RESTRICTED  
  
WT/BFA/W/531  
 
7 September 2020  
(20-6034) Page: 1/82 
Committee on Budget, Finance and Administration  Original: English  
 
 
REPORT OF THE INDEPENDENT EXTERNAL AUDITOR  ON THE AUDIT OF THE  
FINANCIAL STATEMENTS OF THE WORLD TRADE ORGANIZATION (WTO)  
FOR THE YEAR ENDED 31 DECEMBER 201 9 
The Report of the Independent External Auditor  on the Audit of  the Financial Statements of the WTO 
for 201 9 is attached.  
 
_______________  
 
  WT/BFA/W/531  
 
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  REPORT OF THE INDEPENDENT EXTERNAL AUDITOR  
 
ON THE AUDIT OF THE FINANCIAL STATEMENTS  
OF THE WORLD TRADE ORGANIZATION (WTO)  
FOR THE YEAR ENDED 31 DECEMBER 2019  
 
 
Chapter  Title  Paragraph/s  
1 Executive Summary  1 – 15 
2 Scope and Approach of the Audit  16 – 27 
2.1 Scope of the Audit  16 – 20 
2.2 Audit Objective and Approach  21 – 26 
2.3 Audit Conclusion  27 
3 Financial Audit  28 – 149 
3.1 General  28 – 30 
3.2 Contributions  31 – 50 
3.3 Financial Position / Performance  51 – 149 WT/BFA/W/531  
 
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  3.3.1  Statement of Financial Position:  
• Assets and Liabilities  
• Cash and Cash Equivalents  
• Receivables from Members and Observers  
• Inventories  51 – 138 
51 
52 - 68 
69 - 72 
73 - 75 
 
 
 Statement of Financial Position (continued)   
 • Other Receivables  
• Advances and Prepayments  
• Building  
• Equipment  
• Pension Plan Assets  
• Accruals and Provisions  
• Assessed Contributions Received in Advance  
• Short -Term / Long -Term Employee Benefits  
• Loan  
• Pension Benefits  
• ASHI  
• Working Capital Fund  
• Reserves  
• Net Assets (total)  76 - 82 
83 
84 - 85 
86 - 89 
90 - 96 
97 - 110 
111 
112 - 115 
116 - 117 
118 - 121 
122 - 126 
127 - 129 
130 - 137 
138 
3.3.2  Statement of Financial Performance:  
• Revenue and Expenses (Overview)  
• Revenue  
• Expenses  
• Net Result / Surplus of the Period  139 – 149 
139 
140 - 
143 
144 - 
148  
149 
4 Performance Audit  150 – 267 WT/BFA/W/531  
 
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  4.1 Human Resources  
• Focus and Objectives  
• Separation   
• Early Retirement  
• Recruitment Process for Individual Consultants  150 – 193 
150 - 152 
153 - 160 
161 - 171 
172 - 193 
4.2 Trust Funds  
• Focus and Objectives  
• General Overview and Findings   
• Voluntary Contributions  
• Procurement  
• Project Staff (L -positions)  194 – 235 
194 - 195 
196 - 208 
209 - 215 
216 - 228 
229 - 235 
 
4.3 Appellate Body  
• Focus and Objectives  
• General Overview  
• Budget and Expenditure  
• Risk Management – Mitigation Measures  
• Audit Findings  
 236 – 267 
236 - 238 
239 - 250 
251 - 255 
256 - 260 
261 - 267 
5 Cases of Fraud or Suspected Fraud  268 – 269 
6 Acknowledgement  270 
 
 List of Abbreviations and Acronyms   
 Annex / List of Recommendations   WT/BFA/W/531  
 
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  1 Executive Summary  
My team and I have 
audited the financial 
statements of the 
WTO.  1. My team and I have audited the financial statements of the World 
Trade Organization (hereinafter “WTO”) for the financial period from 
1 January to 31  December 2019. These comprise:  
 the stat ement of financial position;  
 the statement of financial performance;  
 the statement of cash flows;  
 the statement of changes in net assets;  
 notes and annexes to the financial statements.  
Responsibility of 
Management.  2. The Management of WTO is responsible for the preparation and 
fair presentation of the financial statements in accordance with 
International Public Sector Accounting Standards (IPSAS)  and for 
such internal control as Management determines necessary to enable 
the preparation of financial statements that are free from material 
misstatement, whether due to fraud or error.  
In preparing the financial statements, the Management is responsible 
for assessing WTO’s  ability to continue as a going concern, disclosing, 
as applicable, matters related to going concern and using the going 
concern basis of accounting unless Management either intends to 
liquidate WTO  or to cease operations, or has no realistic alternative 
but to do so.  
Those charged with governance are responsib le for overseeing the 
WTO’s financial reporting process.  WT/BFA/W/531  
 
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  Responsibility of the 
External Auditor.  3. My responsibilities are to obtain reasonable assurance about 
whether the financial statements as a whole are free from material 
misstatements, whether due to fraud or error, and to issue an auditor’s 
report that includes my opinion. Reasonable assurance is a high level 
of assurance, but is not a guarantee that an audit conducted in 
accordance with ISAs will always detect each and every material 
misstatement.  Misstatements can arise from fraud or error and are 
considered material if, individually or in the aggregate, they could 
reasonably be expected to influence the economic decisions of users 
taken on the basis of these financial statements.  
As part of an au dit in accordance with ISAs, I exercise professional 
judgment and maintain professional skepticism throughout the audit.  
I also:  
- identify and assess the risks of material misstatement of the 
financial statements, whether due to fraud or error, design and 
perform audit procedures responsive to those risks, and obtain 
audit evidence that is sufficient and appropriate to provide a basi s 
for our opinion. The risk of not detecting a material misstatement 
resulting from fraud is higher than for one resulting from error, as 
fraud may involve collusion, forgery, intentional omissions, 
misrepresentations, or the override of internal control;  
- obtain an understanding of internal control relevant to the audit in 
order to design audit procedures that are appropriate in the 
circumstances, but not for the purpose of expressing an opinion on 
the effectiveness of WTO’s internal control;  
- evaluate the appropriateness of underlying accounting policies and 
the reasonableness of accounting estimates and related disclosures 
made by Management;  
- conclude on the appropriateness of Management’s use of the going 
concern basis of accounting and, base d on the audit evidence 
obtained, whether a material uncertainty exists related to events or 
conditions that may cast significant doubt on WTO’s  ability to 
continue as a going concern. If we conclude that a material 
uncertainty exists, we are required to d raw attention, in our 
auditor’s report, to the related disclosures in the financial 
statements or, if such disclosures are inadequate, to modify our 
opinion. Our conclusions are based on the audit evidence obtained 
up to the date of our auditor’s report. H owever, future events or 
conditions may cause WTO  to cease to continue as a going 
concern;  
- evaluate the overall presentation, structure and content of the 
financial statements, including the disclosures, and whether the 
financial statements represent the u nderlying transactions and 
events in conformity with the principles of fair presentation.  
My team communicated with those charged with governance the 
planned scope and timing of the audit and significant audit findings, 
including any significant deficienc ies in internal control that we 
identified during our audit.  WT/BFA/W/531  
 
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  Scope of the audit.  4. The audit included the examination, on a test basis, of evidence 
supporting the amounts and disclosures in the financial statements. It 
also included an assessment of the underlying accounting principles, 
and significant estimates made by the Director -General, as well as an 
evaluation of the overall presentation of the financial statements.  
I have conducted my 
audit in conformity  
with the International 
Standards on Auditin g.  5. I conducted my audit in conformity with the International 
Standards on Auditing (ISAs) as adopted and amended by the 
International Organization of Supreme Audit Institutions (INTOSAI) 
and issued as International Standards for Supreme Audit Institutions  
(ISSAI). These standards require that I plan and perform the audit to 
obtain reasonable assurance about whether the financial statements are 
free from material misstatement.  
I am independent of the WTO  in accordance with the ethical 
requirements that are  relevant to my audit of the financial statements 
and I have fulfilled all other ethical responsibilities in accordance with 
these requirements.  
I believe that the audit evidence I have obtained is sufficient and 
appropriate to provide a basis for my opinion.  
My audit provides a 
reasonable basis for the 
audit opinion.  6. The ISAs, as well as the ISSAI, require the auditor to carry out an 
audit of an organisation’s accounts and financial transactions which 
includes examining, on a test basis, evidence su pporting the amounts 
and disclosures in the financial statements. It also includes assessing 
the accounting principles and significant estimates made by the 
Director -General, as well as evaluating the overall presentation of the 
financial statements. I bel ieve that my audit provides a reasonable 
basis for the audit opinion.  
The financial 
statements present 
fairly the financial 
position.  7. As a result of my audit, I am of the opinion that the financial 
statements present fairly, in all material respects, the financial position 
as at 31  December  2019, that they have been prepared in accordance 
with IPSAS and WTO´s stated accounting policies, and that the 
transactions have been in accordance with the Financial Regulations.  
I have placed an 
unqualified audit 
opinion on the 
financial statements.  8. The audit revealed no weaknesses or errors which I considered 
material to the accuracy, completenes s and validity of the financial 
statements as a whole. Therefore, I have placed an unqualified audit 
opinion on WTO´s financial statements for 2019.  
Areas covered by this 
report.  9. My report includes observations and recommendations intended to 
contribute to the improvement of financial management. For 2019, my 
audit work has mainly covered the areas described in the following 
paragraphs.  
Overall financial 
situation (Part  3). 10. In accordance with Chapter XIII of the Financial 
Regulations, I present an analysis of WTO´s financial statements. In 
Part 3 of my report I comment on the overall financial situation.  WT/BFA/W/531  
 
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  Performance audit 
areas covered by this 
report (Part  4). 11. Regulation  44 of the Financial Regulations stipulates that 
my annual audit shall also inc lude performance audits as defined by 
the INTOSAI Auditing Standards. This year, my performance audit 
has mainly covered the areas of Trust Funds, Human Resources: 
separation of staff and early retirement, and the Appellate Body.   
WTO delivered 
financial statements in 
accordance with 
IPSAS.  12. The financial statements for the year ending 31  December 
2019 are prepared and presented in accordance with IPSAS.  
Cases of fraud or 
suspected fraud 
(Part  5). 13. During our audit, my team followed up with the Office of 
Internal Oversight (OIO) on fraud cases at WTO, and particularly on 
one case of severe fraud regarding home leave and dependency 
allowances already detected in 2017. The incumbent was sanctioned 
and the defrauded amounts were reimbursed to WTO. In the Summer 
of 2019, the incumbent appealed against the sanction. Thus, WTO 
decided to cancel the sanction and contract an independent consultant 
for a second investigation. The applicable report of this seco nd 
investigation was finalized in March 2020. The final decision by the 
Director -General on the sanction was still pending during my audit.    
Acknowledgement 
(Part  6). 14. I wish to convey my appreciation for the cooperation and 
assistance extended by the Di rector -General, the Management and 
staff of the Secretariat. I appreciate that the Secretariat is continuously 
reviewing and improving the financial statements, thus making the job 
for me and my team easier. I am very grateful for their assistance 
during t he entire external audit process.  
List of 
Recommendations 
(Annex).  15. My team reviewed and monitored the pending 
implementation of recommendations made in last year’s report. I note 
that out of the 29 outstanding recommendations as at 31 December 
2018, 10 re commendations (34.5 per cent) had been implemented, 3 
recommendations were overtaken by events (10.3 per cent), and 16 
recommendations (55.2 per cent) were under implementation 
(ongoing). The Annex summarizes the progress made on 
implementing my recommenda tions.  
 
  WT/BFA/W/531  
 
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  2 Scope and Approach of the Audit  
2.1 Scope of the Audit  
Principles governing 
my audit.  16. My staff and I have audited the financial statements of the 
WTO for the financial period from 1  January to 31  December  2019. 
These statements comprise the statement of financial position, the 
statement of financial performance, the statement of cash flows, the 
statement of the changes in net assets and notes and annexes to the 
financial statements. We also examined the related financial accounts  
and transactions.  
Responsibility of 
Management.  17. The Director -General is responsible for the preparation and 
fair presentation of these financial statements in accordance with WTO’s 
Financial Regulations, and with such internal controls as Management 
determines necessary to ensure the preparation of financial statements 
that are free from material misstatement, whether due to fraud or error.  
Responsibility of the 
External Auditor.  18. I am responsible for expressing an opinion on the financial 
statements based on evidence obtained during my audit. I planned and 
performed the audit in such a way as to obtain reasonable assurance that 
the financial statements are free from material misstatement.  
Audit of the financial 
statements.  19. The financial s tatements of the WTO, together with my audit 
report and the audit opinion, have been discussed with the Director -
General. He has taken note of the contents of my report.  
Performance audits.  20. In addition to my audit of WTO´s financial statements, 
accounts a nd financial transactions, I carried out performance audits 
(under Regulation 44 of the Financial Regulations) that I deemed 
necessary with respect to the efficiency and effectiveness of processes 
and procedures  and the financial consequences of existing a dministrative 
practices.  
 
2.2 Audit Objective and Approach  
Objective of financial 
audit:  
Forming the audit 
opinion.  21. The objective of the audit was to enable me to form an 
opinion on whether the expenditure recorded for the year had been 
incurred for the purposes approved by the General Council; whether 
revenues and expenses were properly categorised and recorded in 
accordance with WTO’s Financial Regulations; and whether the 
financial statements presented fairly the financial position as at 
31 December  2019.  
I conducted the audit 
remotely due to the 
special 
circumstances of 
COVID -19.    
 22. On 11 March 2020, the World Hea lth Organization (WHO) 
declared the outbreak of COVID -19 a global pandemic. Since mid -
March WTO staff was requested to work from home. WTO staff 
accessed WTO premises at least on a weekly basis to collect and process 
physical mail. Many of the staff were b ack in office on voluntary basis 
and part time since mid -May.  WT/BFA/W/531  
 
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   23. Subsequently, I cancelled our planned presence for the audit 
on WTO in April 2020. I conducted the audit remotely based on 
requested documents and information provided by WTO as well as 
numerous calls and videoconferences. Further, my team held a number 
of videoconferences and calls with responsible WTO staff to discuss 
significant transactions, processes, evaluations, as well as more detailed 
interpretations and to verify evidence.  
 24. In addition, WTO provided me at the end of May with IT 
equipment which enabled my team to directly access the WTO ERP 
system and intranet as well as a shared drive to exchange confidential 
documents and information needed.    
I conducted the audit 
without ma jor 
restrictions.     25. My audit of the financial statements 2019 took longer than 
planned because of the COVID -19 restrictions at WTO Geneva and 
remote audit activities. However, despite the special circumstances I 
conducted the audit without major restrictions.            
Subs tantive testing 
convinced me of the 
correctness of WTO´s 
records.  26. My audit opinion is based on substantive testing of the 
transactions recorded in all areas of the financial statements. The 
examination was carried out to ensure that the financial statemen ts 
accurately reflect the accounting records and present fairly the financial 
situation of WTO.  
 
2.3 Audit Conclusion  
I found no material 
weaknesses.  
I have placed an 
unqualified opinion on 
WTO´s financial 
statements.  27. Notwithstanding the observations in this report, my 
examination revealed no weaknesses or errors which I considered 
material to the accuracy, completeness and validity of the financial 
statements as a whole. In accordance with normal practice, my team 
reported additional immaterial findings to the Management of the 
Secretariat during the audit. I certify that the financial statements and 
schedules present fairly the financial situation of WTO, and I have 
placed an unqualified opinion on WTO´s financial statements for 2019.  
 WT/BFA/W/531  
 
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  3 Financial Audit  
3.1 General  
My team examined 
the accounting 
records.  28. My audit included a general review, and such tests of the 
accounting records and other supporting evidence as I considered 
necessary in the circumstances. These audit procedures are primarily 
designed to allow an opinion on WTO's financial statements to be 
formed.  
Random sample 
check.  
  29. My audit team analysed data records and transactions. A 
total of 66,409 data sets have been sorted into different layers using the 
audit software “IDEA”, depending on the amount involved. From all 
layers, we took a random sample of a significant number of the 
remaining transactions1. We checked whether invoi ces and the related 
supporting documents had been filed in accordance with the regulations 
and cross -checked the basis for payment and the necessary approvals 
(compliance check). No transactions examined gave cause for criticism. 
The Secretariat was able t o clarify all open questions. In addition, my 
audit team selected a sample of significant transaction in the Trust Funds 
area. I refer to the main results under section Trust Funds.   
I report on WTO’s 
financial 
development.  30. In the following paragraphs, I report on trends and 
tendencies and provide background information. For that purpose, my 
staff carried out an analysis of several of the Organization’s key figures 
and their trend.  
3.2 Contributions  
2019 budget CHF 
197.2 million was 
approved by General 
Council.  
 
 31. WTO activities are financed from the regular budget 
covering expenses and income. The 2019 budget was approved by the 
General Council on recommendation by the CBFA (Committee on 
Budget, Finance and Administration). The regular budget is financed 
from assessed contributions (CHF 195.5 million) and miscellaneous 
income (CHF 1.7 million). The 2019 approved budget amounted to 
CHF  197.2  million. Since 2011 the WTO budget has been at Ze ro-
Nominal Growth, and the regular budget financed from assessed 
contributions has been unchanged since 2013 (CHF 195.5 million).  
2019 total income 
increased to CHF 
200.8 million mainly 
due to the release of 
the Appellate Body 
Operation Fund.  32. In 2019 the total income of WTO (regular budget) amounted 
to CHF 200.8 million. The increase of CHF 3.6 million was mainly due 
to refunds of prior year`s expenditures: release of the Appellate Body 
Operation Fund of CHF 3.3 million (shown under miscellaneous 
income).    
Calculation of 
contributions.  
 33. The assessed contributions are calculated based on each 
Member's international trade (imports plus exports) in relation to the 
 
1 117 samples by a stratified random selection.  WT/BFA/W/531  
 
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 international trade of all WTO Members, based on statistics over a five - 
year period.  
Review of 
contributions -  34. I reviewed contributions for 2019.  
                        
 Table 1 – Assessed and Outstanding Contributions as at 31 December 2019 (in million CHF)  
 
2019  Assessed 
Contributions*  Outstanding 
Contributions  Outstanding contribution 
referred to the budget in per cent  
Members  195.5  24.2   12.4 
Observers      0.7   0.8 114.3  
Total  196.2  25.0   12.7 
 Source: WTO Financial Statements 2019 ; in million CHF; *(D ifferences due to rounding). 
 
In 2019, assessed 
Members’ 
contributions 
amounted to 
CHF  195.5  million.  35. Assessed contributions by Members amounted to 
CHF  195.5  million, contributions by Observers were CHF  0.7 million. 
At the end of 2019, WTO has 164 Members and 23 Observers.  
 36. Assessed contributions paid in advance by Members and 
Observers amounted to CHF  12.4 million (2018: CHF  4.8 million) . In 
2019, just like before in 2018 and 2017, due to the negative interest rate 
of the Swiss National Bank (SNB), Members gained no interest. 
Negative interest was covered by the WTO budget.  
Outstanding 
contributions totalled 
CHF  25.0 million.   37. The outsta nding contributions totalled CHF  25.0 million 
(2018: 26.3 million) - coming from a peak in 2017 with a total of 
CHF  34.4 million outstanding contributions.   
44 Members out of 
164 and 13 Observers 
out of 23 have 
payment arrears.  38. As at 31 December 2019, 4 4 Members out of 164 (27 per 
cent) had payment arrears (after 51 Members in the year before). 13 
Observers out of 23 (57 per cent) had payment arrears (after 10 
Observers in the year before). Two Observers are inactive since 2018 
(Libya and Sao Tome and Pr incipe).    
Administrative 
Measures for 
Members / Observers 
with arrears.  39. Pursuant to Regulation 14 in the WTO Financial Regulations 
Members and Observers with arrears shall be subject to Administrative 
Measures. Details of Administrative Measures and their different levels 
are defined in Annex B of WTO´s Financial Regulations. There are three 
categories of Administrative Measures depending on the number of 
years of outstanding contributions.   
12 Members and 5 
Observers are under 
Administrative 
Measures.  
 
 
 
 
 
  40. 23 Members (14 per cent) and 10 Observers (43 per cent) 
have payment arrears on the level of their annual contributions or higher. 
Currently, 12 Members and 5 Observers are under Administrative 
Measures. WTO has agreed payme nt plans with eight Members. 
Members following a payment plan are no longer listed under 
administrative measures, regardless of the actual outstanding 
contributions. Five out of the eight members are paying as agreed 
(Central African Republic - CAR, Chad, Côte d´Ivoire, Djibouti, The 
Gambia). Three out of them do not comply with the agreed payments WT/BFA/W/531  
 
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  (Burundi, Guinea -Bissau, Sierra Leone) and are therefore under 
administrative measures. Côte d´Ivoire, Djibouti and The Gambia have 
almost completely paid their arrears.  
 
 41. As at 31 December 2019 WTO listed CAR with outstanding 
contributions of CHF 884,461 (more than 30 times the yearly 
contribution) but not under administrative measures. In 2019 CAR paid 
an amount of CHF 26,232 less than the yearly contribution of CHF 
29,325 . Thus, the complete reduction of its arrears is taking longer than 
20 years. In the contrary, WTO listed members under administrative 
measures with outstanding contributions of more than two years.      
 42. As at 31 December 2019 WTO listed Chad with outsta nding 
contributions of CHF 542,872 (nearly 14 times of the yearly 
contribution) but not under administrative measures. Although, Chad has 
once paid a significant amount of CHF 314,752 in 2019 but the complete 
reduction of its arrears is taking longer than 10 years.  
 43. I note that a number of agreed payment plans are not suitable 
to reduce current arrears in an adequate period because the arrears will 
not be significantly reduced within five years based on the current terms 
and conditions. Therefore, WTO sho uld abolish administrative measures 
only if the payment plan ensures a significant reduction of the arrears at 
short time (no longer than three years) and a complete reduction within 
five to seven years. In addition, the Member should separately pay the 
yearly contribution in time.  
Outstanding 
contributions by 
Observers increased 
up to CHF 0.8 million.  44. WTO listed 57 per cent of the Observers (13 out of 23) with 
outstanding contributions (arrears). The total amount of arrears by 
Observers increased to CHF 818,284. These arrears are higher than the 
budgeted yearly contributions by Observers in 2019 (CHF 67 4,475). For 
this reason, WTO initiated administrative measures against five 
Observers (2018: three).       
One of the Observers 
has arrears since 2001.  45. One of the Observers under administrative measures has 
arrears since 2001 (19 years) without any payments in the last years of 
my audit mandate (2014 – 2019). I note that WTO should evaluate the 
status of this Observer and to initiate effective measures.   
The number of 
Members and 
Observers with arrears 
is still high.  46. I note that the sum of outstanding contributions decreased 
only marginally and the number of Members and Observers with 
significant outstanding contributions is still high.  
An action plan f or 
running the WTO with 
outstanding 
contributions is still 
not in place.  47. In 2018 I had recommended to prepare an action plan for 
running the WTO with growing outstanding contributions. WTO did not 
present an action plan but referred to the established Wor king Capital 
Fund (WCF) as a mitigation measure against the risks highlighted (Status 
of the implementation of external audit recommendations).  
I state that the 
Working Capital Fund 
may help to avoid 48. I state that the WCF is an effective measure to avoid the 
budgetary risk based on outstanding contributions as well as unfunded 
payment obligations in future years (e.g. ASHI), in general. But the WT/BFA/W/531  
 
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  budgetary risks but 
WTO should add 
adequate mitigation  
measures to minimize 
arrears.     recommendation also impl ies adequate mitigation measures to minimize 
arrears as well as to convince Members and Observers to pay the 
contributions in a timely manner and to implement more effective 
measures to ensure the willingness of Members and Observers to pay 
their accumulat ed arrears in a reasonable period. I still assume the 
current administrative measures and consequences as not sufficient to 
minimize arrears and to improve payment practice. A formal action plan 
is still missing.  
I maintain the 
recommendation of 
preparing an action 
plan for running WTO 
with growing 
outstanding 
contributions.  49. Therefore, I maintain the recommendation that the 
Secretariat should be prepared and have a common strategy for running 
the WTO even with higher outstanding contributions (action plan).  
 
I recommend that 
WTO should revise its 
Financial Regulations.  50. I recommend that WTO should revise its Financial 
Regulations and implement additional adequate and effective 
administrative measures.      
  WT/BFA/W/531  
 
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  3.3 Financial Position / Performance  
Table 2 - Statement of Financial Position as at 31 December 2019*  
(in million CHF)  
 
 2019  2018  2017  
Current Assets    
Cash and cash equivalents 147.5  130.4  115.1  
Receivables from Members  14.1 16.0 23.4 
Receivables from Observers  0.8 0.6 0.6 
Inventories  0.3 0.3 0.4 
Other receivables  3.8 3.8 3.5 
Advances and prepayments  5.8 5.8 4.8 
Non-Current Assets    
Building  115.4  118.4  121.3  
Equipment  8.2 9.8 11.7 
Intangible assets 0.1 0.2 0.4 
WTO Pension Plan Assets  634.7  564.8  595.9  
TOTAL ASSETS 930.7  850.1  877.1  
Current Liabilities    
Payables 6.5 4.1 4.8 
Accruals  1.6 10.4 6.6 
Provisions  9.5 contained    
in accruals  contained 
in 
accruals  
Assessed contributions received in advance  12.4 4.9 9.4 
Voluntary contributions refundable to donors  31.5 34.2 32.9 
Short -term e mployee benefits 11.7 11.7 12.1 
Non-Current Liabilities    
Loan  51.6 52.8 54.0 
Pension  benefits 1,287.4  1,072.0  1,034.9  
After Service Health Insurance benefits  277.2  283.7  228.9  
Other long -term employee benefits  8.9 8.9 8.3 
TOTAL LIABILITIES 1,698.3  1,482.7  1,392.0  
    
NET ASSETS / EQUITY     (767.6)  (632.6)  (514.9)  
Working Capital Fund  64.2 62.9 10.9 
Actuarial gain/ (loss)  54.7 155.6  246.7  
Accumulated surplus/(deficit)  (950.8)  (917.6)  (837.3)  
Provision for right of use – Centre William Rappard  57.4 58.0 58.6 
Reserves  25.3 22.8 15.8 
IPSAS Budget Allocation and Provisions for BRF 
and SRA    (18.4)  (14.3)  (9.5)  
TOTAL NET ASSETS/EQUITY   (767.6)  (632.6)  (514.9)  
 Source: WTO Financial Statements 2018 and 2019; *(Differences due to rounding).  
 WT/BFA/W/531  
 
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  3.3.1 Statement of Financial Position  
Assets and Liabilities  
My team examined 
the statement of assets 
and liabilities.  51. Full reporting of assets and liabilities in a balance sheet 
enables the reader to understand the financial position of an 
organization. Such a statement of financial position is also required 
under IPSAS. My team examined this statement and the presentation of 
the major underlying accounts.  
Assets  
Current Assets  
 Cash and Cash Equivalents  
Overall cash situation 
with a total of 
CHF  147.5  million is 
sufficient.  52. WTO´s overall cash situation is sufficient. Compared to the 
balance in the previous year, total cash and cash equivalents increased 
by CHF  17.1 million from CHF  130.4  million in 2018 to 
CHF  147.4  million as at 31  December  2019 (CHF  115.1  millio n in 
2017). Cash and cash equivalents include cash in hand (petty cash CHF 
5,000) and cash accounts at bank (CHF 147.451 million).  
Cash deposits in CHF 
increased in 2019.  53. The increase in 2019 is mainly due to the significant 
increase of cash deposits in CHF amounting to CHF  131.1  million 
(CHF  113.1  million in 2018).  
The balance of CHF 
131.1 million includes 
CHF 64.2 million 
restricted funds 
(Working Capital 
Fund).   54. The bank balance of CHF 131.1 million includes restricted 
funds held by the W orking Capital Fund CHF 64.2 million, of which 
CHF 53.3 million is the accumulated budgetary surplus for the period 
2012 -2018. This amount will be subject to a separate investment 
strategy aiming to avoid negative interest and to ensure available funds 
in case of unforeseen shortcomings.  
 55. Other currencies (USD, EUR and GBP) are of minor 
importance for WTO. In 2019, the total amount of assets in other 
currencies was equivalent to approximately CHF  16.3 million (thereof 
15.0 million in USD, 1.0 million in EU R and 0.3 million in GBP2). 
In 2015 the SNB 
lowered the interest 
rate to -0.75 per cent.  56. On 15 January 2015, the Swiss National Bank (SNB) 
announced to lower the interest rate by 0.5 percentage points to -0.75 
per cent.  
In 2019 the SNB 
persisted in 
implementing its 
policy of negative 
interests.  57. Following the SNB decision, WTO´s main banking 
partners (UBS, Credit Suisse and Post Finance) introduced negative 
interest rates of -0.75 per cent on the accounts in CHF as of 
1 April  2015.  
WTO paid negative 
interest in 2019.  58. According to the financial statements, WTO’s cash at Swiss 
bank accounts amounts to more than CHF  131 million. Because of the 
monetary policy of the SNB (see above) WTO paid negative interest in 
2019 just like in 2018, 2017,  2016 and 2015.  
 
2 Converted into CHF as at 31 December 2019.  WT/BFA/W/531  
 
- 17 - 
 
  WTO was charged 
negative interest with 
an amount of CHF 
314,106.  59. In 2019 WTO paid negative interest related to the regular 
budget (CHF 247,620) and the trust funds (CHF 66,486) with a total 
amount of CHF 314,106.  
WTO could reduce 
negative interest rates 
by mid -term 
investments as well as 
positive income from 
investments in USD.  60. The decrease of negative interest was because WTO was 
able to lower the negative interest rates by allocating part of the cash to 
money ma rket funds (UBS MM35 and Credit Suisse time deposit) as 
well as zero interest rate for a bigger portion held by the Working 
Capital Fund in Switzerland. In addition, WTO could partially 
compensate negative interest with positive income from investments in 
fixed investments of money and money market funds in USD.  
In 2019 WTO 
benefited from a 
special agreement 
with its house bank 
granting 50 million 
CHF without negative 
interest.  61. In 2019 WTO still benefited from a granted allowance by 
its house bank. UBS gr anted CHF 50 million without negative interests. 
This special agreement can be cancelled unilaterally with very short 
notice.   This leads to a risk of significantly higher negative interest in 
subsequent years.       
Confirmations of 
WTO bank balances 
disclose potential risks 
by unique signatories.    62. In January 2020 I received the confirmation of WTO bank 
balances from all banks WTO held business relationships with in 2019. 
The three banks (UBS, Credit Suisse and Post Finance) also provided 
me with the i nformation regarding the power of attorney regulations for 
these bank accounts (signatory authority).   
 63. Due to the bank information the Director -General still has 
the full individual power of attorney for all three banks WTO held 
business relationships w ith. All other authorized persons are authorized 
jointly by two (collective) signatures3.      
An individual 
signatory is not in line 
with the Rules and 
Regulations.  64. In 2019, I noted that the authorization for the individual 
signatory is not in line with the WTO Financial Rules and Regulations 
(Payment Policy from 8 November 2017) and does not reflect the four 
eyes principles.  
In 2019                        
I recomme nded that 
WTO adjust existing 
unique signatories as 
soon as possible.  65. Consequently, I recommended that WTO adjust the 
existing individual signatories by the Director General to joint 
signatures 2 by 2 authorizations for all WTO bank accounts as soon as 
possible.  
WTO did not 
implement my 
recommendation up to 
the present audit.   66.  The Secretariat accepted my recommendation to adjust the 
existing unique signatories by the Director -General as soon as possible 
and has started the applicable procedure. Finally,  WTO did not 
implement my recommendation up to the present audit conducted.   
However, there is no case in which the Director -General signed for any 
payment on his own nor has he co -signed any payments as two 
signatories were always available.  
 
3 Post Finance: Five persons jointly by two, one person individually; Credit Suisse: Six persons jointly by 
two, one person individually; UBS: Seven persons jointly by two, one person individually.  WT/BFA/W/531  
 
- 18 - 
 
  My recommen dation 
will be overtaken by 
events.  67. In May 2020, the Director -General decided to resign from 
office as at 31 August 2020. Therefore, my recommendation from 2019 
will be overtaken by events.      
I expect that WTO 
ensure that the new 
DG will be authorized 
in line with the 
Payment Policy.  68. I expect that WTO fully complies with its Payment Policy 
and ensure that the new Director General will be authorized only by 
joint signatures 2 by 2 for all WTO bank accounts.    
 
 Receivables from Members and Observers  
Receivables from 
Members and 
Observers amounts to 
CHF 14.9 million.  69. The receivables from Members amount to CHF 14.1 
million (2018: CHF 16.0 million). The receivables from Observers 
amount to CHF 0.8 million (2018: CHF 0.6 million).  
Provision for arrears 
amounts to 
CHF  10.1million.  70. Receivables from Members and from Observers 
(receivables from non -exchange transactions) include a “provision for 
contributions in arrears”4. This provision for arrears from Members and 
Observers amounts to CHF  10.1 million (2018: CHF  9.7 milli on), 
thereof CHF  9.6 million from Members and CHF  0.5 million from 
Observers.  
12 Members are 
subject to 
Administrative 
Measures representing 
CHF  8 million, 33 per 
cent of all outstanding 
contributions.  71. There is a total of 12 Members subject to Administrative 
Measures in different categories: four in category I (after one but less 
than two full year's outstanding contributions), three in category II 
(after two but less than three full years' outstanding c ontributions) and 
six in category III (after three full years' outstanding contributions). The 
12 Members are representing a volume of CHF 8 million (33 per cent) 
of a total of CHF 24.2 million outstanding contributions from Members.  
5 Observers are 
subject to 
Administrative 
Measures.  72. There are five Observers subject to Administrative 
Measures. The five Observers are representing a volume of CHF 0.6 
million (75 per cent) of a total of CHF 0.8 million outstanding 
contributions from Observers.     
 
 Inventories  
WTO inventories 
consist of souvenirs, 
publications and co -
publications.  73. Inventories within current assets for WTO are souvenirs, 
WTO publications and co -publications as well as non -WTO 
publications totalling CHF  0.3 million (2018: 0.3 million).  
Some inventories are 
held in external 
storage facilities.  
 74. Not all inventories are held internally; a part of the WTO 
publications and co -publications are stored at a third -party storage 
facility representing a volume of CHF 105,000.  
 
4 The provision is calculated based on the ageing of  the contributions  (adjusted receivables) .  WT/BFA/W/531  
 
- 19 - 
 
  WTO conducted a 
physical verification 
for its inventories.  75. WTO conducted a phy sical verification for the stock of 
publications and souvenirs held in -house as well as at the distributor 
storage. As a result, WTO made adjustments and write -offs in total of 
CHF 653.  
 
Other receivables  
Recoverable United 
States taxes amount to 
CHF  2.8 million.  76. Other receivables include recoverable taxes, e.g. from the 
United States (US) or Switzerland. In 2019, other receivables totalled 
CHF  4.0 million (2018: CHF  3.8 million); CHF  2.4 million of the to tal 
amount were recoverable US taxes in 2019, CHF 10,000 represents the 
amount recoverable from the Swiss Government and CHF 1.59 million 
were various other receivables.  
WTO pays estimated 
US tax for staff in 
advance.  77. Staff members of WTO, like those of other international 
organizations, are exempt from income tax. Nevertheless, the US 
requires its citizens and residents to pay tax worldwide. WTO pays 
estimated tax payments in advance and asks for a reimbursement from 
the US Tax Authorities based on an ag reement between WTO and the 
United States of America, of 22  December  2000.  
 78. The WTO Secretariat’s method of calculating 
reimbursements is different from the method used by the US 
Government.  
US tax non -
reimbursable CHF 0.3 
million.  79. In 2019, the amount deemed non -reimbursable for WTO 
totalled CHF  301,551 (2018: CHF  334,193).  
Expenditure incurred 
by WTO and owed by 
the host country of the 
11th Ministerial 
Conference CHF 0.2 
million.  80. The various other receivables include advances CHF 
209,142 paid by WTO for expenditures pertaining to the 11th 
Ministerial Conference. The 11th WTO Ministerial Conference was 
held in Buenos Aires on 10 -13 December 2017. The requested 
settlement is still outsta nding by the host country (Argentina). In this 
context WTO sent several letters and had meetings with the country´s 
officials and with official of the Mission of the Government of 
Argentina to the WTO. But there has not been much movement from 
the Governme nt of Argentina on this.  
WTO accepted a delay 
of more than three 
years without any 
response from the 
Government of 
Argentina.  81. I note that WTO proposed a payment plan of three years for 
the applicable settlement of the amount due, and that there was no 
response from the Government of Argentina. Consequently, WTO 
should reclaim the full amount of these advances from the country's 
officials as soon as possible.        
I recommend that 
WTO reclaims for a 
reimbursement of this 
amount receivable.   82. I recommend that WTO formally reclaims for a full 
reimbursement of the amount owed by the Government of Argentina - 
for the 11th WTO Minist erial Conference in 2017 - immediately.   
 WT/BFA/W/531  
 
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 Advances and Prepayments  
Advances and 
prepayments amount 
to a total of 
CHF  5.6 million.  83. In 2019 WTO stated advances and prepayments with a total 
of CHF  5.6 million. This position includes staff advances made for 
salary, travel and education grants representing CHF  3.1 million; 
advances relating to trust funds activities (e.g. advances paid to hotels 
and to implementing partners) with an amount of CHF  1.6 million and 
other advances (e.g. payments made to suppliers, consultants and 
insurances) of CHF  0.9 million.  
 
 
Non-Current Assets  
 Buildings  
The net carrying 
amount for buildings 
as at 
31 December  2019 is 
CHF  115.4  million.  84. With regard to non -current assets, a balance sheet item of 
high value is “buildings” with a net carrying amount of 
CHF  115.4  million (2018: CHF  118.3  million). The accumulated 
depreciation concerning buildings as at 31  December  2019 amount to 
CHF  19.2 million (depreciation for 2019 only: CHF  3 million).  
CWR building is 
granted by the Canton 
of Geneva and the 
FIPOI as a 99 -year 
surface right.  85. WTO headquarters building at 154 Rue de Lausanne, 
Geneva has two buildings: the old building, the Centre William 
Rappard (CWR) and the new building constructed by WTO itself. The 
CWR building and the land were granted by the Canton of Geneva and 
the Founda tion for International Organizations (FIPOI) as a 99 -year 
“surface right”. The right of use of the building is reported as part of 
the equity of WTO.  
 
 Equipment  
Equipment totals 
CHF  8.2 million.  86. The total value of equipment amounts to CHF  8.2 million 
(2018:  CHF  9.8 million). The most significant items are furniture 
(CHF  3.0 million), audio visual equipment (CHF  3.2 million), security 
equipment (CHF  1.5 million) and IT equipment (CHF  0.3 million).  
An adequate 
stocktaking system is 
imple mented and in 
use.  87. Following my recommendation in the 2016 report, WTO 
implemented software to manage all relevant assets in 2017. This 
software allows recording the lifetime of assets, their purchase date and 
price, location and other information of impo rtance. With these data, 
the assets can be located and their depreciation can be calculated 
automatically. All new acquisitions are recorded in the asset ledger 
automatically via a link to the Oracle ERP system. Procurement, cash 
management and accounting including asset management are now 
automatically linked. Before their first use, assets are tagged 
individually with a barcode. The WTO performs an annual stocktake.  WT/BFA/W/531  
 
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  My team was not able 
to make spot checks 
due to the COVID -19 
situation.  88. My team was not able to make any spot checks of assets as 
in the previous years because of the COVID -19 situation at WTO 
(remote audit). However, my team checked the additions and disposals 
as well as the depreciation for 2019 in the ERP system and with 
documents provided  by WTO. Based on our experiences in 2017 and 
2018 (extended random samples) and the 2019 recordings I state that 
relevant data were correctly recorded and calculated.  
The stocktaking 
system in general 
presents a true and fair 
value of all relevant 
assets.  89. The assets are presenting a fair and true value even if for some 
assets an individual value does not exist (group valuation). I consider 
the valuation method as acceptable.  
 
 
  Pension Plan Assets  
 
 
 
 Fair value of Pension 
Plan assets: CHF 
634.7 million . 90. At the beginning of 2019 (31  December  2018) the fair value of 
Plan assets was CHF  564.8  million. With returns, expenses, 
contributions and benefits paid, the fair value as at 31  December  2019 
was CHF  634.7  million.  
The increase resulted 
from significant 
profits on securities.  91. The increase of CHF 69.9 million was a result of significant 
investment returns in 2019 (CHF 71.9 million).   
Employer 
contributions 2019: 
CHF 19.4 million.  92. The total of all employer regular contributions for 2019 amount 
to CHF 19.4 million (2018: CHF 19.2 million).  
WTO paid CHF 1.5 
million additional 
contributions.  93. In addition, the WTO Secretariat paid CHF 1.5 million 
contributions into the WTO Pension Plan to compensate  the impact 
from early retirement of five WTO staff members. In 2018 WTO did 
not pay any compensation.    
Employees' 
contributions 2019: 
CHF 9.7 million.  94. The total of all plan participants (employees) contributions for 
2019 amount to CHF 9.7 million (2018: CHF 9.6 million).  
Benefits paid in 2019: 
CHF  28.3 million.  95. Benefits paid from the Plan amount to CHF  28.3 million (2018: 
CHF  25.7 million).  
 
Detailed information 
is shown in the audit 
report WTOPP.  96. Detailed information regarding the Pension Plan Assets is shown 
in my audit report of the financial statements of the World Trade 
Organization Pension Plan (WTOPP) for the year ended 31 December 
2019.  WT/BFA/W/531  
 
- 22 - 
 
  Liabilities  
Current Liabilities  
 Accruals and Provisions  
WTO changed the 
position of accruals in 
order to present 
accruals and 
provisions separately.  97. In 2019 WTO changed the position Accruals into the new 
position Accruals and Provisions. According to IPSAS 1.88, provisions 
are to be presented separat ely.  
WTO stated accruals 
and provisions with an 
amount of CHF 12.2 
million.  98. The position contains accruals and provisions of CHF 12.2 
million (2018: CHF 10.5 million). WTO subdivided this position into 
accruals with an amount of CHF 10.2 million (2018: CHF 10.6 million) 
and provisions with an amount of CHF 2.0 million (2018 not sh own 
separately).  
I state that the 
amounts for accruals 
and provisions should 
be shown more 
detailed.  99. I state that the amounts for accruals and provisions should be 
shown more detailed as in the table below:  
 
Table 3 – Accruals and Provisions as at 31 December 2019  
 
Accruals and 
Provisions  Description  31/12/2019                     
(in million CHF)  
Accruals  Agreements with service 
providers, consultants 
and implementing 
partners    1.6 
Provisions  Provision for disabled 
retirees and dependents 
of deceased disabled 
retirees    7.8 
 Provision for expected 
new disability cases    1.5 
 Provision for legal 
damages    0.2 
Total   11.1 
 
 100. WTO recognized accruals for agreements (projects) with 
implementing partners, consulting companies and service providers 
with an amount of CHF 1.6 million.  
The provision for 
WTO obligations due 
to disability cases 
adding up to CHF 9.3 
million.  101. Provisions for disability include those relating to cases of 
disabled retirees and one case for dependents of a deceased staff 
member who was disabled on duty5. As at 31 December 2019, the 
carrying amount of total provisions for disability was CHF 9.3 million. 
WTO considered the average Swiss life expectancy for the calculation 
as I had recommended in 2018. But WTO did not take discounting or 
indexing into accou nt in the calculation.  
 
5 WTO is obliged to pay a monthly amount of approximately CHF 16,286 to entitled beneficiaries . WT/BFA/W/531  
 
- 23 - 
 
  In 2019, WTO 
became aware of a 
new obligation.  102. In 2019, WTO became aware of a new obligation from disability.  
In this case the disabled retiree received a pension for disability from 
WTO since 2010. The disabled retiree deceased in 2017. According to 
Article 20 of the Staff Rules, Annex 3, a disabled staff member is 
entitled to receive an annual compensation for a service -incurred 
accident and/or illness as long as the disability continues. In the event 
of death as a result of the  accident or illness, dependents can benefit 
from a pension.  
 103. I note that WTO legally revised the payment of a dependent's 
pension in the event of a service -related accident or illness. It seems 
appropriate that any claim should be made within a certain period of 
time (e.g. six months), so that the cause of the death, if attributable to 
service, can without doubt be determined at short notice using a 
procedure to be assessed by WTO. In addition, WTO should regulate 
how to provide evidence that the service -related accident or illness was 
the cause of death. In this context WTO may revise the applicable Staff 
Rules.   
The potential risks 
from new disability 
cases was estimated at 
CHF 1.5 million.  104. In 2019, WTO estimated the potential risks from expected (new) 
disability cases to be CHF 1.5 million. But WTO has not yet fully 
recognized this amount, for budgetary reasons.  The estimation is based 
on past experience. WTO justified with a certain number of employees 
who are absent for long periods due to illness.  
 105. I note that the value is appropriate. Therefore, the full estimate 
should be used. As WTO has improved its insu rance cover for disability 
cases, it should take this into account when determining the need for 
provisions in the future.  
I recommend that 
WTO should apply 
actuarial principles to 
determine its 
provisions.  106. I recommend that WTO should apply actuarial pri nciples in 
future to determine its provisions, considering the average age and 
health of the employees. In this context WTO should consider relevant 
methods for discounting and indexing in its calculations.   
I recommend that 
WTO should revise its 
potential risks from 
disability cases.  107. In addition, I recommend that WTO should regularly revise its 
potential risks related to disability cases in order to implement possible 
and effective mitigation measures to min imize such risks. In this 
context WTO should consider possible improvements in insurance.  
WTO stated 
provisions for legal 
risks CHF 0.2 million.   108. Provisions for legal disputes with employees amounted to 
CHF  0.2 million.  
Provisions should be 
stated sepa rately and 
adequately explained.  109. I note that provisions are significant risks. Hence, provisions 
should be stated separately and adequately explained in the Financial 
Statements ensuring clarity and transparency. The amount and purpose 
of the provisions ( inter alia disability cases, legal risks, etc.) should be 
stated in the illustration.  WT/BFA/W/531  
 
- 24 - 
 
  I recommend that 
WTO should state 
significant provisions 
in a separate note.  110. I recommend that WTO should optimize the presentation of the 
provisions by a separate note. In this note WTO should explain the main 
risks grouped and show applicable details in a clear and transparent 
manner.  
 
 Assessed Contributions Received in Advance  
Contributions paid in 
advance: 
CHF  12.4 million.   111. The total amount of contributions paid in advance by Members 
and Observers is CHF  12.4 million (2018: CHF  4.9 million). In 2018, 
(due to negative interest rates) Members that had prepaid their 
contributions gained no interest.  
 
 Short -Term / Long -Term Em ployee Benefits  
As at 31 December 
2019 Short -term 
Employee benefits 
totalled 
CHF  11.7 million.  112. Short -term Employee benefits comprise dependency allowance, 
untaken Annual leave, Education grant, Home leave, Separation grant 
(temporary staff) and provision for bonus. The total as at 
31 December  2019 amounted to CHF  11.7 million.  
 
               Table 4 – Short -term Employee benefits as at 31 December 2019  
 
Short -term Employee benefits  31/12/2019                      
(in million CHF)  
Dependency allowance    0.05 
Untaken annual leave    8.79 
Education grant    1.33 
Home leave    0.84 
Separation grant    0.18 
Provision for bonus    0.48 
Total  11.67  
 
    113. The position provision for bonus contains the accrual for the bonus 
2019: CHF 480,000. In 2019, WTO released a remaining amount of 
CHF 359,100 of non -paid bonuses of prior years to miscellaneous 
income as we had recommended in 2018.      
 114. The position Sep aration grant is 50 % higher than in 2018 (CHF 
0.12 million) because the non -local staff who left the organisation 
increased by three. Most of them left in the middle of 2019. According 
to WTO staff rules the staff has to provide the proof of relocation wi thin 
one year. Therefore, WTO considered a provision of the expected 
amounts at the end of the year.  WT/BFA/W/531  
 
- 25 - 
 
  As at 31 December 
2019 Long -term 
Employee benefits 
totalled CHF 8.9 
million.  
 115. As at 31 December 2019 the Long -term Employee benefits 
amounted to CHF 8.9 million. These benefits include Removal 
Indemnity CHF 1.2 million and Separation Grant (permanent staff) CHF 
7.7 million as in 2018. WTO considered for the Separation Grant as a 
long-term liability the same assumptions as used for the actuarial 
validation for pension and ASHI (inter alia discount and inflation rates).     
 
Non-Current Liabilities  
 Loan  
WTO received an 
interest -free loan of 
CHF  60 million.   116. In 2012 WTO received a CHF  60 million loan from the Swiss 
authorities to finance renovation work on its headquarters: 
CHF  20 million for the south and north courtyards and CHF  40 million 
for the new administrative building.  
The annual repayment 
is CHF  1.2 million; 
the residual debt as at 
31.12.2019 is CHF 
51.6 million.  117. The loan is interest -free; its term is 50 years. WTO started 
repayment in 2013 with CHF  1.2 million (1/50 of CHF  60 million); in 
2019, WTO repaid another CHF  1.2 million. The total of the residual 
debt as at 31  December  2019 is CHF  51.6 million.  
 
 Pension Benefits  
Pension benefits 
totalled 
CHF  1,287.4  million.  118. The WTO Pension Plan is a defined benefit plan. The value of its 
commitments amounts to CHF  1,287.4  million as at 31  December  2019 
(2018: CHF  1,072.0  million), according to IPSAS.  
 119. The pension benefit is calculated by a consulting actuary. The 
WTO pensio n liability of CHF 1,287.4 million is counterbalanced by 
the corresponding pension´s net fair value assets of CHF 634.7 million. 
As a result, this hypothetical pension net liability amounts to CHF 
652.7 million. The big gap between the WTO pension liabilit y and the 
pension´s net fair value assets is due to IPSAS. Because it does not 
allow to consider future pension contributions of WTO and pension 
plan participants, and a projected real return rate based on expected 
return of the strategic portfolio allocat ion.  The pension liability was 
calculated by the consulting actuary based on WTO personnel data and 
past payment experience.        
The increase to CHF 
215.4 million mainly 
has been caused by an 
actuarial loss of    
CHF 184.2 million 
due to a lower 
discount rate and a 
higher number of plan 
participants.  120. The increase of the amount to CHF 215.4 million in the Pension 
liability (Benefit obligation) as at 31 December 2019 is mainly 
attributable to an actuarial loss of 184.2 million due to a lower discoun t 
rate of 1.83 per cent (2018: 2.0 per cent) and a higher number of plan 
participants in 2019: 714 active members and 366 inactive members 
(2018: 702 actives members and 344 inactive members). The cost for 
service (CHF 31.0 million) and interest (CHF 21.1 million) as well as 
the earnings from benefits (CHF 28.3 million) in 2019 were quite 
similar as in 2018.  WT/BFA/W/531  
 
- 26 - 
 
  The applicable 
discount rate 
decreased from 2.0 
per cent in 2018 to 
1.83 per cent in 2019.  121. In their calculation the consulting actuaries used a discount rate 
of 1.83 per cent (2018: 2.0 per cent) as at 31 December 2019. This 
discount rate reflects the applicable discount rate determined by 
reference to the technical interest rate for Swiss pensi on funds as 
determined by the Swiss Chamber of Fund Experts (CSEP).  
 
 ASHI  
ASHI total states a net 
liability of 
CHF  277.2  million 
(2018: CHF 283.7 
million).  122. The After -Service Health Insurance (ASHI) benefits are 
calculated, just like the pension liability, by consulting actuaries. For 
its long -term obligation regarding the ASHI, WTO states in the 
financial statements as of 31 December 2019 a net liability of C HF 
277.2 million (2018: CHF 283.7 million) as “Employee Benefits” (note 
14). This liability was calculated by a consulting actuary based on WTO 
personnel data and past payment experience.  
The decrease of CHF 
6.5 million for ASHI 
from 2018 to 2019 
mainly has been 
caused by a lower 
discount rate and a 
higher number of 
actives and 
beneficiaries as well 
as an actuarial gain of 
CHF 18.5 million.    123. The decrease of CHF 6.5 million in the ASHI lia bility as at 31 
December 2019 mainly results from a higher number of entitled active 
people and beneficiaries in 2019: 737 active and 590 beneficiaries 
(2018: 694 actives and 556 beneficiaries) and a lower discount rate of 
1.83 per cent on one side as well  as an actuarial gain of CHF 18.5 
million (2018: actuarial loss of 43.1 million) on the other side. In its 
report6 the actuary shows the split of the actuarial gain generated in 
2019 as results from effects of changes in financial and demographic 
assumpti ons (CHF 10.2 million) as well as the effect of experience 
adjustments (CHF 8.4 million).  The cost for service (CHF 9.0 million) 
and interest (CHF 5.8 million) as well as the earnings from benefits 
(CHF 2.9 million) in 2019 were quite similar as in 2018.  
The applicable 
discount rate 
decreased from 2.0 per 
cent in 2018 to 1.83 
per cent in 2019.  124. In their calculation the consulting actuaries used a discount rate 
of 1.83 per cent (2018: 2.0 per cent) as at 31 December 2019. This 
discount rate reflects the ap plicable discount rate determined by 
reference to the technical interest rate for Swiss pension funds as 
determined by the Swiss Chamber of Fund Experts (CSEP).  
 125. The amounts in the line item “ASHI liability” are shown below:  
• 31 December 2015   CHF 245.5 million  
• 31 December 2016   CHF 226.3 million  
• 31 December 2017   CHF 228.9 million   
• 31 December 2018               CHF 283.7 million  
• 31 December 2019               CHF 277.2 million  
The yearly 
contributions by the 
WTO are paid from 
the regular budget 
“pay as you go”.  126. The ASHI obligation as of 31 December 2019 is reflecting the 
WTO Secretariat strategy for managing health insurance liabilities as 
from December 2016. Currently, the ASHI obligation (proportion by 
WTO as employer) is not funded by t he Members. The yearly 
contributions by WTO Members are continuously paid from the regular 
budget “pay as you go”.  
 
6 Actuary r eport from 9th April 2020.  WT/BFA/W/531  
 
- 27 - 
 
   Working Capital Fund  
WTO held in the 
Working Capital Fund 
CHF 64.2 million.  127. As at 31 December 2019 WTO states CHF 64.2 million fixed 
reserves held in the Working Capital Fund (2018: CHF 62.9 million).   
This reserve will be subject to a separate investment strategy and could 
cover unforeseen circumstances inter alia growing outstanding 
contributions and ASHI. The separate investment strate gy will allow 
for mid - and long -term investments to reduce negative interest.    
In 2018 WTO 
augmented the 
Working Capital Fund 
by transfer of the 
accumulated surplus 
2012 to 2017.  128. In December 2018 the General Council followed the 
recommendation by the Committee on Budget, Finance and 
Administration from 7 November 2018 to transfer CH F 52 million of 
the WTO accumulated surplus - as at 31 December 2017 - to the 
Working Capital Fund. In addition, WTO recognized CHF 10.9 million 
in the Working Capital Fund resulting from advances by Members 
(CHF 4.7 million) and interest earned (CHF 6.2 m illion)7.    
WTO reallocated the 
budgetary surplus 
2018 to the Working 
Capital Fund.  129. In December 2019 WTO reallocated the budgetary surplus of the 
financial year 2018, amounting to CHF 1.3 million, to the Working 
Capital Fund.  
 
 Reserves  
WTO stated CHF 25.3 
million for five 
reserve funds:   130. WTO stated under the position net assets/equity five reserve 
funds amounting to CHF 25.3 million.   
 
The Ministerial 
Conference Operating 
Fund with   CHF 1.1 
million.  131. The balance of the Ministerial Conference Operating Fund shows 
CHF 1.1 million as at 31 December 2019 (2018: CHF 0.6 million). In 
2019 the fund was replenished with the annual allocation of CHF 0.6 
million for the 12th WTO Ministerial Conference in Kazakhstan. In 
2019 WTO sp ent less than CHF 0.1 million from this fund to cover 
preparatory missions in Kazakhstan.    
The Building 
Renovation Fund with 
CHF 18.9 million.  132. The balance of the Building Renovation Fund shows CHF 18.9 
million as at 31 December 2019 (2018: 15.3 million) . In 2019 WTO 
provided an allocation of CHF 3.6 million to this fund. The Building 
Renovation Fund represents an additional fund allocation for a specific 
purpose in the absence of a specific budget line for the regular budget. 
The specific purpose of this  fund is to cover the costs for future 
comprehensive renovation works on its buildings Centre William 
Rappard (CWR), the extensions of CWR and the new buildings (e.g. 
windows and facade, roof, heating, parking, etc.)8.     
 
7 Interest earned before 2015.  
8 Revised I nfrastructure Contract agreed by the WTO a nd the Swiss Authorities  (FIPOI) from 2013.  WT/BFA/W/531  
 
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  The Special Reserve 
Account for Medical 
Insurance with CHF 
4.3 million.  133. The Special Reserve Account for Medical Insurance shows CHF 
4.3 million as at 31 December 2019. This fund was established in 2017 
in line with a decision by the CBFA. Since January 20 17 in fact the new 
Health Insurance Provider applied a lower insurance premium and the 
Secretariat decided therefore to transfer the savings generated on the 
employer's premium quota to such specific fund. In addition, the fund 
is also financed by eventual  budgetary savings related to the Medical 
Expense Budget line. WTO uses the savings from the new medical 
insurance (lower premium contributions in 2017, 2018 and 2019) for a 
compensation of (employer´s) contribution increases in subsequent 
years.      
The Appellate Body 
Operation Fund with a 
zero balance.  134. As at 31 December 2018 / 1 January 2019 WTO shows CHF 2.6 
million in the Appellate Body Operation Fund (ABOF). In January 
2019 the ABOF was replenished with an allocation of CHF 2.0 million. 
Over the year  the ABOF covered expenses totalling CHF 1.3 million. 
At the end of 2019 the remaining balance of CHF 3.3 million in the 
ABOF was completely transferred to miscellaneous income.  
The Doha 
Development Agenda 
Global Trust Fund 
with CHF 1.0 million.  135. The Doha Agenda Development Global Trust Fund shows CHF 
1.0 million as at 31 December 2019.  
The allocated amount 
of CHF 1.0 million 
was never used since 
2001.  136. The reserves in the Doha Development Agenda Global Trust 
Fund were established and allocated in 2001 but never used since the 
beginning (18 years).    
I recommend that 
WTO should suggest 
to the CBFA to 
reallocate the fund 
internally.  137. I recommend that WTO  should suggest to the CBFA the draw -
down of its reserves in the Doha Development Agenda Global Trust 
Fund and to reallocate the fund internally.  
 Net Assets (total)  
Net assets/equity of 
the period is 
CHF  (767.6)  million.  138. Considering all assets as at 31 December  2019 
(CHF  930.6  million) and all liabilities (CHF  1,698.3 million) there is a 
negative total net assets/equity of CHF 767.6  million      
(2018:  CHF  – 632.6  million). This is mainly due to the inclusion of the 
pension and ASHI liabilities in the  financial statements and their 
valuation according to IPSAS. In particular the pension liability will be 
offset by future contributions and return on investment income.  WT/BFA/W/531  
 
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  3.3.2 Statement of Financial Performance  
 Revenue and Expenses  
The table below 
shows comparative 
figures of 2017, 2018 
and 2019.  139. The IPSAS equivalents of income and expenditure are revenue 
and expenses (as shown in the Statement of Financial Performance). 
The table presents the figures for 2017, 2018 and 2019.  
 
Table 5 - Statement of Financial Performance as at 31 December 2019*  
(in million CHF)  
 
 2019  2018  2017  
Revenue     
Contributions / Members  195.5  195.5  195.5  
Contributions / Observers  0.6 0.6 0.6 
Voluntary contributions for 
trust funds  22.0 21.0 20.9 
Revenue from publications  0.5 0.5 0.5 
Other revenue  4.3 1.3 1.2 
WTO Pension Plan revenues  0 3.4 2.4 
Total Revenue  222.9  222.3  221.1  
    
Expenses     
Staff expenditure  (132.0)  (133.2)  (134.8)  
Actuarial cost for ASHI  (12.0)  (11.6)  (11.1)  
Actuarial cost for pension  (26.1)  (23.5)  (22.8)  
Temporary Assistance  (25.6)  (23.3)  (24.5)  
Supplies / Other service costs  (15.4)  (15.5)  (15.4)  
Travel & Hospitality  (14.5)  (13.6)  (15.1)  
Implementing Partners  (3.9)  (5.3)  (4.4)  
Contribution to ITC  (18.2)  (18.2)  (18.8)  
Ministerial Conference 
Operating Fund (variation)  (0.5)  (0.6)  (1.0)  
Appellate Body Operation 
Fund (variation)  (0.8)  (0.6)  (0.3)  
Depreciation  (5.5)  (5.7)  (5.6)  
Provision for contributions in 
arrears  (0.4)  0.7 (0.5)  
Depreciation of provision for 
right of use - CWR - 0.6 0.6 0.6 
Finance Costs  (0.4)  (0.6)  (0.3)  
Loss on foreign exchange 
transactions  (0.1)  (0.1)  (0.2)  
Total Expenses  254.8  (250.5)  (252.0)  
    
Surplus (Deficit) for the 
Period  (31.9)  (28.2)  (31.0)  
 Source: WTO Financial Statements 2019 and 2018; *(Differences due to rounding).  WT/BFA/W/531  
 
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  Revenue  
Total revenue 
amounts to 
CHF  222.9  million.  140. Revenue at year -end totalled CHF  222.9  million (2018: 
CHF  222.3  million).  
Contributions in 2019 
total 
CHF  196.1  million.  141. The most significant revenue items are contributions from 
Members and Observers amounting to CHF  196.1  million (CHF  195.5 
million Members + 0.6 million Observers) as in the years before.   
Voluntary 
contributions on trust 
funds amount to 
CHF  22.0 million.  142. Voluntary contributions on trust funds increased from CHF 
21.0 million in 2018 by CHF  1.0 million to CHF  22.0 million in 2019.  
Other revenue 
amounts to CHF 4.3 
million.  143. Other revenue increased from CHF 1.3 million in 2018 by CH F 
3.0 million to CHF 4.3 million in 2019. This was mainly due to the 
transfer of CHF 3.3 million from the Appellate Body Operating Fund 
to miscellaneous income.    
 
Expenses  
Total expenses 
amount to 
CHF  254.8  million.  144. Total expenses as at 31  December  2019 are CHF  254.8  million 
(2018: CHF  250.5  million).   
Staff expenditures of 
CHF  170.1  million 
represent two thirds of 
all expenses.  145. Two thirds of the expenses (66.7 per cent) a re chiefly due to staff 
expenditures (salaries, annual leave, pension, health insurance 
including ASHI, as well as entitlements like Education Grant and Home 
Leave among others) with a total of CHF  170.1  million (2018: 
CHF  168.4  million).  
In 2019 expenses for 
ASHI  amount to 
CHF  12.0 million and 
for pension 
CHF  26.1 million.  146. The expenditures (actuarial cost) for ASHI amount to 
CHF  12.0 million and for pension amount to CHF  26.1 million) are 
slightly higher than the year before (ASHI 2018: CHF 11.6 m illion; 
pension 2018: CHF 23.5 million).  
Expenditure for 
temporary assistance 
amounts to 
CHF  25.6 million.  147. Another bigger expenditure item is temporary assistance with an 
amount of CHF  25.6 million (2018: CHF  23.3 million); thus, an 
increase of CHF 2.3 m illion (+ 10 per cent).    
WTO’s contribution 
to the ITC: 
CHF  18.2 million.  148. The WTO´s contribution to the International Trade Centre (ITC) 
also is significant. This contribution includes the funds granted to ITC 
for its core activities (50 per cent of ITC  regular budget). In 2019, WTO 
paid the total amount of CHF 18.2 million, the same amount as in 2018.  
 
 Net Result / Surplus (Deficit) of the Period  
Net result (deficit) for 
the period amounts to 
CHF  (31.9) million.  149. The net result (deficit) for the period 2019 is CHF  (31.9) million 
compared to CHF  (28.2) million in 2018 and after CHF  (31.0) million 
in 2017.  WT/BFA/W/531  
 
- 31 - 
 
  4 Performance Audit  
4.1 Human Resources  
Focus and Objectives   
Audit Scope and 
Audit Methodology.  150. My staff audited the management of separation and early retirement 
and the relevant documentation in the personnel files as part of the 
performance audit. We looked into WTO Staff Regulations and WTO 
Staff Rules. For that reason, my staff used the WTO Intranet platform as 
well as the Oracle system for administration (HR -module). To get an 
overview, we checked five separation cases in 2019. Further, we 
conducted interviews with HR Ma nagement and expert staff from other 
divisions as well as the WTOPP Secretariat. In addition, we raised detailed 
questions in an information request which was responded to by the Human 
Resources Division before our presence in February 2020 as well as befo re 
I have started the remote audit in April 2020.  
Audit Objective.  151. The main objective of the HR audit part was to complete our audit 
on HR processes starting in 2018. In 2019, I was focussed on the 
separation process including early retirement; whether the activities were 
conducted in accordance with WTO´s underlying prin ciples and whether 
the decisions made by the Secretariat's management were comprehensible 
and documented in the personnel files by Human Resources.   
 152. Furthermore, I was focused on the status of the implementation of 
my audit recommendations in previous y ears (follow -up). In this context 
my team checked selected samples remotely, particularly to my 
recommendation on the recruitment process for consultants from 2017.          
Separation  
In 2020, I checked the 
separation process of 
WTO.  153. In February 2020, I have checked the separation process of WTO. 
Already in 2019, I had checked the recruitment and the payroll process of 
WTO and did several recommendations due to process descriptions, 
personal files, IT -infrastructure, salary scales, per formance evaluation, 
bonus and promotion, secondary dependency allowance, summer school 
internship, accumulated annual leave and home leave. The 
implementation of most of my recommendations is still ongoing and is 
separately shown in the annexed status of audit recommendations.    
I reviewed the 
separation of six staff 
members.  154. In 2019, I reviewed the separation process on the basis of the 
separation of six staff members. Four staff members separated from WTO 
based on separation agreements with effect fro m 1 January 2020. One staff 
member separated without an agreement with effect from 1 July 2019. 
These five staff members opted for early retirement. One staff member 
separated from WTO due to a disciplinary decision without the 
opportunity of early retirem ent.   
 WT/BFA/W/531  
 
- 32 - 
 
  WTO paid additional 
indemnities in five 
cases in total: CHF 
71,253.  155. The separation agreement for the four staff members include an 
additional payment by WTO due to staff rule 111.7 “A staff member 
whose contract is to be terminated shall be notifi ed in writing at least three 
months before the date of termination.”. WTO did not pay such indemnity 
for the separation because of disciplinary reasons. WTO paid out this 
“three months indemnity” in all four cases with separation agreements and 
in the case  of separation with effect from 1 July 2019. The total amount 
added up to CHF 71,253 (five cases).     
 156. In addition, WTO paid compensations to WTOPP due to early 
retirement of the five staff members who received the three months 
indemnity. The respective individual compensation was calculated in 
January 2020. The final decision due to separation and the sepa ration 
agreement was notified in four cases in December 2020.  
I note that the 
compensation 
payment to WTOPP 
was not fully 
considered in WTO 
management decision.  157. I note that the WTO management was not fully informed about this 
fact before its final decisi on. 
I note that WTO 
should ensure that late 
decisions not trigger 
additional payments.   158. I state, that at least in two cases, WTO was not obliged to pay the 
three months indemnity because the staff member already has applied for 
disability and/or early re tirement during the year. But the negotiations 
took longer and the final decision by WTO management was notified at 
short notice. In future cases WTO should ensure that late decisions not 
trigger additional payments for indemnities.      
The implemented 
separation process is 
in line with WTO 
rules and regulations.  159. I note that the implemented separation process is in line with WTO 
staff rules and regulations and appropriate to manage the separation of 
staff transparent and effective (in general). But due to  the heterogenic IT - 
infrastructure and different files this process is not efficient because a 
number of information and calculations should be prepared manually. 
That may lead to delays in the process as well as a lack of information 
needed in time.         
I recommend that 
WTO should notify 
decisions due to 
separations in time.  160. I recommend that WTO should notify decisions related to 
separations in time to avoid additional payments for indemnities.    
Early retirement  
WTO paid CHF 1.5 
million additional 
contributions to 
WTOPP due to the 
impact of early 
retirement.  161. In 2019, WTO paid CHF 1.5 million additional contributions due to 
the impact of early retirement of five of its staff members. These early 
retirement cases w ere combined with the separation of a selected group of 
WTO staff effective 31 December 2019. The impact for the WTO Pension 
Plan (WTOPP) was calculated by an actuary in January 2020. The cost for 
the actuary calculation were correctly included in the comp ensation 
payment.     
        WT/BFA/W/531  
 
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  WTO already paid 
additional 
contributions to 
WTOPP due to the 
impact of early 
retirement in former 
years.   162. I also detected that WTO paid additional compensations to WTOPP 
due to the impact of early retirement for a part of s taff members opting for 
early retirement because of separation in the years before.   
• 2015:   CHF 2,279,100 (10 early retirements cases in total)  
• 2016:   CHF 2,015,800 (19 early retirement cases in total)  
• 2017:   CHF    241,300 (13 early retirement cases in total)  
• 2018:   CHF               0 (4 early retirement cases in total)  
• 2019:   CHF 1,543,138 (9 early retirement cases in total)    
  
All WTO staff is 
entitled for early 
retirement five years 
prior to normal 
retirement age.  163. All WTO sta ff is entitled for early retirement starting five years prior 
to normal retirement age according to the WTO staff rules and the 
regulations of the WTOPP. In this regard, eligibility for early retirement 
is age 60 for people whose participation was of 1 Jan uary 2010 to date; 
age 57 for those who assumed duty between 1 January 1990 and 31 
December 2009 and age 55 for those whose participation commenced 
before 1 January 1990.   
WTO management 
finally decide for 
compensations due to 
early retirement.   164. The decision to compensate any impact of early retirement was 
based on “a long -established practice agreed between the Management 
Board of WTO Pension Plan and WTO Director -General” .  In this context 
WTO has agreed to compensate the Pension Plan when it takes 
management decisions artificially elevating the rate of early retirements. 
The final decision to compensate is exclusively reserved to WTO 
management. Neither exists an adequate  agreement with WTOPP to 
determine what “artificially elevating cases” means nor is there a 
regulation in place to limit the number of entitled staff per year according 
to budget lines or to avoid a brain drain (risk management).        
 165. The compensation payments by WTO to WTOPP were not 
recognized in any separation agreements in 2019. Further, the 
management decision was taken before the individual calculation by the 
actuary was done.        
 166. WTO Pension Plan argued: “If actual early retirements remain 
relatively close to assumed probabilities the Pension Plan will remain in 
actuarial balance. However, if the level of early retirements is artificially 
elevated through the actions of WTO management to incentivize early 
retirement, there is a material risk of disrupting the Pension Plan´s 
actuarial balance. Therefore, it seems appropriate for these unanticipated 
elevated costs to be factored into the decision making of the Organization 
and compensated when such decisions are implemented.”  
I note that early  
retirement always has 
an impact on the 
actuarial balance of 
the WTO Pension 
Plan and additional 
contributions by 
WTO needed.  167. I note that all cases of early retirement have an impact on the 
actuarial balance of the Pension Plan. Therefore, WTO should ask the 
WTO Pension Plan to review the effective impact of early retirement for 
the last years based on actuarial calculations by c ase. This allows WTO 
and WTO Pension Plan an applicable estimation for compensation 
payments needed.   WT/BFA/W/531  
 
- 34 - 
 
  I note that there is no 
formal arrangement in 
place for 
compensation 
payments due to early 
retirement.  168. Further, I note that there is no formal arrangeme nt in place for 
compensation payments by WTO due to early retirement. But a formal 
arrangement is essential to determine acceptable terms, obligations and 
justifications for compensation payments and an applicable calculation 
method as well as the process itself, including requests, responsibilities, 
timelines and documentation.   
 169. In addition, I note that WTO management took decisions for 
separation packages based on incomplete information.     
I recommend that 
WTO may enter into 
an arrangement with 
WTOP P due to the 
impact of early 
retirement.    170. I recommend that WTO may enter into a separate arrangement with 
WTOPP regarding compensation payments for early retirement. In this 
agreement WTO and WTOPP should determine an acceptable 
justification and a clear  calculation as well as an applicable procedure 
including timelines and documentation.  
I recommend that 
HRD ensures that 
WTO management 
has all relevant 
information before 
decisions will be 
taken.  171. In addition, I recommend that HRD ensures that the Secretariat’s 
Management has all relevant information related to an optional separation 
packag e before decisions will be taken. This includes individual 
compensation payments by WTO to WTOPP related to early retirement.     
 Recruitment process for individual consultants  
Follow -up concerning 
the recruitment of 
consultants.  172. In my “Report of the In dependent External Auditor on the Audit of 
the Financial Statements of the World Trade Organization for the year 
ended 31 December 2017” I highlighted that there are two WTO -divisions 
responsible for recruiting consultant services and that there are no 
overarching rules for the recruitment of consultants in place. The purchase 
of services from consultant firms is defined in the WTO Procurement 
Manual (Procurement Guidelines) and managed by harmonized 
procurement processes. The recruitment of individual cons ultants is 
governed by the Administrative Guidelines for establishing Special 
Service Agreements (SSA) for consultants and panellists (Administrative 
Guidelines) and managed by the service requesting division and HRD. 
While the Procurement Guidelines conta in, inter alia, details for the 
procurement process; procurement methods in relation to the amount of 
the project (formal competition for procurements valued above CHF 
20,000) and delegated authorities’, similar regulations are not determined 
in the Admini strative Guidelines. Norms and procedures ensuring a 
competitive procurement of SSA’s are missing. Nevertheless, the 
recruitment of individual consultants should be based on highest standards 
of competence, efficiency and integrity by WTO recruitment polic y.  
Already in 2012, OIO 
recommended 
updated guidelines.  173. Already in 2012, the Office of Internal Audit (OIA), now Office of 
Internal Oversight (OIO), criticized the lack of uniform regulations for a 
(competitive) recruiting process of consultants and rec ommended updated 
guidelines.  WT/BFA/W/531  
 
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  In 2018, I detected a 
lack of compliance 
and recommended a 
standardized 
recruitment process 
according to 
procurement.  174. During my audit in April 2018, I have checked a big sample of 
consultants and SSA´s with similar findings as OIO. The update of 
applicable guidelines was still in process. Therefore, I recommended in 
my audit report standardizing the recruitment processes for individual 
consultants according to the Procurement Guidelines. In 2019 and 2020, 
WTO stated the status of the implementation of recommendations as 
ongoing.  
The process is still 
ongoing.  175. I note that the process is still ongoing and that there are no  uniform 
regulations for the recruitment process of consultants in place. 
Furthermore, the drafted guideline was not finally adjusted with the 
Administration and General Services Division (AGSD) and OIO.  
 176. WTO justified the delay on processing of the recr uitment process 
for consultants with work on other policies as well as the tender 
concerning the health insurance and the launching of a comprehensive 
review of HR workflows and information systems. HRD would have been 
also responsible for rolling out the promotion exercise and the diplomatic 
status exercise each year. The last status updated was that HRD had 
indicated that they would finish the consultation process by 31 July 2020 
and that the guidelines would be approved by the Director -General on 31 
Augu st 2020 and published on 1 September 2020.  
WTO was not able to 
draft an essential 
guideline within eight 
years.  177. I note that WTO was not able to draft an essential guideline for the 
recruitment process of individual consultants within eight years. 
Therefor e, I suggest the harmonization of procurement processes to ensure 
compliance and transparency.  
I strongly recommend 
that WTO implement 
the new guidelines as 
soon as possible.  178. I strongly recommend that WTO finish and implement the new 
guidelines for the recruitment of individual consultants as soon as possible 
to ensure similar regulations and compliance for all services provided 
from consultants as well as to determine an appro priate segregation of 
duties and delegated authorities in the process.  
I selected a number of 
contracts due to the 
follow -up on my 
previous year 
recommendation.  179. I selected five SSA contracts as spot checks due to the follow -up on 
my previous year recommendation. In none of the selected cases WTO 
has checked the sanction list. In two of the selected contracts the 
consultants were selected by the service -requesting division (segregation 
of duty) without any competition. Further, the two contracts have been 
extended/renewed multiple times. Therefore, both contracts adding up 
significantly above CHF 50,000.  
   
 
 
 
 
 
 WT/BFA/W/531  
 
- 36 - 
 
  Individual case I  
Special Service 
Agreements in 201 8, 
2019 and 2020.   180. WTO employs a dependent of the director of the Enhanced 
Integrated Framework Executive Secretariat as an individual consultant 
since May 2018 and extended/renewed the contract multiple times 
based on the same requirements . The applicable Special Service 
Agreements foresee following contract regulations concerning duration 
and consideration:  
 
Table 6: Details of SSA contracts 2018, 2019, 2020  
 
 SSA 2018  SSA 2019/2020  SSA 2020  
Duration  12 weeks between 
period 28  May 
2018 to 
28 September 2018  
 
16 h per week 
(2 days)  
 
And 4 weeks (2 
days a week) from 
29 September to 31 
October 2018  12 months 
between period 
4 March 2019 to 
3 March 2020  
 
16 h per week 
(2 days)  12 months between 
period 4  March 
2020 to 
31 December 2020  
 
16 h per week  
(2,5 days)  
Contracted 
fee, conditions  CHF 500 per 
working day  
(8 h)  CHF 500 per 
working day  
(8 h)  CHF 500 per 
working day  
(8 h)  
 
The consultant was 
selected and recruited 
without any 
competition.   181. The recruitment of the consultant took place without any 
competition (selection directly). The description of the requested 
services and the selection process was governed and approved by  the 
same (development) division (segregation of duties). The director of 
the requesting division signed all Special Service Agreements. The 
final internal decision about the recruitment was confirmed via e -mail 
by the relevant Deputy Director -General of t he contracting division.  
The contracted fee has 
been exceeded in 2018 
and 2019.  182. In 2018, the consultant received a total consideration of CHF 
16,500 and in 2019 CHF 50,000 (as well as other travel related 
expenditure / out of pocket: CHF 1,723). The contr acted fees have been 
exceeded in 2018: CHF 500 and in 2019: CHF 2,000. Finally, WTO 
paid in total CHF 2,500 more than contracted. In 2020, WTO has paid 
CHF 22,750 for services from March to August due to the current 
contract.      
I note that the 
procedur e was not in 
line with good 
practice in 
International 
Organizations.    183. I note that the procedure to contract a dependent of a WTO staff 
member - without any competition - was not in line with good practice 
in International Organizations. The actual circum stances do not exclude 
misconduct or a conflict of interests. Therefore, I point out that WTO 
should take special care to possible conflicts of interests as well as 
misconduct according to contracts with dependents or relatives of staff 
members.     WT/BFA/W/531  
 
- 37 - 
 
  I note that WTO 
extended the contract 
multiple times without 
competition and over - 
paid CHF 2,500 in 
2018 and 2019.  184. In addition, I note that WTO extended the contract multiple 
without a new selection/recruitment and in 2020 based on inconsistent 
data: 12 month s period starting 4 March 2020 and ending 31 December 
2020. Thus, the contracted term extended from initially 12 weeks up to 
26 months at current status. The contracted fees increased - by more 
than 7 times - from CHF 12,000 up to CHF 89,200 without any 
adjustment of the daily fees. Finally, WTO paid CHF 2,500 more than 
contracted in 2018 and 2019 (overpayment).  
I recommend that 
WTO should finish 
the contract.   185. I recommend that WTO should terminate the contract at the end 
of the contracted period without  any extensions. Exceeded payments 
for 2018 and 2019 should be offset if not correctly justified and 
approved.  
I recommend that 
WTO should ensure a 
competitive process 
by HRD in all cases 
where consultants are 
close relatives of 
WTO staff.  186. In addition, I recommend that WTO should ensure a competitive 
and transparent process governed by HRD in all cases where 
consu ltants are close relatives of WTO staff members. Final decisions 
only should be taken by the Director -General or the Deputy Director -
General responsible for human resources.        
  
Individual case II  
Multiple Special 
Service Agreements 
for Appellate Bod y 
hearings in 2019.  187. In 2019, WTO contracted a company (LTD) multiple times as an 
individual consultant (SSA). The contracted company was selected by 
the requesting Appellate Body Secretariat (ABS) without any 
competition because it was of the understanding  that the established 
practice of a waiver continued to apply. The ABS was not requested to 
submit a divisional procurement plan in 2019 regarding the 
transcription of appeal hearings and therefore this activity is not listed 
in the WTO Annual Procurement Plan 2019. The respective SSA for 
each appeal hearing followed the same HRD templates and were signed 
by the director of the ABS. The contracted company provided WTO 
with verbatim transcriptions of oral hearings (transcript of the 
proceedings) of the Appel late Body (AB). For this purpose, the 
contracted company sent up to five reporters to Geneva for AB oral 
hearings. ABS contracted this company separately for each individual 
hearing of the AB. But there was no formal frame contract in place. In 
each contra ct the consultant considered attendance on daily basis and 
were paid the amount of the hearing transcription and DSA per 
attending reporter. In addition, the contracted company invoiced WTO 
for travel expenses based on a fixed amount for each flight as wel l as 
DSA and terminal expenses.   WT/BFA/W/531  
 
- 38 - 
 
  In 2019 WTO paid 
CHF 101,091.  188. While the payments for services under each of these contracts 
were below CHF 20,000, WTO paid in 2019 a total of CHF 101,091 
based on the individual settlements by the consultant company for  each 
Appellate Body individual hearing session in each of nine appeals 
pending (there were two oral hearings each in the two largest pending 
appeals). The payments also include travel expenses and DSA. If the 
payments for appeal hearing transcription fees  in 2019 are separated 
from the payments for travel costs (flights and DSA) of court reporters, 
then the amount of transcription fees is below CHF 50,000 (usually 
consultancy contracts focus on the cost of services rendered, e.g. 
transcriptions). The speci fic transcription contracts could only be 
drawn up after the size of an appeal, the hearing date, and the number 
of hearing days were known. All services and payments have been 
recorded as “Panellist fees” in the books. In this context WTO has 
explained th at the use of this term was unfortunate because it creates 
confusion with fees paid to first -instance panellists. Nevertheless, 
transcription fees and travel costs were properly budgeted and recorded 
in the Appellate Body Operating Fund.         
I note th at the contract 
form was incorrect.  189. I note that the contracted form was incorrect. The abbreviation 
LTD means Limited and indicated a corporation. Due to WTO Rules 
and Regulations individual consultants are exempt from harmonized 
procurement and should be recruited under the SSA regulations 
(guidelines). Companies always have to be selected and contracted by 
the WTO procurement unit due to the requested profiles and conditions 
by the requesting unit based on the applicable procedures and 
procurement regulat ions. This implies a segregation of duties and 
delegated authority as well as a check of sanction lists before 
contracting.      
I note that WTO 
contracted the 
consulting company 
without a competition.  190. I also note that WTO contracted the consulting company without 
a competition needed. In addition, such kind of services should be 
considered in a frame contract and procured by an op en competition.    
I note that the services 
were not recorded 
correctly.  191. In addition, I note that the services were not recorded correctly. 
Services and travel cost should be recorded separately and correctly 
designated according to the chart of accounts .   
I recommend that 
WTO should ensure 
that companies always 
be contracted by 
following a 
harmonized 
procurement process.  192. I recommend that WTO should ensure that companies only can 
be selected and contracted by following a harmonized procurement as 
well a s the applicable rules and regulations.  
I recommend that 
WTO should agree 
frame contracts if 
applicable.   193. Finally, I recommend that WTO should agree frame contracts for 
recurring services over a longer period, if applicable.  
 WT/BFA/W/531  
 
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  4.2 Trust Funds  
Focus and Objectives   
Audit Scope and 
Audit Methodology.  194. My staff also audited the financial statements as well as the 
management of trust fund activities and the relevant documentation. We 
looked into the applicable Rules and Regulations as well as the qu arterly 
reports on trust fund activities. For that reason, my staff used the WTO 
platform Qlickview as well as the WTO ERP system (Oracle). 
Furthermore, my team conducted interviews with the management and 
expert staff from AGSD. In addition, I raised deta iled questions in an 
information request which was responded to by AGSD before our remote 
audit.  
Audit Objective.  195. The main objective of the audit on trust funds was the funding 
situation and the purpose of the new established funds. The audit included 
an extensive check of the financial statements as well as the current 
funding situation. To get an overview, my audit team checked a big sample 
of agreements for voluntary contributions (earnings) as well as the 
procurement process and the settlem ent of services provided by 
implementing partners and by hotels and consultants (expenditures) in 
2019.  
General overview  
In 2019 WTO stated 
14 trust funds and 3 
administrative funds 
in its financial 
statements with a 
total volume of CHF 
30.1 million as at 31 
December.  196. As at 31 December 2019, WTO shows in its financial statements 
14 trust funds and 3 administrative funds wit h a total volume of CHF 
30.1 million funded by voluntary earmarked contributions from 
individual WTO Members as well as the European Union.  WT/BFA/W/531  
 
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  Overview of WTO 
trust funds as at 31 
December 2019.  197. An overview of WTO trust funds is shown in the table below:  
 
Table 7 Overview of WTO trust funds as at 31 December 2019  
Trust Fund   
(technical term)  Est. Purpose  Balance as at 
31/12/2019   
in KCHF 
(31/12/2018)  
DOHA Development 
Agenda Global Trust 
Fund  
(DDGATF)  2001  Funding technical assistance 
programmes and training 
activities for developing 
countries and LDCs by voluntary 
contributions   9,644  
(12,609)  
French Irish 
Internship 
Programme 
(TIMM1)  2001  Internship to benefit Geneva -
based missions of LDCs and 
small eco nomies  1,228    
(1,262)  
Netherlands Trainee 
Programme  
(TNL05)  2005  Internship programme helping 
government officials to improve 
understanding of trade policy  1,182                                             
(   981)  
Trade Facilitation 
Agreement Facility 
(TTFAF)  2015  Support of developing and LDC 
members to assess specific needs 
for implementing the agreement  5,112     
(6,228)  
Participation LDCs   
in Ministerial Confe -
rences (TMI10)  1996  Participation of LDCs in 
Ministerial Conference s using 
voluntary contributions  405                    
(338)  
Standards on Trade 
Development 
Facility (STDF)  2014  Global partnership that supports 
developing countries in capacity 
building  9,392    
(8,219)  
China LDCs and 
Accessions 
Programme 
(TCLAP)  2011  Participation of LDCs in WTO 
activities and helping acceding 
LDCs to improve their capacity 
for accession  749             
(571)  
Data Set on Trade in 
Services by Sector 
and Mode of Supply 
(TDSTS)*  2016  Funding a project analysing and 
providing data o n goods, 
services and intellectual property 
by the EU Commission   0                
(18) 
Natural Disaster and 
Trade (TNDAT)  2018  Highlight issues that could be 
researched on trade and disasters    8                     
(52) 
Transferring 
technologies for the 
development of 
Cotton (TEF02)  2019  Technology transfer for cotton 
by-products (development)  78 
LDC Graduation 
Fund ( TLDCG)  2019  EIF project on graduation for 12 
LDCs  120 
LDC Fisheries 
Negotiations Trust 
Fund  
(TFSNG)  2019  Funding travel costs of LDCs to 
take part in negotiations on rules 
for fisheries subsidies  34 
CDCRI: Investment 
Facilitation for 
Development 
(TCR01 )   2017  Strengthen collaboration in 
research and research related 
technical assistance and capacity 
building for trade  196             
(196)  
CDCRI: Asycuda 
Tiva Trust Fund 
(TCR02)  2019  Improving access to trade and 
market access statistics and 
databases  1,089  
(0) 
Administrative funds**  
Enhanced Integrated 
Framework 2008  Multilateral partnership to assist 
LDCs in their use of trade as an 483           
(414)  WT/BFA/W/531  
 
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  Executive Secretariat 
(TIFES)  engine for growth, sustainable 
development and poverty 
reduction  
Trust Fund   
(technical term)  Est. Purpose  Balance as at 
31/12/2019   
in KCHF 
(31/12/2018)  
Administrative funds**  
Entity Pre -shipment 
Inspection - Deposits 
(T0013)     1995  Mechanism for settling disputes 
between exporters and pre-
shipping inspection companies  88               
(88) 
Programme Support 
Fund (EPSF1)  1999  Administration of 13% overhead 
charges on extrabudgetary funds   1,039              
(   939)  
 
 *  The fund was closed at the end of 2019.  
** The Programme Support Fund as well as the Enhanced Integrated Framework Executive 
Secretariat and the Entity Pre -shipment Negotiations Trust Funds are technically not trust funds 
and therefore not considered in the following analysis.   
 198. The Doha Development A genda Global Trust Fund (DDAGTF) is 
the flagship multi -donor trust fund in the WTO overseen by the Institute 
for Training and Technical Co -operation (ITTC). In 2019 it has 
accounted for 52 per cent of trust fund activities as measured by total 
trust fund e xpenditures. In addition to the DDAGTF, ITTC also oversees 
three other trust funds, the Netherlands Trainee Programme, the French 
Irish Mission Internship Programme, and the China LDC Accessions 
Fund. All of these funds are part of the Biennial Technical A ssistance 
and Training Plan (TA Plan) submitted to the Committee on Trade and 
Development (CTD) for approval and to the CBFA for review and 
recommendation to the General Council for approval.  
 199. In total, these four funds governed by ITTC account for 64 pe r 
cent of total trust fund expenditure.  
 200. The second most significant multi donor trust fund is the 
Standards and Trade Devel0opment Facility (STDF). In 2019 it has 
accounted for 27 per cent of total trust fund expenditure. It has its own 
governance struc ture consisting of a Policy Committee and Working 
Group comprised of Partners, Donors and Developing Country Experts.  
 201. Together the (five) funds falling under the TA Plan and STDF 
account for 91 per cent of total trust fund expenditures in 2019.  
 202. Another significant multi -donor trust fund is the Trade Facilitation 
Agreement Facility (TFAF) which is overseen by the Market  Access 
Division and develops plans in consultation with Members including 
developing and LDC Members. It reports regularly on its activities in 
the Trade Facilitation Committee. In 2019 it has accounted for 7 per cent 
of total trust fund expenditures.  
Six trust funds 
represent 98 per cent 
of the total 
expenditures.  203. These six significant trust funds represent 98 per cent of total trust 
fund expenditures in 2019.  
  204. I note that the remaining trust funds represent only two per cent of 
the total expenditur es in 2019.  WT/BFA/W/531  
 
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  I note that 9 of the 14 
trust funds were 
established in the last 
six years; just in 2019 
four of them.  205. I note that 9 of the 14 trust funds were established by WTO in the 
last six years (since 2014). Just in 2019, WTO established four new tru st 
funds, mainly funded by only one to three members. Only one out of the 
four trust funds received a significant contribution (CHF 1.1 million) in 
2019. The remaining three trust funds received together about CHF 0.5 
million and have a balance of CHF 0.2 million as at 31 December 2019.     
I note that nine of the 
trust funds received 
only one contribution 
by a single donor.  206. In addition, I note that nine of the current trust funds received only 
one contribution in 2019. Six out of them received one contribution from 
a single Member and three out of them from a single UN Organization.  
Therefore, WTO should review the purpose o f such trust funds due to 
its own tasks and purposes as well as its position as an International 
Organization. Besides, WTO may ask for non -earmarked contributions 
or earmarked contributions for its technical assistance in general.    
I note that WTO has 
no centralized unit to 
manage its trust fund 
activities.  207. Finally, I note that WTO has no centralized unit to manage its trust 
funds' activities as well as the funding. At least seven divisions (ITTC; 
Market Access; Agriculture & Commodities; Economic Rese arch and 
Statistics; Intellectual Property, Government Procurement and 
Competition; Enhanced Integrated Framework Executive Secretariat 
and AGSD) are managing trust fund activities. There is no overall 
responsibility defined. I detect in all of these divis ions temporary 
contracted project staff financed by voluntary contributions (L -posts). 
This may lead to overlaps and inefficiencies as well as to a different 
handling of internal processes e.g. controlling and procurement (see 
later in my report).  
I recom mend that 
WTO should review 
its trust fund 
landscape.  208. I recommend that WTO should critically review its trust fund 
landscape. As a result, WTO should develop a strategy to close trust 
funds without any activity in 2019 as well as to merge trust funds with  
similar purposes and donor structure. In this context, WTO may 
harmonize main processes to better manage the trust funds like 
controlling, funding, and procurement in a separate unit to ensure 
consistency and transparency as well as full compliance with W TO 
Rules and Regulations.   
 
Voluntary contributions  
In 2019 WTO 
received CHF 21.0 
million voluntary 
contributions.  209. In 2019 WTO received CHF 21.0 million voluntary contributions: 
CHF 14.3 million from single members as well as from the European 
Union (EU) CHF 1.9 million and from UN Organizations9 CHF 4.8 
million to finance its trust fund activities.   
 210. All voluntary contributions were earmarked due to the individual 
WTO trust funds (DDAGTF, STDF) or specific projects/programmes.  
 
9 United Nations Office for Project Services (UNOPS).  WT/BFA/W/531  
 
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  Most of the donors 
granted voluntary 
contributions only for 
one year.  211. Most of the donor granted voluntary contributions only for one 
year and paid the respective amounts in the financial year of WTO. But 
in individual cases the donor granted the contributions for two or 
multiple years due to the WTO Biennial Technical Assistance and 
Training Plan (TA Plan) and the project terms. This may have an effect 
due to IPSAS 23.    
In all cases WTO 
recognized the 
pledged contributions 
in the financial year.  212. Until now, WTO r ecognized and recorded the respective 
contributions as paid or pledged in the agreements with the donor in the 
present financial year. WTO did not recognize any contributions due to 
IPSAS 23 in 2019.    
 213. Because of the special situation in 2020 due to COV ID-19 and the 
related restrictions, I was not able to check together with WTO all 
applicable agreements due to the prerequisites of IPSAS 23. But the TA 
plan 2018/2019 has been ended at 31 December 2019 and most of the 
multiyear commitments are based on th is plan.        
I note that WTO 
should implement an 
applicable monitoring 
of all voluntary 
contributions pledged 
for more than one 
year.  214. I note that WTO should implement an applicable monitoring to 
ensure that all voluntary contributions pledged for more than one year 
will be checked due to a necessary recording due to IPSAS 23. In this 
context WTO may create a tool to oversee the contractual arrangements 
according to the prerequisites of IPSAS 23.   
I recommend that 
WTO should 
implement an 
effective monitoring 
to ensure  a correct 
recording due to 
IPSAS 23.  215. I recommend that WTO should implement an effective monitoring 
of all multiyear voluntary contributions to ensure a correct recording due 
to IPSAS 23, starting in 2020.   
Procurement  
I selected a random 
sample of 54 
acquisitions for 
services for trust fund 
activities in 2019.  216. I selected a random sample of 54 acquisitions for services from 
implementing partners, hotels, training and consultants contracted for 
trust fund activities in 2019. In this context I checked the procurement 
of the requested services as well as the correct payments due to the 
provided settlements by WTO. In addition, I checked the correct 
recording and the delegation of authority.  
WTO contracted in 
11 cases services 
from hotels without a 
required  competition. 
The contracted 
volume amounted 
CHF 1.4 million.  217. WTO contracted in 11 cases hotels with an amount higher than 
CHF 20,000 without a required competition of three offers according to 
the WTO Procurement Manual. In two out of these 11 cases WTO 
contracted the hotels based on only two offers and in nine case s without 
any competition. The contracted services amounted from CHF 27,602 
up to CHF 238,338 with an average of CHF 124,200 per case. The total 
contracted services added up to nearly CHF 1.4 million. Finally, the 
selection process of the hotels was incomp letely documented.  WT/BFA/W/531  
 
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   218. In one of the selected cases, an implementing partner undertook to 
provide services amounting CHF 80,230 without a fully signed 
agreement. But payment controls in place ensured that no payment was 
made to the implementing partner with out a signed agreement.   
In 2019, WTO paid 
sales taxes in a 
number of cases for 
services from hotels 
CHF 125,503.  219. In 12 cases WTO paid sales taxes (e.g. VAT, IVA) for services 
provided by hotels outside Switzerland. In total, WTO paid CHF 
125,503 sales t axes in a number of countries in Africa, Asia and Latin 
America and the Caribbean for hotel services in 2019.    
WTO procurement 
unit was not involved 
in any case.  220. The relevant procurement and contracting were managed in all 
cases by ITTC and Market Acces s Division. In a number of cases the 
procurement process was not in line with WTO policy which require 
segregation of duties and an open competition (contracted amount CHF 
50,000 or higher). The WTO procurement unit was not involved or 
contacted in any of these cases.      
In general, WTO is 
exempt from any 
sales taxes.  221. Due to the Marrakech agreement establishing WTO (Article VII, 
Status of WTO), WTO is as a specialized agency exempt from all direct 
and most indirect taxes. In general, this also include sa les taxes. 
Therefore, WTO should not pay any sales taxes and is entitled to reclaim 
all taxes paid.  
I note that WTO may 
have paid too much 
for services provided.  222. I note that WTO may have paid too much for services provided by 
hotels and implementing partners because the acting divisions did not 
award such services in required competition in a number of cases with 
significant amounts.  
I note that WTO paid 
sales ta xes although 
WTO is exempt from 
taxes.   223. In addition, I note that WTO paid sales taxes of CHF 125,503 
although WTO generally is exempt from tax payments.    
I note that WTO 
overlooked the 
segregation of duties.  224. I also note that WTO overlooked segregation of duties in a number 
of cases related to procurement managed by some trust fund managing 
divisions.    
 225. Finally, I note that the trust fund managing staff members in ITTC 
and Market Access Division were not aware of the tax status of WTO.  
I recommend t hat 
WTO should 
harmonize the 
procurement for trust 
fund activities.  226. I recommend that WTO should subject all procurement activities 
with higher amounts to a harmonized and compliant procurement 
process to ensure transparent and standardized procedures and correct 
documentation as well as to guarantee an appropriate value for money.     
I recommend that 
WTO should train all 
responsible staff.  227. In addition, I  recommend that WTO should continue to train all 
staff responsible for procurement in other divisions to ensure correct 
proceedings and economic thinking as well as the tax -exempt status of 
WTO.   
Finally, I recommend 
that WTO check tax 
refunds.  228. Finally, I  recommend that WTO should monitor requests for 
exemption from sales taxes for services in 2019 and 2020 and to check 
whether it is worth reclaiming taxes paid during these years.     
 WT/BFA/W/531  
 
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  Project staff  
As at 31 December 
2019 WTO stated 41 
staff members on L -
posts.   229. As at 31 December 2019 WTO employed 41 staff members with 
temporary contracts on L -posts funded by voluntary contributions. This 
staff was originally contracted project based for a two years period with 
possible extension up to four years.      
27 staff members on 
L-positions have been 
contracted longer 
than four years.  230. As at 31 December 2019 27 out of these 41 staff members have 
been contracted longer than for four years by WTO. Two out of these 
27 were on special leave without payment (SLWOP) for a period longer 
than six months.  
  231. Temporary contracts automatically switch to the status of 
permanent contracts when a temporary contract was extended twice or 
the total contracted period is l onger than four years according to the 
jurisdiction of ILO.  
I note that WTO is 
faced with a high risk 
due to L -positions.  232. I note that WTO is faced with a high risk due to L -positions 
contracts when the staff member is contracted longer than four years. 
Because these staff positions are not covered by the regular budget and 
voluntary contributions may decrease without any compensation at short 
notice.     
 233. Further, I note that WTO should not offer SLWOP for longer 
periods than six months to staff members o n L-positions because these 
are temporary contracts. Therefore, WTO should check with priority to 
terminate these contracts.  
I recommend that 
WTO should review 
all L-post contracts 
and implement an 
effective monitoring.  234. I recommend that WTO should review  all temporary contracts 
with staff on L -positions and implement an effective monitoring 
regarding temporary contracts to ensure that these contracts do not 
automatically switch into permanent contracts by expiring the deadline 
of four years for temporary contracts.     
I recommend that 
WTO develop a 
concept for staff on 
L-positions.  235. In addition, I recommend that WTO should develop a sustainable 
concept for staff on L -positions to enable a transfer to permanent 
positions or to terminate contracts based on structural requirements. 
New contracts should be generally terminated before the four years 
period expires.   
 
4.3 Appellate Body  
Focus and Objectives   
Audit Scope and 
Audit Methodology.  236. After discussions with the WTO administration in May, I decided to 
include an audit on expenditures for the Appellate Body in 2019 within 
my performance audit. Because of the COVID -19 situation I was not able 
to conduct the audit in Geneva. Therefore, all audit activities were WT/BFA/W/531  
 
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  conducted remotely by my audit team. My team audited the current 
situation of the Appellate Body (AB) and the respective expenditures of 
the Appellate Body Secretariat in 2019. We looked into the applicable 
Rules and Regulations as we ll as the reports on AB activities in the first 
semester 2020. My audit team used the WTO platform Qlickview as well 
as the WTO ERP system (Oracle). Further, my team conducted interviews 
with the management and expert staff from ABS and AGSD. In addition, 
I raised detailed questions in an information request which was responded 
to by ABS, HRD and AGSD during our remote audit.  
Audit Objective.  237. The main objectives of the audit on AB were the expenditure and 
funding in 2019. The audit includes an extensive check of the expenditures 
of the ABS in 2019. In this context, I also reviewed the OIO report on 
Appellate Body Members and Panelists´ expendit ures.   
 238. In addition, I checked the actions taken by WTO management to 
cover risks due to the specific situation of the AB.  
General overview  
The settlement of 
disputes is one of the 
core activities of 
WTO.   239. The settlement of disputes is one of WTO's main tasks (core 
activities). A dispute arises when a Member believes another Member 
is violating an obligation or commitment that was undertaken as part of 
WTO covered agreements. WTO has one of the most active 
international dispute settlement mechanisms in the world. Since the 
entry into force of WTO, a total of 593 disputes have been brought and 
over 350 rulings have been issued.       
 240. The General Council convenes as the Dispute Settlement Body 
(DSB) to deal w ith disputes between WTO members.   
 241. Appeals are conducted according to the procedures established 
under the Understanding of Rules and Procedures Governing the 
Settlement of Disputes (DSU) and the Working Procedures for 
Appellate Review (Working Procedur es).  
The Appellate Body 
(AB) is a standing 
body composed of 
seven members 
(ABMs).  242. The Appellate Body (AB) was established in 1995 under Article 
17 of the DSU. The AB is a standing body normally composed of seven 
members (ABMs), each to be appointed by th e DSB for a term of four 
years with the possibility of being reappointed once for another four -
year term.  
Renumeration 
package for ABMs.  243. The remuneration package for ABMs has been adopted by the 
WTO Members in DSB Decision DSB/1.3 and contains:  
• a retainer of CHF 9'085 per month;  
• allowance for administrative expenses of CHF 330 per month;  
• a daily fee of CHF 783 when working on a case;  
• a dai ly subsistence allowance (DSA), calculated in accordance 
with the United Nations rates (currently CHF 374), for each day 
that the ABM is required to be in Geneva on official business of WT/BFA/W/531  
 
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   the AB and for each day of travel that is necessary for the ABM 
to per form official business of the AB:  
• a contribution to the cost of health insurance of CHF 211 per 
month (if applicable).  
 244. Moreover, when ABMs are required to travel in order to perform 
official business for the AB or attend meetings in Geneva, their travel 
expenses (i.e. airline tickets, terminal expenses, etc.) are entirely 
covered by WTO.  
The AB is located in 
Geneva.  245. The AB is located in Geneva, Switzerland.   
In December the AB 
suspended its work 
because the terms of 
two of the remaining 
three ABMs expired.  
 246. Since July 2017, WTO Members have been unable to agree on the 
appointment of new ABMs and the number of ABMs has decreased. 
Already in October 2018, the number of ABMs fell to three members. 
In December 2019, the terms of two of the remaining thr ee ABMs 
expired. Deprived of the quorum of three members needed (at least) to 
hear an appeal, the AB suspended its work.  
Three pending 
appeals have been 
continued.  247. Nevertheless, a number of appeals were completed by ABMs after 
their term of office ended pursuant to Rule 15 of the AB Working 
Procedures. Specifically, in two appeals which had been finalized by 
ABMs in 2019, the AB reports were translated and circulated in 2020. 
In another pending appeal work continued in 2020 whereas the oral 
hearings had a lready taken place in 2019. This appeal was finished in 
2020 and the AB report was circulated in June 2020.       
 248. In 2019, Members continued to be unable to reach consensus on 
launching the selection processes for the appointment of new ABMs.  
Thus, as at 11 December 2019 six out of seven positions on the AB were 
vacant. The term of one remaining ABM expires in Novemb er 2020.  
The Appellate Body 
Secretariat (ABS) 
provided legal and 
administrative 
support to the AB.  249. The AB received legal and administrative support from its 
Secretariat (ABS). The ABS consisted of a number of counsellors and 
dispute settlement lawyers as well as administrative service staff led by 
a director.  
The ABS was 
inactive by the end of 
June 20 20.  250. As at 30 June 2020 all of the ABS staff has been seconded or 
transferred to other WTO divisions or units as the AB had become 
inactive.  WT/BFA/W/531  
 
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  Budget and Expenditure  
Budget of the 
Appellate Body and 
its Secretariat for 
2019 was CHF 7.6 
million.  251. The activities of the Appellate Body and its Secretariat are 
financed from the WTO regular budget (AB Secretariat budget and 
Appellate Body Operating Fund) based on assessed contributions by 
Members. The WTO regular budget 2019 was approved by the 
General Council; this included the separately stated budget for the AB 
and its Secretariat CHF 7.6 million (2018: CHF 7.6 million). In 2019, 
WTO recognized 24 staff positions and four internships for the ABS.  
Main budget 
positions were staff 
expenditures CHF 4.6  
million, ABM fees 
CHF 0.8 million and 
contribution to the 
ABOF CHF 2.0 
million.     252. In 2019, the AB Secretariat budget was mainly allocated to staff 
expenditure CHF 4.6 million (2018: 4.6 million), ABM retainers 0.8 
million (2018: CHF 0.8 million) and the  Appellate Body Operating 
Fund (ABOF) CHF 2.0 million (2018: 2.0 million). The ABS budget 
covers the fixed costs for ABMs (i.e. the monthly retainers). The CHF 
2.0 million contribution to the ABOF was directly allocated at the 
beginning of 2019 (as in prev ious years). The ABOF covered the 
variable costs associated with appeals (daily fees, travel costs and 
subsistence allowances of ABMs as well as transcription costs for 
appeal hearings).  
Expenditure covered 
by the ABOF 
amounted to CHF 1.2 
million.  253. In 201 9, WTO covered from the ABOF total expenditure of CHF 
1.2 million (2018: CHF 1.4 million), including CHF 0.7 million ABM 
daily fees (2018: CHF 0.8 million), CHF 0.4 million ABM travel 
expenditures and subsistence allowances (2018: CHF 0.5 million), and 
CHF  0.1 million consulting expenditures for oral hearings 
(transcription fees and travel costs for court reporters), same amount as 
in 2018.       
ABOF remaining 
funds of CHF 3.3 
million were 
transferred to the 
regular budget 
(surplus).  254. As at 1 January 2019, WTO stated in the opening balance of the 
ABOF CHF 2.6 million (accumulated funds over the previous years). 
In total the available funds in 2019 amounted to CHF 4.6 million after 
the allocation of CHF 2.0 million contributions from the  regular 
budget in January 2019. At the end of 2019, after deduction of the 
expenditure of CHF 1.3 million, WTO transferred the remaining funds 
of CHF 3.3 million from ABOF to miscellaneous income, and 
subsequently to the overall budgetary surplus, in keep ing with a 
decision by the CBFA (also see para 134 “reserves”).        
The ABOF 
consequently had a 
balance of zero after 
the remaining funds 
in the ABOF were 
transferred.  255. I note that, consequently, the closing balance in the ABOF as at 
31 December 2019 wa s released and transferred to miscellaneous 
income and finally to the overall Budgetary Surplus.     WT/BFA/W/531  
 
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  Risk Management - Mitigation Measures  
WTO pointed out the 
risk of a blocked AB.  256. Since 2018, WTO pointed out the risk of a blockage of the AB as 
one of its core activities as well as the possible departure of experienced 
staff needed to service appeals (key risk). But adequate mitigation 
measures were solely depending on decisions by t he General Council 
and the Dispute Settlement Board.   
The General Council 
appointed a facilitator 
to help improve the 
AB functioning and 
resume the 
appointment of AB 
members.  257.   In the first months of 2019, the General Council had appointed 
the chairman of the DSB as a facilitator to help WTO Members discuss 
how to improve the AB functioning and resume the appointment of AB 
members. Twelve proposals were put forward by WTO Members to 
address the functioning of the AB. The facilitator delivered five report s 
to the General Council and a draft General Council decision. But in the 
end, there was no consensus to approve the draft decision.           
In November 2019, 
the Director -General 
requested the OIO to 
conduct an internal 
audit on the AB 
expenditure.  258. In November 2019, the Director -General requested the OIO to 
conduct an internal audit of expenditures relating to ABMs and 
Panelists.  
Since February 2020, 
WTO transferred 
ABS staff to other 
divisions. As at 30 
June 2020 the ABS 
was inactive.  259. On 1 February 2 020, WTO started to second ABS staff members 
to other WTO divisions (secondment). As at 1 May 2020, only the 
director and the administrative assistant were still managing the expiring 
business and completed the last appeal together with some staff already 
seconded to other divisions. As of the 30 June 2020, they were seconded 
or transferred to other WTO Divisions.  
WTO has started 
important steps to 
cover its risks and to 
enable a quick restart 
of the appeals level.  260. I note that WTO has realized the potenti al risks of less funding as 
well as the loss of institutional knowledge and already started important 
steps to save funds and to secure the knowledge of its experienced staff 
members within the organization. This may enable a quick restart of the 
appeals l evel.      
Audit Findings  
I selected a big 
sample of the 
expenditure for ABS 
staff and ABM 
variable expenses.  261. I selected a random sample of nearly 50 per cent of the expenditure 
for ABS staff as well as ABM variable expenses. Furthermore, I 
reviewed the report and the documents provided by OIO relating to the 
ABM retainer cost and daily fees.     
I state that all  
expenditure was 
correctly allocated.  262. I state that WTO correctly allocated all expenditure of the AB to 
the separate budget.  
ABS staff contracts 
were properly 
monitored and the 
staff was correctly 
classified.   263. The contracts of the ABS staff members wer e properly monitored 
and the staff was correctly classified in the WTO remuneration system.         WT/BFA/W/531  
 
- 50 - 
 
  WTO correctly 
calculated and paid 
daily fees, travel cost 
and subsistence 
allowances for 
ABMs.  264. I state that WTO correctly calculated and paid ABM daily fe es, 
travel costs and subsistence allowances based on detailed settlements 
reviewed by the ABS.     
The total 
renumeration of 
ABMs is comparable 
to other International 
Organizations.  265. The retainer cost and daily fees for ABMs were detailed checked 
by OIO. In its report from March 2020, OIO stated that all checked items 
were correctly approved, settled an d recorded in compliance with the 
applicable rules and regulations. In general, the total renumeration of 
the ABMs is comparable to other international adjudicative bodies and 
tribunals. However, an applicable benchmarking was not effective 
because the rem uneration package does not include any entitlement for 
pension or other allowances paid by comparable organizations (i.e. 
dependency allowance, home leave, education or separation grants)10.          
A daily fee may 
affect independence.  266. In addition, I sta te that a daily fee is more common for consultants 
and may affect the independence of an ABM in his/her function as an 
independent member of an Appellate Body.    
The contract form for 
consultants for oral 
hearings was not 
correct.  267. I note that the contra ct form for contractors for the transcription of 
oral hearings was not correct (for details see para 187 - 189). 
Furthermore, the applicable services were not correctly recorded (see 
para 188).    
 
5 Cases  of Fraud or Suspected Fraud  
One case of severe 
fraud detected by 
WTO in 2017 still 
pending.  268. During our audit, my team requested an update on the case of 
severe fraud regarding home leave and dependency allowance which 
we had already detected in 2017. The incumbent was sanctioned and 
the defrauded amounts were reimbursed to the WTO. In the Summer of 
2019 t he incumbent appealed against the sanction. Thus, WTO decided 
to cancel the sanction and contract an independent consultant for a 
second investigation. Th e applicable report of this second investigation 
was finalized in March 2020. The applicable report of this investigation 
was presented in March 2020. The final decision by the Director -
General was still pending during my audit.    
 269. In 2019 the Secretariat reported that it did not have any cases of 
fraud or suspected fraud. Neither during our audit, had my team 
detected such cases.  
 
 
 
10 I detected only one International Organization that comprise fixed and variable cost components for 
appeals (International Tribunal for the Law of the Sea).  WT/BFA/W/531  
 
- 51 - 
 
  6 Acknowledgement  
I am grateful for the 
support received 
during the audit.  270. I wish to express my appreciation for the cooperation and 
assistance extended by the Director -General, the Management and staff 
of the WTO. I appreciate that the Secretariat is continuously reviewing 
and improving the financial statements, thus making the job for me and 
my tea m easier. I am very grateful for their assistance during the entire 
external audit process.  
 WT/BFA/W/531  
 
- 52 - 
 
  List of Abbreviations and Acronyms  
 
AB    Appellate Body  
ABOF    Appellate Body Operation Fund  
ABS     Appellate Body Secretariat  
AGSD    Administration and General Services Division  
ASHI     After Service Health Insurance   
CHF     Swiss Francs  
CWR     Centre William Rappard  
DDAGTF    Doha Development Agenda Global Trust Fund  
DDG     Deputy Director -General  
DG    Director -General  
DGO     Office of the Director -General  
DSA     Daily Subsistence Allowance  
DSB     Dispute Settlement Body  
DSU     Dispute Settlement Understanding  
ERP    Enterprise -Resource -Planning  
EUR     Euro  
FS    Financial Statements  
FTE    Full Time Equivalent  
GATT    General Agreement on Tariffs and Trade  
GBP     British Pound  
HL    Home Leave  
HR    Human Resources  
HRD     Human Resources Division  
IAS    International Accounting Standards  
INTOSAI    International Organization of Supreme Audit Institutions  
IPSAS    International Pu blic Sector Accounting Standards  
IPSASB    International Public Sector Accounting Standards Board  
ISA    International Standards on Auditing  
ISSAI    International Standards for Supreme Audit Institutions  
IT    Information Technology  
ITC    International Trade Centre  WT/BFA/W/531  
 
- 53 - 
 
  ITTC     Institute for Training and Technical Cooperation  
IVA    Impuesto al Valor Agregado  
LAD     Legal Affairs Division  
OIA    Office of Internal Audit (today: OIO)  
OIO    Office of Internal Oversight  
PM    Procurement Manual  
SLWOP    Special Leave without Payment  
SNB     Swiss National Bank  
SSA    Special Service Agreement  
STDF    Standards and Trade Development Facility  
TA    Technical Assistance  
UBS     Union Bank of Switzerland  
UN    United Nations  
US    United States  
USD     United States Dollar  
VAT     Value Added Tax  
WCF    Working Capital Fund  
WTO     World Trade Organization  
WTOPP    World Trade Organization Pension Plan  
 
   
  WT/BFA/W/531  
 
- 54 - Annex 1  
 
List of Recommendations  
 
No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
19 Home leave  3.3.1 / 2015  Regarding the finding (see para 25) in our sample check we 
additionally looked into the approved home leave (HL) in 2014 and 
2015 with a total amount of CHF 2,873,352 and related procedures. In 
this context we filtered the HL of beneficiary staff from sele cted 
countries all over the world. The analysis of the lump sums showed a 
wide variation of home leave amounts paid even for the same country 
or town.  
I recommend reviewing the rules for home leave. A benchmark with 
other international organizations could be helpful.  
 
 June 2018  
The OIO conducted an internal audit 
of Home Leave in 2017 and the 
External Auditors have received a 
copy of the internal audit report 
(report OIO/IA/2017 -01). HRD is 
currently drafting a new Home Leave 
policy, which will incorporate the 
recommendations contained in the 
internal audit report. The first follow -
up of the recommendations will be 
conducted in Q4 this year.  
February 2019  
Status updated included in the OIO 
report  
 Overtaken by 
events  
Also see m y 
recommendations 
No. 73, 74 and 75 
from 2018.  
45 Action plan for 
growing 
outstanding 
contributions.  3.2 / 2017  
3.2 / 2018  
 Outstanding contributions totaled 2017: CHF  33.8 million, 2018: CHF 
25.7 million. Although the sum of outstanding contributions temporary 
decreased, there are effectively more Members and Observers with 
significant outstanding contributions than in 2017.      June 2018  
The WTO Secret ariat agrees with the 
observation. Instead of an action plan, 
the WTO Secretariat will be proposing 
appropriate steps to be taken in a Ongoing  
  
  WT/BFA/W/531  
 
- 55 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
 
 
 I recommend in 2018 preparing an action plan for running the WTO 
with growing outstanding contributions.    
I maintain the recommendation of preparing an action plan for 
running the WTO with growing outstanding contributions .   dedicated paper to be presented to the 
CBFA in June 2018.  
 
February 2019  
The CBFA has approved the transfer 
of the accum ulated budget surplus of 
52 MCHF to the Working Capital 
Fund. This is considered a sufficient 
mitigating measure against the risk 
highlighted by the Auditor's report.  
August 2020  
The WTO Secretariat accepts this 
recommendation. The plan will be 
prepared by  end of Q1 2021.  
49 Delegation of 
authority  4.1 / 2017  I recommend updating regularly the document "WTO Delegation of 
Authority". It should be noted that there is a delegation of authority to 
the Director of the AGSD for the adoption of the travel policy.  June 2018  
The Secretariat agrees with the 
observation. There is an amended 
travel policy that is going through the 
internal review process which will be 
signed as per the current delegation of 
authority  
 Closed   
  WT/BFA/W/531  
 
- 56 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
 
February 2019  
A new SOAM (Staff Online 
Administrative Manual) is currently 
available on the intranet. The 
Documents in the Manual are 
centrally managed by HR and the 
status of each published WTO 
document (i.e. in force, archived etc.) 
is clearly indicated.  
The new Travel Policy is  still under 
review by the Secretariat.  
October 2019  
The new Travel Policy has been 
finalized. The recommendation can be 
closed.  
50 Reimbursement 
programs of 
airlines  4.1 / 2017  WTO has not entered into any contracts with airlines to participate in 
such reimbursement programs.   
I recommend checking participating in reimbursement programs of 
airlines.  June 2018  
The Secretariat will evaluate the 
feasibility of the recommendation.  
February 2019  Closed   
  WT/BFA/W/531  
 
- 57 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
The WTO signed an incentive 
programme with Airplus that will lead 
to a refund at the end of the year.  
 
51 Expanding 
application 
MobileXpense  4.1 / 2017  If the introductory phase has been successfully completed, I 
recommend that the WTO check expanding the application of 
MobileXpense to other categories of travelers.  June 2018  
The Secretariat agrees on the 
observation and will aim to implement 
it by the second quarter of 2019  
February 2019  
End of project report for phase 1 of 
MobileXpense has been submitted to 
the Project Board.  A prototype to 
extend the solution to non -WTO travel 
was delivered and the WTO is 
working on the amendment of the 
initial contract with MobileXpense.   
A project plan for phase 2 is under 
finalization with the objective of 
implementing MobileXpense for non -
WTO staff at the end of 2019.  
October 2019  
Development of MobileXpense phase 
two is in progress.   Ongoin g  
  WT/BFA/W/531  
 
- 58 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
August 2020  
Due to the organization of MC12 
during the first quarter of 2020 and the 
lock down as from March 2020, the 
phase 2 prototype could not be tested 
by the project team.  The testing is 
scheduled to resume in September 
2020.  
52 Calculating 
advances  4.1 / 2017  MobileXpense often exceeded the reimbursable travel expenses. The 
travel service team then informed the employee in each individual case 
to process the repayment of the overpayment. This created additional 
work that can be avoided by complying with the travel policy.  
I recommend calculating advances in line with regulations.  June 2018  
The Secretariat agrees with the 
observation and will implement it by 
the second quarter of 2019.  
February 2019  
Change to adjust the calculation of the 
DSA advance in MobilXpense in 
course of development.  
Implementation to follow as soon as 
the development wil l be operational.  
Revised Travel Policy still with the 
JAC for consideration.  
October 2019  
Travel policy has been finalized and 
the advance has been regulated Closed   
  WT/BFA/W/531  
 
- 59 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
automatically in MobilXpense. The 
recommendation can be closed.  
53 Application for 
authorization  4.1 / 2017  Application’s for authorization shall be submitted at least 10 working 
days before the start of official travel.  
I recommend that travelers be requested to make travel claims as early 
as possible; if submitted short ly before the start, this should be justified 
accordingly in the travel request.  June 2018  
 
The Secretariat will reinforce the 
message for the submission in good 
time of travel requests through a 
notification in the AGSD weekly news 
and in ad hoc messages if needed.  
February 2019  
 
In March 2019, AGSD will send 
notifications to all Admin Assistants 
in charge of travel claims to inform 
them about the end of Phase 1 of 
MobilExpense and about the new 
features of the system (i.e. automatic 
closure of open reports after 30 days). 
In that communication the importance 
of the minimum 10 days for travel 
authorization will be highlighted.  
 
October 2019  
 
This has been implemented. The 
recommendation can be closed.  Closed  
54 Open travel 
expense reports  4.1 / 2017  Travel expense reports in MobileXpense are considered "open".  
I recommend making a settlement as soon as possible, which means 
when cases are technically completed.  June 2018  
The Secretariat agrees with the 
observation and will implement it by 
the second quarter of 2019.  Closed   
  WT/BFA/W/531  
 
- 60 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
February 2019  
Automatic settlement of open expense 
reports is now ready for 
implementation.                                  In 
March 2019 a communication will be 
sent to relevant stakeholders to 
announce th e beginning of this 
process as of 1st April 2019. The 
recommendation can be closed.  
55 Recruitment 
process for 
consultants  4.2 / 2017  There are two different processes in the two responsible divisions 
(HRD and AGSD) for consultants.  
I recommend standardizing recruitment processes for individual 
consultants according to the Procurement Guidelines.  June 2018  
The Secretariat agrees with the 
observation and has already started the 
revision process to issue a dedicated 
consultant guideline.  
February 2019  
HR has drafted a new guideline on 
individual consultants and AGSD has 
provided feedback to be incorporated 
in the finalized document.  
October 2019  
The drafted new guideline is still 
under review.  
February 2020  Ongoing  
Also see my new 
recommendation 
No. 86   
  WT/BFA/W/531  
 
- 61 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
Same as above  
August 2020  
Please  refer to the Secretariat’s 
response in No. 88.  
 
56 Cash and cash 
equivalents  3.3.1 / 2018  I recommend that WTO adjust the existing unique signatories by the 
DG to joint signatures 2 by 2 authorizations for all WTO bank accounts 
as soon as possible.  June 2019  
The Secretariat accepts the 
recommendation and will implement 
it as soon as possible.  
October 2019  
Form to update the bank signature 
prepared and to be sent to the DG's 
office.  
February 2020  
Same as above  
 Overtaken by 
events.  
Also see my new 
recommendation 
No. 77  
57 Accruals and 
provisions  3.3.1 / 2018  The position Accruals  CHF 10.4 million (2017: CHF 6.6 million) 
contains not only accruals but also provisions. Due to IPSAS 1.88, 
provisions are to be presented separately.  June 2019  
The Secretariat accepts the 
recommendation and will implement Closed  
   
  
  WT/BFA/W/531  
 
- 62 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
I recommend that WTO should present accruals and provisions 
separately in its Financial Statements.  it in the 2019 Financial Performance 
Report.  
October 2019  
The Secretariat will implement the 
recommendation in the 2019 Financial 
Performance Report.  
 
February 2020  
Recommendation implemented in 
closure 2019.  
58 Accruals and 
provisions  3.3.1 / 2018  I recommend that WTO should explain the positions accruals and 
provisions by separate notes in the Financial Statements. In these notes 
WTO should explain the relevant facts and the applicable calculation 
methods.  June 2019  
The Secretariat accepts the 
recommendation and will implement 
it in the 2019 Financial Performance 
Report.  
October 2019  
The Secretariat will implement the 
recommendation in the 2019 Financial 
Performance Report.  
February 2020  Overtaken by 
events  
Also see my new 
recommendation 
No. 81    
  WT/BFA/W/531  
 
- 63 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
Recommendation implemented in 
closure 2019.  
59  Accruals and 
provisions  3.3.1 / 2018  As I already recommended in 2017 (no. 46), WTO should review its 
calculation regarding actual long term (legal) obligations. For the new 
calculation WTO should consider the average Swiss (remaining) life 
expectancy, the monthly amount as well as payments a nd claims from 
the WTO Pension Plan (retirement, early retirement, and disability 
benefits), payments from third parties and the applicable discounting 
for long term liabilities.   
I recommend that WTO should review its calculation regarding to 
actual long  term (legal) obligations.  The Secretariat does not accept this 
recommendation due to the fact that 
these provisions were introduced in 
order to implement a previous 
recommendation by the External 
Auditor - audit recommendation 33 
"provision for invalidit y case" which 
has been closed (Audit report 2016, 
paragraph 3.1.1.).  Closed  
Also see my new 
recommendation 
No. 79  
60 Accruals and 
provisions  3.3.1 / 2018  WTO should revise its potential risks related to disability cases in order 
to implement possible and effective mitigation measures to minimize 
such risks.  
I recommend that WTO should revise its potential risks related to 
disability cases in order to implement possible and effective mitigation 
measures to minimize such risks.  June 2019  
The Sec retariat will revise its risk 
register to take account of this 
recommendation.  
October 2019  
The updated risk register will include 
the item indicated in the 
recommendation. This will be done by 
March 2020.  
February 2020  
Same as above  Ongoing  
Also see my new 
recommendation 
No. 80   
  WT/BFA/W/531  
 
- 64 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
August 2020  
Please ref er to the Secretariat’s 
response in recommendation No.80.  
61 Short -term 
employee 
benefits  3.3.1 / 2018  The position provision for bonus contains the accrual for the bonus 
2018: CHF 480,000 as well as a remaining amount of CHF 359,100 
non-paid bonuses of prior years. WTO still recognized the remaining 
non-paid bonuses incorrectly as short -term employee benefits.  
I recommend that WTO review the current purpose of the non -paid 
bonuses. WTO should recognize this amount as miscellaneous income 
in 2019 so far as entitlements could not be directly claimed by staff.  June 2019  
The Secretariat accepts the 
recommendation and will implement 
it in the 2019 Financial Performance 
Report.  
 
October 2019  
The Secretariat will implement the 
recommendation in the 2019 Financial 
Performance Report.  
February 2020  
Recommendation implemented  Closed  
62 Process 
description 
(HR)  4.1 / 2018  The absence of process description may lead to a conflict of interest as 
well as limited transparency. This might cause unclear tasks and 
responsibilities. Furthermore, this always entails the risk of inefficient 
and ineffective processes as well as poor w orkflows. Additionally, in 
parts of the processes I detected interface problems, duplication of 
efforts, and redundant workflows. I appreciate that WTO already has 
carried out significant work in terms of process mapping and the 
development of Standard Ope rating Procedures (SOPs) as well as June 2019  
Gaps were identified by a 
management consultancy firm in early 
2018. To address  these, the Secretariat 
initiated a project to put a robust 
Human Resources Information 
System (HRIS) in place. Significant Ongoing   
  WT/BFA/W/531  
 
- 65 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
progress to avoid conflict of interest. However, the final adjustments 
and decisions are still pending.  
 
I recommend that WTO finalize the process description soon to ensure 
a smooth workflow with a transparent and clear  allocation of tasks and 
responsibilities. Therefore, the Human Resources Division should 
immediately define and harmonize the ownership of the processes and 
clarify the roles and responsibilities. On that basis, the Human 
Resources Division should coordin ate the finalized process description 
internally with all process participants. The consensual version of 
process descriptions should then be authorized accordingly.  work was done, in collaboration with 
an external consultant, to map out 
current processes.  
 In addition, there are "as -is" process 
workbooks for all HR processes 
indicating the tasks/steps, 
responsibilities and interactions 
required. Furthermore, the gaps 
identified by the external consultant 
resulted in recommendations to 
develop SOPs. This is in progress. The 
project is estimated to conclude in 
2020.  
 
October 2019  
HRD has started developing SOPs, 
several have already been finalized 
and the project should conclude in 
2020.  
February 2020  
Same as above  
August 2020  
The HRIS implementation began on 
10 August, with a scheduled  
  WT/BFA/W/531  
 
- 66 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
completion da te of Q2/Q3 2022. 
There are two phases to the project: 
Phase 1 includes HR Core, Absence, 
Compensation, Benefits, Recruitment, 
Reporting, whereas Phase 2 includes 
Learning and Development and 
Performance Management.  
The goal is for all HR processes to 
adapt as much as possible to the 
standard of what the HR system 
offers. Due to numerous changes to 
come in the configuration and design 
phase, Standard Operating Procedures 
will need to be continuously updated 
until the HR system is implemented.  
63 Personnel files  4.1 / 2018  I recommend that WTO should implement clear instructions for the 
documentation of all staff related matters. These instructions should 
govern what kind of essential information shall be documented and in 
which form.  
 
Despite  the high priority of this recommendation WTO is still 
working on it. I recommend that WTO should push the HRIS 
project to finally get results after two years.  June 2019  
Agreed. The Secretariat will finalize 
the necessary documentation by 2020 
as this is a component of the HRIS 
project.  
October 2019  
The Secretariat will finalize the 
necessary documentation by 2020 as 
this is a component of the HRIS 
project.  Ongoing  
  
  WT/BFA/W/531  
 
- 67 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
February 2020  
Same as above  
August 2020  
Concrete decisions on this matter will 
be made during the im plementation of 
the HR system, specifically the 
Design and Configuration stage, as it 
will be evident what types of 
documentation the Secretariat should 
have, as well as what the Secretariat 
can and will store within the worker 
profile in the HR system. Fr om this  
point, the Secretariat would be able to 
decide to what extent it will be able to 
house all other types of essential 
documentation electronically – stored 
in SharePoint for example, or other 
secure location and eliminate the need 
to maintain physica l/paper files for 
employees.  
64 Personnel files  4.1 / 2018  I recommend that WTO should prescribe a uniform and appropriate 
structure of the personnel files, paper and electronic files, as well as 
limited access rights.  
 June 2019  
Agreed. The Secretariat will develop 
clear guidelines related to the 
documents that ought to be contained 
in the personnel files of staff 
members. This will also cover the Ongoing  
  
  WT/BFA/W/531  
 
- 68 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
Despite the high priority of this recommendation WTO is still 
working on it. I recommend that WTO should push the HRIS 
project to finally get results after two years.  assurance that the documents are 
maintained in the same format.  
October 2019  
HRD has started to develop clear 
guidelines and as such this 
recommendation is still in progress  
February 2020  
Same as above  
August 2020  
As per the Secretariat's Comments 
regarding  recommendation 63, this 
will be a determination made during 
the course of the implementation . 
Other key aspects that will be covered 
during implementation are the access 
rights / security groups to be put in 
place. This will affect not only HR or 
IT acces s to documentation and 
information within the HR system but 
will also relate to the establishment of 
a framework around access rights for 
all employees for areas in scope 
within the system.  
65 Heterogenic 
(IT-) 4.1 / 2018  The use of a heterogenic, fragmented and non -interconnected 
landscape is neither effective nor efficient. Negative effects of a June 2019  Ongoing   
  WT/BFA/W/531  
 
- 69 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
infrastructure – 
payroll process  heterogenic system landscape may be error susceptibility, interface 
losses, redundant data, low data reliabil ity and data inconsistencies. 
Furthermore, media interruptions may lead to a lack of internal control 
within the Human Resources Division.  
I recommend that WTO should finalize straightaway the HR -process 
descriptions to identify future required functions (first step). The 
essential goal should be to consolidate the current heterogenic 
landscape of systems and applications in a timely manner.  What is covered in this 
recommendation is already part of the 
scope of the HRIS project.  
October 2019  
Still in progress as part of the HRIS 
project  
February 2020  
Same as above  
August 2020  
The Secretariat refers to the comments 
for recommendation No. 62 above.  
66 Heterogenic 
(IT-) 
infrastructure – 
payroll process  4.1 / 2018  Only an optimized and efficient (IT) -infrastructure that contains all 
data and processes enables HRD to attain effective and efficient task 
fulfillment. In my opinion a future -proof HRMS system should 
basically contain all HR functions, including benefits administration, 
payroll, recruiting and training, as well as performance analysis and 
review.  
I recommend that WTO should generate a performance description to 
start the procurement process based on successful defined 
requirements for an effective HRMS (s econd step).  June 2019  
What is covered in this 
recommendation is already part of the 
scope of the HRIS project.  
October 2019  
Still in progress as part of the HRIS 
project.  
February 2020  
Same as above  Ongoing   
  WT/BFA/W/531  
 
- 70 - No. Issue  Reference: 
Chapter, Year  Recommendation  WTO´s Comment / 
Implementation  Status  
August 2020  
The procurement process was 
finalized for th e selection of the HRIS 
solution from a vendor. Furthermore, 
the Secretariat entered into a contract 
with an implementation service 
provider and began the 
implementation on 10 August, 
estimated to be completed in Q2/Q3 
2022.  
The Secretariat also refers to  the 
response to recommendation No. 62.  
67 Salary scale  4.1 / 2018  The Human Resources Division used five different salary scales. The 
salary scale used for each staff member depends on the date of 
recruitment (vacancy note) or on the date the staff member started 
his/her first fixed -term contract. In 2019 WTO already red uced one of 
the scales.  
I recommend that WTO reduce the different salary scales as soon as 
possible to one uniform scale. In this context, WTO should use all 
options to adapt the salaries. The applicable salary scale for new 
recruitments should be fixed t o ensure better comparability and 
maximum transparency.   June 2019  
Agreed. Implementation will be 
gradual, over the years.  
February 2020  
The same as above.  
 
August 2020  
One salary scale has been removed, 
leaving 3 frozen salary scales. The 
remaining frozen scales will be 
removed as the current salary scale Ongoing  
HRD is still 
working with four 
scales.   
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- 71 - No. Issue  Reference: 
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overtakes frozen scales, resulting in 
only one salary scale being applicable 
to all staff. Depending on a number of 
factors, including inflation and 
exchange rate movements, this 
process is likely to take some time. At 
this point in time, it is not possible to 
determine how quickly the remaining 
frozen scales will be overtaken and 
removed, only that they may be 
overtaken  over time. The adjustment 
of the WTO salary scale is governed 
by the methodology set out in Annex 
B to the Staff Regulations.  
68 Performance 
evaluation, 
bonus and 
promotion  4.1 / 2018  The current performance evaluation system may not be an effective 
tool for performance -related payments and human resources 
development. As long as WTO does not implement valid and 
measurable indicators according to the agreed objectives, it will be 
really  difficult for an objective target achievement evaluation and 
control.  
I recommend that WTO should revise the performance evaluation 
system. This should include the implementation of valid and 
measurable indicators to enable an objective target achievemen t 
evaluation due to the agreed objectives.  June 2019  
The performance evaluation system 
has been reviewed and the relevant 
documentation is being assessed by 
the Joint Advisory Committee.  
October 2019  
The reviewed performance policy was 
issued to all staff on 4 October 2019.  Closed  
69 Secondary 
dependency 
allowance  4.1 / 2018  The maximum amount that can be applied is CHF 2,712 per year (staff 
rules, Annex 2 c.). In 2018 WTO paid in total CHF 137,749 for the 
secondary dependent's allowance. WTO did not implement a 
differentiation regarding the applicable salary of its staff to c onsider June 2019  
The dependency allowance is detailed 
in the staff regulations and staff rules Ongoing  
  
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financial needs or the economic status nor the general social situation 
of the applicable dependent's in their home country.  It seems 
appropriate to reduce the secondary dependency allowance to a limited 
number of cases (lower grades) or to abolis h this regulation.  
I recommend that WTO review and adjust the rules for the secondary 
dependency allowance. In this context, WTO should consider granting 
secondary dependent’s allowance to a limited number of staff 
members only, taking into account the eco nomic status of the staff 
member as well as the social situation of the final beneficiaries. WTO 
also might be considering abolishing this regulation.  
I still hold on my recommendation.  Thereby, WTO should consider 
the economic status of the staff member as well as other dependency 
allowances paid.  and is duly implemented according to 
them. This benefit exists in other 
international organizations. Assessing 
the general social situations of the 
dependents in the home countries of 
secondary dependents would be 
highly complicated from several 
perspectives, including the cost of 
implementation.  Furthermore, Staff 
Members receiving any type of 
allowance are required to submi t 
documentary evidence justifying their 
eligibility on an annual basis.  
October 2019  
Recommendation can be closed.  
August 2020  
The Secretariat reiterates that it would 
be overly complex and cumbersome to 
introduce a differentiation based on 
economic situat ion of staff members, 
which is not necessarily correlated 
with their grade level, and, in 
particular, the social situation 
applicable in the home country of the 
secondary dependent. The cost of 
administering the allowance, which is 
paid to fewer than 10% o f staff  
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members, would increase with the 
additional complexity recommended 
and would likely exceed any savings. 
The potential additional 
administrative costs could be assessed 
on the basis of a more detailed 
recommendation on the policy change 
and proposed  criteria to be taken into 
account in differentiating the 
allowance.  
70 Summer school 
internship  4.1 / 2018  
 
 
 
 WTO did not implement any regulations or guidelines regarding the 
structure or nature of the Summer School Programme. Besides, WTO 
did not require operational needs or individual and professional skills 
of potential applicants.  
I recommend that WTO close the current Summer Student 
Programme. If WTO develops an appropriate programme, this should 
be based on a formal guideline which includes formal regulations for 
needs, required skills and qualifications of applicants, available budget 
(number of internship s per year) as well as duties and responsibilities 
to implement and govern this programme.  
Furthermore, WTO should consider opening the programme for all 
potential applicants by means of a fair recruitment process.  June 2019  
The Secretariat will benchmark  
against other international 
organizations, with a view to 
assessing the recommendation in an 
objective manner.  
February 2020  
Same as above  
August 2020  
In 2020, the programme was 
suspended due to COVID -19. A 
closure of the programme as of 2021 
will be cons idered.  Ongoing  
71 Accumulated 
annual leave  4.1 / 2018  I note that WTO has a risk of CHF 8.4 million as at 31 December 2018, 
coming from accumulated annual leave for previous years.  This risk June 2019  Ongoing   
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may affect the budget planning of subsequent years as well as longer 
substitution periods.  I determine that a number of WTO staff is not 
(sufficient) using their entitlements for recreating. As a result of this 
WTO may be affected with an increase of cases of illness and 
occupational stress. Another effect may be that staff includes the 
payout for untaken annual leave fo r separation.  
I recommend that WTO enhance the monitoring of accumulated 
annual leave days of its staff to ensure that the staff uses the annual 
leave for recreation purposes and to avoid that annual leave days expire 
or that WTO has to pay out a number of  untaken annual leave in case 
of separation. In this context, WTO further should raise awareness 
among the supervising directors for a better management and control 
of annual leave balances.  Stringent measures have been already 
in place for seve ral years. These 
include: statistics sent to directors, 
reminders to staff etc. Furthermore, 
any leave reimbursement is limited to 
a maximum of 60 days at the time of 
separation. The Secretariat will 
continue to emphasize the importance 
of annual leave man agement to staff 
and directors.  
February 2020  
Same as above  
August 2020   
Management continues to closely 
monitor accumulated annual leave 
balances. Such balances are regularly 
communicated to supervisors who are 
requested to encourage staff to take 
annual leave periodically.  The WTO 
has been continuously working on a 
reduction of the balance of Annual 
Leave and at the beginning of 2019, 
the number of staff members whose 
annual leave balances exceed 60 days 
has been reduced from 101 staff 
members to 40 staff members.   
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72 Accumulated 
annual leave  4.1 / 2018  According to WTO, the applicable reference period is from 1 May to 
30 April. In fact, the 60 -day rule is not relevant as at 31 December and 
staff may accumulate up to 90 days as at 31 December.  WTO limited 
leave reimbursements to a maximum of 60 days at the time of 
separation.              Eight staff members had an excessive annual leave 
balance of 69 days as at 31 December 2018 (negative amount).  In two 
out of the six cases the staff members a re on special leave without pay. 
The negative balance of 28 respective 9.5 days should be recuperated 
from the annual leave allocation after their returning in 2019.  In five 
cases WTO granted advance leave day up to 10 days for family 
reasons, health and studies as well as preparation of retirement. WTO 
could not provide us with written regulations concerning the granting 
of advance annual leave and refers to a “long -standing practice to grant 
up to 10 days exceptional circumstances”. In one case the exces s leave 
days (5.5 days) were deducted from the final payment because of 
cessation of service.         
I recommend that WTO review the staff rules regarding the regulations 
for accumulating annual leave to ensure that risks in subsequent years 
will be reduc ed as well as to implement written regulations concerning 
the granting of advance annual leave. In this context WTO also should 
consider to align the applicable reference period with the calendar 
year. Furthermore, WTO should implement appropriate payment 
restrictions for untaken annual leave.   June 2019  
The WTO agrees to work towards 
aligning the leave cycle with the 
calendar year and to assess measures 
of governing untaken leave.  
February 2020  
Same as above  
August 2020  
Aligning the reference period with  a 
calendar year has implications for 
staff members from the Southern 
hemisphere who typically take leave 
from December to January.   If, for 
example, excess leave was to be 
reduced in December of a given year, 
such reduction would affect 
disproportionatel y such staff.   Ongoing  
73 Home leave  4.1 / 2018  In my report from 31 May 2016 I recommended WTO to review the 
rules for HL, especially the calculation of the lump sum. In addition, I 
recommended WTO to consider the results and recommendations of 
the audit conducted by the Internal Audit (OIO) as well as  its 
respective investigation regarding HL in 2016/2017. Even, OIO June 2019  
The Secretariat agrees and is in the 
process of finalizing its review of the 
new Home Leave Policy.  Ongoing   
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strongly had recommended to review and adjust the rules and 
guidelines for HL because of detected systemic problems and 
vulnerability to fraud in 2017.    
I strongly recommend that WTO shou ld review the rules and 
guidelines for HL as soon as possible. In this context WTO should 
consider the recommendations by OIO to bring the new rules and 
regulations in line with other comparable regulations of International 
Organizations (Benchmark) as wel l as to avoid excess payments and 
misconduct.   
Despite the high priority of this recommendation WTO is still 
working on it. I recommend that WTO should prioritize the 
implementing of a new Home Leave Policy to finally get results 
after five years.  
 October 2019  
A revised text of the Home Leave 
Policy has been elaborated by HRD 
and received input from the 
AGSD/Travel for its feasibility. The 
document is being finalized.  
February 2020  
Same as above  
August 2020  
Two policies have been prepared in 
this regard. These are:  
1. Home Leave and Family Visit 
Policy, which has been approved by 
the Director General.  
2. The Methodology for the 
Calculation of  Benefits Pertaining to 
Home Leave, Family Visit, 
Recruitment and Education Grant. 
This proposed revised policy will be 
submitted to the JAC for review by 
30th September 2020. The JAC will 
subsequently make recommendations 
on a revised text to the Director  
General.   
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74 Home leave  4.1 / 2018  Up to April 2019 WTO did not implement a formal sanction 
mechanism to ensure contemporary settlements and evidence checks.        
I recommend that WTO implement an effective sanction mechanism 
to ensure evidence and a correct settlement in time.  Same comme nts by WTO and status 
of progress as in recommendation No. 
73.   
August 2020  
This issue is no longer valid. This 
recommendation can be closed.   Closed  
75 Home leave  4.1 / 2018  Due to Rule 109.3 (f) of WTO Staff Rules a staff member shall 
normally be required to spend at least two weeks in the country of HL. 
In six of the 14 checked HL cases in our sample (43 per cent) the staff 
spent less than 10 days in the country of HL.  
I recommend that WTO should ensure that the entitled staff effectively 
spends at least two calendar weeks (or 10 working days) in the country 
of HL. This also may be helpful to reduce the number of untaken 
annual leave within a period of two years.  Same c omments by WTO and status 
of progress as in recommendation No. 
73.    
 Ongoing  
76 Administrative 
measures  3.2 / 2019  I recommend that WTO should revise its Financial Regulations and 
may implement additional adequate and effective administrative 
measures.  The administrative measures are 
subject to the Members' review.   
77 Cash and cash 
equivalents  3.3.1 /2019  I expect that WTO fully complies with its Payment Policy and ensure 
that the new DG will be authorized only by joint signatures 2 by 2 for 
all WTO bank accounts.  The Secretariat agrees to ensure a dual 
signatory once the new DG is selected.   
78  Other 
receivables  3.3.1 / 2019  I recommend that WTO formally reclaims for a full reimbursement of 
amounts due from the Government of Argentina for the 11th 
Ministerial C onference in 2017 – immediately.  The Secretariat will continue 
following up with the Government of 
Argentina, seeking settlement of this 
amount owed.    
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79 Accruals and 
provisions  331 / 2019  I recommend that WTO should apply actuarial principles in future to 
determine its provisions considering the average age and health of the 
employees. In this context WTO should consider relevant methods for 
discounting and indexing in its calculations.  The Secretariat agrees to revise the 
calculation of the disability case 
provision aligned with actuarial 
principles.   
80 Accruals and 
provisions  331 / 2019  I recommend that WTO should regularly revise its potential risks 
related to disability cases in order to implement possible and effective 
mitigation measures to minimize such risks. In this context WTO 
should consider possible improvements in insurance.  The Secretariat agrees to explore this 
recommendation.   
 
81 Accruals and 
provisions  331 / 2019  I recommend that WTO should optimize the presentation of the 
provisions by a separate note. In this note WTO should explain the 
main risks grouped and show the significant details clear and 
transparent.  The Secretariat agrees to disclose 
Provisions in a s eparate note aligned 
with IPSAS 19 starting with the 2020 
Financial Performance Report.   
82 Reserves  3.3.1 / 2019  I recommend that WTO should suggest to the CBFA the draw -down 
of its reserves in the Doha Development Agenda Global Trust Fund 
and to reallocate the fund internally.  The Secretariat will review the merits 
for the reserve and provide an update 
to the Auditors at a later stage.     
83 Separation  4.1 / 2019  I recommend that WTO should notify decisions due to separations in 
time to avoid additional payments for indemnities.  The Secretariat will assess this.   
84 Early retirement  4.1 / 2019  I recommend that WTO may enter into a separate agreement with 
WTOPP due to compensation payments for early retirement. In this 
agreement WTO and WTOPP should determine an acceptable 
justification and a clear calculation as well as an applicable procedure 
including timelines and documentation.  The actuarial assumptions approved 
by the WTOPP Board already include 
estimates of "Early retirements".   
Actuarial calculations are based on a 
number of actuarial assumptions.  
These actuarial assumptions are 
periodically reviewed by the WTOPP 
Board and adjusted in light of the 
actual experience. The Secretariat and   
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the WTOPP agrees to explore 
potential con ditions for a separate 
agreement.  
85 Early retirement  4.1 / 2019  I recommend that HRD ensures that the Secretariat's Management has 
all relevant information due to an optional separation package before 
decisions will be taken. This includes individual compensation 
payments by WTO to WTOPP due to early retirement.  The W TO agrees to provide relevant 
information to management before 
decisions are taken on optional 
separation packages.   
86 Recruitment 
process for 
individual 
consultants  4.1 / 2019  There are two different processes in the two responsible divisions 
(HRD and A GSD) for consultants.  
Since 2018, I have recommended standardizing recruitment processes 
for individual consultants according to the Procurement Guidelines.  
I strongly recommend that WTO should finish and implement the new 
guidelines for the recruitment of individual consultan ts as soon as 
possible to ensure similar regulations and compliance for all services 
provided from consultants as well as to determine an appropriate 
segregation of duties and delegated authorities in the process.   The Secretariat accepts this 
recommendat ion and will finalize the 
guidelines.  
 
 
 
 
 
  
87 Recruitment 
process for 
individual 
consultants  4.1 / 2019  I recommend that WTO should terminate the contract referred to in the 
detailed Audit Report at the end of the contracted period without any 
extensions. The exceeded payments for 2018 and 2019 should be offset 
if not correctly justified and approved.   It should be noted that while the Staff 
Rules prohibit the recruitment of 
relatives of staff members, spouses are 
excluded from this limitation. 
Consultants are not staff members and 
are not subject to the WTO staff rules, 
but it would be erroneous to imply that   
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it is contrary to the recruitment policy 
to hire spouses of staff members (the 
staff rules state that spouses shall be 
given equal opportu nity in recruitment 
provided that they are fully qualified 
for the post under consideration).  
The basis of recommending that any 
payments for 2018 and 2019 to be 
offset against current payments in 
2020 is not articulated. There is no 
suggestion or proof th at any days 
worked beyond the time were 
erroneous.  
 
88 Recruitment 
process for 
individual 
consultants  4.1 / 2019  I recommend that WTO should ensure a competitive and transparent 
process governed by HRD in all cases where consultants are close 
relatives of WTO staff members. Final decisions should only be taken 
by the DG or the DDG responsible for staff related matter s.   Consultants are normally hired for 
short periods of time and whenever 
the Organization seeks a technical 
skill not available among its staff.  
Whilst the Secretariat does not support 
the introduction of heavy selection 
processes as this could impact 
negatively on the agility of the 
Organization to respond to specific 
needs, it does agree with the need for 
clearance at a senior level, whenever 
consultants bear any family relation 
with any staff member.    
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89 Recruitment 
process for 
individual 
consultants  4.1 / 2019  I recommend that WTO should ensure that companies only can be 
selected and contracted by following a harmonized procurement 
process as well as the applicable rules and regulations.  The Secretariat agrees with this 
recommendation.   
90 Recruitment 
process for 
individual 
consultants  4.1 / 2019  I recommend that WTO should agree frame contracts for recurring 
services over a longer period if applicable.  The Secretariat agrees with this 
recommendation.   
91 Trust funds  4.2 / 2019  I recommend that WTO should critically review its trust fund 
landscape. As a result, WTO should develop a strategy to close trust 
funds without any activities in 2019 and to merge trust funds with 
similar purposes and donor structur e. In this context, WTO may 
harmonize main processes to better manage the trust funds like 
controlling, funding, and procurement in a separate unit to ensure 
consistency and transparency as well as full compliance with WTO 
Rules and Regulations.   The Secr etariat agrees to critically 
review the trust fund landscape and 
develop a strategy to limit the 
proliferation of small funds as well as 
to assess closing trust funds which had 
no activity in 2019.   
92 Trust funds  4.2 / 2019  I recommend that WTO should implement an effective monitoring of 
all multiyear voluntary contributions to ensure a correct recording due 
to IPSAS 23, starting in 2020.   The Secretariat agrees to monitor 
multi -year voluntary contribution 
agreements to ensu re alignment with 
IPSAS 23.   
93 Trust funds  4.2 / 2019  I recommend that WTO should subject all procurement activities with 
higher amounts to a harmonized and compliant procurement process 
to ensure transparent and standardized procedures and correct 
documentation as well as to guarantee an appropriate value for money.  The Secretariat agrees to review the 
thresholds for procurement relating to 
trust funds.   
94 Trust funds  4.2 / 2019  I recommend that WTO should continue to train all staff responsible 
for procurement in other divisions to ensure correct proceedings and 
economic thinking as well as the tax -exempt status of WTO.   The Secretariat will continue to 
provide training to all r elevant staff 
across the organization.    
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95 Trust funds  4.2 / 2019  I recommend that WTO should monitor requests for exemption from 
sales taxes for services in 2019 and 2020 and to check whether it is 
worth reclaiming taxes paid in 2019 and 2020.  The WTO Procurement Section will 
assist colleagues from other divisions 
dealing with trust fund activities to 
ensure that exemptions are 
consistently sought for and will 
document cases where this is not 
possible.  
Any attempt to reclaim Sales Taxes 
paid in 2019 , from individual 
companies which at this point have 
already transmitted such sales tax to 
their respective Governments, would 
be close to impossible and unduly 
costly given the amount involved.  For 
2020, the required follow up to regain 
the Sales Taxes w ill be instituted.   
96 Trust funds  4.2 / 2019  I recommend that WTO should review all temporary contracts with 
staff on L -positions and implement an effective monitoring regarding 
temporary contracts to ensure that these contracts do not automatically 
switch into permanent contracts by expiring the deadline of four years 
for temporary contracts.  The WTO agrees to review all 
temporary contracts with staff on L -
posts in a view to implementing this 
recommendation where feasible   
97 
 Trust funds  4.2 / 2019  I recommend that WTO should develop a suitable concept for staff on 
L-positions to enable a transfer to permanent contracts or to terminate 
contracts based on structural requirements. New contracts should be 
generally terminated befo re the four years period expires.   The WTO agrees to develop a strategy 
for existing long -serving staff on L -
posts and to ensure the limitation of 
future L -Post contracts to a maximum 
possible tenure of 4 years.   
__________