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WT/BFA/W/ 641 
 
12 June 2023 
(23-4002) Page: 1/7 
Committee on Budget, Finance and Administration    
 
 
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SECRETARIAT'S RESPONSES TO THE FOLLOW -UP TO OUTSTANDING  
RECOMMENDATIONS OF THE EXTERNAL AUDITORS  
1  BACKGROUND  
1.1.  This document is an update on the status of implementation of outstanding recommendations 
from previous external audits, as at 31 May 2023.  
1.2.  The recommendations from the audits conducted in 2019 and 2020 by the previous External 
Auditors (the  German Budgesrechnungshof ) are rela ted to Performance Audit only and were followed 
up by the Cour des Comptes .  
1.3.  Table  1 contains the status u pdate on recommendations pertaining to financial audit s and Table  
2 contains a status update on recommendations pertaining to performance audits. Both tables 
replicate  the template of the status of recommendations included in the External  Auditor's report 
WT/BFA/W/ 639. 
 
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- 2 - 2  FINANCIAL AUDIT RECOMMENDATIONS  
Table 1  Summary of the implementation of recommendations (Financial Audits)  
2.1.  Of the 12 recommendations resulting from successive financial audits since 2020, nine (i.e. 75%) may be considered as having been implemented, 
while three are ongoing.  
Issue  Implemented  Ongoing  Open  Lapsed  Total  Year/  
Observation  
No. Secretariat's Response as at 
31 May 2023  
Strictly apply the provisions of IPSAS 
1, paras. 127 and 128, by setting out 
in the notes information relevant to an 
understanding of the financial 
statements.  X     1.1/2020  
(2) Recommendation implemented, additional 
narrative, including specific note on ESG and 
Non-Financial Disclosure have been added in the 
2022 Financial Statements.  
This recommendation can be closed.  
Finalize the "Internal Control 
Framework of the WTO Secretariat".   X    3.1/2020  
(4) The internal control framework was finalized 
and is included in document WT/BFA/W/626 
distributed in May 2023. The auditors have 
reviewed it and have informed the Secretariat 
that they  will provide feedback during the next 
interim audit.  
Implement a business continuity plan 
to ensure the operational readiness of 
the procedures and actions of the 
operational divisions in the event of a 
crisis affecting IT resources.   X    3.2/2020  
(5) The Business Continuity objectives were 
established by the ITSD service owners, in 
consultation with the business units concerned. 
The objectives represent the best of our 
knowledge as to the availability requirements of 
different services. Th is said, there is no formal 
process in place to map critical business process 
requirements to the supporting infrastructure.  
Establishing such a process would require 
implementation of the secretariat -wide Business 
Continuity Management System (e.g. along the 
lines of the ISO 22301 standard) – an effort well 
beyond IT. Undertaking this effort may be 
hampered by budgetary restrictions, and lack of 
dedicated personnel to maintain and operate the 
BCM process.  
Formalize the change management 
procedure for the Oracle EBS 
integrated management software 
package. Restrict authorized access to 
the development and production X     3.2/2020  
(7) The Auditors have positively assessed the 
implementation of formal procedures on change 
management by the IT division.  
  
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- 3 - Issue  Implemented  Ongoing  Open  Lapsed  Total  Year/  
Observation  
No. Secretariat's Response as at 
31 May 2023  
environment. Carry out a hierarchical 
review of ex post  validation of 
changes.  Recommendation can be closed.  
Evaluate the control procedures and 
valuation methods for current fixed 
assets, review those that need to be 
made more effective or compliant, 
and, at a minimum, carry out a 
complete inventory of fixed assets by 
the time the WTO presents its 
accounts for 2022.  X     4.1/2021  
(1) The Secretariat conducted a global inventory of 
WTO Assets at the end of 2022 & in 
January  2023.  
The Secretariat has also updated the Fixed Asset 
policy.  
 
Recommendation can be closed.  
 
Take note of the irrecoverable nature 
of the debt of the Government of 
Argentina related to the organization 
of the Eleventh Ministeri al Conference 
and write it off in full.  X     4.3/2021  
(2) MC11 pending receivable from the Government 
of Argentina has been written off.  
 
Recommendation can be closed.  
 
Establish a procedure to identify, 
beyond the current short list, the 
WTO's related parties, and formalize 
the submission by key management 
personnel of a regularly updated 
declaration of interests and an annual 
declaration of the transactions 
between the WTO and such personnel 
(or their close family members).  X     4.4/2021  
(3) Third party disclosure for KMP (Key 
Management Personnel) has been collected as 
per IPSAS 20. The list of KMP has been updated 
and included in the 2022 Financial Statements.  
 
Recommendation can be closed.  
Explore the possibility, for the 
implementation of administrative 
measures associated with penalizing 
late payments by Members, of 
consolidating mandatory contribution 
debts with any other debts held by the 
WTO as a result of specific 
agreements concluded with the 
concerned  Members . X     4.4/2021  
(4) After exploring various possibilities, the 
Secretariat is of the opinion that it cannot 
consolidate contribution debts with other types 
of Members'. The due payables need to remain 
distinct and administrative measures shall be 
applied as per  the financial regulations.  
 
Recommendation can be closed.  
Value the Pension Plan liabilities in a 
prudent and consistent manner by 
using a discount rate that refers to 
market yields at the end of the 
reporting period on high -quality Swiss 
corporate bonds, rather than to the 
average interest rate for the last 12 X     4.5/2021  
(5) The Secretariat implemented the 
recommendation in the 2022 Financial 
Statements.  
 
Recommendation can be closed.  
  
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- 4 - Issue  Implemented  Ongoing  Open  Lapsed  Total  Year/  
Observation  
No. Secretariat's Response as at 
31 May 2023  
months on 10 -year Swiss 
Confederation bonds, a method that 
minimizes the value of long -term 
liabilities without justification and 
does not appear to be in line with 
IPSAS 39.  
Use a single discount rate for the 
actuarial valuation of all long -term 
employee benefit liabilities.  X     4.5/2021  
(6) The Secretariat implemented the 
recommendation in the 2022 Financial 
Statements.  
 
Recommendation can be closed.  
Establish a special account for the 
after-service health insurance plan, 
and endow it gradually, using the 
funds currently put into the "special 
reserve account" and extraordinary 
contributions, with assets capable of 
covering its long -term liabilities.  X     4.5/2021  
(7) The Secretariat has modified the narrative 
within the structure of the financial statements 
to clearly describe the gap between the Special 
Reserve Account and the overall liability related 
to ASHI  
 
Recommendation can be closed.  
Define and implement, by the end of 
the 2022 financial year, procedures 
for managing user accounts, as an 
essential element of and in keeping 
with the Workday project 
management.   X    4.6/2021  
(8) The Human Resources Division (HRD) with the 
help of the In formation Technology and Solutions 
Division (ITSD) is putting in place a request 
framework in Workday so that a staff member 
can only request special security roles through 
that channel. This will follow a chain of approvals. 
All requests will be kept in W orkday.  
A review of all the roles and related accesses and 
Segregation of Duties in Workday will be carried 
out during the second half of 2023.  
Financial subtotal  9 3 0 0 12    
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- 5 - 3  PERFORMANCE AUDIT RECOMMENDATIONS  
3.1.  Of the 14 recommendations resulting from successive financial performance audits since 2018, five (i.e. 36%) may be considere d as having been 
implemented, while nine are ongoing  (including 6 from the 2023 audit).  
Table 2 Summary of the implementation of recommendations (performance audits)  
Issue  Implemented  Ongoing  Open  Lapsed  Total  Year/  
Observation  
No. Secretariat's Response as at 31  May 
2023  
Finalize the description of HR 
processes and the responsibilities of 
process owners.  X     4.1/2018  
(62) Processes have been implemented in Workday. 
Standard Operating Procedures are used as 
benchmarks for the process mapping in Workday.  
This recommendation can be closed.  
Prescribe a uniform and appropriate 
format for personnel files with limited 
access rights.  X     4.1/2018  
(64) All Personnel files have been transferred to 
Workday.  
The recommendation can be closed . 
Evaluate and review the regulations 
concerning home leave to avoid 
systemic weaknesses, which leave the 
Organization vulnerable to fraud.  X     4.1/2018  
(73) The new Home Leave calculation method will 
entry into force starting 1 July 2023.  
Recommendation can be closed . 
Enter into an agreement with the 
Pension Plan on the compensation 
conditions for early retirement.  X     4.1/2019  
(84) Agreement signed and entered into force as of 
March 2023.  
Recommendation can be closed.  
Rationalize trust funds by closing 
those that are inactive, and merging 
those with similar activities or the 
same donors; use this opportunity to 
harmonize management procedures.  X     4.2/2019  
(91) This Recommendation has been superseded by 
the Performance Audit on Trust Funds that was 
undertaken in 2022.  
Submit a proposal to the Ministerial 
Conference whereby, in the event of a 
major, unexpected and prolonged 
crisis, the Director -General be given 
the requisite special powers to 
manage the Secretariat in a flexible 
and proactiv e manner.   X    4.1/2020  
(11) The Secretariat continues working on a coherent 
approach to risk management. The Secretariat 
has now commenced the recruitment of a Chief 
Risk and Compliance Officer at a more senior 
grade.   Once that individual has been onboarded, 
the Secretariat will be more able to address the 
recommendation.  
Finalize a set of regulations to provide 
a framework for teleworking when 
major crisis situations make it 
necessary.   X    4.4/2020  
(12) The Secretariat created the Energy Crisis 
Response Committee for recommendations to 
prepare further the WTO to a possible power 
outage. In addition, the Secretariat has  
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Observation  
No. Secretariat's Response as at 31  May 
2023  
expanded its teleworking policy to cover also 
working outside duty station.  
 
Such polic y would be fully in force since June 1st 
2023; once it will be tested by the Auditors, the 
recommendation can be closed.  
Formalize follow -up of the 
Organization's performance through 
quantified means and performance 
indicators.   X    5.2/2020  
(13) Templates have been designed and distributed to 
all Divisions, to compile KPIs in a systematic 
fashion and to monitor performance against 
these, on an annual basis.  
The divisional performance data will be collected 
in early 2024 to monitor the year 2023.  
Close the support fund of the 
Independent Entity - Pre-Shipment 
Inspection, inactive since 2006, and 
terminate the agreement that created 
it because it is no longer needed.   X    2.37/2022  
(1) The recommendation will be presented to 
Members to take a deci sion, at a meeting of the 
Committee on Customs Valuation (CCV) in 
November 2023.  
Establish a suitable steering body with 
access to management, financial and 
operational information in order to 
ensure the overall coordination of and 
coherence in the trust funds' 
strategies and activities, as well as the 
information provided on this activity 
to Members, whether contributors or 
not.  X    3.47/2022  
(2) The Secretariat accepts the recommendation and 
will undertake the necessary steps to implement 
it duri ng the coming year.  
Include in the quarterly and annual 
trust fund activity monitoring reports 
submitted to the CBFA, a statement of 
the income collected and expenditure 
recorded shown against future budget 
estimates.   X    4.80/2022  
(3) A statement of income collected, and expenditure 
recorded against budget estimates, will be 
included in the trust fund reports submitted to 
the CBFA, with effect from the Q1 report in 2024  
Supplement biennial technical 
assistance plans so as to present all 
WTO technical assistance activities in 
the broad sense, including capacity -
building activities, thereby providing 
Member s and stakeholders with 
comprehensive information, beyond 
technical and legal specificities, that 
can be correlated with the  activities of  X    5.86/2022  
(4) Internal consultations are underway to discuss 
and define guidelines for Trust Funds where 
consolidated technical assistance plans will be 
considered.   
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Observation  
No. Secretariat's Response as at 31  May 
2023  
the various funds contributing to the 
technical assistance strategy.  
Accept the consequences of the 
particular relationship between the 
regular budget and the Trade 
Facilitation Agreement Facility (TFAF) 
by reincorporating the Facility's assets 
and the financing for implementation 
of the Trade Agreement Facility (TFA) 
into the regular budget, with any 
subsequent financial needs covered 
by calls for contributions.   X    5.96/2022  
(5) The Secretariat is still assessing the feasibility of 
implementing this recommendation.  
 
Introduce cost accounting for trust 
funds so as to ensure a clear and 
comprehensive understanding of the 
full costs of each fund, identifying, 
among other things, the costs, in 
particular staff costs, borne by the 
regular budget.   X    5.101/202
2 
(6) The Secretariat discussed with the Auditors on 
the pract ical aspects of the recommendation to 
minimize the implementation costs.  
 
The Secretariat is considering the various options 
to address the recommendation and will seek for 
input from key stakeholders.  
Performance subt otal 5 9   14   
 
 
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