 EX/6 Part III to be adopted by the FA Commission in order to make reference to 184 EX/Decision 33, as well as clarify the content of paragraph 8.


1. Recalling 184 EX/Decision 33,

2. Having examined document 185 EX/6 Part III,

3. Emphasizing the need to strengthen UNESCO’s cooperation with Haiti in support of the efforts of the Government to promote reconstruction, peace and development through education, the natural sciences, the social and human sciences, culture, and communication and information, following the devastating earthquake which hit the country on 12 January 2010,

4. Stressing UNESCO’s role in restoring education services and opportunities in a holistic manner, and in strengthening the institutional capacities of the Haitian education system,

5. Recognizing the importance of culture, including cultural heritage in all its forms, for the rebuilding of Haiti and for the national identity of the Haitian people,

6. Welcoming the outcome of the first meeting of the International Coordination Committee for the Safeguarding of Haitian Cultural Heritage, held at UNESCO Headquarters on 7 to 8 July 2010,


7. Expresses its appreciation to the Director-General for her prompt initiatives and action undertaken by UNESCO to respond to the urgent needs of Haiti and to develop the medium- and long-term cooperation strategy for Haiti in the Organization’s fields of competence;

8. Approves the medium- and long-term cooperation strategy for Haiti submitted by the Director-General;

9. Calls on all Member States to consider supporting UNESCO’s role and activities with regard to Haiti in all relevant international forums;

10. Further calls on Member States, intergovernmental, governmental and non-governmental agencies and foundations to provide extrabudgetary resources to reinforce UNESCO’s efforts in support of the reconstruction and capacity-building of Haiti in its fields of competence;

11. Invites the Director-General to present to the Executive Board a progress report on the implementation of this decision at its 185 186th session.

Part V Biennial evaluation report on the activities and results of all UNESCO decentralized bodies (Financial and administrative aspects)

Document reference: 185 EX/6 Part V



Decision required from the FA Commission: Yes (185 EX/6 Part V, para.25)

Rapporteur: Algeria


23.1 The representative of the Secretariat briefly introduced the item, outlining the systemic key achievements and key challenges that had emerged from the twenty field office evaluations and audits conducted by IOS since autumn 2008.


24.1 This item did not raise any debate among the Experts who appreciated the presentation made by the Secretariat.


25.1 The Group of Experts recommends the draft decision contained in paragraph 25 of document 185 EX/6 Part V to be adopted by the FA Commission without amendments. The Group noted that in the preambular paragraph the correct reference is 182 EX/Decision 6 (II).


1. Recalling 182 EX/Decision 6 (II Annex) and 35 C/Resolution 82(II),

2. Having examined document 185 EX/6 Part V,

3. Takes note of its content.


Part VI Report by the Director-General on the management of extrabudgetary resources and activities including the updated extrabudgetary resource mobilization strategic plan

Document reference: 185 EX/6 Part VI

185 EX/INF.6



Decision required from the FA Commission: Yes (185 EX/6 Part VI, para.33)

Rapporteur: Italy/Morocco


26.1 The representative of the Secretariat introduced the Director-General’s report on this item, which is submitted to the Executive Board once a year and touches upon the four phases of management of extrabudgetary activities (programming, resource mobilization, monitoring and implementation). The importance of the scope of extrabudgetary activities compared to the regular budget and their coherence with the regular programme was underlined. Furthermore, it was reminded that in 2008, the Secretariat launched the Complementary Additional Programme (CAP) for 2008-2009 which contains 908 project proposals for $1.2 billion. This allowed UNESCO to present upfront a coherent programme at the beginning of the biennium indicating the activities for which the Organization would mobilize funding. CAP was presented to Member States and was met by them with appreciation. Some of them had expressed constructive criticism, notably on the requirements for further streamlining of the outlines and the necessity of a programme approach.

26.2 With respect to the performance of the CAP as a tool for resource mobilization, it is to be noted that some $323 million were mobilized (agreement signed, funds committed) in 2008-2009 in favour of the 34 C/5 CAP.

26.3 When launching the current CAP in early June 2010, UNESCO took into account the suggestions made by Member States. The programme approach was strengthened, intersectoral programmes were introduced, and the preparation process of CAP was launched in parallel to the elaboration of the 35 C/5 work plans, to further reinforce its coherence with the Regular Programme. The current CAP includes 745 project proposals for a total amount of $809 million in terms of funding requirements. The CAP format is more donor-friendly. It presents the strategy and reflects a programme approach, plus specific references to UNESCO’s added value. As a major innovation the thematic approach was introduced. With respect to the 35 C/5 CAP, during the first nine months of 2010, UNESCO has mobilized $127 million for specific projects financed through funds-in-trust, plus $12 million for special accounts (figures of June 2010) and some $35 million for UNESCO’s institutes: these figures give a good perspective for 2010, notwithstanding the expected ODA spending decrease.

26.4. To strengthen implementation capacity, efforts are made through training, streamlining of administrative procedure and strengthening UNESCO’s expertise at field level.

26.5 On the monitoring side, the Sector alert systems have been established which provide that ADGs meet as a minimum twice a year to review the extrabudgetary activities under their respective responsibility. This allows early detection of underperforming projects and timely adoption of remedial measures.



27.1. Some of them expressed appreciation for CAP and its new presentation. However, two Experts noted that further efforts needed to be made as CAP still remains linked to a classic scheme, is offer driven and not sufficiently prioritized. Moreover, several Experts underlined that extrabudgetary activities should be strictly aimed at reinforcing Regular Programme priorities. One Expert indicated the need for distinction between funds mobilized in support of UNESCO’s own programme activities, and situations where UNESCO mobilizes funds to cover the cost of its services. The Secretariat stressed the importance of mobilizing non-earmarked, or softly earmarked contributions to major programmes (such as intangible heritage, EFA, etc.).

27.2. In response to a comment by an Expert on the discrepancy between the figures provided on fund mobilization in favour of extrabudgetary projects, and those appearing in the 185 EX/4 Part II, the Secretariat explained the different formulas for describing the funds managed, received and mobilized by UNESCO. While the EX/4 refers to allocations, i.e. funds made available each year for implementation for all ongoing initiatives, the figures in document 185 EX/6 Part VI correspond to the amount of funds mobilized, i.e. signed agreements and other formal commitments made by donors, and voluntary contributions (i.e. fresh cash received into UNESCO’s Accounts for extrabudgetary activities).

27.3. One Expert stressed that UNESCO’s resource mobilization strategic plan should be centred on UNESCO’s priorities, not donor priorities. The Secretariat stressed that UNESCO’s resource mobilization efforts were focused on UNESCO’s priorities, but in the context of ongoing resource mobilization activities, an effort was made to match these priorities with those of donors and partners.

27.4. With respect to developments on the cost recovery policy, and in response to questions raised by one Expert, the Secretariat noted that: (i) the online budget preparation tool is currently in its final stage of testing, and that follow-up training will be provided by BFM and BSP who are currently developing a detailed training calendar. This IT tool will enable Project Officers to map out their budget plans and prepare the corresponding budget; (ii) the PSC reimbursement mechanism is now operational, and units implementing projects are receiving funds in accordance with the guidelines; (iii) the cost recovery policy was still a work-in-progress, and one of the items to be reviewed, as previously mentioned by the Secretariat, was how to take into account “economies of scale” in the determination of PSC rates. Finally, the representative of the Director-General noted that the work on harmonization of cost recovery policy among United Nations agencies was still being reviewed in the inter-agency context, with emphasis recently placed on a “common budgetary framework,” and the FB Network and HLCM had not yet issued any final conclusions.


28.1 The Group of Experts recommends some amendments to the draft decision contained in paragraph 33 of document 185 EX/6 Part VI to be adopted by the FA Commission in order to reflect the prevailing feeling that at the present stage it is appropriate to note the efforts already made by the Secretariat, and to encourage further action aimed at elaborating strategies and activities in order to mobilize extrabudgetary resources that would reinforce UNESCO’s programme priorities.


1. Having examined document 185 EX/6 Part VI and 185 EX/INF.6,

2. Welcomes the steps taken Recognizes the efforts by the Director-General to strengthen the coherence and programmatic concentration of the Complementary Additional Programme, and to make it more accessible and attractive to potential donors and partners;


3. Welcomes Notes the updated extrabudgetary resource mobilization strategic plan;

4. Further takes note of the Director General’s ongoing efforts:

(a) to promote a better understanding of the cost-recovery policy and proper project budgeting;

(b) to increase the efficiency of project proposal preparation by developing and implementing simple and automated processes;

5. Invites the Director-General to report to it at its 187th session on the management of extrabudgetary resources and activities.

Part VII Report by the Director-General on the implementation of the Participation Programme and emergency assistance.

Document reference: 185 EX/6 Part VII and Add. and

185 EX/INF.7 and Add.



Decision required from the FA Commission: Yes (185 EX/6 Part VII, para.12)

Rapporteur: Tanzania/Algeria


29.1 The debate opened with the presentation of the documents mentioned above on the implementation of the Participation Programme from the start of the 2010-2011 biennium up to the end of September. The representative of the Secretariat informed the Group of the requests approved by the Director-General from Member States, Associate Members/other territories and international non-governmental organizations.

29.2 After the 35th session of the General Conference, the Director-General addressed Circular Letter 3906 to Member States, requesting them to submit their requests under this programme no later than 28 February 2010.The Secretariat received 1,500 requests representing a total of $38,048,908. These were all examined for their compliance with the conditions and criteria of 35 C/Resolution 67. Certain non-compliant requests were the subject of correspondence with the Member States concerned in order to obtain additional information.

29.3 The procedure for recording data in the System of Information on Strategies, Tasks and the Evaluation of Results (SISTER) was completed and the evaluation by programme sectors and central services was able to begin. Thus, it was possible to convene a first Intersectoral Committee on 29 April 2010 to consider the projects already evaluated and recommend them for approval to the Director-General. A second Committee was likewise convened on 27 May and a third on 2 and 3 September 2010, according to the progress of the evaluation process. By the end of September, 444 requests had been approved for a total of $9,883,050.


30.1 One Expert asked which Member States had benefited from projects approved to date. The representative of the Secretariat replied that document 185 EX/INF.7 and Add. gave lists of all the approved requests along with the amounts and the beneficiaries. Another expert raised the question of Member States which were required to submit financial reports and carry out activities and asked what means were used by the Secretariat to encourage these Member States to


respect their obligations. The representative of the Secretariat stressed that the General Conference resolution stipulates that a Member State which does not submit its accountability reports cannot benefit from the Participation Programme. He also stated that the Secretariat devoted much time to following up the submission of reports due from Member States. Another expert asked what the execution rate of the Participation Programme was. The representative of the Secretariat stated an approval rate of 52% and an execution rate of around 40%.

31. Draft decision submitted to the FA Commission

31.1 The Group of Experts recommends several amendments to the draft decision contained in paragraph 12 of document 185 EX/6 Part VII to be adopted by the FA Commission in order to reflect the correct reference of the documents examined by the Executive Board.


1. Recalling 35 C/Resolution 67,

2. Having examined document 185 EX/6 Part VII and Add. and 185 EX/INF.7 and Add.,

3. Takes note of its their content.

Part VIII: Geographical distribution and gender balance in the staff of the Secretariat.

Document reference: 185 EX/6 Part VIII

185 EX/INF.8



Decision required from the FA Commission: Yes (185 EX/6 Part VIII, para.23)

Rapporteur: Algeria/Russian Federation


32.1 The representative of the Secretariat gave a brief account on the progress made in the implementation of the five-year Action Plan to improve geographical balance in the staff of the Secretariat, adopted by the Executive Board in April 2010. She also reported on progress in the implementation of the Gender Action Plan, for achieving 50% representation of women at the Senior Management levels by 2015.

32.2 She mentioned the steps taken with the underrepresented Regional Groups (GRULAC and ASPAC), to identify ways of increasing the number of candidates from these regions. She also indicated that the Young Professional Programme (2010-2011) would be launched after the Executive Board. On the gender issue, she reported progress at the senior management level: with the appointment of five women ADGs, near parity is achieved at ADGs level. Since May 2009, the number of women at Director and above level has increased by 4% (to reach 27%). However efforts must be sustained to reach the target of 50% by 2015.

33. Discussion with the Experts and replies by the Secretariat

33.1 One Expert asked for information and clarifications on the methodology for calculating geographical quotas. Another Expert called for an extension of the consultations with the Regional Groups, beyond ASPAC and GRULAC. One Expert expressed concern on the steady number of non-represented countries and urged the Secretariat to focus its effort on increasing the


representation of Member States. Pointing at Table 2 in document 185 EX/6 Part VIII, another Expert requested that trends be shown in the representation of Directors and above level staff by Regional Group, as was the case for other data in the document.

33.2 An Expert noted that, although good progress has been made, an imbalance still remains in the number of women at Director level and above, and stressed the need for the Secretariat to continue its efforts.

33.3 One Expert deplored the lack of information available on the base figure that was theoretically subject to geographical distribution and which is determined by the General Conference. He also questioned the mid-point applicable to each State in terms of its membership factor and its contributions, while noting that the weight of each factor is critical. In the past, that was 76% for the membership factor and 24% for the contribution factor. The Expert wanted to know what each factor weighs today. Consequently, information was provided by the Secretariat: 65% for the membership factor, 30% for the contribution factor and 5% for the population factor, and these figures have been in place since 2003.


34.1 The Group of Experts recommends the draft decision contained in paragraph 23 of document 185 EX/6, Part VIII for adoption by the Finance and Administrative Commission.

Part IX Report by the Director-General on the development of the human resources strategy.

Document reference: 185 EX/6 Part IX and Add.



Decision required from the FA Commission: Yes (185 EX/6, Part IX, para.17)

Rapporteur: Russian Federation


35.1 The representative of the Secretariat briefed the Experts on the steps taken for the preparation of the Human Resources Strategy for 2011-2016, which is to be submitted to the Executive Board at its 186th session. She indicated that the process would involve consultations with Regional Groups, as well as with senior management and staff representatives.


36.1 This item did not raise any debate among the Experts.


37.1 The Group of Experts recommends some amendments to the draft decision contained in paragraph 17 of document 185 EX/6 Part IX to be adopted by the FA Commission in order to recall in the preambular paragraph the decision adopted on this issue by the General Conference at its 35th session and indicate the correct reference of the documents examined.



1. Recalling 35 C/Resolution 82 Part I,

2. Having examined documents 185 EX/6 Part IX and Addendum,

3. Takes note of the work accomplished to date in preparation of the Human Resources Strategy for 2011-2016 and invites the Director-General to pursue this work with a view to submitting the Human Resources Strategy to it at its 186th session.

Part X Report by the Director-General on the state of the Medical Benefits Fund

Document reference: 185 EX/6 Part X and Add.



Decision required from the FA Commission: Yes (185 EX/6 Part X, para.12)

Rapporteur: Ghana/Japan


38.1 The representative of the Secretariat introduced the document by highlighting the study and recommendations made by a consulting firm that was recently completed and submitted to the Board for information only at this time, as it is presently undergoing the required review by the MBF Board prior to making a recommendation to the Director-General for decision. She highlighted also the immediacy of the matter due to the actuarial study undertaken in 2009 and because of this recent new review. She further outlined the alternative measures regarding the proposed changes in contribution formula, plan design and governance of the medical fund. She explained further that the recommendations are currently under evaluation by a Working Group which will submit its recommendations to the MBF Board and subsequently to the Director-General for decision. She concluded by explaining that the Director-General upon making a decision will submit an implementation plan on how to address the matter to the Executive Board at its 186th session.


39.1 Most Experts raised a number of questions with regard to the proposed contribution formula options outlined in the executive summary of the consulting firm’s report. A certain number of Experts expressed concern over the recommendation to hire an outside consultant to advise the MBF Board while others considered that this could be a useful proposal to improve the governance of the fund.

39.2 One Expert raised questions on the administrative burden of the adjustment at least biennially and also asked the reason why a 5.5% cap of salary or pension would be established. He requested confirmation that the Secretariat had evaluated the possibility of UNESCO joining the medical plans of other United Nations agencies in Geneva, further to the question raised at the 184th session of the Board. A certain number of Experts questioned why certain benefits, such as custodial nursing care, highlighted as “highly unusual” in the report, remained a benefit offered by the MBF.

39.3 The representative of the Secretariat answered that a 5.5% cap and certain benefits are traditionally maintained and there is no standard medical plan for United Nations agencies in Geneva. The Representative of the Secretariat confirmed that no decision had been made with regard to the recommended Options in the report. Indeed all recommendations are currently under evaluation by the Working Group of the MBF Board. She confirmed that each option entailed its


pros and cons. She also explained that the final decision would be made by the Director-General unless there are additional financial implications.


40.1 The Group of Experts recommends several amendments to the draft decision contained in paragraph 12 of document 185 EX/6 Part X to be adopted by the FA Commission in order to indicate the correct document reference in its preambular paragraph 2.

40.2 With regard to paragraph 3 of the draft decision, several Experts proposed to include at the end, after the words “at its 186th session” the phrase “taking into account the discussions of the Executive Board at its 185th session”. At the same time, the Group noted that as the issue is still under consideration by the MBF Board and the Director-General has not yet been able to make her decision, all deliberations of this matter at the present session of the Board are of an intermediate nature and generally express the concern of the Board over the urgent need to finalize reflection and pass on to the decision-making process.


1. Recalling 35 C/Resolution 95,

2. Having examined document 185 EX/6 Part XI and Add.,

3. Takes note of its content and invites the Director-General to report on the Action Plan to the Executive Board at its 186th session taking into account the discussions of the 185th session.

Item 16 Report by the Director-General on the feasibility of establishing category 2 institutes and centres under the auspices of UNESCO (Item to be examined by the Joint Meeting of the PX and FA Commissions)

Part I Proposal for the establishment of an international centre on sustainable development of mountain territories in Vladikavkaz (Russian Federation)

Document reference: 185 EX/16 Part I

Item to be examined by: Joint Meeting FA/PX


Decision required from the FA Commission: Yes (185 EX/16 Part I, para.12)

Rapporteur: Ghana

41. The Group of Experts was informed that due to the need to finalize the approval of legal documents related to the establishment of an international centre on sustainable development of mountain territories in Vladikavkaz, North Ossetia, Russian Federation, as a category 2 centre under the auspices of UNESCO at the national level, the Russian Federation had withdrawn this item from the agenda of the present session of the Executive Board and requested that it be postponed until a future session.


Part II Proposal for the establishment in Beijing, China, of an international research and training centre for science and technology strategy

Document reference: 185 EX/16 Part II



Decision required from the FA commission: Yes (185 EX/16 Part II, para.19)

Rapporteur: Algeria 42. Presentation by the Secretariat

42.1 In her introduction, the representative of the Secretariat explained that document 185 EX/16 Part II contains the assessment of the feasibility of the proposal submitted by the People’s Republic of China for the establishment of an International Research and Training Centre for Science and Technology Strategy in Beijing, China, as a category 2 centre under the auspices of UNESCO. It was underlined that the proposal is in full conformity with the integrated comprehensive strategy for category 2 institutes and centres under the auspices of UNESCO as approved by the 35th session of the General Conference (35 C/Resolution 103).

42.2 The Secretariat noted that the sustainability of the Centre is ensured by the Government of the People’s Republic of China which has agreed to provide funding of $1.2 million per year to meet the recurring costs and to finance programmes and activities of the Centre. The Ministry of Science and Technology will be responsible for the financial and logistical aspects of the Centre.

42.3. For UNESCO, financial consequences will consist mainly in covering expenses related to the attendance by a UNESCO representative at formal meetings of the Centre. The relatively minor incremental costs of this involvement, which are integral parts of UNESCO’s Medium-Term Strategy 2008-2013, will be more than offset by the fact that the Centre will be actively involved in the execution of UNESCO’s programmes on capacity-building and technical assistance on STI policy. The feasibility study has shown that there is sound justification for the establishment of such an International Centre in the People’s Republic of China. The proposal has a clear set of objectives with well-defined modalities for achieving them.




44.1 The Group of Experts recommends the draft decision as contained in paragraph 19 of document 185 EX/16 Part II for adoption by the Joint Meeting of the Finance and Administrative and Programme and External Relations Commissions.

Part III Proposal for the establishment in Lisbon, Portugal, of a centre for the advanced training of scientists from Portuguese-speaking countries in areas of the basic sciences




Decision required from the FA commission: Yes (185 EX/16 Part III, para.22)

Rapporteur: Algeria



45.1 The representative of the Secretariat introduced this item and underlined that the proposal on the establishment of an International Centre for Advanced Training of Scientists from Portuguese-Speaking Countries in Areas of Basic Sciences in Lisbon as a category 2 centre under the auspices of UNESCO submitted by the Portuguese Republic was unanimously endorsed and supported by the Comunidade dos Países de Língua Portuguesa (CPLP) (Community of Portuguese-Speaking Countries) in the Declaration proclaimed and signed by Ministers responsible for research and higher education at the Community’s meeting in Lisbon, Portugal, on 29 August 2009.

45.2. He underlined that a feasibility study on the establishment of the Centre had been undertaken in line with the guidelines and criteria for category 2 institutes and centres as approved by UNESCO’s General Conference in 35 C/Resolution 103 and contained in document 35 C/22. It was carried out in consultation with the relevant Portuguese Authorities and the Scientific Board of the International Basic Sciences Programme (IBSP) which is responsible for advising the Director-General on the IBSP activity.

45.3 Furthermore it was pointed out that the Portuguese Republic had committed to provide €1.5 million (€1.2 million in cash and €0.3 million in kind) annually for the first six years for the direct budget of the Centre to cover, inter alia, its fellowships programmes, the organization of workshops, training courses, and international meetings, secretariat costs, hosting of the Centre, and the provision of a central computer server. This support will be given on the basis of a long-term financial arrangement between the Portuguese Republic and the Centre.

45.4 For UNESCO, establishment of this Centre as a category 2 centre under the Organization’s auspices will entail minor financial implications linked with the participation in the meetings of the Governing Board.




47.1 The Group of Experts recommends several amendments to the draft decision contained in paragraph 22 of document 185 EX/16 Part III to be adopted by the Joint Meeting of the Finance and Administrative and Programme and External Relations Commissions.


1. Having examined document 185 EX/16 Part III, which provides an analytical outline of the proposal to establish an International Centre for Advanced Training of Scientists from Portuguese-Speaking Countries in Areas of Basic Sciences as a category 2 centre under the auspices of UNESCO,

2. Emphasizing the importance of international and regional cooperation for human and institutional capacity-building in the basic sciences,

3. Welcoming the proposal of the Portuguese Republic,

4. Noting the support for the Portuguese proposal by the Community of Portuguese-Speaking Countries,

5. Highlighting important opportunities for action the establishment of the Centre offers in the framework of the International Basic Sciences Programme (IBSP),


6. Recognizing that the proposed Centre meets the guidelines and criteria for the creation of institutes and centres under the auspices of UNESCO (category 2), as approved by UNESCO’s General Conference in 35 C/Resolution 103 and contained in document 35 C/22.

7. Recommends that the General Conference at its 36th session approve the establishment of the International Centre for Advanced Training of Scientists from Portuguese-Speaking Countries in Areas of Basic Sciences in Lisbon (Portugal) as a category 2 centre under the auspices of UNESCO and that it invite authorizes the Director-General to sign the corresponding Agreement between UNESCO and the Portuguese Republic contained in the Annex to document 185 EX/16 Part III.

Item 17 Preliminary proposals by the Director-General concerning the Draft Programme and Budget for 2012-2013 (36 C/5) (Financial and administrative aspects)

Document reference: 180 EX/17 Part I and Corr.

and Part I Addenda (A), (B) and

(C) and 185 EX/17 Part II




Rapporteur: Morocco/Japan


48.1 The Representative of the Secretariat made a detailed presentation of document 185 EX/17 Part II, outlining the budgeting techniques used to estimate the zero real growth (ZRG) requirements for the Draft 36 C/5, which totalled $687.3 million. The representative of the Secretariat further stated that this ZRG estimate which is $34.3 million higher than the 35 C/5 Approved budget ($653 million), was determined using the budgeting techniques outlined in 35 C/Resolution 105. These techniques aim at estimating a budget level which maintains the same purchasing power parity as that of the 35 C/5 Approved but does not prejudge the way in which the budget will be structured and its content. The representative of the Secretariat assured the Group that the Secretariat was keenly aware of the continuing uncertainty in the global economic and financial environment and its impact on Member States’ budgets, and had made every effort to present ZRG calculations which were both realistic and conservative.

48.2 The representative of the Secretariat further noted that in accordance with the prescribed methodology, this budget proposal does not include provisions for additional reform initiatives such as additional headquarters security requirements as outlined in the Revised Medium-Term Security Plan and conservation costs, nor the $1.6 million additional funds which were exceptionally made available from the 34 C/5 regular budget for use by the ISPAS project in 2010-2011. The Secretariat will however, ensure that provisions for ongoing IPSAS and internal control- related costs will be incorporated in the base of the 36 C/5 Draft Budget, as requested in 182 EX/Decision 45.7.


49.1 Certain Experts expressed that the increase of $34.3 million would be difficult for their governments to accept given the ongoing economic crisis, and called for the Secretariat to make additional efforts to identify cost savings. The representative of the Secretariat recalled that the


objective of this exercise was to simply present the additional requirements for statutory, inflationary and technical adjustment elements using the same structure of the 35 C/5 Approved as the base. Nonetheless, possible cost savings identified through the Director-General’s ongoing initiatives to streamline the Organization, would be incorporated in the Draft 36 C/5 to be presented at the next session of the Executive Board.

49.2 Several Experts requested clarification regarding the $19 million or 2.4% average annual increase proposed for staff costs, noting that this amount seemed considerably high given the ongoing economic situation. Certain experts cited cases where salary cuts were being proposed in their countries. Although Experts understood that the recommendation on the staff salary determined by the ICSC should be respected, one Expert questioned whether UNESCO was obliged to automatically apply the ICSC decisions, while another Expert questioned the validity of the data used by ICSC in their calculations.

49.3 In this regard, the Chairperson of the Group of Experts, given his expertise on ICSC matters, cited Article XII – Personnel arrangements of the Agreement between the United Nations and UNESCO.1

49.4 The Chairperson reminded the Group that the ICSC aims at harmonizing the remuneration of the international civil servants. He further noted that although ICSC’s decisions can be difficult to accept in certain circumstances, such harmonization of staff costs was essential to maintaining the quality of the staff within the United Nations system and the survival of the system itself.

49.5 In response to another question raised concerning the staff cost requirements, the representative of the Secretariat assured the Expert Group that any possible savings generated from the retirement of senior staff and the recruitment of incumbents for these posts at lower step levels are taken into account to the extent possible in the calculation of the budget proposal.

49.6 With regard to the cost estimates for goods and services, one Expert noted that the $6.8 million or 1.4% average annual increase proposed also seemed high, given the fact that economic recessions or slower economic growth being experienced in many countries tend to have a downward pressure on inflation. To this the representative of the Secretariat reminded the Group that the overall average annual increase proposed for goods and services of 1.4% was well in-line with the IMF estimates for France and “emerging and developing counties” as outlined in paragraph 7 of document 185 EX/17 Part II.

49.7 Several Experts expressed concern that the budget proposal did not include provisions for additional reform initiatives; additional headquarters security (as per the Revised Medium-Term Security Plan) and conservation costs; nor the $1.6 million exceptionally made available from the 34 C/5 regular budget for use by the IPSAS project in 2010-11. One Expert requested whether the Secretariat could provide the costs of these items, in order to obtain a holistic picture of the total cost estimates for the Draft 36 C/5. The representative of the Secretariat noted that as per the approved methodology, the Secretariat uses the structure of the 35 C/5 Approved as its base, upon which it calculates the costs of statutory, inflationary and technical adjustments items to determine the ZRG requirement for the 36 C/5. Since the additional costs or possible savings of the aforementioned items were not included in the 35 C/5 Approved, they were not included in the ZRG estimates. Furthermore, the Secretariat cannot give an accurate estimate of the budgetary impact of these items at this time as pertinent elements (such as the approval, implementation and financing modalities for these items) are still being discussed by the Executive Board. The representative of the Secretariat assured the Group that as appropriate, any Executive Board 1 “The United Nations and the United Nations Educational, Scientific and Cultural Organization recognize that the

eventual development of a single unified international civil service is desirable from the standpoint of effective administrative coordination, and with this end in view agree to develop common personnel standards, methods and arrangements designed to avoid serious discrepancies in terms and conditions of employment, to avoid competition in recruitment of personnel, and to facilitate interchange of personnel in order to obtain the maximum benefit from their services”. (Article XII – Personnel Arrangements, Agreement between the United Nations and UNESCO).


decision made at the current Board session concerning these items will be incorporated in the Draft 36 C/5.

49.8 For one Expert, the use of a fixed exchange rate which inflates the dollar (€0.869 for $1) for expenses and receipts in euros resulted in the publication of distorted accounts.

49.9 Consequently, regular budget expenses for the 2008-2009 biennium valued at $641.9 million represented both current dollars (expenditure directly in dollars or another currency besides the euro) and constant dollars (expenditure in euros). Expenditure in current dollars would amount to approximately $698 million on a more realistic basis with an average exchange rate of €0.769 for $1, and a rate of two-thirds of expenditure in euros.

49.10 Under the same criteria, the income of $631 million advanced for the same biennium would in fact amount to $686 million. The fact is that because of this rule, Member States of the Organization, for the part of their contribution payable in euros, pay an exchange value in dollars higher than the amount actually due (e.g. $1,200,000 instead of $1,000,000 under the same criteria).

49.11 Similarly, this practice does not allow for a realistic comparison from one budgetary period to another, as the figures presented are not consistently expressed in constant dollars.

49.12 The Representative of the Secretariat took note of the comments made, but underlined that a more detailed reflection was needed as this issue has wide implications not only on the budget but also on the financial management of the Organization as a whole. He also stressed that a change in the constant dollar rate could significantly affect the figures to be presented in the budget document.

49.13 A few Experts who made comments concerning 185 EX/17 Part I, particularly regarding Intersectoral Platforms, were reminded that this portion of the document was not on the agenda of the Expert Group, but will be discussed in full at the PX Commission.

50. Deliberations on the draft decision

50.1 The Group of Experts recommends several amendments, including in paragraphs 3, 4 and 5, to the draft decision contained in paragraph 22 of document 185 EX/17 in order to eliminate duplication in the draft decision.

50.2. However, no consensus was reached on the phrase in paragraph 6 (new paragraph 5) “on the basis of this budget ceiling”. One Expert requested that it should be placed in square brackets.


1. Having examined document 185 EX/17 Part II,

2. Notes that the preliminary budgetary estimates for the 36 C/5 have been calculated using Approved budgeting techniques and methodology in accordance with 35 C/Resolution 105 adopted by the General Conference;

3. Also notes that the document provides an preliminary estimate of the zero real growth (ZRG) requirements needed for the 36 C/5 to maintain the same purchasing power as that of the present 35 C/5;

4. Further notes that this proposed ZRG envelope of $687.3 million represents a $34.3 million increase over the 35 C/5 Approved budget of $653 million;


Notes that a budget ceiling of $687.3 million would represent a ZRG approach for the 36 C/5 (2012-2013); and

5. Invites the Director-General to prepare the Draft Programme and Budget for 2012-2013 (36 C/5) on the basis of this budget ceiling by taking into account the discussions held by the Executive Board during the 185th session, and to submit the draft budget document to the Executive Board at its 186th session.

Item 19 United Nations General Assembly proposal to align planning cycles with the quadrennial comprehensive policy review of operational activities for development of the United Nations system (Item to be examined by the Joint Meeting of the PX and FA Commissions)

Document reference: 185 EX/19

Item to be examined by: Special Committee, Joint Meeting FA/PX


Decision required from the FA Commission: Yes (185 EX/19, para.25)

Rapporteur: Algeria

51. Discussion among the Experts and reply from the Secretariat

51.1 Although this agenda item was not formally assigned to the Group of Experts for review, it was nonetheless authorized by the Bureau for consideration if the Group considered it useful. During their discussions, the Experts stressed the particular importance of this item given its impact on the overall governance of the Organization with regard to planning, scheduling and administrative and financial management.

51.2 The Secretariat’s representative noted that this item had been subject to intense debate by the Special Committee which prepared a draft resolution to this effect to be submitted to the Executive Board.


52.1 The Experts decided not to examine the draft decision contained in paragraph 25 of 185 EX/19 because it had already been seen by the Special Committee and would be considered by the Joint Meeting of the Finance and Administrative and Programme and External Relations Commissions.

Item 20 Reducing the running costs of the General Conference


Item to be examined by: FA/Special Committee



Rapporteur: Tanzania



53.1 The Representative of the Secretariat introduced this item, explaining the nature of the document.


54.1 The Group reached a general consensus that the aim of reducing costs should not be an end in itself and should not jeopardize the effectiveness of the Organization. If cost reduction leads to inefficiency, this is counter-productive, and there is a need to study the impact and implications of cost savings.

54.2 There was also a general feeling that particular attention should be paid to avoid jeopardizing the mandate of UNESCO’s governing bodies. One Expert noted that the decision on item 19 concerning the proposed alignment of planning cycles with the quadrennial comprehensive policy review of operational activities for development of the United Nations system may have a bearing on the financial costs of the General Conference meetings, in case UNESCO decides to switch to a four-year cycle and to adopt a four-year C/5 or C/4.

54.3 One Expert welcomed the efforts to reflect on the restructuring of UNESCO’s governing bodies and confirmed that her country would be prepared to participate in a working group to discuss how to restructure the General Conference without impacting on its overall objectives. Interest was expressed in carrying out a comparison of how other United Nations agencies restructured their governing bodies and what lessons UNESCO might learn fro m their experience.

54.4 Two other Experts expressed an opinion that it was not up to that Group to decide on the future nature of the General Conference as it went beyond the Group’s mandate. At the same time, it was noted that if the duration of the General Conference is shortened, that might lead to the need to have more parallel sessions which, in turn, could be an additional financial burden because of the need for larger delegations, etc.

54.5 A general opinion was formed that a move towards paperless meetings corresponds more to ecological concerns than to the aims of reducing spending as this could result in increased costs for Member States and/or for the Secretariat because computers would have to be purchased, maintained, and replaced. It was recognized that UNESCO should do a comparison with other United Nations organizations and should calculate the cost and impact of electronic dissemination and paperless meetings before going completely paperless.

55. Deliberations on the draft decision

55.1 No additions to the draft decision contained in paragraph 18 of document 185 EX/20 were proposed but it was recommended that the recommendations related to item 17 (document 184 EX/17) should be extended to item 20 (document 185 EX/20).

Item 25 Financial report and audited financial statements of UNESCO for the period ended 31 December 2009 and report by the External Auditor

Document reference: 185 EX/25 Part I (Director-General’s report and financial statements) and 185 EX/25 Part II Rev. (External Auditor’s report)



Decision required from the FA Commission: Yes (185 EX/25 Part I, para.3)

Rapporteur: Russian Federation


56. Presentation by the External Auditor and the Secretariat

56.1 The representative of the External Auditor in introducing document 185 EX/25 Part II Rev. stated that the External Auditor issued a clean opinion on the financial statements of UNESCO as at 31 December 2009. He then further commented on three issues mentioned in the report. He highlighted the fact that some accounts receivable had remained outstanding from previous biennia and amounts for equipment procured under extrabudgetary resources were significant and were not monitored closely enough. He raised the issue of the slow implementation of a certain number of projects reviewed during the 2008-2009 biennium. He finally stated that the Organization needs to ensure that the human resources system (STEPS) should be better integrated with the financial system (FABS).

56.2 The representative of the Director-General commented on document 185 EX/25 Part I by stating that the financial statements had been prepared under the United Nations Systems Accounting Standards (UNSAS) and that it was the last time when UNESCO prepared its accounts under such standards. As from 1 January 2010, the Organization has adopted International Public Sector Accounting Standards (IPSAS), which is dealt with in greater detail in document 185 EX/26. He explained that audit reports assist the Secretariat in improving its ways of working and that the comments of the External Auditor can generally be grouped into four main categories: general housekeeping, internal control, accounting and policy/principles. Some recommendations are much easier to comply with but others have implications far beyond the Bureau of Financial Management and normally take longer to implement.


57.1 Experts thanked the External Auditor for his work and then asked several questions addressed to the Secretariat, in particular raising the issue of the constant dollar mechanism and how it is accounted for by the Organization. One Expert felt that the use of the fixed euro rate to the US dollar meant that Member States paid more and that it was not reflected in the accounts in a transparent manner. He stated that the Organization had not changed this rate for more than fifteen years. He also raised the fact that the foreign currency exchange was shown as a net figure in the financial statements, rather than showing the losses and gains separately. The same Expert also sought clarification on the percentages in the table in paragraph 8 of document 185 EX/25 Part I.

57.2 Another Expert noted that the Organization had hired an external firm to carry out a study of the Medical Benefits Fund (MBF) and that the work of the firm had been accepted in one area and rejected in another. The same Expert also raised the fact that the External Auditor reported that a bureau of the Secretariat was involved in contract-splitting thus avoiding going through the Contracts Committee for contracts of more than $100,000.

57.3 The Secretariat clarified that the constant dollar mechanism had been put in place as a budget rate so that contributions and expenses in relation to the regular programme of the Organization were accounted for using this fixed rate of euro to the US dollar. He then went further to clarify that this mechanism had been put in place as a way of managing the foreign currency risks of the Organization. He stated that the General Conference, many years ago, had decided that the risks in relation to euro fluctuations to the US dollar would be borne by Member States. He agreed that there may be a need to have a rate that would be closer to reality but highlighted the difficulty in achieving this.

57.4 The representative of the Director-General clarified that the percentages in the table in paragraph 8 show the proportion of programme expenditure before inter-fund eliminations. He explained that UNESCO operated in four main business areas and thus transfers between funds were eliminated in order to arrive at the net result of the Organization.

57.5. The representative of the Director-General mentioned that the work requested by the Bureau of Financial Management covered the actuarial valuation of the After Service Health Insurance (ASHI) liability of the Organization which amounts to around $650 million. The other work on MBF,


which was rejected, had been requested by the Bureau of Human Resources Management and it was a study on the financial sustainability of the Fund. The representative of the Director-General did note the fact that weaknesses did arise in systems of internal control and that the Organization was continuously working to improve the system. He stated that what was needed was to build in a culture of discipline to respect the rules of the Organization.

57.6 Several Experts proposed to include in paragraph 6 of the draft decision some words reflecting the need to present the discussions on this item held by the Executive Board in the report to be prepared by the Director-General on the implementation of the recommendations of the External Auditor for the 36th session of the General Conference. However, consensus was not reached on this proposal during the discussion of the draft decision.


58.1. The Group of Experts recommends some amendments to the draft decision contained in paragraph 3 of document 185 EX/25 Part I to be adopted by the FA Commission in order to indicate the title of the Statement to which the reference is made in paragraph 5.


1. Recalling Article 12.10 of the Financial Regulations,

2. Having examined documents 185 EX/25 Parts I and II,

3. Expresses its appreciation to the External Auditor for the high standard of his work;

4. Notes the opinion of the External Auditor that the financial statements presented fairly, in all material respects, the financial position of UNESCO as at 31 December 2009 and the results of its operations and its cash flow for the two-year financial period then ended; that they were prepared in accordance with the stated accounting policies, which were applied on a basis consistent with that of the preceding financial period;

5. Takes note of the unobligated balances in of Statement IV “Status of Appropriations of the General Fund – Regular and Participation Programmes for the financial period ended 31 December 2009”, document 185 EX/25 Part I, page 16, by appropriation line and approves the expenditure as reported;

6. Invites the Director-General to report on the implementation of the recommendations of the External Auditor to the General Conference at its 36th session and to submit this report to it at its 187th session for prior review;

7. Decides to transmit to the General Conference at its 36th session the report by the External Auditor and the audited financial statements of UNESCO for the period ended 31 December 2009.


Item 26 Report by the Director-General on the implementation of International Public Sector Accounting Standards (IPSAS) and proposed amendments to the financial rules





Rapporteur: Japan


59.1 In introducing the item, the representative of the Secretariat stated that document 85 EX/26 was comprised of two parts, one part dealt with the progress in the IPSAS implementation at UNESCO and the other part was related to the proposed amendments to the Financial Rules, although both parts were linked by the respective impact of IPSAS on them. It was stressed that this document was the fifth progress report on IPSAS implementation at UNESCO. The Organization had completed its primary IPSAS policy papers and had prepared a Policy Guidance Manual which was distributed to staff. He also informed that Phase 1 of IPSAS training had been completed, and Phase 2 was under way.

59.2 He further noted that significant changes had been made to IT systems in order to generate IPSAS compliant financial information, including roll-out of the Materials Management, Sales and Distribution and Fixed Asset modules. An exercise to prepare IPSAS opening balances had been undertaken, and a dry-run of IPSAS compliant financial statements had been prepared for the five months ended on 31 May 2010. IOS had performed two reviews of the project implementation to date, and the implementation of the recommendations arising from this advanced.

59.3 It was explained that the Secretariat was to prepare a second dry-run of financial statements for the nine months ended on 30 September 2010. In order to help users of the financial statements to be prepared for the changes that would result from IPSAS implementation, the Secretariat had prepared a short guide which was distributed to members of the Group of Experts. Speaking about the proposed changes of the Financial Rules, the representative of the Secretariat reminded that the General Conference at its 35th session requested the Secretariat to prepare amendments to the Financial Regulations which should be approved by the Executive Board prior to their introduction. It was also underlined that the Secretariat when drafting the amendments to the Financial Regulations was guided by the United Nations Development Group (UNDG) project on harmonization of financial rules and undertook a review of the financial rules of other United Nations organizations.

59.4 The proposed amendments can be grouped into three categories. The first category is related to the different accounting treatment of assets, liabilities, revenue and expense and results from the IPSAS implementation. The second category includes amendments concerning best management practices, including individual statements of internal control, conflict and disaster procedures, procurement rules and oversight services. And the third, combines those that provide greater detail on delegated authorities within the Organization. The Financial Rules can now be seen as a clear part of the comprehensive structure that makes the link between the Financial Regulations and the Internal Control Policy Framework.



60.1 Concerning the implementation of IPSAS, the Group asked whether UNESCO was still on target to achieve its 2010 implementation date. The question was also raised as to why under IPSAS the budget will continue to be prepared under a modified cash basis with the constant dollar rate applied, whereas the financial statements will be prepared on an accrual basis with the United Nations monthly exchange rate applied. The Experts also enquired as to the meaning of small attractive items in the context of property, plant and equipment, which under IPSAS will be capitalized in the financial statements. The Group highlighted that under IPSAS, significant unfunded liabilities will be recognized in the financial statements, and asked if any progress had been made in addressing how these liabilities would be funded. In relation to this, the question was raised as to whether the works of art which are assets of the Organization might also be recognized in the financial statements.

60.2 Concerning the proposed amendments to the Financial Rules, the Experts highlighted that the changes extended beyond the impacts of IPSAS, and asked how it was possible to understand which changes related to IPSAS implementation. The question was also raised what was the rationale behind referring to the rules of other organizations, and the likely completion date of the UNDG harmonization project. The Experts stated that the proposed Rule 3.7 represented a major departure from the current practice of returning two-thirds of interest income to donors and queried whether the proposed change had been analysed from a legal perspective. The question of the legal basis of Financial Rule 6.34 had been raised. Experts pointed out that the matter should be included in the “Financial Regulations” and not in the “Financial Rules”.

60.3 The Experts questioned whether the proposed Rule 2.2 could be misinterpreted as indicating that the Director-General could decide on the final contents of the regular programme and budget. It was also questioned whether proposed Rule 3.4 dealing with voluntary contribution agreements would require existing agreements to be modified in order to comply with the Rule. Further clarification on the composition of the Investment Committee as referred to in the proposed Rule 6.8 was requested. The Group queried the basis for establishing proposed Rule 4.4, and also asked for further explanation on the definitions of Authority and Responsibility as referred to in the proposed Article 1. A question was also raised as to the clarity of the meaning of the word “actual” in the proposed Rule 2.10.

60.4 In response to the questions relating to IPSAS implementation, the representative of the Secretariat emphasized that the Organization is still on target to achieve its implementation date of 2010. It is not currently envisaged that the basis for budget preparation will change, although this could be a development to be considered in the future. Small attractive items are property such as laptop computers and mobile phones which need to be monitored to avoid loss, but which fall below the standard threshold for capitalizing assets. As such, a lower threshold has been developed for these items to ensure that they are recorded and included within property, plant and equipment in the financial statements. The Secretariat confirmed that the introduction of IPSAS will result in significant liabilities being recognized in the financial statements, such as the After Service Health Insurance liability, but stated that no recent progress had been made in identifying ways to fund these liabilities. For the time being, Works of Art will not be recognized or valued in the financial statements. It is noted that the values of these items can fluctuate significantly, and currently there is no IPSAS standard requiring their recognition in the financial statements.

60.5 Regarding the questions concerning the proposed amendments to the Financial Rules, the Secretariat emphasized that many of the changes relate to current practices and in the interest of transparency it has been considered necessary to include these practices together within the Financial Rules. The Financial Rules of other organizations were referred to in order to facilitate the rule drafting process. The UNDG harmonized rules will not be finalized in time for UNESCO’s requirements, and it is noted that many United Nations organizations will not be implementing IPSAS until after 2010. The amended Financial Rules as presented have been through a complete


review process including Legal Affairs. The changes brought about by proposed Rule 3.7 were introduced with the aim of aligning practices with other United Nations organizations.

60.6 The Secretariat stated that proposed Rule 2.2 clearly refers to the “proposed” regular programme and budget, which is “submitted for examination” by the Executive Board. However, if any ambiguity is believed to remain the wording can be re-examined. The Secretariat clarified that proposed Rule 3.4 would not require any retroactive changes to existing agreements, and also provided details of the composition of the Investment Committee referred to in proposed Rule 6.8. Rule 4.4 does not introduce any changes to current practices, and the wording in proposed Rule 2.10 is taken from IPSAS and the terminology is perhaps clearer in the original English version. The Secretariat provided clarification on the definitions of Authority (the authority for establishing the Financial Rules contained within the Financial Regulations) and Responsibility (the responsibility for implementing the Financial Rules) as referred to in the proposed Article 1.

60.7 During the discussion of the draft decision, consensus was not reached on paragraph 6 which says “Approves the amendments to the Financial Rules presented in the Annex to document 185 EX/26” and several Experts proposed that this paragraph be passed to the FA Commission in square brackets.


61.1 After examination of the draft decision contained in paragraph 25 of document 185 EX/26, the Experts made a recommendation to the FA Commission to change the order of paragraphs so that the preambular paragraph comes first.


1. Recalling 181 EX/Decision 36 requesting the Director-General to review and revise the Financial Rules for the approval of the Executive Board in accordance with Article 15.2 of the Financial Regulations,

12. Having examined document 185 EX/26, being the fifth progress report on the implementation of IPSAS,

23. Takes note of the work performed and the progress to date, and of the importance of the work to be performed in the remainder of 2010 and 2011;

3. Recalling 181 EX/Decision 36 requesting the Director-General to review and revise the Financial Rules for the approval of the Executive Board in accordance with Article 15.2 of the Financial Regulations,

4. Having considered the amendments to the Financial Rules shown in the Annex to the Director-General’s report,

5. Recognizing the need to revise the Financial Rules to bring them up to date with IPSAS requirements and current UNESCO processes and procedures,

6. Approves the amendments to the Financial Rules presented in the Annex to document 185 EX/26.


Item 27 Collection of Member States’ contributions

Document reference: 185 EX/27 Parts I and II and 185 Part I Add.



Decision required from the FA Commission: Yes (185 EX/27 Part I, para.15 and 185 EX/27 Part II, para. 34)

Rapporteurs: Algeria

62. Presentation by the Secretariat – 185 EX/27 Part I and Add.

62.1 The representative of the Secretariat introduced documents 185 EX/27 Part I and Add. and provided an update on contributions received as of 30 September 2010. She reported that the current cash position can only cover one month of expenditures. On behalf of the Director-General, she urged the Member States that are behind with the payment of their contributions to pay their arrears without delay.

63. Discussion by the experts and replies by the Secretariat



64.1 The Group of Experts recommends the draft decision as contained in paragraph 15 of document 185 EX/27, Part I for adoption by the Finance and Administrative Commission.

65. Presentation by the Secretariat – 185 EX/27 Part II

65.1 The representative of the Secretariat informed that the Working Group concluded that there is no technical matter which prevents the Organization from having an incentive scheme under IPSAS. The Working Group identified 4 possible options. As simulations will not be available before the closing of the first IPSAS 2010 accounts, the Working Group will submit its final analysis and proposals to the Executive Board at its 187th session.


66.1 One Expert requested that the Secretariat would provide a comparison of the four options after the closing of the 2010 accounts.


67.1 The Group of Experts recommended the draft decision as contained in paragraph 34 of document 185 EX/27 Part II for adoption by the Finance and Administrative Commission.


Item 28 Financial regulations of special accounts





Rapporteurs: Argentina


68.1 The representative of the Secretariat briefly introduced the item and indicated that, in accordance with Articles 6.5 and 6.6 of the Financial Regulations of UNESCO, the Director-General would submit in document 185 EX/28, for the information of the Executive Board, special Financial Regulations to govern the operation of six special accounts. The representative of the Secretariat added that these special Financial Regulations had been prepared on the basis of a standard model text approved by the Executive Board in 161 EX/Decision 7.10.


69.1 It was noted that certain articles of the Financial Regulations differed from one special account to another and that it would be advisable to establish a list containing explanations of these differences.

69.2 The Experts also requested greater harmonization in the drafting of the various financial regulations for special accounts. The representative of the Secretariat replied that efforts to increase harmonization were indeed desirable but also underscored the fact that two of the Financial Regulations were related to Conventions and had been discussed and adopted by other governing bodies. The representative of the Secretariat also pointed out that these documents were being submitted for the information of the Executive Board.

69.3 One Expert raised the issue of the term “miscellaneous income” used in Article 4 of these Financial Regulations and the use of that term in the IPSAS standards. The representative of the Secretariat indicated that the term “miscellaneous income” should be interpreted within a broader context and that it did not correspond in any way to the term “miscellaneous income/revenue” which appeared in the regular programme.

69.4 In reply to a question specifically regarding the independent external evaluation of UNESCO, the representative of the Secretariat indicated that the Special Account had been set up to receive voluntary contributions to finance the evaluation, as was done for other activities; he indicated that the account remained active and that the Secretariat was waiting to receive the final invoices from the consultant. He also mentioned that the Director-General would decide upon the closure of the Special Account and that excess funds, if any, could be retained for the implementation of action plans by way of follow-up to this evaluation.

69.5 Lastly, the Group of Experts indicated that the Financial Regulations under discussion had not been revised following the restructuring of UNESCO services and that, as a result, the specific term “comptroller” was no longer suitable.


70.1 The Group of Experts recommended the draft decision as contained in paragraph 9 of document 185 EX/28 for adoption by the Finance and Administrative Commission.


Item 29 Report by the Director-General on the reform of the field network





Rapporteur: Algeria


71.1 The representative of the Secretariat introduced the item. He underlined that the proposed reform of the field network pursues the aim of making of our Organization “One UNESCO”, with both Headquarters and field units serving the same objectives and performing the same functions. He stressed that the reform will reinforce UNESCO’s presence in the field and at the same time it should strengthen UNESCO’s global mandate, its standard-setting work and its intellectual and moral leadership within the United Nations system. The reform of the field network will permit UNESCO to better respond to the present needs of the United Nations reform and to make its operational activities more relevant and adapted to the needs in Africa, LDCs and SIDS, as well as to those of emerging and middle-income countries. He also highlighted the proposed field network architecture, based on a multisectoral regional presence consistent with the geographical coverage of regional integration organizations and a flexible, adaptive and adapted to the nature and degree of need of Member States’ country presence. The representative of the Director-General replied to the questions from the Experts.


72.1 One Expert enquired what the net impact of the increase of 35 new posts would be on the future budgets of the Organization. The representative of the Secretariat reassured the Experts that there would be no budgetary implication since posts at Headquarters would be reduced and transferred to the field.

72.2 Another Expert mentioned the conversion of temporary posts to fixed-term posts (in the context of the financial impact of the proposed reform), to which the representative of the Director-General replied that this is envisaged in the case of long-serving local staff with a view not only offering fairer conditions but also to retaining their services by aligning UNESCO’s conditions with those of the other United Nations agencies.

72.3 One Expert was interested to know of the countries proposed to host offices and enquired about the concept of the regional integration spaces. He requested a comparison with the approach of other United Nations agencies, which he was told can be found in document 182 EX/6 Part II, presented at the 182nd session of the Executive Board in autumn 2009. The representative of the Director-General responded that the matching of the multisectoral regional offices to regional integration spaces will be carefully studied in each region, according to its specificities, in order to identify the optimal network. As for the question regarding the implementation of the reform at national level, he reminded that the criteria adopted gives priority to cost-effectiveness and to the countries’ status as PCPD, LDC, etc.

72.4 To the Expert’s question on the impact of increasing the level of staff in the field, the answer was provided that there would indeed be less recourse to external expertise (consultants) under the regular programme once the qualitative level of staff in the field offices has been raised. Recourse to the services of consultants would largely be limited to extrabudgetary projects.


72.5 One Expert was concerned that the geographical mobility scheme coupled with the field network reform, as proposed, might result in increased costs, to which the representative of the Director-General responded that, while mobility was to become a permanent feature, this would have no incidence on the reform of the field network as such (and the budgetary ceiling would in any case be respected). As opposed to transferring existing staff, posts vacated over the next biennia would largely be used to fill gaps in the field offices, thus limiting costs.


73.1 The Group of Experts recommends an amendment to the draft decision contained in paragraph 47 of document 185 EX/29 to be considered by the FA Commission which consists in changing the word “Endorses” for “Supports” in its paragraph 4.

73.2 Some Experts noted that there was no consensus on all principles of the renovation of UNESCO’s field office network, set out in paragraphs 18 to 32 of document 185 EX/29 and on all ways of the gradual implementation of the new network over two biennia, as set out in paragraphs 39 to 45 of document 185 EX/29 and therefore it was proposed that the relevant part of paragraph 4 and the whole paragraph 5 should be placed in square brackets.

4. Endorses Supports the principles of the renovation of UNESCO’s field office network, set out in paragraphs [18 to 32] of document 185 EX/29;

5. [Approves the gradual implementation of the new network over two biennia, as set out in paragraphs 39 to 45 of document 185 EX/29;]

Item 30 Report by the Director-General on the revised medium-term security plan for UNESCO Headquarters





Rapporteurs: Latvia/USA


74.1 The Secretariat presented the background of the revised medium-term security plan for Headquarters, published in cooperation with the Headquarters Committee and submitted to the Executive Board.


75.1 The representative of the Secretariat presented the technical details of the document and answered the questions of the Experts who, for example, asked for further information on the amounts listed in the tables contained in the document. Explanations were provided on available funds and funds to be identified for the construction of a reception area at the Fontenoy entrance. The vital importance of this construction was confirmed.

75.2 Attention was also drawn to the importance of the efforts needed to reinforce the security of the perimeters of both Headquarters sites in close and effective cooperation with the Host Country authorities. The Secretariat also indicated that several projects were under examination or had already been launched (video surveillance, reinforcement of vehicle entry points, recruitment of


security officers, etc.) within the scope of the currently available budget. It was noted that each new investment would be made following an in-depth study.

75.3 Essential requirements regarding recurrent costs linked to staff – and in particular to fire safety – were explained. On the subject of the possibility of outsourcing the service, the Secretariat stated that the system of supernumeraries was more effective, safer and less costly.


76.1 The Group of Experts recommends some amendments to the draft decision contained in paragraph 37 of document 185 EX/30 to be adopted by the Finance and Administrative Commission.

76.2 With regard to paragraph 4 of the draft decision, it is proposed to remove the word “any” before “savings that may become available from unliquidated obligations (ULOs) for the 2008-2009…”.


1. Having examined document 185 EX/30,

2. Takes note of the revised medium-term security plan presented in document 185 EX/XX 30;

3. Takes note also of the Headquarters Committee’s recommendations and r Requests the Director-General to reallocate such savings as may be made on programme implementation in 2010-2011 in particular to the Special Account for Strengthening the Security of UNESCO Premises Worldwide;

4. Further requests the Director-General to continue to examine other possible sources of funding to implement these security measures, including the use of any savings that may become available from unliquidated obligations (ULOs) for the 2008-2009 financial period (34 C/5), and to make a recommendation, as appropriate, to the Executive Board at its 187th session at the latest;

5. Appeals for extrabudgetary funds in order to finance the security measures set out in the revised medium-term security plan and invites the Director-General to bring it to the notice of potential donors.

Item 31 Report by the Director-General on the activities of the Advisory Committee for Works of Art





Rapporteur: Tanzania


77.1 The representative of the Secretariat made a brief introduction of the document, previously approved by the Headquarters Committee at its 174th session (on 3 June 2010). The Group was informed that, in accordance with the Statutes of the Advisory Committee for Works of Art, the


Committee ceased to function after its initial four-year term, and that it may be reinstated only with the approval of the Executive Board, following the Director-General's report on the Committee's activities.


78.1 One Expert wondered, whether the renewal of the Committee’s term meant also the reinstatement of its current members. The Secretariat informed the Group that the renewal concerned the mandate of the Committee only, and not its membership.

78.2 The Group wondered whether the Headquarters Committee had made any comments regarding the document. The Secretariat clarified that the document had been endorsed by the Committee without any reservations.

78.3 Concerning the geographical representation of the Advisory Committee members, the Chairperson evoked Article 3.1 of the Committee's Statutes stipulating that "The Committee shall be composed of six high-level experts in the various disciplines and specializations relating to the cultural and artistic pluralism of the various geographical regions." He also reminded that members should be selected on the basis of their artistic and geographical specialization, and not on their nationality.


79.1 During discussion of the draft decision, referring to its paragraph 3, the Experts noted that document 185 EX/31 presents a general overview of the work of the Advisory Committee for Works of Art. In the light of this, the Group of Experts recommends that the draft decision contained in paragraph 16 of document 185 EX/31 be adopted by the FA Commission as amended.


1. Having examined document 185 EX/31,

2. Recalling 160 EX/Decision 7.9, 161 EX/Decision 7.9 and 170 EX/Decision 7.9,

3. Takes note of the activities carried out by the Advisory Committee for Works of Art during its term of office;

43. Takes note of the Report by the Director-General on the activities of the Advisory Committee for Works of Art concerning the donations, gifts of works of art, antiquities and artefacts constituting the UNESCO collections;

54. Approves the decision of the Director-General to renew the term of office of the Advisory Committee for Works of Art for another four years, in accordance with its Statutes.


Item 32 External Auditor’s new audits

Part I Report on the International Fund for the Promotion of Culture (IFPC), including an audit and an evaluation of the period 1999-2009 (Item to be examined by the Joint Meeting of the PX and FA Commissions)

Document reference: 185 EX/32 Part I



Decision required from the FA Commission: No

Rapporteur: Chile

80. Presentation by the External Auditor’s representatives

80.1 The representative of the External Auditor underlined that the Executive Board at its 184th session had requested the External Auditor to undertake a comprehensive review including an audit and an evaluation of the IFPC covering the period from 1999 to 2009 and to report to it at its 185th session. Pursuant to the decision taken by the 184th session of the Board, an external audit of the IFPC was carried out from late May to early July 2010.

80.2 The report of the auditors was presented in 185 EX/32 Part I and introduced during the session by a representative of the auditing team. She presented the main results and indicated that their investigation found three major shortcomings facing the IFPC, namely concerning its governance, financial state and effectiveness. The auditors underlined that the operational and administrative autonomy of the IFPC did not function as originally intended. They also found a lack of follow-up reports monitoring the impact of projects financed by the IFPC. The IFPC has not been able to attract new funding and those working on its operations have been paid for by the regular programme budget.

80.3 The team confirmed that no anomalies were found during the audit checks on paid-in contributions, on interest earnings or during tests on the validity of recorded operational expenditure or charges during accounting and payroll reconciliations.

80.4 Two recommendations were proposed by the auditors: (i) to liquidate the IFPC; or (ii) to reorganize the IFPC in order to increase its efficiency and impact.


81.1 Interventions were made by several Experts who raised, inter alia, questions on:

(i) the relevance of the IFPC in light of the Culture Sector’s (and the Organization’s) changing priorities;

(ii) the importance of examining the objectives and political and cultural impact of the IFPC, especially in developing countries;

(iii) the follow-up of the Auditor’s recommendations by the Secretariat, be it in the form of an action plan, joint commissions, working groups, etc.;

(iv) how the Fund’s resources would be reallocated if it were liquidated;

(v) the need to draw lessons learned from this exercise and other audits, especially in terms of governance and management, and to apply them to UNESCO’s operations as a whole.


81.2 One Expert agreed with the recommendation to discontinue the IFPC. Specific reasons given were: its mandate was too broad, the activities of the Fund were not increasing its profile and that after years of administrative mismanagement and the lack of a results-based management system, dedicating limited resources to bringing the Fund to life is not advisable. Another emphasized that the IFPC is important for developing countries, particularly in the fields of cultural development and cultural policies.

81.3 Two Experts stressed the fact that the situation was inappropriate because the Fund has mainly worked on the basis of interest generated by its capital, which currently amounts to approximately $4 million, whereas the activities were suspended for reasons linked, inter alia, to the inadequate resources and to the difficulty it had in increasing its resources. In this context, one Expert highlighted the need to review this financial rule which is a serious obstacle to the operation of the fund and which stops it from achieving its full objectives.

81.4 The representative of the auditing team addressed specific questions raised. She mentioned that if it is decided to discontinue the IFPC, there are two options for the disbursal of the remaining funds: (i) they can be given back to donors; or (ii) used to support the regular programme budget of UNESCO. Although there are currently no procedures in place to give donors their money back in the case that the IFPC is liquidated, they could be implemented. Furthermore, she stressed that the audit did not focus on linking the IFPC’s activities and relevance to the objectives of UNESCO, rather it examined how/to what extent the IFPC was meeting its own objectives.

81.5 The Secretariat indicated that it will implement decisions taken by the Member States on the future of the IFPC in consultation and transparency.

81.6 The President concluded the session by indicating that no decisions on the IFPC are required and that this would be a topic of discussion at the FA Commission.


82.1 No decision is required for this item.

Part II Auditor’s report on the Division of Water Sciences in the Natural Sciences Sector of UNESCO

Document reference: 185 EX/32 Part II



Decision required from the FA commission: No

Rapporteur: Latvia

83. Presentation by the External Auditor’s representative

83.1 In his introductory comments, the External Auditor’s representative specified that his audit applied to the period 2007 to March 2010 and that freshwater was chosen as the theme.

83.2 After outlining his auditing methodology, the External Auditor’s representative delivered his comments: he noted that the Division’s internal organization was informal and sometimes unbalanced and that there was a lack of definition and evaluation of individual goals. He noted a lack of connection between the Division’s financial means and the stated level of priority, a reduction in the number of expected results, weak results indicators for activities undertaken (especially for activities funded by extrabudgetary resources), a lack of internal coordination regarding the assignment of objectives and the related resources, an increase in staff costs at


Headquarters, and insufficient follow-up relative to budget consumption and the evaluation of established programmes.

83.3 The External Auditor’s representative mentioned that the Division frequently resorted to hiring consultants, including in institutional services, who are employed without any real competition taking place, sometimes at post and salary levels that do not correspond to the services required. While commenting on the diversity of geographical representativeness, he nevertheless remarked on the predominance of certain nationalities sometimes giving preference to retired staff members without any serious evaluation of the services they provide. As for the activities carried out, the External Auditor’s representative encouraged the Division to strengthen coordination with category 2 institutes, to increase communication in relation to the Chairs and to strengthen the resources for its priority programme of preparedness for water-related disasters. He also remarked on the delayed implementation by the Division of the Organization’s publication guidelines, and observed that the delays in this field imposed a strain on the Division’s own publishing interests.

84. Discussion by the Experts and replies from the Secretariat

84.1 Several Experts commented on the work accomplished by the Division and its high international visibility. They regretted that there were no comments in the External Auditor’s Report to this effect while acknowledging the utility and relevance of the report.

84.2 Three Experts remarked that several points mentioned by the External Auditor were not confined to the Division alone but concerned the whole Organization, especially with regard to governance and the hiring of consultants. In particular, one Expert commented that the reduction in the number of expected results mentioned in the report was a result of the overall simplification of the C/5 document as a whole.

84.3 With regard to staff and the hiring of consultants, five Experts requested explanations from the Secretariat’s representative on the matter of geographical representativeness in the selection of consultants, and on the subject of multiple contracts, conflicts of interest, the classification of posts, the recruitment process for Directors, the changes in the Division’s organizational chart, the effective responsibility of supervisors for the evaluation of staff members and the appropriateness of the ratio between academic and administrative staff.

84.4 Concerning the organization of the Division itself, three Experts commented that the academic nature of the Division meant that it tended to give preference to horizontal organization instead of a more classical vertical structure.

84.5 One Expert pointed out to the Secretariat’s representative that the category 2 institutes lacked visibility.

84.6 After emphasizing the importance of the report, the Secretariat’s representatives stated that they had already corrected certain weaknesses identified during the audit and promised to report on the progress of implementation of such recommendations. They also stated that certain findings did not only concern the Division but could be applied more generally, notably in the field of human resources. After explaining the exceptional nature of the IHP’s operation, they emphasized the international recognition of the Organization’s expertise in the field of water sciences.

84.7 In reply to the questions raised by the Experts, the representatives of the Secretariat stated that the organization chart of the Division was being revised. They drew attention to the fact that the lack of visibility was not limited to category 2 institutes, but was a widespread problem and had led to the recruitment of a dedicated official. The representatives of the Secretariat said that the geographical representativeness of consultants was improved by considering the consolidated data from Headquarters and the Field.


84.8. Furthermore, they stated that the post description for the Director to be recruited had been finalized. They pledged to apply the rules on the definition of individual objectives and the assessment of their achievement in the Division. It was pointed out that the contracts mentioned in paragraph 39 of the report had been concluded in accordance with the applicable rules of the Organization. They also regretted that the simplification of the C/5 document made it more difficult to evaluate programmes and trace responsibilities. Without being specific to the Division, the representatives of the Secretariat said that consultants should be included when examining the ratio of scientific staff to administrative staff. Lastly, they indicated that the horizontal organization of the Division would be enhanced.



Part III Auditor’s report on the Regional Bureau for Education (Dakar)




Decision required from the FA commission: No

Rapporteur: Algeria

86. Presentation by the External Auditor’s representative

86.1 The report is the result of an audit carried out last June following interviews at Headquarters and drawing on the contents of various internal audits and expert reports on the UNESCO Office in Dakar and Regional Bureau for Education in Africa (BREDA). This report contains 20 recommendations.

86.2 The decrease in regular resources, amounting to 16% between 2006 and 2011, contrasts with the increase in extrabudgetary resources – which now represent five times the amount of regular programme budget appropriations.

86.3 While mission costs have also been controlled more effectively, the provisions of the Administrative Manual are not, however, systematically complied with. Above all, the organization of regional conferences, necessary in view of the size of the continent, involves high direct costs and particularly draws on the Office’s human resources which, as we will see later, represent a key challenge for its future.

86.4 In practical terms, the management of the Dakar Office raises two points: maintenance expenses are limited to the cleaning of facilities, thus demonstrating the absence of a maintenance plan, and the absence of a user agreement must be seen in connection with the provision of access to the site for staff from other United Nations agencies.

86.5 Incidentally, the vehicle fleet, considered by the auditors to be ill-suited to actual needs calls for comments on the use of vehicles that seems inconsistent with their expected official use.

86.6 Lastly, staffing issues cannot be overlooked since both the quantitative and qualitative situation does not appear to meet the Organization’s stated goals. In addition to the reduction in staff numbers, it should be emphasized that posts are sometimes vacant for several months. The use of consultants, partly linked to these vacant posts, has substantially increased ($1.2 million in 2009). As in the External Auditor’s previous report, the consultant recruitment policy reveals a lack of transparency and the absence of evaluation.


86.7 The checks carried out on the various educational projects have led to four main observations:

– as mentioned previously, human resources do not meet the Organization’s goals;

– accountable decentralization is proving difficult to achieve even though the use of a collaborative work platform for education specialists is a quality initiative that needs to be strengthened: the issue that arises relates to the transfer of responsibilities, sometimes insufficient and inconsistent with the transfer of tasks;

– there is no formalized regional education strategy based on performance indicators;

– there is a need to carry out an ex ante and ex post evaluation of projects, particularly since BREDA is receiving increased extrabudgetary resources, which requires the Organization to justify the effective use of these resources.

86.8 The auditors also focused their attention on the other sectors of a cluster office covering four countries. The case of the Communication and Information Sector may be quoted for two reasons: the way in which its files were kept may have posed an obstacle to the ability to audit the projects and the concept of institutional support should be clarified and more transparent in order to ensure that BREDA respects the purpose of the projects.

86.9 The reputation of BREDA has long been associated with an active publication policy. This is no longer the case today, as demonstrated by the number of publications and the activities of the documentation centre. The auditors encourage BREDA to demonstrate greater commitment to enhancing its visibility through, for instance, an annual activity report, but also by maintaining an effective presence with UNESCO’s various partners. The absence, on several occasions, of qualified representatives of BREDA at important meetings with United Nations agencies illustrates this.

87. Discussion by experts and replies by the Secretariat

87.1 Certain experts reasserted the need to find a balance between stated objectives and resources, particularly human resources – in terms of number and quality – and asked the Secretariat for an explanation regarding the obstacles to recruitment and whether a redeployment of Headquarters resources could not help to achieve such a balance. The representative of the Secretariat informed the Group that, since the audit carried out in June 2010, three recruitment actions had been completed and that others were under way.

87.2 One expert asked the Secretariat if provision would have to be made for extra costs in document 36 C/5 to cover any expenditure relating to the recruitment of a deputy director for the Bureau and the rehabilitation and maintenance of the building. The representative of the Secretariat confirmed that an evaluation would have to be carried out, especially in the light of the reform of the field network under item 29 (185 EX/29).

87.3 In reply to the question of one expert concerning internal monitoring of the application of financial rules and the existence of a policy providing for penalties in the event that such rules were not observed, the representative of the Secretariat drew attention to the internal means and mechanisms in force in the Organization.



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