RESTRICTED  
  
WT/BFA/W/56 6 
 
2 July 2021  
(21-5307) Page: 1/11 
Committee on Budget, Finance and Administration    
 
- 1 - 
 
 
STATUS OF PREVIOUS EXTERNAL AUDITORS' RECOMMENDATIONS AS OF JUNE 2021  
This document presents the status update concerning the findings of previous External Auditors . 
 
_______________  
 
 
  
  WT/BFA/W/ 566 
 
- 2 -  
 
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
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 imple ment possible and effective 
mitigation measures to minimize such risks.  June 2019  
The Secretariat 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 . 
 
August 2020  
Please refer to the Secretariat 's response in 
recommendation No.80.  
 
June 2021  
Please refer to the Secretariat 's response in 
recommendation No.80.  Ongoing  
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 ine ffective processes as well 
as poor workflows. 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 Operating 
Procedures (SOPs) as well as progress to 
avoid conflict of interest. However, the final 
adjustments and decisions are still pending.  
 June 2019  
Gaps were identified by a management 
consul tancy firm in early 2018. To address 
these, the Secretariat initiated a project to put 
a robust Human Resources Information System 
(HRIS) in place. Significant work was done, in 
collaboration with an external consultant, to 
map out current processes.  
 
In a ddition, 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.  Ongoing   
  WT/BFA/W/ 566 
 
- 3 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
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 Hum an Resources Division should 
coordinate the finalized process description 
internally with all process participants. The 
consensual version of process descriptions 
should then be authorized accordingly.  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 completion date 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.  
 
February 2021  
Same as above .  
 
June 2021  
The implementation of this will be done 
subsequent to the implementation of HRIS in 
Q2/Q3 2022.  
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 June 2019  
Agreed. The Secretariat will finalize the 
necessary documentation by 2020 as this is a 
component of the HRIS proj ect. Ongoing   
  WT/BFA/W/ 566 
 
- 4 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
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.  October 2019  
The Secretariat will finalize the necessary 
documentation by 2020 as this is a component 
of the HRIS project.  
 
February 2020  
Same as above . 
 
August 2020  
Concrete decisions on this matter will be made 
during the implementation 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. 
From 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 physi cal/paper 
files for employees.  
 
February 2021  
Same as above . 
 
June 2021  
The Secretariat will ensure that the Auditors' 
recommendation to push the HRIS project to 
finally get results after two years is 
implemented.  
 
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 assurance Ongoing   
  WT/BFA/W/ 566 
 
- 5 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
Despite the high priority of this 
recommendation WTO is still workin g 
on it. I recommend that WTO should 
push the HRIS project to finally get 
results after two years.  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 plac e. This 
will affect not only HR or IT access 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.  
 
February 2021  
Same as above . 
 
June 2021  
Same as above . 
 
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 th e time of separation.   June 2019  
The WTO agrees to work toward s aligning the 
leave cycle with the calendar year and to 
assess measures of governing untaken leave.  
 
 
 Ongoing   
  WT/BFA/W/ 566 
 
- 6 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
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 are 
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 wi th 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 
excess leave days (5.5 days) were deducted 
from the final payment because of c essation 
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 reduced as 
well as to implement written regulations 
concerning the granting of advanc e 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.   February 2020  
Same as above . 
 
August 2020  
Aligning the reference period with a calendar 
year has implications for staff members from 
the Southern hemis phere 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 disproportionately such staff.  
 
February 2021  
Similar to  the response to Recommendation 
no. 71, the DDG in charge of Administration 
has instructed all Division Directors to adhere 
to the relevant rules and policies relating to 
annual leave.   Furthermore, HRD has informed 
staff quarterly, that the 60 -day limit will be 
applied strictly, despite the exceptional 
circumstances surrounding the pandemic.  
 
June 2021  
The Secretariat considers this as having been 
implemented. In paragraph 16 of the report, 
the External Auditors wrote "The 
recommendation relating to annua l leave 
including, in particular, a reorganisation of the 
practice of advance on leave entitlements is 
considered to be implemented. If it is actually 
implemented on some of the aspects 
mentioned by the External Auditor, it is not 
implemented on (a) the al ignment of the leave 
period over the calendar year, (b) the issue of 
advances on leave entitlements. On point (a) 
the Secretariat rightly points out the difficulty 
encountered by staff from the southern  
  WT/BFA/W/ 566 
 
- 7 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
hemisphere, when the leave period is based on 
the cal endar year. Its refusal to implement this 
part of the recommendation is justified ".  
 
The External Auditors further wrote " However, 
it does not provide any evidence documenting 
the withdrawal, or supervision of the practice 
of the advance on leave entitlem ents by a 
formal regulation. Since this aspect is 
significant, the external Auditor considers that 
the recommendation continues to be “in the 
process of implementation”.  
 
With reference to the paragraph immediately 
above, the Secretariat will prepare an o fficial 
Memorandum to implement the 
recommendation.  
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 
strongly had recommended to review and 
adjust the rules and guidelines for HL 
because of detected sy stemic problems and 
vulnerability to fraud in 2017.  
 
I strongly recommend that WTO should 
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 June 2019  
The Secretariat agrees and is in the process of 
finalizing its review of the new Home Leave 
Policy.  
 
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 Ongoing   
  WT/BFA/W/ 566 
 
- 8 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
International Organizations (Benchmark) as 
well 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 im plementing of a new 
Home Leave Policy to finally get results 
after five years.  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.  
 
February 2021  
The Methodology for the calculation of the 
benefits pertaining to Home Leave, Family 
Visit, Recruitment and Education Grant was 
update d based on the recommendations and it 
was incorporated into an updated Travel Policy 
that will be submitted in February 2021 for the 
Joint Advisory Committee (JAC)'s review. The 
JAC will subsequently make recommendations 
on a revised text to the Director G eneral. The 
delay in the submission to the JAC is due to a 
more extensive exercise than anticipated being 
undertaken with the updated Travel Policy 
consolidating and revisiting all existing travel 
policies.  
 
June 2021  
The updated Travel Policy was present ed to 
JAC in April 2021 and several follow up 
meetings have been held for further 
clarifications. The JAC is currently working on 
recommendations on a revised text to be 
submitted  to the Director General.  
 
79 Accruals and 
provisions  3.3.1 / 
2019 I recommend that WTO 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.  August 2020  
The Secretariat agrees to revise the calculation 
of the disability case provision aligned with 
actuarial principles.  Ongoing   
  WT/BFA/W/ 566 
 
- 9 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
February 2021  
Same as above.  
June 2021  
The Secretariat agrees to apply the actuarial 
principles for the disability case provision as 
part of the 2021 financial closing.  
80 Accruals and 
provisions  3.3.1 / 
2019 I recommend that WTO 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.  August 2020 
The Secretariat agrees to explore this 
recommendation.  
 
February 2021  
The Secretariat is currently in contact with its 
insurance broker, Cigna, to assess the risks 
and additional insurance requirements.  
 
June 2021  
Same as above  
 Ongoing  
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.  August 2020  
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 the WTOPP agrees to explore potential 
conditions for a separate agreement.  
 
February 202 1 
The Secretariat is drafting  proposed guidance 
on how and when compensation payments for 
early retirement will be activated for 
subsequent agreement with the WTOPP.  
 
 Ongoing   
  WT/BFA/W/ 566 
 
- 10 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
June 2021  
An agreement  between WTO and WTOPP 
covering compensation payments for early 
retirement has been drafted and  is awaiting 
discussion and  signature.  
 
91 Trust funds  4.2 / 2019  I recommend that WTO 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 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 WTO Rules and 
Regulations.   August 2020  
The Secretariat agrees to c ritically 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.  
 
February 2021  
The Secretariat is actively engaging its 
Members in a review o f the trust fund 
landscape to ensure that its administrative 
practices align with Member priorities. This 
includes efforts to discourage the proliferation 
of small single purpose trust funds. In any 
case, the Secretariat agrees to monitor closely 
trust fun d activity and close or consolidate low 
activity funds on an annual basis. We note that 
due to the global Covid -19 pandemic, 2020 was 
an unusual year for trust fund activities and as 
a result some trust funds anticipated to finish 
their mandates in 2020 wi ll be extended into 
2021.  
 
June 2021  
A working group on trust funds has been set up 
by the CBFA. Se veral meetings hav e taken 
place and the aim is to submit a document at 
the CBFA in September/October 2021.  
  Ongoing   
  WT/BFA/W/ 566 
 
- 11 -  
No Issue  Reference: 
Chapter, 
Year Recommendation  Secretariat response  Status  
93 Trust funds  4.2 / 2019  I recommend that WTO ensure that all 
procurement activities with higher amounts 
are subject to a harmonized and compliant 
procurement process t o ensure transparent 
and standardized procedures and correct 
documentation as well as to ensure an 
appropriate value for money.  August 2020  
The Secretariat agrees to review the 
thresholds for procurement relating to trust 
funds.  
 
February 2021  
A robust policy to be developed in 
collaboration with multiple divisions with the 
Secretariat by 31 October 2021.  
 
June 2021  
The timeline for the development of a Policy 
remains unchanged (by 31 October 2021).  
 Ongoing  
 
 
 
__________