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Cablegate: Wmo Executive Council 57th Session: Financial And

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 03 GENEVA 001815

SIPDIS

STATE FOR IO/T FOR G.ROBERTS
STATE FOR IO/S FOR DAVID LEIS
COMMERCE PASS NOAA FOR DUS J.KELLY, R.MASTERS, W.BOLHOFER
USUN FOR S.KOTIS

E.O. 12958: N/A
TAGS: EFIN AORC KUNR WMO
SUBJECT: WMO EXECUTIVE COUNCIL 57TH SESSION: FINANCIAL AND
ADMINISTRATIVE MATTERS


-------
SUMMARY
-------

1. (U) This cable provides an overview of the key financial
and administrative matters considered by the World
Meteorological Organization's (WMO) Executive Council (EC)
at its 57th session from June 21 to July 1 and by the WMO
Financial Advisory Committee (FINAC) at its June 20 session.
Reporting on the WMO Audit Committee and coverage of the
fraud investigation and follow-up will be provided SEPTEL.

2. (U) Overall, the EC's decisions on financial and
administrative matters were in line with USG positions.
Most noteworthy were decisions that the WMO Secretary-
General: 1) prepare a zero-nominal-growth budget, 2)
strengthen the internal audit function on an urgent basis
and explore the option of outsourcing all or part of it, 3)
arrange for annual external audits, 4) prepare a budget for
the 15th financial period (2008-2011) based on an improved
results-based budgeting approach, 5) present a tailor-made
code of ethics for WMO at the EC's 58th session, and 6)
harmonize WMO paternity leave policy with relevant
International Civil Service Commission guidelines. As an
added bonus, the S-G presented for the first time charts of
information about WMO's consultancy contracts and
procurement actions.

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----------------------------
PROGRAM AND BUDGET 2006-2007
----------------------------

3. (U) The EC accepted the S-G's proposed budget of CHF
126.6 million (about $99 million) for the second biennium
(2006-2007) of the 14th financial period (2004-2007). The
amount is the remainder of the funding that Congress
approved for the 14th financial period after subtracting
expenses for the first biennium (2004-2005). There was
little debate regarding the allocation of funds to
particular programs.

4. (U) The EC accepted the S-G's proposals for spending the
surplus of about CHF 5.5 million (about $4.3 million) still
remaining from the previous 13th financial period (2000-
2003). The 14th Congress waived on an exceptional basis
Financial Rule 9.1, which requires that a surplus be
returned to the Members. Accordingly, the S-G is permitted
to spend the surplus from the 13th financial period during
the 14th financial period to support a specified group of
high-priority programs. There was little debate about the S-
G's proposed allocation of the surplus to high-priority
activities.

----------------------------
PROGRAM AND BUDGET 2008-2011
----------------------------

5. (U) Looking ahead to the 15th financial period, the EC
began consideration of the next four-year program and
budget. The S-G indicated his plan to submit a program and
budget proposal based on zero real growth. That budget
would amount to CHF 262 million (about $205 million), which
starts with the base of CHF 249.8 million (about $195
million) and accounts for 1.9% annual inflation. Numerous
PermReps rejected the idea of simply topping up the budget
by accounting for inflation and pressed the S-G to build a
budget based on what WMO plans to achieve during the
financial period. In this regard, the EC decided the
following:

-- It requested that the S-G submit budget proposals for the
15th financial period based on zero-real-growth and zero-
nominal-growth and using the figure of CHF 249.8 million as
the base. Moreover, the EC requested that the budget
proposals be developed using a results-based budgeting
approach and taking into account the 7th Long-Term Plan, now
under development.

-- It requested that the budget presentation show all
sources of income, not just Members' contributions, so that
Members will not be overassessed.

-- It emphasized that Financial Rule 9.1 would not be waived
for the 15th financial period and that the WMO would have to
return any surplus from the 14th financial period to
Members.

-- It requested the formation of an ad hoc group on
presentation of program and budget for 2008-2011 that would
provide the S-G guidance on an improved results-based
budgeting approach.
6. (U) The ad hoc group on the presentation of program and
budget for 2008-2011 will meet just after the next session
of the Audit Committee, which will be held October 24-25,
2005. The U.S. PermRep to the WMO was designated as one of
seven core members of this ad hoc group, in which any
interested PermRep to WMO may participate.

--------------------------
EFFORTS TO COLLECT ARREARS
--------------------------

7. (U) The S-G reported that a number of Members have
sizeable arrears dating back a number of years. As a result
50 Members (27% of the total membership) have lost the right
to vote. The S-G noted that Members tend to pay off their
arrears just before Congress (every four years) so they will
be able to vote, which results in an uneven flow of cash.
The S-G proposed several options aimed to facilitate payment
of arrears. These included:

-- Allowing repayment plans for countries whose yearly
installment exceeds 200% of their assessed contribution to
be extended up to 15 years.

-- Allowing those who default on repayment agreements to A)
re-enter into those agreements, if they pay what's due, or
B) to enter into new agreements, if the EC approves.

-- Creating a voluntary trust fund that would be used to pay
off poor countries arrears.

8. (U) The EC was not ready to decide on any of these
options and requested the S-G to continue studying the
matter and report back at the EC's 57th session. PermReps
were most skeptical about the proposal to create a trust
fund to pay off arrears, noting that the concept raised
concerns about conflict of interest and influence peddling.
A number of PermReps and WMO staff have said they believe
that some Members buy votes from Members in arrears by
giving them money to pay their arrears just before sessions
of Congress.

-----------------------------------------
STRENGTHENING INTERNAL AND EXTERNAL AUDIT
-----------------------------------------

9. (U) Having heard the reports and recommendations of the
Audit Committee, FINAC, and the external auditor and
understanding the S-G's desire to improve internal controls,
the EC agreed on the need to strengthen WMO's internal audit
function and conduct external audits more frequently. The S-
G presented three options for strengthening internal audit:
1) staff increases, 2) a mix of staff increases and
outsourcing, and 3) complete outsourcing. Having considered
these options, the EC took two decisions:

-- It requested that the S-G strengthen WMO's internal audit
function on an urgent basis within the budget envelope for
2006-2007. The approved program and budget for 2006-2007
provides CHF 1.2 million (about to $940,000) for internal
audit, up from CHF 741,000 (about $579,000) in 2004-2005.

-- It requested that the S-G explore the option for
outsourcing some or all of the internal audit function and
report his findings at the EC's 58th session.

-- It decided that external audits would be conducted on an
annual basis starting in 2005.

10. (U) While no one disputed the utility and necessity of
outsourcing some elements of internal audit, some PermReps
opposed outsourcing the entire internal audit function,
either to the UN Office of Inspection and Oversight Services
(OIOS) or another provider. The French and Japanese
PermReps were the most vocal opponents.

--------------
CODE OF ETHICS
--------------

11. (U) The S-G informed the EC that WMO would immediately
adopt the ICSC Standards of Conduct on an interim basis. S-
G noted that WMO has had no code of staff conduct in place
and that such a code is an important element of his efforts
to build an anti-fraud organizational culture. Recognizing
that the ICSC Standards of Conduct have weaknesses, the S-G
committed himself to developing a code of ethics for WMO
that would be stronger than the ICSC Standards of Conduct.
The EC welcomed these moves and requested that he present a
proposed WMO code of ethics at its 58th session.

-------------
STAFF MATTERS
-------------

12. (U) Advisor to the U.S. PermRep raised concerns about
differences between WMO's policies related to paternity
leave, DSA for senior officials, and educational benefits
for staff residing and serving outside their home country
and those of UN Headquarters in New York. The Secretariat
opposed immediate action on the DSA issue, noting that it
would produce limited savings and had not yet been reviewed
by the ICSC. The French PermRep's Alternate opposed
immediate action on the educational benefits issue, citing a
disproportionate impact on French nationals. No other
PermReps spoke on these matters, but the Swiss Mission has
subsequently taken interest in the educational benefits
issue. In the end, the EC took two decisions:

-- It EC requested that the S-G harmonize WMO's paternity
leave policy with that of the International Civil Service
Commission (ICSC).

-- It requested that the S-G study the option of harmonizing
WMO's policies regarding DSA for senior officials and
educational benefits for staff residing and serving outside
their home country with those of the UN Headquarters in New
York and report his findings to the EC's 58th session.

-------------
GENDER ISSUES
-------------

13. (U) Advisor to the U.S. PermRep intervened to ask that
the WMO present side-by-side comparisons of the number and
percentage of men and women in professional positions. The
Secretariat took the point, and we expect future information

SIPDIS
of this type to be in the format requested.

14. (U) With regard to the third women's conference, which
had not been specified in the list of events in the S-G's
proposed program and budget for 2006-2007, the EC reminded
the S-G that the 14th Congress had requested that he make
appropriate arrangements for that conference to take place
before the end of 2007.

--------------------------------------------- ----
NEW DATA ON CONSULTANTS CONTRACTS AND PROCUREMENT
--------------------------------------------- ----

15. (U) At his own initiative, the S-G presented information
about WMO's consultancy contracts and procurement actions
during 2004. PermReps welcomed this as a positive step
forward that would provide greater transparency.

16. (U) Data on consultancy contracts included: the name and
nationality of the contractor, number of days employed,
cost, source of funding (regular or extrabudgetary), task,
location where the work was performed, and total amounts per
country in CHF. At CHF 342,700 (about $268,000), the U.S.
was the second largest provider of consultancy services in
2004 behind Mexico at CHF 990,800 (about $774,000). Mexico
towered above all others due to a large water project that
WMO is carrying out there with UNDP.

17. (U) Data on procurements included: the name and
nationality of the supplier, good/services provided, cost,
source of funding (regular or extrabudgetary), and location
where the product was delivered. At CHF 565,371 (about
$442,000), the U.S. was the WMO's fourth largest supplier
behind Germany, Switzerland, France, and Norway.

18. (U) The U.S. Permanent Representative to WMO --
Brigadier General John J. Kelly, Jr., USAF Retired -- and
his U.S.-based advisors did not have a chance to clear this
cable before their departure from Geneva.

MOLEY

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