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 8 
Chapter  Title  Paragraph/s 
1 Executive Summary 1 - 15 
2 Scope and Approach of the Audit  16 - 23 
2.1 Scope of the Audit  16 - 20 
2.2 Audit Objective and Approach 21 - 22 
2.3 Audit Conclusion  23 
3 Financial Audit  24 - 114 
3.1 General  24 - 26 
3.2 Contributions  27 – 37 
3.3 Financial Position / Performance 38 – 114 
3.3.1 Statement of Financial Position: 
•Assets and Liabilities
•Cash and Cash Equivalents
•Receivables from Members and Observers
•Inventories38 – 104 
38 
39 - 53 
54 - 56 
57 - 59 
 
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- 3 -Statement of Financial Position  (continu ed) 
•Other Receivables
•Advances
 and Prepayments
•Building
•Equipment
•Pension Plan Assets
•Accruals and Provisions
•Assessed Contributions R eceived in A dvance
•Short- Term / Long -Term Employee Benefits
•Loan
•Pension Benefits
•ASHI
•Net Assets (total)60 - 63 
64 65 - 66 67 - 70 
71 – 75 
76 - 87 88 89 - 93 94 - 95 96 - 97 98 - 103 
104 
3.3.2 Statement of Financial Performance: 
•Revenue and Expenses
•Net Result / Surplus of the Period105 - 114 
106 - 113 
114 
4 Performance Audit  115 – 179 
4.1 Human Resources  
•Focus and O bjectives
•WTP Principles on Staff
•Recruitment and Contract Policy
•Process D escription
•Personnel F iles
•Heterogenic (IT -) Infrastructure - Payroll Process
•Salary Scale
•Performance Evaluation, Bonus and Promotion
•Secondary Dependency Allowance
•Summer School Programme
•Accumulated Annual Leave
•Home Leave115 – 179 
115 - 116 
117 - 118 119 120 - 125 126 - 130 
131 - 135 
136 - 139 140 - 150 151 - 154 155 - 159 160 - 169 
170 - 179 
 
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- 4 -5 Cases of Fraud or Suspected Fraud  180 -  181 
6 Acknowledgement  182 
 
 List of Abbreviations and Acronyms   
 Annex  / List of Recommendations   
 
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- 5 -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 fr om 
1 January to 31 December 2018. These comprise:  
 the statement of financial position;  
 the statement of financial performance;  
 the statement of cash flow s; 
 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 M anagement determines  necessary to enable the 
preparation of financial statements that are free from material 
misstatement, whether due to fraud or error. 
In preparing the financi al statements, the M anagement 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 M anagement either intends to 
liquida te WTO  or to cease operations, or has no realistic alternative but 
to do so.  
Those charged with governance are responsible for overseeing the 
WTO’s financial reporting process.  
 
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- 6 -Responsibility of the 
External Auditor 3. My responsibilities  are to obtain reasonable assurance as to  
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 audit 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 basis 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 t he 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 M anagement;  
- conclude on the appropriateness of M anagement’s use of the going 
concern basis of  accounting and, based on the audit evidence 
obtained, whether a material uncertainty exists related to events  or 
conditions that may cast significant doubt on the WTO’s  ability to 
continue as a going concern. If we c onclude that a material 
uncertainty exists, we are required to draw 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. However, 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 underlying transactions and 
events in co nformity 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 deficiencies in internal control that we 
identify during our audit.  
 
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- 7 -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 statemen ts. 
I have conducted my 
audit in conformity  
with the International 
Standards on Auditing.  5. I conducted my audit in conformity with  the International 
Standards on Auditing (ISA s) 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 as to  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 suffi cient and 
appropriate to provide a basis for my opinion.  
My audit provides a 
reasonable basis for 
the audit opinion.  6. The ISA s, 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 supporting the amounts 
and disclosures in the financial statements. It also inclu des assessing 
the accounting principles and significant estimates made by the 
Director -General, as well as evaluating the overall presentation of the  
financial statement s. I believe that my audit provides a reasonable basis 
for the audit opinion.  
The fina ncial 
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  2018, that they have been prepared in accor dance 
with IPSAS and WTO ’s stated accounting policies, and that the 
transactions have been in accordance with the Financial Regulations.  
Furthermore , I assume  that the IT system for which the Secretariat is 
responsible and which it is  using for accounting and the preparation of  
the financial statements is working properly and in accordance with  
ISSAI s tandards (even though I had no chance to verify that in the 
course of this audit ), especially concerning IT s ecurity (see also my 
recomm endations in previous report s). 
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, completeness and validity of the financial 
statements as a whole. Therefore , I have placed an  unqualified audit 
opinion on WTO ’s financial statements for 201 8.  
Areas covered by this 
report  9. My report includes observations and recommendations intended to 
contribute to the improvement of financial management. For 2 018, 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 P art 3 of my 
report , I comment on the overall financial situation.  
 
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- 8 -Performance audit 
areas covered by this 
report (Part  4) 11. Regulation  44 of the Financial Regulations stipulates that my 
annual audit shall also include performance audits as defined by the 
INTOSAI Auditing Standards . This year , my performance audit has 
mainly covered the areas of human resources: recruitment of staff, on-
going payroll and selected entitlements, performance evaluation and 
the bonus system.   
WTO delivered 
financial statements in 
accordance with 
IPSAS.  12. The financial statements for the year ending 31 December 201 8 
are prepared and presented in accordance with IPSAS . 
Cases of fraud or 
suspected fraud (Part  5) 13. During our audit, my team was informed by the Office of Internal 
Oversight ( OIO) about one case of severe fraud. The case regarding 
home leave and dependency allowance was detected in 2017. The 
incumbent was sanctioned and the defrauded amounts were reimbursed 
to the WTO . The trial is still pending b ecause the incumbent appealed 
against the sanction and the results of the internal investigation  
conducted .  
Acknowledgement 
(Part  6) 14. I wish to convey my appreciation for the cooperation and 
assistance extended by the Director -General, the M anagement and staff 
of the Secretariat. I appreciate that the Secretariat  is continuously 
reviewing and improving the f inancial statements , thus  making the job 
for me and my team easier.  I am very grateful for their assistance 
during the entire external audit process.  
List of 
Recommendations 
(Ann ex) 15. My team reviewed/monitored the pending implementation of 
recommendations made in the last year’s report.  
 
  
 
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- 9 -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  2018 . These 
statements comprise the statement of financial position, the statement 
of financial performance, the statement of cash flow s, the statement of 
the changes in net assets and notes an d 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 M anagement 
determines are 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 plann ed 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 statements 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 
and financial transactions, I carried out the reviews (under R egulation 
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 current  administrative 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  2018. 
Substantive testing 
convinced me of the correctness of WTO ’s 
recor ds.  22. 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 statements 
accurately reflect the accounting records and present fairly the financial 
situation of the WTO .  
 
 
 
 
 
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- 10 -2.3 Audit Conclusion  
I found  no ma terial 
weaknesses.  
I have placed an 
unqualified opinion on 
WTO ’s financial 
statements.  23. 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 repor ted 
additional findings to the M anagement of the Secretariat in the course 
of 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 201 8.  
 
 
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- 11 -3 Financial Audit  
3.1 General  
My team examined 
the accounting 
records. 24. 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  
  25. We analysed data records and t ransactions. A total of 71,679  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 signif icant number of the remaining transactions. 
We checked whether  invoices and the related supporting documents 
had been filed in accordance with the regulations and cross -checked the 
basis for payment and the necessary approvals. No  transactions 
examined  gave cause for criticism. The S ecretariat was able to clarify 
all open questions.   
I report on WTO’s 
financial development.
 26. In the following paragraphs, I report on trends and tendencies and 
provide background information. For that purpose, my staff carried out 
an an alysis of several of the Organiz ation’s key figures and their trend.  
3.2 Contributions 
2018 budget was 
approved by General 
Council.  27. WTO activities are financed from  the regular budget covering 
expenses and income for a biennium, this time 2018-2019. The 2018  
budget was approved by the General Council on recommendation by 
the CBFA (Committee on Budget, Finance and Administration) . The 
budget is financed from assessed contributions an d miscellaneous 
income. The 2018 appr oved budget amounted to CHF  197.2 million 
and represented  the first year of the biennium 2018-2019. 
Since 2011, t here has been  a Zero -Nominal Growth Bud get Policy fo r 
the WTO , so the b udget has been  unchanged since 201 1. 
Calculation of 
contributions  
 28. The contributions are calculated based on each Member State ’s 
international trade (imports plus exports) in relation to the international 
trade of all WTO Member States, based on statistics over a five- year 
period.  
 
 
        
 
 
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- 12 -Review of 
contributions  29. I reviewed contribu tions for 201 8.  
 
2018  Assessed 
Contributions * Outstanding 
Contributions  Outstanding contribution s 
referred to the budget in per cent  
Member States  195.5  25.7 13.1 
Observers  0.7 0.6 85.7 
Total  196.2  26.3 13.4 
 S ource: WTO  Financial Statem ents 2018 ; in million CHF ; *(D ifferen ces due to rounding). 
 
In 201 8, assessed 
Member States’ 
contributions 
amounted to 
CHF  195.5 million.  30. Assessed contributions by Member States amou nt to 
CHF  195.5 million, contributions by Observers are CHF  0.7 million . At 
year-end 2018, WTO has  164 Member States  and 23 Observer States.  
 31. Assessed contributions paid in advance by Members and 
Observers amount to CHF  4.8 million  (2017: CHF  9.4 million) . In 
2018, just like in 201 7, due to the negative interest rate of the Swiss 
National Bank (SNB), M embers gained  no interest. Negative interests  
were covered by the WTO budget.  
Outstanding 
contributions totalled  
CHF  25.7 million .  32. The outstanding contributions totalled  CHF  25.7 million  - coming 
from a peak i n 2017 with a total of CHF  33.8 million outstanding 
contributions ( CHF  16.5 million in 2016). The decrease in the amount 
of outstanding contributions is due to the fact that one of the top 10 
Members paid its outstanding contribution of the year 2017 in the first 
quarter of 2018. Beyond that , 9 Members paid back outstanding 
contributions fully or partial ly (CHF 2.5 million).  
51 Members out of 
164 and 10 Observers out of 23 have 
payment arrears.   33. Out of 164 Members, 51 (after 48 in the year before) had payment 
arrears (app rox. 31 per cent). Even 10 Observers (after 10 in the year 
before) had payment arrears (approx. 44 per  cent).   
Administrative 
measures for 
Members/Observers with arrears.  34. Pursuant  to Regulation 14 in the WTO Financial Regulations , 
Members and Observers with arrears shall be subject to a dministrative  
measures.  Details of a dministrative measures and their different levels 
are defined in Annex B of WTO ’s Financial Regulations.  There are 
three categories of a dministrative measures depe nding on the number 
of year s of outstanding contributions.    
13 Members and 3 
Observers are subject to administrative 
measures.  
  
 
  
 
 
  35. 31 Members ( 19 per cent) and 8 Observers (3 5 per cent) have 
payment arrears on the level of their annual contributions  or higher. 
Currently , 13 Members and 3 Observers are subject to  administrative 
measures . As at 31 December 2018, 4 Members had to follow  a 
payment plan. However, WTO did not receive payments by two of 
them. Outstanding contributions in the period 1980-201 6 amount to 
CHF 6.5 million.  
 
36.  Although the sum of outstanding contributions temporar ily 
decreased, there are actually  more Members and Observers with 
significant outstanding contributions than in 2017 (+ 3 Members) .  
 
 
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- 13 - 
I reiterate  the 
recommendation of 
preparing an action 
plan for running WTO with growing 
outstanding 
contributions.  37. Therefore , I reiterate  the recommendation that the Secretariat 
should be prepared and have a common strategy for running WTO even 
with higher outstanding contributions 
 
  
 
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- 14 -3.3 Financial Position / Performance  
Table 1 - Statement of Financial Po sition as at 31 December 2018* 
(in million CHF ) 
 
 2018  2017  2016  
Current Assets    
Cash and cash equivalents 130.4  115.1  132.9  
Receivables from Members  16.0 23.4 6.8 
Receivables from Observers  0.6 0.6 0.6 
Inventories  0.3 0.4 0.4 
Other receivables  3.8 3.5 2.8 
Advances and prepayments  5.8 4.8 5.4 
Non-Current Assets    
Building  118.4 121.3  124.3  
Equipment  9.8 11.7 13.2 
Intangible assets 0.2 0.4 0.4 
Pension Plan Assets  564.8  595.9  535.5  
TOTAL ASSETS 850.1  877.1  822.3  
Current Liabilities    
Payables 4.1 4.8 2.8 
Accruals  10.4 6.6 5.1 
Assessed contributions received in advance  4.9 
 9.4 16.8 
Voluntary contributions refundable to donors  34.2 32.9 34.5 
Short -term e mployee benefits 11.7 12.1 12.1 
Non-Current Liabilities    
Loan  52.8 54.0 55.2 
Pension  benefits 1,072.0  1,034.9  982.0  
ASHI  283.7  228.9  226.3  
Other long-term employee benefits  8.9 8.3 7.7 
TOTAL LIABILITIES 1,482.7  1,392.0  1,342.5  
    
NET ASSETS / EQUITY  (632.6)  (514.9)  (520.2)  
WCF (Working Capital Fund)  62.9 10.9 10.9 
Actuarial gain (loss)  155.6  246.7  210.4  
Accumulated surplus  (917.6)  (837.3)  (806.4)  
Provision for right of use  - CWR  58.0 58.6 59.2 
Reserves  22.8 15.8 12.2 
Extra  Budget Fund Allocation  (14.3)  (9.5) (6.5) 
TOTAL NET ASSETS (632.6)  (514.9)  (520.2)  
 Source: WTO  Financi al Statements 201 7 and 201 8; *(Differences due to rounding). 
 
 
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- 15 - 
3.3.1 Statement of Financial Position  
Assets and Liabilities  
My team examined 
the statement of assets 
and liabilities.  38. 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  130.4  million is 
sufficient.  39. WTO ’s overall cash situation is sufficient. Compared to  the 
balance in the previous year, total cash and cash e quivalents increased 
by CHF  15.3 million from CHF  115.1 million in 2017 to 
CHF  130.4 million as at 31  December  2018 (CHF  132.9 million in 
2016). Cash and cash equivalents include cash in hand (petty cash 
CHF 5,000) and cash accounts at bank s (CHF 130.372 million) . 
Cash d eposits in CHF 
increased in 2018. 40. The increase in 201 8 is mainly  due to the significant increase of 
cash deposit s in CHF amounting to CHF  113.1 million 
(CHF  97.3 million in 201 7). 
 41. Other currencies (USD, EUR and GBP) are of m inor importance 
for WTO. In 2018 , the total amount of assets in other currencies was 
equivalent to approximately CHF  17.3 million  (out of this amount, 
14.9 million in USD) . 
In 2015 , the SNB 
lowered the interest 
rate to -0.75 per cent . 42. 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 201 8, the SNB 
persisted in implementing its 
policy of negative 
interests . 43. 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 
interests in 2018 just 
like in 2017 and 2016. 44. According to  the financial statements , WTO’s cash and cash 
equivalents amount to more than CHF  130 million . Because of the 
monetary policy of the SNB (see above) , WTO paid negative interests 
in 201 8 just like in 201 7 and 2016 .  
WTO was charged 
with negative interests 
in an amount of CHF 
641,479. 45. In 201 8, the WTO paid  negative interests related to the regular 
budget and the trust funds of CHF 544,848. Additionally , the WTO 
Pension Fund paid CHF 96,631 of negative interests for its own 
investments. In total, WTO was charged with  negative interests in  an 
amount of CHF 641,479 in 2018 . 
 
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- 16 -WTO could not  
compensate the 
negative interests with positive income.  46. The increase of negative interests was because WTO could not 
achieve sufficient positive income from investments in fixed 
investments of money and money market funds to compensate the 
negative interests in Switzerland.  
In November 2017 , 
Credit Suisse 
cancelled its 
agreement with WTO granting CHF 40 
million without 
negative interest s. 47. In 2016 and 2017 , WTO still benefited  from allowances granted 
by two of its main banking partners : UBS granted CHF 50 million 
without negative interests and Credit Suisse granted CHF 40 million 
without negative  interests. In November 2017, Credit Suisse cancelled 
its agreement with WTO. WTO was mainly burdened with the effects 
of this decision in 2018.      
There is a risk of 
negative interests of up to CHF
 1 million 
per annum.  
 48. WTO will be faced with negative interest rates continuing  to rise 
up to more than half a million CHF  in 2019. The agreement with  UBS 
may be cancelled also from one day to another. In this case, the risk of 
negative interest could increase up to 1 million CHF per annum. 
Confirmation s of 
WTO bank balances 
disclose potential risks 
by unique signatories.    49. In January 2019 , I received the conf irmation of WTO bank 
balances from all banks WTO held business relationships with in 
2018. The three banks (UBS, Credit Suisse and PostFinance ) also 
provided information on the power of attorney regulations for these 
bank accounts (signatory authority).   
 50. According  to the bank information , the D irector -General  still has 
the full power of attorney for all three banks WTO held business 
relationsh ips with. All other authorized persons are authorized jointly 
by two (collective) signatures1.      
An individual 
signatory is not in line with the Rules and 
Regulations.  51. I note that the authorization for the individual signatory neither is 
in line with the WTO Financial Rules and Regulations (Payment 
Policy from 8 November 2017) nor with the four-eyes principle.  
I recommend that 
WTO adjust all current unique 
signatory 
authorizations to joint 
signatory 
authorizations.  52. I recommend that WTO adjust the current  unique signator y 
authorizations by the D irector -General  to joint signatures (2 by 2 
authorizations) for all WTO bank accounts as soon as possible.   
Transfer of CHF      
52 million to the Working Capital Fund 
to avoid loss of funds 
due to negative interest.  53. In December 2018 , the General Council followed the 
recommendation by t he Committee on Budget, Finance and 
Administration of 7 November 2018 to transfer CHF  52 million of the 
WTO accumulated surplus - as at 31 December 2017  - to the Working 
Capital Fund. Th is amount will be subject to a separate investment 
strategy aiming to avoid negative interest and to ensure available 
funds in case of un expected  shortcomings.      
 
 
1 PostFinance: Five persons jointly by two, one person individually; Credit Suisse: Six persons jointly by two, one person indi vidually; 
UBS: Seven persons jointly by two, one person individually.  
 
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- 17 - Receivables from Members and Observers  
Provision for arrears 
amounts to 
CHF  9.7 million.  54. Receivables fr om Members and from Observers ( receivables 
from non- exchange transactions) include a provision for outstanding 
contributions2. The provision for arrears from Members and 
Observers amount to CHF  9.7 million (2017: CHF  10.4 million): 
CHF  9.2 million from Members; CHF  0.5 million from Observers.  
13 Members are 
subject to  
administrative 
measures representing 
CHF  7.9 million ,      
31 per cent of all 
outstanding 
contributions.  55. There is a total of 13 Members subject to administrative 
measures in different categories : four in category I (after one but less 
than two full yea r’s outstanding contributions) , three in category II 
(after two but less than three full year’s outstanding contributions) and 
six in category III (after three full year ’s outstanding contributions).  
The 13 Members are representing a volume of CH F 7.9 million 
(31 per cent)  of a total of CHF 25.7 million of outstanding 
contributions.   
3 Observers are 
subject to 
administrative 
measures.  56. There are three Observers subject to administrative measures. 
One of them in category I and two in category II I. The three 
Observers are representing a volume of CHF 0. 5 million (70 per cent) 
of a total of CHF 0.7 million of outstanding contributions from 
Observers.  
    
 
 Inventories  
Inventories consist 
mainly of WTO 
publications and co-
publications.  57. Inventories within current assets for WTO are mainly 
publications and co-publications totalling  CHF  0.3 million.  
Some inventories are 
held in external 
storage facilities.  
 58. 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 91,000.  
WTO conducted a 
physical verification 
for its inventories.  59. WTO conducted a physical verification for the stock of 
publications and souvenirs held in- house as well as at the distributor 
storage.   
 
 
     
2 The provision is calculated based on the ageing of  the contributions.  
 
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- 18 - Other receivables  
Recoverable United  
States taxes amount to 
CHF  2.8 million.  60. Other receivables include recoverable taxes, e.g. from the United 
States (US) or Switzerland. In 2018, other receivables totalled  
CHF  3.8 million (201 7: CHF  3.5 million); CHF  2.8 million of the 
total were  recoverable US taxes  in 2018 . 
WTO pays estimated 
US tax for staff in 
advance.  61. 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 agreement between WTO and the 
US of 22 December  2000.  
 62. The WTO Secretariat’s  method of calculating reimbursements is  
different from the method used by  the US Government, although the 
WTO method is validated by the International Labour Organization 
(ILO).  
US tax non -
reimbursable  63. In 201 8, the non-reimbursable amount  for WTO totaled  
CHF  334,193 (2017: CHF  286,509). 
   
 Advances and P repayments  
Advances and 
prepayments total 
CHF  5.8 million.  64. In 201 8, advances and prepayments  with a total of 
CHF  5.8 million include staff advances made for salary, travel and 
education grants representing CHF  3.1 million; advances relating to 
trust funds activities with an amount of CHF  1.7 million and other 
advances (e.g. payments made to suppliers, consultants and 
insurances) of  CHF  1.0 million.  
 
 
Non-Current Assets  
 Building  
The net carrying 
amount for building as 
at 31 December  2018 
is CHF  118.3 million.  65. With regard to non -current assets, a  balance sheet item of high 
value is “building” with a net carrying amount of CHF  118.3 million  
(2017: CHF  121.3 million).  The accumulated depreciation concerning 
buildings as at 31 December  2018 amount to CHF  16.2 million  
(depreciation for 201 8 only: CHF  3 million).  
CWR building is 
granted by the Canton 
of Geneva and the 
FIPOI as a 99 -year 
surface right.  66. WTO headquarters building at 154 rue de Lausanne, Geneva has 
two buildings: the old building of CWR  and the new building 
constructed by WTO itself. The CWR building and the land were  
granted by the Canton of Geneva and the Foundation for International 
Organiza tions ( FIPOI ) as a 99 -year “surface right”. The right of use of 
the building is reported as part of the equity of WTO. 
 
 
 
 
 
WT/BFA/W/488 
 
- 19 - Equipment  
Equipment totals  
CHF  9.8 million . 67. The total value of  equipment amounts to CHF  9.8 million 
(2017: CHF  11.7 million). The most significant items  are furniture 
(CHF  3.9 million), audio visual equipment (CHF 3.6 million), security 
equipment (CHF  1.7 million) and IT equipment (CHF  0.4 million).  
An adequate 
stocktaking system is 
implemented.  68. Following my recommendation in the 2016 report,  in 2017, 
WTO implemented  software  to manage all relevant assets. This 
software allow s recording the lifetime of assets, their purchase date 
and price, location and other information of importance. With these 
data, the assets can be located and traced and their depreciation can be 
calculated automatically. All new acquisitions will be recorded in the 
asset ledger automatically via a link to the Oracle ERP system. 
Procurement, cash management and accounting incl uding asset 
management are now automatically linked. Before their first use, 
assets will be tagged individually with a barcode. The WTO take s the 
stock annually . 
My team checked the 
software and the 
stocktaking process.  69. My team had the possibility to check the software and to verify 
the amount of the assets presented in the financial statements. My  
team took a sample of assets; all of them w ere found and all relevant 
data were recorded.  
The stocktaking 
system in general 
presents a true an d fair 
value  of all relevant 
assets.  70. The assets are presenting a fair and true value  even if for some 
assets an individual value does not exist . I consider the valuation 
method to be acceptable.  
 
 
 
  Pension Plan Assets  
Fair value of Pension 
Plan assets:  
CHF  564.8 million . 71. At the beginning of 201 8 (31 December  2017), the fair value of 
Plan assets was CHF  595.9 million. With all expenses, contributions 
and benefits paid, the fair value as at 31 December  2018 was 
CHF  564.8 million.  
Employer 
contributions 2018: 
CHF 19.2 million.  72. The total of all  employer contributions for 201 8 amount s to CHF 
19.2 million (201 7: CHF 19.0 million).  
The actuarial loss 
amounts to CHF  44 million.  73. The actuarial loss on P lan assets net of act ual investment 
expenses for 2018 is CHF 4 4 million (in 201 7: gain of CHF 48.5 
million).  
Benefits paid in 2018: 
CHF  25.7 million.   74. Benefits paid from the P lan amount to CHF  25.7 million 
(2017: CHF  27.1 million).  
 
Detailed information 
is shown in the 
WTOPP audit report . 75. Detailed information on the Pension Plan Assets is provided in 
my audit report of the financial statements of the World Trade 
Organization Pension Plan (WTOPP) for the year ended 31 December 
2018.  
 
 
WT/BFA/W/488 
 
- 20 -Liabilities  
Current Liabilities  
 A ccruals  and Provisions 
The position accruals 
incorrectly contains 
accruals 
(CHF  5.4 million) as 
well as provisions 
(CHF 5.0 million).   
 76. The position Accruals  CHF 10.4 million (2017: CHF 6.6 million) 
contain s not only accruals but also provisions. According to IPSAS 
1.88, provisions are to be present ed separately.  
77. Accruals as at 31 December 2018 contain CHF 5.4 million 
(2017: CHF 6.6 million).  
78. Provisions as at 31 December 2018 contain CHF 5.0 million.   
Accruals  79. In 2018 , WTO recognized accruals for medium -term agreements 
(projects) with implementing partners , consultancies , service 
provider s and for trainings.   
Provisions for 
disabled retirees 
totaled in 2018 
CHF  4.8 million.   
  
  
 
 
 
 
WTO should revise 
potential risks related 
to disabilities and 
implement effective 
mitigation measures.     80. Provisions  include three cases of disabled retirees. WTO is 
obliged to pay a monthly amount to the entitled beneficiaries. WTO 
recognized its payment obligations as at 31 December 2018 in total 
with CHF 4.8 million.  
81. As I already recommended in 2017, WTO should review its 
calculation of 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 and claims from 
the WTO Pension Plan (retirement, early retirement , and disability 
benefits ), payments from third parties and the applicable discounting 
for long- term liabilities.   
82. In addition, WTO should revise its potential risks  related to 
disability cases in order to implement possible and effective 
mitigation measures to minimize such risks.             
Provisions for legal 
risks  83. Provisions for legal disputes with employees amount to CHF 0.2 
million. These cover 100 per cent of the legal risks for WTO.  
I recommend that 
WTO  present accruals 
and provisions 
separately  84. I recommend that WTO present accruals and provisions 
separately in its f inancial s tatements.  
I also recommend that 
WTO explain the 
positions, accruals and 
provisions by means 
of separate notes.    85. I also recommend that WTO explain  the positions , accruals and 
provisions by means of separate notes in the financial statements. In 
these notes , WTO should explain the relevant facts and the applicable 
calculation methods.    
In addition , I 
recommend that WTO review its calculation of its long -term 
obligations.  86. In addition , I recommend that WTO review its calculation of 
actual long -term (legal) obligations.  
 
WT/BFA/W/488 
 
- 21 -Finally , I recommend 
that WTO revise risks 
related to disability cases and implement 
effective mitigation 
measures.  87. Finally , I recommend that WTO revise its potential risks related 
to disability cases in order to implement possible and effective 
mitigation measures to minimize such risk s. 
 
 Assessed C ontributions Received in Advance 
Contributions paid in 
advance: CHF  4.9
 million .  88. The total amount of contributions paid in advance by Members 
and Observers is CHF  4.9 million (201 7: CHF  9.4 million) . In 2018,  
(due to negative interest rates) Members gained no interests.  
 
 Short -Term / Long-T erm Employee B enefits  
Short -term employee 
benefits total 
CHF  11.7 million.  89. Short -term employee benefits comprise dependency allowance, 
untaken annual leave, e ducation grant, home lea ve, s eparation grant 
(temporary staff) and provision for bonus . The total as at 
31 December  2018 amounts to CHF 11.7 million.  
 
Short -term employee 
benefits  31/12/201 8                      
(in million CHF)  
Dependency allowance  0.05  
Untaken annual leave  8.54 
Education grant  1.35 
Home leave  0.79 
Separation grant  0.12 
Provision for bonus  0.84 
Total  11.69 
 
Provision for non-paid 
bonuses of prior years:  
CHF 359,100.    90. 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 of non-paid bonuses of prior years. 
91. WTO still recognized the remaining non -paid bonuses 
incorrectly as short -term employee benefits.  
I recommend that 
WTO review the correct purpose of 
non-paid bonuses.   92. 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. 
Long -term employee 
benefits total CHF  8.9 million . 
 93. The long-term employee benefits include removal indemnity of 
CHF 1.2 million and s eparation grant (permanent staff) of 
CHF  7.7 million.   
 
   
 
WT/BFA/W/488 
 
- 22 -Non-Current Liabilities  
 Loan 
WTO received an 
interest -free loan of 
CHF  60 million .  94. 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 another CHF  40 million for the 
new administrative building.  
The a nnual repay ment 
is CHF  1.2 million; 
the residual debt as at 
31 December 2018 is 
CHF 5 2.8 million.  95. The loan is interest -free; its term  is 50 years. WTO started 
repaymen t in 2013 with CHF  1.2 million (1/50 of CHF  60 million); in 
2018, WTO repaid another CHF  1.2 million. The total of the residual 
debt as at 31  December  2018 is CHF  52.8 million.  
 
 Pension  Benefits  
Pension benefits total 
CHF  1,072 million.  96. WTO Pension Plan is a defined benefit plan. The value of its 
commitments  in accordance with  IPSAS amounts to 
CHF  1,072 million as at 31  December  2018 (2017:    
CHF  1,034.9  million).  
Discount rate as an 
essential assumption 
is 2 per cent . 97. The key actuarial assumption is  2 per cent  for the discount rate 
for pension benefit obligations . The expected long -term rate of  return 
on Plan assets is  2 per cent;  the assumption for inflation is 0.6 per  cent  
as in 2017 . 
 
 ASHI  
ASHI  total states  a net 
liability of 
CHF  283.7  million  
(2017: CHF 228.9 
million) . 98. The After -Service Health Insurance (ASHI) benefits are 
calculated, just like the pension liability, by consulting actuaries. For 
its long -term obligation regarding ASHI , WTO states  in the financial 
statements as at  31 December 2018 a net liability of CHF 28 3.7 
million  (2017: CHF 228.9 million) as “Employee Benefits” (note 14). 
This liability was calculated by a consulting actuary based on WTO 
edited personnel data and past payment experienc e. 
 
The increase of 
CHF  55.8 million for 
ASHI from 2017 to 2018 mainly has been 
caused  by higher 
insurance premiums and changes in demographic 
assumptions.   99. The increase of CHF 55.8 million in the ASHI liability as at 
31 December 2018 is mainly attributable to actuarial loss of 
CHF  43.1 million because of higher insurance premium s 
(CHF  33.8 million) and changes in demographic assumptions  
(CHF  9.3 million) . The cost for services  (CHF 9.2 million) and 
interest s (CHF 4.7 million) as well as the earnings from benefits 
(CHF  2.3 million) are similar to  2017.   
 100. In its report from April 2019, the actuary already considered the 
new contributions to the health insurance. The total contribution for 
an adult increased from CHF 550 up to CHF 633 (+ 15 per cent) and 
for children from CHF 275 up to CHF 316 (+15 per cent). These 
higher insurance premiums have an impact of CHF 33.8 million.  
 
WT/BFA/W/488 
 
- 23 - 101. Furthermore, the actuary c onsidered changes in demographic 
assumptions with an impact of CHF 9.3 million. This impact was 
explained by the employer contribution rate increase; 59.7 per cent 
instead of 56.2 per cent in 2017.  
 102. The changes 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 28 3.7 million  
The annual  
contributions by the 
WTO are paid from 
the regular budget 
“pay as you go”. 103. The ASHI obligation as of 31 December 201 8 is reflecting the 
WTO Secretariat strategy for managing health insurance liabilities as 
from December 2016. The ASHI obligation (proportion by WTO as 
employer) currently is not funded by the Member States. The yearly 
contributions by WTO are paid from the regular budget “pay as you 
go”. 
 
 Net A ssets (total)  
Net assets/ equity of 
the period is CHF  (632.6)
 million.  104. Consideri ng all assets as at 31  December  2018 
(CHF  850.1 million) and all liabilities (CHF  1,482.7 million) , there is 
a negative total net assets/equity of CHF 632.6 million      
(2017: CHF  - 514.9 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/488 
 
- 24 -3.3.2 Statement of Financial Performance  
 Revenue and Expenses  
The table below 
shows comparative 
figures of 2016, 2017 and 2018. 105. The IPSAS equivalents of income and expenditure are revenue 
and expenses (as shown in the Statement of Financial Performance). 
The tab le presents the figures for 2016, 2017 and 2018.  
 
Table 2 - Statement of Financial Pe rformance as at 31 December 2018* 
(in million CHF)  
 
 2018  2017  2016  
Revenue     
Contributions  / Members  195.5  195.5  195.5  
Contributions  / Observers  0.6 0.6 0.6 
Voluntary c ontributions  on 
trust funds  21.0 20.9 19.8 
Revenue  from publications  0.5 0.5 0.6 
Other r evenue  1.3 1.2 1.1 
WTO Pension Plan revenues  3.4 2.4 9.6 
Total  Revenue  222.3  221.1  227.2  
    
Expenses     
Staff expenditure  (133.2)  (134.8)  (133.5)  
Actuarial cost for ASHI  (11.6)  (11.1) (13.2) 
Actuarial cost for pension  (23.5)  (22.8) (26.4) 
Temporary Assistance  (23.3)  (24.5)  (22.9)  
Supplies/other Service Costs  (15.5)  (15.4)  (15.5)  
Travel & Hospitality  (13.6)  (15.1)  (12.6)  
Implementing Partners  (5.3)  (4.4)  (4.6)  
Contribution to ITC  (18.2)  (18.8)  (18.8)  
Ministerial Conference 
Operating Fund (variation)  (0.6)  (1.0)  (0.5)  
Appellate Body Operation 
Fund (variation)  (0.6)  (0.3)  (0.4)  
Depreciation  (5.7)  (5.6)  (5.7)  
Provision for contributi ons in 
arrears  0.7 (0.5)  (1.4)  
Depreciation of provision for 
right of use - CWR - 0.6 0.6 0.6 
Finance Costs  (0.6)  (0.3)  (0.18)  
Loss on foreign exchange 
transactions  (0.1)  (0.2)  (0.5)  
Total  Expenses  250.5  (252.0)  (255.5)  
    
Surplus (deficit) for the 
Period  (28.2)  (31.0)  (28.2)  
 Source: WTO Financial Statements 201 8 and 201 7; *(Differences due to rounding).  
 
WT/BFA/W/488 
 
- 25 -Revenue  
Total reven ue 
amounts to 
CHF  222.3 million.  106. Revenue at year -end totaled CHF  222.3 million 
(2017: CHF  221.1 million).  
Contributions in 201 8 
total 
CHF  196.1 million.  107. The most significant revenue item s are contributions from 
Members and Observers amounting  to CHF  196.1 million (CHF  195.5 
+ 0.6 million)  as in the years before .  
Voluntary 
contributions on trust 
funds amount to 
CHF  21.0 million.  108. Voluntar y contributions on trust funds in creased from 
CHF  20.9 million in 201 7 by CHF  0.1 million to CHF  21.0 million in 
2018. 
 
Expenses  
Total expenses 
amount to 
CHF  252.5 million.  109. Total expenses as at 31  December  2018 are CHF  250.5 million 
(2017: CHF  252.0 million).  
Staff expenditures of 
CHF 168.4 million  
represent two thirds of 
all expenses . 110. Two thirds of the expenses (67 per  cent) are chiefly due to staff 
expendi tures ( these include salaries, annual leave, pension, health 
insurance , entitlements such as education g rant and home leave) with 
a total of CHF  168.4 million (201 7: CHF  168.6 million).  
In 201 8, expenses for 
ASHI  amount to 
CHF  11.6 million and 
for pension to 
CHF  23.5 million.  111. The expenditures for ASHI (CHF  11.6 million) and pension 
(CHF  23.5 million) are slightly higher than the year before (ASHI in 
2017: CHF 1 1.1 million; pension in 2017: CHF 2 2.8 million).   
Expenditure for 
tempor ary assistance 
amounts to 
CHF  23.3 million.  112. Another expenditure  item is temporary assistance with an 
amount of CHF  23.3 million (201 7: CHF  24.5 million).  
WTO’s c ontribution 
to the ITC: 
CHF  18.2 million.  113. The WTO ’s contribution to the  International Trade Centre (ITC) 
is another s ignificant expense. This contribution includes the funds 
granted to ITC for its core activities. In 2018, WTO paid the total 
amount of CHF 18.2 million, CHF  0.5 million less than  the year 
before . 
 
 Net R esult/ Surplus (D eficit) of the P eriod  
Net result (deficit) for 
the p eriod amounts to 
CHF  (28.2) million.  114. The net resu lt (deficit) for the period 20 18 is CHF  (28.2) million 
compared to CHF  (31.0) m illion in 2017 and after CHF  (28.2 ) million 
in 201 6.  
 
 
 
 
 
 
 
WT/BFA/W/488 
 
- 26 -4 Performance Audit  
4.1 Human Resources  
Focus and Objectives   
Audit Scope and 
Audit Methodology  115. My staff audited the management of recruitment  and payroll 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 platform Qlickview 
as well as the Oracle system for administration  (HR module) . To get a n 
overview, we made a sample check of 12  recruitment cases  in 2017 and 
2018. Further more , we took a random sample of 30 staff members with 
active payroll in 2018 reflecting the different grades and positions. My 
staff checked the sample by using the Oracle platform and the paper 
documents in the personnel files  as well as additional information from 
Excel or other database/software used by the Human Resources  
Division . Furthermore , we conducted interviews with Human R esources  
Management and expert staff. In  addition, we raised detailed questions in 
an information request which was responded by the Human Resources 
Division before our visit. 
Audit Objective  116. The main objective of the audit was to assess whether the 
recruitment and the payroll processes  were conducted in accordance with 
WTO ’s underlying principles and whether the decisions made in the 
Appointment Board were comprehensible and documented in the 
personnel files by Human Resources.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WT/BFA/W/488 
 
- 27 -WTO Principles on Staff  
 
In 2018 , WTO 
employed 718 staff 
on 707.5 staff 
positions , the staff 
expenditures 
amount ed to 
CHF  168.4 million.  117. In 2018 , WTO total staff expenditures amounted to CHF 168 .4 
million  (2017: CHF 168.6 million ). Staff expenditures include costs such 
as salaries, annual leave, pension, health -insurance and other 
entitlements and benefits. In 2018, WTO employed 718 staff on 707.5 
full time equivalent (FTE) positions : 658.5 permanent staff, 49 
temporary staff . The FTE of staff funded from the regular budget were 
615.5 permanent and 42 temporary employees. The FTE staff funded 
from voluntary contributions/extra -budgetary funds were 42 permanent 
and 7 temporary employees.    
The following tables show the grading structure as at December 2018 : 
 
Table 3: Permanent Employees (Full -time Equivalent, funded from Regular budget and Extra -
budgetary funds)  
Category/Grade  Dec-18 
Professional  411.4  
DG 1 
DDG 4 
12 2 
11 17 
10 87 
9 105.9  
8 73.4 
7 70.8 
6 50.3 
Support  247.1  
7 23.1 
6 55.1 
5 90.5 
4 51.4 
3 27 
Grand Total  658.5  
 
Table 4: Temporary Employees (Full -time Equivalent, funded from Regular budget and Extra -
budgetary funds)  
Category/Grade  Dec-18 
Professional  25 
8 2 
7 7 
6 16 
Support  24 
5 11 
4 6 
3 5 
2 2 
Grand Total  49 
 
  
 
WT/BFA/W/488 
 
- 28 -Internal regulations 
and rules concerning 
human r esources  
 118. The Staff Regulations govern the conditions of service and the 
personnel practices of the Secretariat, and the Staff Rules provide the 
means for implementing the provisions of the Staff Regulations. WTO 
Staff Regulations stipulate that WTO should establish  a salary scale 
which should be adjusted annually (Regulation 6.2). This should be done 
under certain conditions (Regulation Annex B). Staff members should be 
entitled to a dependency allowance in respect of a primary or secondary 
dependent (Regulation 6.5 ). Internationally recruited staff members 
serving outside the country of their recognized home should be entitled 
to an education g rant, home leave,  family visit and separation g rant 
(Regulation 6.8). Regulation 10.6 stipulates the conditions under which a 
separation grant shall be payable.  
 
Recruitment and Contract Policy  
Internal regulations 
and rules concerning the recruitment and contract policy 
 119. The recruitment policy of the WTO shall be to seek to attract and 
retain staff members offering the highest standards of competence, 
efficiency and integrity. It shall be based on the principle of equal 
opportunity for all, regardless of gender, nationality, race or religion, 
with the objective of ensuring the broadest possible diversification of the 
Secretariat (Regulation 3.1). The Director -General shall appoint the staff 
members of WTO and shall determine their duties and conditions of 
service (Regulation 3.2). The basic objective of the contract policy of  
WTO shall be to offer staff members the prosp ect of employment 
consistent with the requirements of the Organization, including the need 
to ensure the appropriate balance between continuity and renewal, and 
taking into consideration the needs and aspirations of the staff. The 
Organization may grant staff members fixed -term or regular contracts 
(Regulation 4.1). A fixed- term contract is for a fixed duration. Fixed -
term contracts may be extended once  or twice . The total length of service 
under fixed- term contracts shall not normally exceed five years 
(Regulation 4.2) . A fixed -term contract may lead to a regular contract. A 
regular contract carries no expiration date (Regulation 4.4) . 
 
WT/BFA/W/488 
 
- 29 -Process D escription  
Human Resources  
process description  120. My staff checked the relevant processes of Human Resources 
(staff budgeting, recruitment, ongoing payroll, performance 
evaluation and separation). In addition to the  Human R esources 
Division, there are additional divisions of WTO  involved in the 
human resources  processes: e.g. Financial Management Service  is 
responsible for staff budgeting. Also the assessing/ requesting 
divisions are integrated into performance evaluation and recruitment  
processes. For entitlements such as home leave, the Finance Divisi on 
(Travel Unit) is responsible for the calculation of the lump sum and 
the settlement.  
121. The responsibility of Human Resources in the recruitment 
process is not always clearly defined. The requesting divisions are 
also involved in the long -listing process before short -listing. 
Irrespective of the fact that Human Resources need technical 
experience already for the pre- selection it should be avoided any 
conflict of interest.      
122. The process of staff budgeting and staffing of vacancies is 
mainly based on budg et restrictions and not really based on real 
demands by the respective tasks and workflow. Therefor e, 
recruitments have been carried out position by position. WTO did not 
use the opportunities for collective recruitments to establish a roster 
and to recrui t staff with a wider  range of potential qualifications and 
services required  by the entire  organization.      
123. My staff  further  noted that there was no description for the 
human resources processes in place which defined  the tasks, 
operations, responsibilities and interactions between the different 
process participants. According to the Human R esources Division , the 
description of the processes is ongoing but not yet finalized.  It can not 
be predicted  when the description  will be available .  
Unclear activities and 
responsibilities  entail 
the risk of inefficient 
and ineffective 
processes.  124. In general t he absence of process description may lead to a 
conflict of interest as well as limited transparenc y. This might cause 
unclear tasks and responsibilities. Furthermore, t his always entails the 
risk of inefficient and ineffective processes as well as poor workflows . 
Additionally, in parts of the processes I detected interface problems, 
duplication of efforts, and redundant w orkflows.  I appreciate that 
WTO already has carried out a significant work in terms of process 
mapping and the development of Standard Operating Procedures as 
well as progress to avoid conflict of interest. However, the final 
adjustments and decisions are still pending.       
I recommend that 
WTO finalize the 
process review and 
description.  
  
  
 
 
 125. I recommend that WTO finaliz e 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 bas is, the 
Human R esources Division  should coordinate  the finalized process 
description inter nally with all process participants . The consensual 
version of process descriptions should then be authorized accordingly. 
 
 
 
WT/BFA/W/488 
 
- 30 -Personnel F iles 
WTO did not keep all 
relevant documents in 
the personnel files.   126. My staff audited the management of the Human Resources 
Division  and the documentation in the personnel files as part of the 
performance audit. For our sample , we selected 30 staff members 
from the payroll  2018 . We received the personnel files of these 
employees. The paper documents in the personnel files were diverse. 
In a number of cases e ssential documents such as  diplomas, birth 
certificates, marriage certificates or residence permits were lacking in 
the files.  
127. There were no clear instructions on which documents had to be 
in the files  (paper or electronic files) . During their interviews , my staff 
got the impression that also employees working in the H uman 
Resources Division  could not receive all relevant inf ormation 
regarding a staff member in a timely manner. However, Human 
Resources already have  improved the documentation of all relevant 
information  for new recruitments.         
128. The H uman Resources Division  is divided into different sections 
such as recruit ment, payroll, entitlements etc. It seems that the Human 
Resources Division  staff only has  access to the part belonging to their 
section of work. This often impedes the ir work , in particular if files 
are not complete or basic calculations have been done by different 
Human R esources  sections and in separate systems  or manually.  
 
I recommend  that 
WTO implement  clear 
instructions for the 
documentation of all 
staff related matters .   129. I recommend that WTO implement clear instructions for the 
documentation of all staff -related matters. These instructions should 
determine  what kind of essential information shall be documented and 
in which form.  
I recommend that 
WTO prescribe a 
uniform and 
appropriate structure 
of the person nel files . 130. Further more,  I recommend that WTO prescribe a uniform and 
appropriate structure of the personnel files, paper and electronic files, 
as well as limited access rights.   
 
WT/BFA/W/488 
 
- 31 -Heterogenic (IT) Infrastructure -  Payroll P rocess  
Heterogen ic (IT) 
infrastructure  131. During the Human Resources  performance audit , my staff found  
a heterogenic (IT) infrastructure with a fragmented variety of 
programs, data systems, documentations and registrations used by the 
Human R esources Division. The landscape has been  grown 
historically and is characterized by decentralized responsibilities for 
different tasks as well as by in -house developments. Due to that fact , 
my staff found diverse sources and files concerning recruitment, 
personnel files with basic data and additional data, performance 
evaluation, promotions, bonus and a number of manual calculations 
e.g. for entitlements.  
The (IT)  landscape is shown in the following overview: 
• Recruitment – recruitment program – recruitment folder  
• Basic data – ORACLE HR module – personnel files 
• Payroll – ORACLE HR module and manually calculated –  
personnel files 
• Separation – manual ly calculated  – personnel files  
• Performance Evaluation – own system used – only electronic files  
• Bonus calculation – manual ly calculated   
• Promotion – promotion board – decisions separately documented  
• Entitlements ( home leave, education grant) – manual ly calculated  
– Excel sheets  – personnel files  
• Allowances (child, spouse, secondary) , rental subsidies –  
manual ly calculated – Excel sheets – partially in personnel 
files                
The Human R esources Division  already started  the procurement of a 
Human Resource Management System (HRMS) which combines the 
relevant functions into one package. According to the Human 
Resources Division, the selection of a functional IT system should be 
finished in quarter III 2019.  However, we note t hat a number of 
demanded functions are not yet fully defined.  
The use of heterogenic 
and non-
interconnected 
systems is neither effective nor efficient.
 132. The use of a heterogeni c, fragmented and non -interconnected 
landscape is neither effective nor efficient. N egative effects  of a 
heterogenic system  landscape may be  error susceptibility, interface 
losses, redundant data , low data reliability and data inconsistencies . 
Furthermore, media interruptions may lead to a lack of inte rnal 
control within  the Human R esources D ivision .  
133. Currently , the Human R esources Division  has limited capacity 
only to gain a complete overview of all relevant (payroll) information  
with a ppropriate effort. Only an optimized and efficient (IT) 
infrastructure that contains all data and processes enables the Human 
Resources Division  to an effective and efficient task fulfil lment . In 
my opinion, a future -proof HRMS system should basically contain all 
human resources  functions, including benefits ad ministration, payroll, 
recruiting and training, as well as  performance analysis and review . 
I recommend that 
WTO consolidate the 
heterogenic (IT) 
landscape . 134. I recommend that WTO finaliz e the H uman Resources  process 
description 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 .  
 
WT/BFA/W/488 
 
- 32 -I recommend that 
WTO develop a 
performance 
description.  135. Further more,  I recommend that WTO develop  a performance 
description to ensure that the procurement process will be based on 
requirements defined for an effective HRMS (second step).  
 
Salary Scale 
In 2018 , WTO used 
five different salary 
scales.  136. In 2018 t he Human Resources Division  used five different salary 
scales. The salary scale used for each staff member depend s on the date  
of recruitment (vacancy note)  or on the date the staff member started  its 
first fixed -term contract.  In 2019 WTO could already reduce one of the 
scales.  
Internal  regulations 
and rules concerning 
salary s cale 
 137. WTO Staff Regulations stipulate that WTO should establish a 
salary scale which should be adjusted annually (Regulation 6.2). This 
should be done under certain conditions (Regulation Annex B). The 
WTO salary scale shall be adjusted annually on 1 January through a 
comparison of WTO international salaries with the salary scales effective 
on 1 January in a basket of comparators. The comparators shall be the 
United Nations Office in Geneva (UNOG) and the Co ordinated 
Organi zations (CO). The relative weighting of the comparators shall be 
70 per cent  for the United Nations and 30  per cent  for the Coordinated 
Organizations (Regulation Annex B). The salaries of the comparators 
shall be measured at the mid -point of each of the grades that have been 
determined by the Director -General, and reported to the Committee on 
Budget, Finance and Administration and the General Council, to be 
equivalent to grades 1 through 12, A ssistant Director -General  and 
Deputy D irector -General  in the WTO. The Director -General shall take 
account of the need to maintain competitiveness of all grades with the 
salaries in the comparators and shall report his decision to the Committee 
on Budget, Finance and Administration. The scale of salaries payable to 
staff members is reproduced in Annex 1, Table 1 of the Staff Rules.  
The use of different 
salary scales may lead to inefficiencies in the 
payroll process.  138. The use of different salary scales may lead to inefficiencies in the 
payroll process. Further more , the use of different salary scales in the 
same grade may lead to a lack of comparability and fairness for the 
employees.  
I recommend that 
WTO reduce the different salary scales . 
 139. 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 to ensure better comparability and  
maximum transparency.   
  
 
  
 
 
 
 
WT/BFA/W/488 
 
- 33 -Performance Evaluation, Bonus and Promotion  
WTO is using 
performance 
evaluations of its  staff 
for performance -
related pay and 
human resources development
. 140. WTO implemented a performance management system for all 
permanent staff. This aims to enhance effectiveness and accountability 
of the WTO Secretariat through improved work planning, 
communication, evaluation and staff training . Furthermore, it aims  to 
facilitate taking decisions based on staff performance, such as on 
performance -related pay (increase of steps, bonuses) and promotions, 
and to enhance the career development of staff members.  
Internal regulations 
and rules concerning performance 
evaluation
. 141. The performance of a staff member should be subject to an annual 
evaluation (Regulation 5.1). The Director -General should establish 
objective and transparent procedures both for the evalua tion of a staff 
member ’s performance and for the assessment of the staff member ’s 
potential to assume other responsibilities (Regulation 5.2). The staff 
member and the supervisor should together conduct an annual review of 
the staff member ’s performance an d accomplishments (Rule 105.2 a). 
The supervisor shall prepare a written assessment of the staff member ’s 
performance and recommendations for further action e.g. promotion, 
training, transfer (Rule 105.2 b). A final report should carry the 
signatures of th e first and second level supervisors and of the staff 
member (Rule 105.2 e). A staff member whose performance is judged to 
be fully satisfactory shall receive a pensionable increase in annual salary 
(Rule 106.3 a). A staff member whose performance is judge d to be 
excellent shall be eligible to receive a non -pensionable, lump- sum bonus 
payment under conditions established by the Director -General, in 
addition to the award specified above. A staff member who has been 
promoted during the reference period shall not be eligible to receive a 
bonus payment (Rule 106.3 b). The duties and responsibilities of each 
job in grades 1- 12 inclusive shall be evaluated on the basis of job 
classification standards approved by the Director -General (Rule 107.3).  
WTO is using four 
categories for staff 
assessment.  142. The supervising directors are assessing their staff on a n annual  
basis using four grades/categories:  
• Grade 4 = Significantly exceeds performance requirements (SE)  
• Grade 3 = Fully m eets performance requirements (F)  
• Grade 2 = Partly s atisfactory (PS)  
• Grade 1 = Unsatisfactory (US)  
 
143. WTO only limited the number of staff with a possible performance 
evaluation in grade 4: Limit of 30 per  cent of the staff per division.  
 
 
         
 
 
WT/BFA/W/488 
 
- 34 - 144. Based on the results of the annual performance evaluation , the staff  
member  receives a salary increment (steps in the salary scale between 
the minimum and maximum annual salary in the applicable grade). 
Grade 2 allows an increment of 50 per  cent, grade 3 and 4 allow 
increments  of 100 per cent. Entitlements to get a bonus3 as well as 
promotions require a performance of grade 4. If the staff member was 
assessed in at least one of the latest three performance evaluations with 
the grade 4 (significantly exceeds performance requirem ents) , he/she 
will be eligible for consideration for a performance -based promotion for 
a higher salary grade. The results of the annual performance evaluation 
shall be submitted by the supervising directors to the Human R esources 
Division  by March of the f ollowing year.    
30 per cent of the staff 
members received the 
highest performance 
evaluation grade. Less 
than 1 per cent have 
been assessed with  the 
two lower grade s 
(partially satisfactory 
and unsatisfactory)  145. In our sample , my audit team found  that out of 30 staff members 
(97 per cent) , 29 have been assessed with the grade 4 (significantly 
exceeds performance requirements) at least once on the occasion of the 
latest three performance evaluations (2015, 2016, 2017). Hence , all of 
them received a bonus at least once within the last three year s and were 
entitled for promotions. None of the staff in the sample was assessed 
with grade 2 (partly satisfactory) or 1 (unsatisfactory). In interviews , my 
audit team has been informed that  until now 30 per c ent of the staff 
members have regularly received the highest performance grade 4 (SE) 
by their supervisors as well as a bonus. Less than 1 per  cent of the staff 
members received the grade 2 ( partly satisfactory ) and even less the 
grade 1 ( unsatisfactory ).    
WTO paid bonuses to 
30 per cent of its staff every year. The 
amounts paid often do 
not depend on 
individual or team performances.    146. In 2016, 2017 and 2018, WTO paid (in each case for the previous 
year) bonuses up to the approved budget of CHF 480,000. The same 
amount shall be paid for 2018 in June 2019. In the last three years , WTO 
paid bonuses to approximately 30 per cent of its staff (between 184 and 
230 staff members). The calculation of the bonus payments 
predominantly  depends on the available budg et. The total amount is split 
among the entitled staff and corresponds to a fix ed percentage of the 
relevant mid -salary scale of the staff . Individual work performance or 
team performances are not taken into account . WTO paid more than 
40 per  cent - of the bonus total amount - to staff in grade 9 and 10 (the 
highest professional grades entitled for bonuses).      
More than 95 per cent 
of the staff received a bonus for their 
“extraordinary” 
performance in the 
last three years.
    147. In fact, more than 9 5 per cent of the applicable staff received a 
bonus because of “ extraordinary ” performance within the last three years 
(in our sample 29 out of 30) . Having had at least one „significantly exceeds 
performance requirements” rating in the last three years is a lso one of the 
criteria  to be granted  for a promotion. In contrary, less than 1 per cent of 
the staff has “underperformed ”.       
 
 
 
  
 
 
3 Directors (grade 11 and up) as well as temporary staff are not entitled for bonuses.  
 
WT/BFA/W/488 
 
- 35 -The current 
performance 
evaluation system is not effective for 
performance- related 
payments and human resources 
development.  148. The current performance evaluation system may not be an effective 
tool for performance -related pay ments and human resources 
development . As long as WTO does not implement valid and measurable 
indicators according to the objectives  agreed , it will be really difficult to 
ensure an objective target achievement evaluation and control. My audit 
team concluded that the current system may also depend on subjective 
assumptions by the supervising directors  as well as the  possibility to 
promote 30 per cent of the supervised staff for bonuses or promotions 
every year. In this context I appreciate the ongoing review of the current 
policy on performance evaluation as well as conducted trainings for 
supervising managers to improve comprehensible target achievement 
evaluation and control.       
 149. As long as nearly each staff member is assessed  with a fully 
satisfactory performance grade and thus receives  a pensionable salary 
increase, there is no additional motivation  to perform better.  
 
I recommend that 
WTO revise the rules 
and guidelines for the performance 
evaluation of its staff.  150. I recommend that WTO revis e the performance evaluation system . 
This should include the implementation of valid and measurable  
indicators to enable an objective target achievement evaluation in line 
with the objectives  agreed .  
Secondary D ependency  Allowance 
WTO is generally 
granting secondary 
dependent’s  
allowance  for all staff.  151. Every WTO staff member can be granted secondary dependency 
allowance.  The allowance is paid regardless of the grade of the staff 
member or his/her individual economic status. In our sample , my audit 
team detected  two cases where WTO paid full secondary allowances to 
staff in grades 9 and 10.  
Regulations and rules 
concerning s econdary 
dependents. 
 152. Staff members should be entitled to a dependency allowance in 
respect of a primary or secondary dependent (Regulation 6.5). A 
secondary dependent shall be the mother, father, sister or brother for 
whom the staff member provides one half or more of the financial 
support, and in any case at least twice the amount of the dependency 
allowance, provided that the sister or brother fulfills  the same age and 
school attendance requirements established for a depe ndent child. If the 
sister or brother is physically or mentally incapacitated for substantial 
gainful employment, either permanently or for a period expected to be of 
long duration, the requirements as to school attendance and age shall be 
waived (Rule 106 .13 d).  
In 2018 , WTO paid in 
total CHF  137,749 for 
secondary dependent’s 
allowance
.  153. The maximum amount that can be applied for 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 consider 
financial needs or the economic status nor the general social situation of 
the applicable dependent ’s in their home country. Thus simply provides 
“deadweight  effects” for the entitled staff. It seems appropriate to reduce 
the secondary dependency allowance to a limited number of cases (lower 
grades) or to abolish this regulation. 
 
 
WT/BFA/W/488 
 
- 36 -I recommend that 
WTO review and 
adjust the rule s 
depending more on 
financial needs.    154. I recommend that WTO revi ew and adjust the rules for the 
secondary dependency allowance. In this context , WTO should consider 
grant ing secondary dependent ’s allowance to a limited number of s taff 
only, taking into account the economic status of the staff member  as well 
as the social situation of the final beneficiaries.  WTO also might be 
considering abolishing this regulation.   
 
Summer School Programme  
WTO offere d a 
Summer S tudent 
Programme  
exclusively for 
children of staff.  155. As in the past years, also in 2017 and 2018 , WTO offered a  
Summer Student Programme ( Summer Programme ) for children of 
staff members . This special programme  is exclusively  for children of 
current WTO employees holding fixed- term or regular contracts,  and 
runs from June to the end of August each year  for a period of 10 
working days (two consecutive weeks) .  
In 2017 and 2018, 
WTO paid altogether 
CHF 66 ,419.   156. The programme  was remunerated at salary grade 1  in 2017 and 
adjusted to a fixed daily fee of CHF 60 in 2018. In 2017, WTO spent 
CHF 48,719 and , in 2018 , CHF 17,700 for th is programme4. 
WTO did not 
implement any 
regulations or guidelines. 157. WTO did not implement  any regulations or guidelines regarding 
the structure or nature of th e Summer School  Programme . Besides , 
WTO did not require operational needs or individual and professional 
skills of potential applicants.   
The practice of 
rewarding such intern programmes does not 
conform to the usual 
international standards 
for similar 
programmes and 
internships.  158. The practice of rewarding such internship does not conform to 
the usual international standards for  similar programmes  and 
internships. For example,  the United Nations does not pay any salary 
for internships. The absence of regulations or guidelines leads to a 
lack of governance and transparenc y. Furthermore, offering the 
internship to a closed circle of staff members ’ children only represents 
a disadvantage to others  and does not meet the requirements of 
fairness .  
I recommend that 
WTO close the current 
Summer Student Programme.
 159. I recommend that WTO close the current Summer S tudent 
Programme. If WTO develops an appropriate programme, this should 
be based on a formal guideline which includes  formal regulations for 
needs, required skills and qualification s of applicants , available 
budget ( number of internships per year ) as well as duties and 
responsibilities to implement and g overn this programme. 
Furthermore, WTO should consider opening  the programme  for all 
potential applicants by  means of  a fair recruitment process .  
 
 
 
 
4 2017: 26 participants, 2018: 23 participants.  
 
WT/BFA/W/488 
 
- 37 -Accumulated A nnul Leave 
WTO considers a 
provision for untaken 
annual leave 2018: 
CHF 8.4 million 
(2017: 
CHF  8.7 million)  160. WTO shows in its financial statements under the position Short -
term employee benefits  (CHF 11.683 million)  a provision for untaken 
annual leave as at 31 December 2018:  CHF 8.4 million                   
(2017: CHF  8.7 million)5. The supporting document (Excel sheet) list s 
all staff  members and their accrued untaken annual leave as at 
31 December  2018.   
 
As at 31 December 
2018, WTO recognized for 121 
staff with 60 or more 
days untaken  annual 
leave.  161. My audit team noted that 121 staff members had accrued untaken 
annual leave of 60 day s or more as at 31 December 2018. The 
correspondent part of the provision amounts to CHF 4.4 million. For 11 
of these staff , we detected an untaken annual leave of 80 days  or more 
with an amount of CHF 0.5 million; even  one staff member with untaken 
annual leave of 90 days, which corresponds to CHF 68,841. WTO 
limited leave reimbursements to a maximum of 60 days  at the time of 
separation.     
In 2018 , a number of 
staff excessed their 
annual entitlement.   162. In addition , we found that  eight  staff members had an excess ive 
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.  I n five cases WTO granted advance leave 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 excessed  leave 
(5.5 days) were deducted from the final payment because of cessation of 
service.         
WTO Staff Rules and 
internal regulations.  163. In accordance with Rule 109.2 of WTO Staff Rules , a staff member 
shall be entitled to annual leave of 30 working days per year of service. 
Staff members shall be required to take at least one half of their annual 
entitlement each year. The maximum allowable annual leave is 60 days, 
which corresponds to a  two-year entitlement that the employees can 
carry forward.  
 164. 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 has a risk of 
CHF 8.4 million for 
accumulated annual 
leave.  165. 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 may  affect the budget planning of subsequent years  as 
well as longer substitution periods.    
 
 
 
 
5 Note 14 Employee benefits, Table 56 Provision for Employee Benefits.  
 
WT/BFA/W/488 
 
- 38 -WTO may be affected 
by higher sick leave 
and occupational stress.  166. Further more,  I determine that a number of WTO staff is not 
(sufficient ly) using their entitlements for recreation purposes. As a result,  
WTO may be affected by an increase of cases of illness and occupational 
stress. Another effect may be that staff requests untaken annual leave to 
be paid out in case of  separation.      
 167. My team found  that WTO also granted annual leave apart from the 
annual entitlement in eight  cases  (advance leave days)  without any 
written regulation .  
I recommend that 
WTO better monitor  
annual leave to ensure that staff is using it 
for recreati on 
purposes as well as to avoid that annual 
leave expires.   
 168. 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 annua l 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.  
I recommend that 
WTO review the staff rules regardin g annual 
leave.   169. In addition , 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 advance annual le ave. 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.    
   
Home Leave 
My audit team 
checked the home 
leave of all entitled 
staff in the selected sample.  
 170. In our sample , my audit team also checked the home leave of the 
entitled staff (17 out of 30 in the sample) for the period 2017 and 2018. 
Two out of them did not take their home leave because of separation in 
this period. Another  staff member  did not apply for home leave in the 
applicable period (remaining 14 cases).            
In two cases , 
documents for the settlement have been 
submitted after a 
considerable delay.  171. In two cases , the entitled st aff did not submit the required 
settlements for the conducted home leave within 30 working days. The 
relevant documents have been sent to the Travel Unit only during our 
audit visit in April with a delay of seven or five months and after 
reminders. At this  time, WTO had not implemented a formal sanction 
mechanism to ensure timely  settlements and evidence checks.        
The granted lump -
sum payments are 
very generous and 
based on a n obsolete 
calculation  practice.  172. Also  in 2018 , WTO granted lump -sum payments for home leave 
based on an obsolete  calculation practice6. This practice results in 
generous lump- sum payments compar ed to  the actual expenditures7. The 
policy still in place only provides that the basis of the calculation is the 
full economy fare flight ticket  (average of all possible connections).  
6 The full economy air fare provided by the contracted travel agency was based on average prices from IATA (International Air 
Transport Association) data base until October 2018.     
7 In our sample we detected lump sum payments from  4 times up to more than 10 t imes of the actual expenditures.   
 
WT/BFA/W/488 
 
- 39 -There is no obligation to check the best value for money  or to claim the 
home leave in advance to save money.  
Almost every second 
entitled staff spent 
less than 10 days in 
the home country.   173. In accordance with  Rule 109.3 (f) of WTO Staff Rules , a staff 
member shall normally be required to spend at least two weeks in the 
home country. In 6 of the remaining 14 effective home leave cases in our 
sample (43 per cent) , the staff spent less than 10 days in the home 
country.    
 
The External Auditor 
as well as the Internal Audit had already recommended 
reviewing the rules 
and guidelines for 
home l eave.  174. Already in April 2016 , my team checked the WTO rules and 
guidelines for home leave. In my report of 31 May 2016, I recommended 
that WTO review  the rules for home leave, especially the calculation of 
the lump -sum payments. In addition, I recommended that WTO  consider 
the results and recommendations of the audit conducted by the Office of 
Internal Oversight  as well as its  respective investigation  regarding home 
leave in 2016/2017 . 
 175. Even the Office of Internal Oversight had strongly recommended 
review ing und a djusting the rules and guidelines for home leave because 
of detected systemic problem s and vulnerability to fraud in 2017.      
 176. I uphold my former criticism regarding the needs to adjust the 
applicable rules and guidelines for home leave .   
I strongly recommend 
that WTO review and 
adjust the rules and 
guidelines for home 
leave.    177. I strongly recommend that WTO review the rules and guidelines for 
home leave as soon as possible. In this context , WTO should consider 
the recommendations by the Of fice of Internal Oversight  to bring the 
new rules and regulations in line with other comparable regulations of 
international organizations ( benchmark) as well as to avoid excess ive 
payments and misconduct.    
I recommend that 
WTO implement an 
effective san ction 
mechanism.  
 178. In addition , I recommend that WTO implement an effective 
sanction mechanism to ensure submission of evidence and a correct 
settlement in time.   
Finally , I recommend 
that WTO ensure that 
the entitled staff 
spends a certain 
number of annual 
leave days in the 
home country.    179. Finally , I recommend that WTO ensure that the entitled staff 
actually  spends at least two calendar weeks (or 10 working days) in the 
home country. This also may be helpful to reduce the number of untaken 
annual leave within a period of two years.        
 
  
 
WT/BFA/W/488 
 
- 40 -5 Cases of Fraud or Suspected Fraud 
One case of severe  
fraud detected  by 
WTO  in 2017 still 
pending.  180. During our audit, my team was informed by the Office of 
Internal Oversight  about one case of severe fraud  in 2017 . The case 
regarding home leave and dependency allowance was detected in 
2017. The incumbent was sanctioned and the defrauded amounts were 
already reimbursed to WTO . The trial is still pending b ecause the 
incumbent appealed against the sanction based on the results of the 
investigation conducted by the Office of Internal Oversight .  
 181. In 2018 , the Secretariat reported that it did not have any 
information on cases of fraud or suspected fraud. Also  during our  
audit, my team did not detect such cases.  
 
6 Acknowledgement 
I am grateful for the 
support received 
during the audit.  182. I wish to express  my appreciation for the cooperation and 
assistance extended by the Director -General, the M anagement and 
staff of the WTO. I appreciate that the Secretariat is continuously 
reviewing and  improving the f inancial statements , thus making the job 
for me and my  team easier. I am very grateful for their assistance 
during the entire external audit process.  
 
 
WT/BFA/W/488 
 
- 41 -List of Abbreviations and Acronyms 
 
ABS     Appellate Body Secretariat  
AGSD    Administration and General Services Division  
ASHI     After -Service Health Insurance   
CHF     Swiss Francs  
CO    Coordinated Organizations 
CWR     Centre William Rappard  
DDG     Deputy Director -General  
DG    Director -General  
DGO     Office of the Director -General  
DSA    Da ily Subsistence Allowance  
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 Public 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 
LAD     Legal Affairs Division   
OIA    Office of Internal Audit (today: OIO) 
OIO    Office of Internal Oversight  
PM    Procurement Manual  
SNB     Swiss National Bank  
UBS     Union Bank of Switzerland 
UN    United Nations 
 
WT/BFA/W/488 
 
- 42 -UNOG     United Nations Office at Geneva  
US    United States  
USD    United States Dollar  
VAT     Value Added Tax  
WCF     Working Capital Fund 
WTO     World Trade Organization 
WTO PP   World Trade Organization Pension P lan 
 
              
 
 
 
 
WT/BFA/W/488 
 
- 43 -Annex 1  
 
List of Recommendations  
 
No. Issue  Reference: 
Chapter, 
Year  Recommendation  WTO´s Comment / 
Implementation  Status  
1 Uncollectible 
contributions  3.2 / 2014 Pursuant to Regulation 14 in the WTO Financial Regulations Members and 
Observers with arrears shall be subject to Administrative Measures. 
Furthermore, there might be (inactive) Members without a payment plan but 
with long -term outstanding contributions (e.g. states no longer in existence). 
As required by IPSAS contributions uncollectible shall be completely 
written off. This is not a standard practice within WTO.    
I recommend developing a practice or procedure and deciding how to deal 
with uncollectible contributions (e.g. in the case of states no longer in 
existence like Yugoslavia).  The uncollectible contributions from 
Former Yugoslavia were written -off in 
2015 and incorporated in the audited 
financial statements.  done  
2 Accounting 
transactions 
foreign  
currencies  3.3.1  / 2014 WTO uses the United Nations Operational Exchange Rate for accounting 
transactions concerning foreign currencies. There is no official decision or 
document supporting this practice.  
I recommend that  the Secretariat ask for an authorization and an official 
decision to use UN Operational Exchange Rate as official accounting rate 
for WTO transactions.  The Secretariat accepted the 
recommendation and presented during our 
audit a memorandum concerning this topic 
signed by the DDG.  done  
3 Recoverable US 
taxes 3.3.1 / 2014  Other receivables include recoverable taxes, e.g. from the United States 
(US) or Switzerland. 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. The WTO pays 
estimated tax payments in advance and asks for a reimbursement from the 
US Government based on an agreement between WTO and US of 
22 December 2000.  
I recommend, just like my predecessor the years before,  pursuing  efforts to Recommendation a ccepted  
All past backlog of claims solved, 
including for 2015.  
Only claims for US taxes for 2016 are to 
be reimbursed in 2017, given the one year 
time-lag.  done  
 
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accelera te the refunding procedure and negotiat ing and agree ing with the US 
Government on a similar reimbursement method based on the ILO approach.   
4 Short -term 
employee 
benefits  3.3.1  / 2014 I requested respectively suggested several adjustments regarding the figures, 
phrases and presentation in the tables of note 14. In particular, this pertained 
to updated calculation bases and the clarity of descriptions of provisions 
concerning short -term employee benefits. The Secretariat accepted the 
recommendation and will follow the 
suggested indications.  done  
5 Staff 
expenditures  3.3.2 / 2014 For improving transparency I recommended that more explanations and 
more details in Note 19 for expenses, especially for staff expenditures, e.g. a 
table with details to the different types of staff expenditures be given.  The Secretariat acce pted the 
recommendation and included  Table 62 in 
the report with details concerning staff 
expenditures including trust funds.  done  
6 Temporary 
assistance  3.3.2 / 2014 Like for staff expenditures I recommend giving more details concerning this 
item in Note 19.  The Secretariat accepted the 
recommendation and included  Table 63 in 
the report with details concerning 
temporary assista nce including trust funds.  done  
7 ITC 
consolidation  3.3.2 / 2014 The ITC is a joint technical cooperation agency of the UN and WTO. 
Originally established in 1964 by the General Agreement on Tariffs and 
Trade (GATT), ITC has operated since 1968 under the joint aegis of GATT 
and the UN. It is operated jointly (as outlined in the financial statements of 
WTO) and therefore - based on IPSAS 8 - a jointly controlled entity.  
WTO is documenting the above mentioned payment to ITC as expenses 
within the statement of financial performance and is not consolidating ITC. 
According to IPSAS 8 ITC is legally a jointly controlled entity; important is 
only the ability, not the de facto control; therefore WTO has to consolidate 
ITC. 
Even if actually WTO might have just limited or no control, the legal 
situation still defines ITC as a jointly controlled entity and there is no proof 
or document stating  any other fact. I recommend that  WTO negotiat e with According to new IPSAS standards 35 -37 
consolidation is no longer r equired by the 
EA (details see r eport). closed  
 
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ITC or with the UN and clearly defin e the legal situation, especially 
concerning control. If there might be a new  contract documenting that ITC is 
just a grant taker without any control from WTO, this reservation could be 
removed and WTO financial statements might be completely in line with 
IPSAS.  
8 Procurement 
planning  4.1 / 2014  The WTO Secretariat has to ensure that the divisions reliably define their 
needs before allocating the divisional budgets. I recommend that  WTO 
specify the procedures for needs assessment and the requirements of 
procurement planning. To ensure compliance with the regulations and 
coherence between all divisional practices I recommend that WTO defin e 
clear responsibilities and establish high le vel managerial approval of the 
procurement plans.  All PPs have been presented except the 
ITSD which is scheduled by mid -May.  done  
9 Use of 
consulting 
services  4.1 / 2014  To minimise risks of duplication of efforts, impropriety and fraud when 
using consulting services, I recommend that  WTO Secretariat strengthen its 
internal coordination and control. The Secretariat should examine how the 
control mechanisms could be supported by an automated comparison of 
data.  A restricted folder has been  created i n 
L:\Restricted \SSA List to b e shared 
between HRD staff and p rocurement. This 
folder is managed by HRD and contains all 
the individuals who have S SA contracts 
with the WTO. The p rocurement team has 
been given read only rights to the folder so 
they are able to check and ensure a 
consulting firm does not also have an 
individual contract.  
HR discussed with the IT division options 
for an automated checking process and HR 
has decided to add a declaration to the 
contracts asking the individual consultant 
to decla re whether they have any other 
contracts with WTO.  done  
 
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10 Amendments to 
contracts  4.1 / 2014  I recommend that the Secretariat implement procedures to ensure that 
requesting units always have to involve the Procurement Section in advance 
before they accept modifications to the purchase order, even more so if these 
modifications result in an adjustment of the price . To ensure sound 
management of the WTO budget, such modifications have to be subject to 
the identification and availability of sufficient funds in advance. I also 
recommend establishing an automat ed notification to the Procurement 
Section if the amount of  the purchase order diverges from the amount 
requested in the invoice.  Recommendation partially accepted  
In order to enhance and implement the 
recommendation the policy for invoice 
settlement will be amended. The 
amendment shall rule each cases of 
mismatc h between POs and related 
invoices and shall provide procedural 
guidance to stakeholders. Concerning the 
establishment of automatic notification 
that include the cases covered by the 
policy, this was assessed by ITSD but was 
not consider as a priority item  among the 
ERP planned updates.  closed  
11 Contract 
management  4.1 / 2014  I recommend de veloping a procedure to ensure appropriate documentation 
and that availability, reliability, and integrity of information and records on 
all procurements be  safeguarded. I also recommend evaluating the 
organizational links between the Procurement Section and the requesting 
divisions. In addition, it might prove appropriate to highlight the importance 
of sound contract management and transparent documentation to the staff 
members of the Secretariat. Procurement has implemented the e -
tendering system on 14 February 2017. 
The e -tendering solution package includes 
a contract management (CM) Module 
provided at no additional cost to WTO for 
year 1. The module has so me interesting 
features such as the email prompts for 
contract renewals, warning flags when 
contract documents are past their expiry 
date or email reminders for expiring 
contracts. The purchaser can easily set an 
alarm and proceed in time with a new 
tender  before expiration of the current 
contract. 
 done  
 
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12 Adoption of IT 
standards  4.2 / 2014  I recommend that the Secretariat apply international standards and best 
practices for the IT environment in combination with the establishment of its 
IT policy framework (see above). In doing so, the Secretariat should 
consider its individual ch aracteristics like its size  and tasks and modify 
suitable standards according to its requirements. Only in exceptional cases 
the Secretariat’s special needs should justify an exception or e xtension;  it 
may define and document these special guidelines for itself. Depending on 
their i mportance and nature, different standards can be defined as mandatory 
or optional . However, some key elements should be implemented as a 
minimum to reach an appropriate level of IT governance maturity. These 
standards should cover the areas mentioned above (IT governance, IT 
service management, IT project management and information security 
management) and could also be extended to cover efficiency issues and the 
compatibility requirements of applications and databases. Adherence to 
these standards should b e monitored in an appropriate manner.  The formal project management guideline 
was distributed in June. A recent 
amendment was made to improve the 
project closure process.  
174 changes have been through a formal 
change management process since May  
2017. The Change Advisory Board (CAB) 
meets every week to review the proposed 
changes that are not pre -approved and a 
special process has been implemented for 
urgent changes. While most changes are 
infrastructure related, the application team 
have also started going  through the same 
process for their application releases.  
Problem management has been formally 
functioning for the past 2 months and it 
reports to the management team once a 
month with its progress and the ability to 
escalate if it cannot resolve issues.  done 
13 Business 
strategy, IT 
strategy  4.2 / 2014  I encourage the Secretariat to define and document a general business 
strategy with an adequate level of detail not only but also as a requirement 
description in regard to a needs -based IT environment. I recommend that the 
Secretariat set up an appropriate IT policy framework that should be aligned 
with the business strategy.  
The framework should fulfil the requirements mentioned before as a 
minimum standard containing documentation of needs  analyses, assessment 
of existing systems, current procedures, planning, strategies and also future 
targets. The existing documents could be used as input when they have been 
updated. The initiatives and activities already in place to improve elements The portfol io for 2017 was selected in 
January (attached ITSSC summary and 
portfolio "live" document in attachment 
split between 17 January decision and live 
projects) and the process of managing it is 
on-going as a D2D operational process 
(monthly PMO, quarterly ITS SC 
meetings).  closed  
 
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of the Secretariat’s IT policy could be integrated in the preferably 
overarching approach. Management should ensure that the components of 
this framework are periodically updated and communicated to all relevant 
parties across the Secretariat. It should also monitor their implementation 
and evaluate the results.  
14 IT security  4.2 / 2014  I acknowledge the Secretariat’s efforts to improve WTO’s IT security in 
order to reduce the IT environmental risk exposure. I strongly recommend 
that the Secretariat follow the recommendations of the IT security 
assessment as soon as possible. Without interfering with the on -going audit 
of the OIA on this matter I will continue to monitor the improvement of 
WTO’s IT security.  See.4.2 / 2015 below….  closed  
15 Black list   3.1 / 2015  During our sample check  my team noted that WTO is not using a "black list" 
or "sanction list" (similar e.g. to UN procedures). There is no procedure or 
policy how to handle this issue for contracts and procurement.  
I recommend considering the implementation of a black list or sa nction list 
as this is common practice in other international organizations.  
 
 
 
 
 
 Since February 2017, WTO has 
implemented the e- tendering module 
through the United Nations Global 
Marketplace (UNGM), the common 
procurement portal of the United Nations 
system of organizations. As part of th e 
registration application all v endors are 
required to declare (both for parent and/or 
subsidiary entities, as applicable) that they 
are not, nor associated with a company or 
individual, under procurement prohibition 
by the United Nations, including but not 
limited to prohibitions derived from the 
Compendium of United Nations Security 
Council Sanctions Lists.  done  
 
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16 Cash s ituation /  
negative 
interests  3.3.1 / 2015  Following the SNB decision main partner banks introduced negative interest 
rates as of 1 April 2015. Currently, the WTO is benefitting from an 
exemption limit of CHF 50 million by the UBS and CHF 40 million by 
Credit Suisse resulting in negative interest of approximately CHF 400.000, 
based on average cash balanc es for 2015, after factoring in the thresholds at 
which no interest is levied. But these limits can be changed unilaterally by 
the UBS and / or Credit Suisse at short notice, so the WTO is being faced 
with a risk of negative interests of up to CHF 1 millio n per annum if the 
exemptions are no longer granted.  
To reduce risks and to prevent negative interests we recommend the 
following options:  
• premature repayment of ongoing loans such as the building loan, if 
possible;  
• review / update the financial investment  policy;  
• negotiate with the main banks and the Swiss authorities on mid -term 
and long- term exemptions for negative interests (this could be more 
effective together with other international organizations and 
institutions based in Geneva e.g. the UN)  •The loan agreement with the Swiss 
Government has a clause that only allows 
payment of the annual repayment for the 
given year . Most institutions in 
Switzerland are averse to holding large 
sums of cash due to the negative interest 
regime in place.  Furthermore,  the cash 
received in any given year is attributable to 
that year's budget and considering that 
there is usually a lag in contributions 
received, cash flow is a strong 
consideration that would not make it 
prudent to use funds to pay in advance.  
•A new treasury policy was approved, 
implemente d and presented to the CBFA 
in 2016. This incorporates several changes 
such as the extension of the investible 
asset classes to include bonds and longer -
dated term deposits and a revision of the 
minimum credit – rating to  A-. 
•Attempts to engage with other 
international organizations based in 
Geneva were not successful.  Most of the 
entities stated that the Swiss Authorities 
that they had spoken to stated that this was 
a systemic matter taken by the Central 
Bank.  It affects all institutions, including 
Swiss companies and g overnment bodies, 
render ing exceptions unfeasible for any 
party.  done  
 
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17 Buildings  3.3.1 / 2015  CWR building is granted by the Canton of Geneva and the FIPOI as a 99 -
year surface right.  
Given the current situation we recommend the following (in accordance 
with IPSAS 17):  
• entering an asset of CHF 60 million (or an estimated equivalent 
value of the CWR building and the use of the land), position “CWR 
building” ; 
• depreciating the asset by 1/99th annual ly so as to bring the value of 
the use of the building down to zero at the expiry of the surface 
right, starting in 2015 (in 2015 pro rata for four months) ; 
• entering a corresponding equity of CHF 60 million (or the 
estimated equivalent value) as liability.  The Secretariat has accepted and 
immediately implemented the 
recommendation of the Auditor . done  
18 Inventory  3.3.1 / 2015  There is no regular physical inventory for assets (exception: publications). 
WTO has no suitable stocktaking system, depreciation is calculated 
manually.  
I recommend that  WTO implement a suitable system which contains all 
assets.  Asset i nventory software was selected 
through a tender process. The service 
provider was implemented during second 
and third quarter of 2017 and went live b y 
September 2017.  
In July 2017 an inventory of all assets was 
done, and all data were transferred in the 
new system. The new software is running 
in full capacity since 1 October 2017 . 
 
 
 done  
 
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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 selected countries all over the world. T he 
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  on-
going 
20 Establishing an 
Office of 
Internal 
Oversight  
 4.1 / 2015  WTO established an Office of Internal Oversight (OIO). The WTO 
expanded the tasks of the former Office of Internal Audit (OIA) but it is not 
providing the new OIO with more audit staff.  
I recommend that  WTO evaluat e the number and qualification of staff 
necessary to fulfil t he tasks of the OIO.  I recommend reviewing the new 
audit work p lan so that it is more based on comprehensible criteria like 
volume of costs or level of risk as well as on the provided staff capacity.  The Head of the Office of Internal 
Oversight assumed duty in September 
2016.  He presented the OIO's bi -annual 
plan (2017 and 2018)  to the CBFA in 
February 2017. This included the staffing 
plan with an additional resource to be 
recruited within the next 12 months.   
A working group that had been set up to 
assess whether to establish an Audit 
Committee at the WTO has concluded its 
mandate.  Its conclusion was that at this 
stage an Audit Committee should not be 
established.  done  
 
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21 Staffing of the 
posts in the 
OIO 4.1 / 2015  All posts of the OIO were vacant when we started to audit this issue in 
November 2015. No deputy for the OIO was installed. There were no 
internal audit reports issued for the years 2014 and 2015. Since December 
2015 there is an interim head of OIO. 
I recommend that WTO identify important  or critical positions in the WTO 
in general and determine replacement rules for these posts.  
 
 
 
 
 The Office is staffed with two people 
(head and an administrative assistant). A 
budget allocation has been made to recruit 
a third staff member (an auditor).  done  
22 Risk 
management  4.1 / 2015  The WTO established a risk management policy for the entire Secretariat at 
the end of 2012 with the objective to strengthen its internal governance 
structure and its internal control system.  Risks of damages in the WTO 
building were not listed in the risk register.  
I recommend  includ ing mitigating measures faster.  The Risk Manager closely monitored the 
implementation of mitigation measures to 
ensure that the probability of the 
occurrence of the risks and their impacts 
remain low.  
On critical and high priority risks, the Risk 
Manager monitored the development of 
risk mitigation plans and the execution of 
immediate actions. 
As a result of this cyclical and iterative 
process, additional risk issues were 
closed.   
The Deputy Director -General in charge of done  
 
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administration reviewed and endorsed the 
risk register and submitted to the Director -
General.  
 An annual Secretariat risk management 
report on critical risks was presented to the 
Committee on Budget, Finance, and 
Administration on 31 March 2017.  
 
 
 
 
23 Strategic r eview  4.1 / 2015  I recommend in a first step publishing  an overarching document which 
summarizes the idea, the objectives and the achieved results of the strategic 
review. Furthermore I recommend that  WTO extend the initiative by aspects 
which concern the core business of the WTO to reach the objective of a 
strategic r eview.  The strategic r review  that the DG 
mentioned in his maiden speech forecast 
on the Secretariat and its operations. The 
overarching document of the strategic 
review can be found in the following link 
http://intranet/en/news/archive/news0059.h
tm 
The DG's speech set the objectives and the 
working methods. Related documentation 
and the status of the strategic review are 
constantly reported on a dedicated intranet 
page.  
http://intranet/en/wto_me/review/review.ht
m done  
 
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There have been several achie vements i.e. 
promotions, m obility exercises and many 
others (access via the link above).  
24 IT governance  4.2 / 2015  My team analysed modifications of existing documentation concerning IT, 
information security and information confidentiality and took note of the 
efforts  for advancing the IT strategy in the Secretariat. We also monitored 
the processing of examinations made by or on behalf of the former Office of 
Internal Audit (OIA), respectively the new Office of Internal Oversight 
(OIO). Recommendations:  
• to apply  international standards and best practices for the IT 
environment covering the areas of IT governance, IT service 
management, IT project management and information security 
management and to implement them in the existing and f uture 
structures and documents;  
• to define and document a general business strategy with an adequate 
level of detail not only but also as a requirement description in regard 
to a needs -based IT environment. I encourage in this regard the 
Secretariat to promote the current initiative to discuss strategic and 
scenario planning. If the realisation of a business strategy will not be 
practicable for the WTO, business requirements concerning IT should 
be analysed and collected in the whole organization with a common 
approach and also specified and documented in an overarching IT 
strategy . 
• to set up an appropriate IT policy framework, aligned with the general 
business strategy or rather specified business requirements, containing 
the results and the documentation of requirement analyses, assessment 
of existing systems, current procedures, planning, strategies and future 
targets. In a first step I suggest to finalize and implement the available 
drafts of the “WTO Enterprise Architecture” and the “2016 -2019 IT Reco1: The Secretariat agrees with 
recommendation.  
The plan the S ecretariat is following is 
along these lines: Formal i ncident and 
request management implementation by 
end 2016, elimination of legacy platform 
and leveraging of an ITIL compliant tool 
to improve our s oftware asset management 
and contract management in 2016 ( manage 
engine/ service desk plus), problem 
manager role established  in 2016 and 
effective beg inning in 2017, change and 
release management and CMDB to be 
initiated in 2016, information security 
policy development and information risk 
framework all planned in 2016.  
Reco2: The Secretariat agrees that having 
a business strat egy would be useful for IT 
strategy and planning. ITSD participates 
with other d ivisions to the discussions 
about strategic and scenario planning.  
Reco3: The 2016- 2019 IT strategy was 
developed after talking to all business 
divisions about their requiremen ts, 
reviewing the existing systems, evaluating 
the results of a user survey and evaluating done  
 
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strategy”.  our maturity against a COBIT framework. 
It will be updated every year ensuring the 
business requirements are up to date. We 
are not planning to complete the overall IT 
architecture but to focus our effort on the 
development of data architecture. Precise 
planning of how to do this work will be 
done in the next few weeks.  
25 IT security  4.2 / 2015  I recommend that OIO and IT security staff focus their work on the 
implementation of the IT security assessment’s recommendations to achieve 
a significant improvement of the WTO’s IT security. 
I also recommend that Management take into account that for some staff the 
Ministerial Conferences held every two years are an ext ensive extraordinary 
workload in addition to their regular duties. I suggest considering these tasks 
in regard to the analysis of personnel requirements.   We are progressing in several major 
domains of the audit. Specifically, the 
overarching information s ecurity policy as 
well as confidentiality classification policy 
has been validated at the latest session of 
ITSSC Furthermore, the key information 
assets inventory is progressing. The 
recruitment of the security engineer is 
completed to strengthen the IT security 
requirements.  
Concerning the second recommendation 
about personnel requirements, the 2016-
2019 project planning included in the IT 
strategy takes into account ministerial 
conference resource requirements.  done  
26 Information 
confidentiality  4.2 / 2015  In connection with the improvement of IT security governance, the 
Secretariat drafted a new “Information Classification Policy” with an 
accompanying “Technical Standard”.  I appreciate the current approaches to 
update the WTO’s polic y concerning information confidentiality. However , 
documentation of the processes was not adequate to counteract the risks for 
confidentiality of data and information.  June 2018  
The Secretariat agrees with this 
recommendation. The intranet information 
was updated and an on- line training for all 
WTO Staff is being to be prepared.  The 
draft of the Information Confidentiality closed  
 
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I recommend providing the WTO staff with extended guidelines and 
appropriate procedures o n how to deal with confidential information.  Classification Policy has been finalised by 
the ITSSC, and submitted for review and 
approval to the Joint Advisory Committee, 
as it affects staff roles and responsibilities. 
Review of the policy has been undertaken 
by the JAC and specific suggestions made 
to the originators of the document and they 
will revise the proposed texts. Technical 
tools to support the policy and aid the 
users are planned for implementation 
(Public Key Infrastructure project 
approved for 2017) and study (Data 
Labelling / Data Leakage Prevention 
systems to be evaluated in 2017). The 
results of the information assets inventory / 
risk assessment (which map directly to the 
policy categories) would define further 
practical application measures of the 
policy. The policy will be included in the 
upcoming CBT InfoSec awareness course.  
February 2019  
Confidentiality issues were covered by the 
ad hoc policies and ITSD is already 
implementing confidentiality measures 
based on the risk nature. Recommendation 
can be closed. 
 
 
 
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27 Facilit y 
management 
strategy and 
framework  4.3 / 2015  My team analysed WTO’s facility management (FM) activities, its 
organisational structure, procedures and existing regulations as part of the 
performance audit. We analysed the existing policies, guidelines and other 
relevant documentation like files and records held by the WTO Secretariat.  
The WTO Secretariat stated that it has not adopted the relevant FM 
standards and has currently no specific overarching FM strategy in place. It 
further mentioned that recent FM activities rather were in response to 
current issues than to support proactively maintenance of the building and 
premises . 
I recommend that  WTO Secretariat apply internationally  accepted FM 
standards and best practi ces as a guidance to its FM activities in order to 
ensure the most effective and efficient use of resources. In this regard I 
encourage the WTO Secretariat to initiat e and periodically updat e and 
enhanc e a generic “FM policy framework” considering the already existing 
documents as input.  I further recommend improving the internal and 
external coordination and communication .  The Secretariat shared the draft Strategic 
Facilities Plan with the External Auditors 
and subsequently made amendments to 
take on -board some of the suggestions 
expressed  by the external auditors during a 
meeting they held with the relevant 
Secretariat staff members to discuss the 
draft Strategic Facilities Plan.  
The DDG in charge of administration has 
endorsed the Strategic Facilities Plan and it 
is being implemented.   
After an extended assessment process 
regarding the pros and cons of establishing 
an FM Committee, the conclusion was that 
there is a proliferation of committees in the 
organization.  Therefore, the Secretariat 
does not agree to establish an FM 
Committee.  W hat the Secretariat 
interpreted from the audit recommendation 
is that various sections and divisions 
involved in matters pertaining to the 
building and premises have to engage 
more and collaborate on aspects dealing 
with the on- going  maintenance, 
renovatio n, enhancements, refurbishment, 
management of the grounds and other 
aspects relating to the WTO facilities.  The 
Secretariat has thus instituted a core team 
comprising of the chiefs of the FM, 
Security and Conference Services to done  
 
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discuss any planned activit ies and actions 
affecting the building and make 
recommendations to the Director AGSD 
for decision -making, as appropriate, before 
these are undertaken.  The core team will 
engage other relevant parties as and when 
necessary.  As an example, this team, 
toget her with a person from Budget and 
Finance, worked together to develop the 
Strategic Facilities Plan referred to above.     
28 Staff 
distribution  4.3 / 2015  The reduction of posts is  decided  on a case to case basis, within FMS and 
SSS there is no concept reflecting the minimum staff requirements.  
I recommend initiating an overarching concept reflecting the minimum staff 
requirements for FM. 
Although the a uditors based their recommendation on the last recent staff 
cuts within FMS and SSS, a concept is basically necessary to define staff 
requirements within FM Services. Without an objective assessment of FM 
Services, there is  no evidence that FM Services is currently or in future 
understaffed or even overstaffed.  The Secretariat agrees with the gist of the 
recommendation but is unable to 
implement:  
The staff requirements are decided by the 
Director General, with the professio nal 
input of the HR Division, taking into 
account the relative needs for resources 
throughout the organization. Furthermore, 
the Director General has a target structure 
of the organization that was developed 
taking into account the projected needs of 
the o rganization and the quest to address 
the inverted py ramid structure. No 
division, let alone a s ection, has authority 
or expertise to determine the resource 
needs for itself.  
 
 closed  
 
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29 Backup 
situation  4.3 / 2015  Within FMS the function of recording inventory was not in service from 
May to November 2015 due to sick leave of a staff member. The backup 
situation of FMS and SSS is not sufficiently organized. The existing backup 
documentation lacks the designation of backup staff and of related duties in 
detail for several functions.  
I recommend ensur ing sound and reliable backup plans and introducing a 
written guidance on replacement of staff in case of longer absence.  The Secretariat accepted the 
recommendation:  
 
Backup plans were strengthened. As 
recommended, HRD introduced a written 
admin memorandum no.977 on sick leave 
guidance on 31 January 2017.  
  done  
30 Pending repairs 
and projects 
related to 
construction 
works  4.3 / 2015  The renovation  and extension works were completed in 2012 -2013, but 
necessary repairs of defects are still pending.  
I recommend improving efforts to address  construction works related defects 
or damages and initiating a written procedure on the termination of the 
defects liability periods.  WTO S ecretariat followed the 
recommendation and improved its effort in 
addressing construction shortcomings.  
Through a stronger contract management 
deficiency liabilities will be addressed 
promptly and solved before the end of the 
defect liability period.  
The signage project has been now 
completed . done  
31 Links and 
interactions 
between FMS 
and SSS  4.3 / 2015  My team observed cooperation  and coordination between FMS and SSS. 
Within its large scope of responsibilities SSS also detects  malfunctions of 
the building and its equipment by its 24/7 security patrols and safety 
inspections. In order to ensure proper maintenance of the building SSS 
reports malfunctions to FMS via help requests, including proposals for 
measures which might improve the security infrastructure.  We noticed 
inconsistencies as to cooperation between SSS and FMS. The interaction 
between FMS and SSS could be improved.  
I recommend th at WTO Secretariat evaluat e the current structures, links and 
interactions between FMS an d SSS in order to provide measures to 
streamline cooperation between FMS and SSS.  As recommended, i n order to reduce 
dependencies and overlaps between SSS 
and FM, a budget of about CHF 250,000 
has been transferred to SSS on a trial 
period of 12 months. Thi s budget transfer 
will make SSS independent for all fire 
safety equipment. At year -end a review 
will be carried out to see how this transfer 
has worked.  done  
 
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32 Cash and cash 
equivalents  3.1.1 / 2016  Pursu ant to the financial regulations of the WTO, all payments shall be 
made by authorized officials of the Administration  and General Services  
Division . There is no specific regulation regarding the four eyes principle 
for the signature authorities.  
For all fund ing and payments WTO is using three house banks: UBS, Credit 
Suisse and Post Finance. All these banks sent us a confirmation of their 
business relationship with the WTO maintained as per booking date 31 
December 2016. Enclosed to these confirmations they l isted the persons who 
are authorized  for bank transfers with their signatures. Except the DG all 
designated officials are authorized only to jointly sign transactions (2 by 2 
authorizations). However , the DG can make bank transfers individual ly, 
without a second signatory (unique signatory).  
I recommend that WTO replace the applicable unique signatory by the DG 
to a joint signature 2 by 2 authorizations. Furthermore , I recommend that 
WTO revise the financial regulations regarding the current regulations fo r 
bank transactions and payments with respect to the four eyes principles in all 
relevant cases.  Financial Regulations 38 (c) and (d) make 
it imperative to have the four eye principle 
for payments. The relevant extract from 
the regulations read as follows: The 
Director -General shall : 
c) cause all payments to be made on the 
basis of appropriate supporting documents 
and other documents which ensure that the 
services or goods have been received and 
that payments have not previously been 
made;  
d) designate the officers who may receive 
monies, incur obligations and make 
payments on behalf of the WTO. All 
payments shall require a minimum of two 
signatories . 
The text that is underlined and in bold 
implies the four eyes principle.  
In view of the above, there is no need to 
review the financial regulations. The 
policy regarding payments, which 
authorizes the Director -General to be the 
sole signatory in some instances was 
revised in September 2017 to include the 
four eyes principle and was submitted for 
signature to the  DG. The policy reflects 
also the recent changes in the structure of 
AGSD staff.  closed  
 
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33 Provision for 
invalidity case  3.1.1 / 2016  Concerning a provision for an invalidity case in 2015 WTO established a 
provision within the FS 2016 for one case of invalidity and allocated CHF 
750,000 to it. This might be not sufficient to cover all related costs.  
In view of the prospective monthly payments from 2017 onwards I 
recommend reviewing whether more funds have to be allocated to this 
provision.  The Secretar iat agrees with this 
recommendation and will look into the 
approach for determining provisions for 
legal cases to assess whether this amount 
is appropriate or needs to be revised 
upwards.  
Provision for 2017 is set at 1.3. Million 
CHF and for 2018 1.5 Milli on CHF.  done  
34 Overtime  3.1.1 / 2016  The financial statements of the WTO include  as “Employee benefits 
liabilities” as at 31 December 2016 a position “Untaken annual leave” with 
an amount of CHF 8,725,000 . This position includes the accrued untaken 
annual leave by permanent and temporary staff with an amount of CHF 
8,608 ,000 as well as the accrued overtime by permanent and temporary staff 
with an amount of CHF 117,000 (1,438 hours). For more transparent and 
meaningful financial statements WTO shall c alculate and identify all 
employee benefit liabilities in detail regarding their different entitlement 
and/or justification.  
I recommend that WTO state  the positions “Untaken annual leave” and 
“Overtime” separately and explain the number of considered day s/hours and 
the calculation of the liabilities comparing the relevant data of the previous 
financial year in the notes  attached . 
 
 
 
 The WTO will prepare the 2017 Employee 
benefits liabilities tables to separately 
present the provision for the remaining 
untaken annual leave dues and that for the 
remaining hours attributable to 
Compensatory Time Off (CTO).  done  
 
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35 Information 
confidentiality  / 
Personnel 
aspects  4.1 / 2016  I suggest opening a discussion in the Secretariat whether it would be helpful 
to setup the crosscutting function of a “general” security officer . This 
function could coordinate the Secretariat’s efforts in the context  of 
information confidentiality, especially as to classified physical material. 
This central contact person could particularly e.g.  
• help to  harmonize rules and procedures;   
• serve  as an advisor to the divisions;  
• safeguard that established rules and instructions are i mplemented 
and adopted proper ly; 
• carry out examinations following  suspected cases .  The overarching issue, from the 
Secretariat's perspective, is that there needs 
to be an effective link between the 
Information Security Officer and Security 
Services. Before looking at a new role, 
form alizing how this link functions within 
the existing governance would already be 
beneficial.  
 closed  
36 Information 
confidentiality / 
Personnel 
aspects  4.1 / 2016  I suggest broadening the approach of backgroun d checks in future also to 
permanent and temporary staff.  The hiring of staff on Fixed Term 
appointment is already preceded by 
reference checks. To do it for temporary 
staff might imply delays and/or additional 
costs. The possibility of outsourcing 
reference checks will be explored as a way 
to co pe with the additional volume of 
conducting reference checks for temporary 
staff.  
For temporary staff hired for very short 
periods, such reference checks might not 
be productive. Similarly, in cases of 
unanticipated and urgent replacement, 
such reference checks for temporary staff 
might not be viable.  
 closed  
 
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37 Information 
confidentiality / 
Organizational  
aspects  4.1 / 2016  I encourage the WTO to complete the mentioned inventory as soon as 
possible. I suggest strengthening  the capacity of the responsible unit, e.g. by 
temporary support, to achieve this and other aims  in a more timely manner. 
The results should be taken as a basis to establish a transparent landscape of 
the needs  of the Secretariat concerning information con fidentiality.  June 2018  
This recommendation can be incorporated 
in the implementation of the Information 
Confidentiality Recommendation No. 26 
(4.2/2015). The related policy is currently 
on hold at the JAC (Joint Advisory 
Committee) for final approval.  
February 2019  
Recommendation can be closed as per 
previous comment  closed  
38 Information 
confidentiality / 
Organizational 
aspects  4.1 / 2016  I encourage the responsible of the Secretariat to discuss in which way the 
rules and procedures in the area of dispute settlement could be harmonized 
and possibly simplified.  
I recommend providing such procedures, considering the results of the 
“Inventory of Key Information Assets” and taking into account the already 
existing procedures in the area of dispute settlement. In this respect I repeat 
my not yet implemented recommendation of the previous report to set up 
extended guidelines (see para. 92/93). I also recommend accompanying the 
implementation of procedures with suitable training to increase the 
awarene ss of staff concerning information confidentiality throughout WTO.  The Secretariat is of the view that at this 
stage it would be more important for it to 
concentrate its efforts on enhancing the 
Secretariat -wide procedures and processes 
pertaining to confidentiality of information 
and establishing overarching guidelines 
that can be employed by various divisions, 
as they prepare specific internal 
procedures. It is more important for the 
Secretariat to build its policies, standards 
practices and training rath er than focus on 
standardising only three divisions.  
This overarching approach is taken in 
serious consideration by the Joint 
Advisory Committee . 
 closed  
 
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39 Information 
confidentiality / 
Aspects of 
physical 
security  
 4.1 / 2016  Executing the planned  reassessment I recommend initially  
•  defin ing a clear process with designation of the involved functions 
respectively individual WTO staff members,  
•  setting up co mparable criteria of protection;  
•  taking  relevant standards into account (e.g. EN 1047 regarding fire 
resistance, EN 1627/1630 regardi ng anti -burglar security, etc.);  
•  document ing all relevant steps of the particular measures.  
The process of implementation of security measures should also consider 
existing and future  policies regarding security, business continuity and 
disaster recovery.  June 2018  
The Secretariat agrees to explore 
implementing feasible aspects of this 
recommendation. In 2018 the Secretariat is 
going to implement a Security Renova tion 
Project that will cover the items 
recommended. 
February 2019  
Major part of the Security Renovation 
Project is achieved. The conclusion of the 
project is foreseen by Summer 2019  on-
going  
40 Ministerial 
Conference / 
Decision on 
date and venue 
of sessions  
 4.2 / 2016  I recommend that the Secretariat continue its efforts on establishing a 
guideline on organizing Ministerial Conferences.  
I further recommend that the Secretariat incorporate and follow up risks 
related to the organization of sessions of the Ministerial Conference in its 
risk register on a project based approach.  Many documents exist regarding the 
preparation for and management of 
Ministerial Conferences e.g. the Roles and 
Responsibilities document; the 
Requirements List; a Lessons Learned 
document from MC10; project plans; floor 
plans of meeting and conference rooms 
and other spaces to be used during the 
Conference; an Agreement with the Host 
Country detailing the obligations and 
deliverables by each party; and several 
information notes sent to Members and 
other prospective Participants etc.     
In view of the above, it is important not to 
have an inundation of preparatory 
materials that could lead to hours spent on 
planning and crowding -out focus on done  
 
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imple mentation and other core aspects of 
the Ministerial Conferences.  
The Secretariat has developed a risk 
register (document shared), using a 
consultative process across Divisions and 
come up with mitigating actions. From the 
Secretariat's perspective, this plus all the 
above -mentioned documents would be 
enough. (Check MC11 Risk Register) . 
41 Ministerial 
Conference / 
Guidelines on 
organizing 
sessions  
 4.2 / 2016  I acknowledge the efforts the Secretariat has made to improve project 
management of organizing sessions of the Ministerial Conference. In this 
regard I consider the Handbook for prospective hosts and the lessons learned 
report as important inputs to consoli date internal knowledge and to 
streamline project management and project organization.  
I recommend that the Secretariat continue its efforts on issuing a guideline 
on organizing Ministerial Conferences. I recommend that the Secretariat 
incorporate and fol low up risks related to the organization of sessions of the 
Ministerial Conference in its risk register on a project based approach.  The Secretariat sees this recommendation 
as being exactly the same as 
Recommendation No. 40 above.  It, 
therefore, requests  clarification of the 
distinction so that an appropriate comment 
can be stated. closed  
42 Ministerial 
Conference / 
Project 
planning  
 4.2 / 2016  I recommend that the Secretariat assess the workload related to the 
organization of Ministerial Conference sessions and its impact to the 
common workload of the involved staff members.  
I recommend that the Secretariat additionally consider calculating more  
realistic time frames for other projects of involved staff members.  Ministerial Conferences and the 
implication of various individuals in this 
are a major consideration  when 
performance objectives are set with people 
who are closely involved in preparing  for 
and servicing Ministerial Conferences, 
during a year in which the Ministerial 
Conference is to be held.   
Therefore, some projects were rationalized 
and deferred to the following year so as to done  
 
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not over -encumber the people responsible 
for these areas i n 2017.  Examples include 
some projects that are to be delivered by 
ITSD and Conference Services as well as 
Security Services.  The objectives set for 
the relevant individuals took account of the 
workload from the Ministerial Conference 
activities.  
43 Termination 
indemnities / 
Mutually 
agreed  
termination due 
to behavioural 
reasons  
 4.3 / 2016  I recommend consideri ng whether cases like the above  could be handled 
more restrictively in terms of indemnity payments. This includes the 
application of all disciplinary measures in preparation of a notice, in 
particular written warnings. Where it is known that WTO is likely to pay 
indemnities to avoid cou rt procedures this could create incentives for 
inappropriate working attitude. I suggest that OIO analyzes the termination 
indemnity policy, in particular regarding the above cases.  WTO has now a clearly defined procedure 
for administrative investigations and 
disciplinary actions and has established a 
Joint Disciplinary Body, responsible for 
determining whether the disciplinary 
measures proposed by the Director -
General are proportionate to the observed 
breaches. When adopting disciplinary 
sanctions, the Dir ector -General takes into 
consideration the interest of the 
Organization.  closed  
44 Termination 
indemnities  /  
Cases of 
exceptional 
circumstances 
with additional 
payment in lieu 
of notice  4.3 / 2016  I recommend that separations becoming necessary be planned and initiated 
earlier in order to avoid such payments.  The Organization will aim to initiate any 
separations before the end of the third 
quarter, with a view to the separation 
taking effect at the end of the year.  
 
 
 
 closed  
 
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45 Action plan for 
growing 
outstanding 
contributions.  3.2 / 201 7  
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.      
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.    June 2018  
The Secretariat agrees with the 
observation. Instead of an action plan, the Secretariat will be proposing appropriate steps to be taken in a dedicated paper to be 
presented to the CBFA in June 2018.  
February 2019  
The CBFA has approved the transfer of the 
accumulated 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 . on-
going  
 
46 Provisions of 
invalidity  cases  3.3.1  / 2017  Provisions of invalidity tot alled CHF 4.53 million in 2017. If the monthly 
payments to both persons are accrued over the average Swiss (remaining) 
life expectancy, these provisions would have to be raised to abou t CHF 9.4 
million in total, each provision would have to be more than doubled.  
I repeat and extend my recommendation in my report last year to check and 
adapt all relevant WTO invalidity cases.  June 2018  
This recommendation is linked to the 
recommendation below 48. The Secretariat 
agrees with the observation and will 
investigate the feasibility of this 
suggestion relative to other options.  
February 2019  
The Secretariat has increased the 
Provisions for invalidity cases of 2.7 
Million according to the updated 
information and costs of 2018 data.  
 closed  
 
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47 HR focal point / 
contact person  3.3.1 / 2017  HR delivered documents delayed to the Auditor.   
I recommend that HR provide a focal point / person to channel and deal with 
audit requests regarding HR topics to avoid any future delay of providing 
information to the Auditor.  The Secretariat agrees with the observation 
and will provide a HR focal point for the 
next audit.  
 done  
48 Insurance 
policy  3.3.1 /  2017  I suggest that WTO review whether it is economically advantageous to take 
out an insurance policy that covers the complete risk of invalidity instead of 
minor one -time lump sum payments only.  The Secretariat agrees with the observation 
and will investigate the feasibility of this 
suggestion relative to other options  on-
going  
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 p olicy.  June 2018  
The Secretariat agrees with the 
observation. There is an amended travel 
policy that is going through internally 
review process which will be signed as per 
the current delegation of authority 
February 2019  
A new SOAM (Staff on line 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 . 
 
 on-
goin g 
 
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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  
The WTO signed an incentive programme 
with Airplus that will lead to a refund at 
the end of the year.  closed  
51 Expa nding 
application 
MobileXpense  4.1 / 2017  If the introductory phase has been successfully completed, I recomme nd that 
the WTO check expa nding the application of MobileXpense to other 
categories of travelers.  June 2018  
The Secretariat agrees on the o bservation 
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 i s 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.  
 
 on-
goin g 
 
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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 tra vel policy . 
I recommend calculating advances in line with regulations.  June 2018  
The Secretariat agrees on the observation 
and will implement it by the second 
quarter of 2019.  
February 2019  
Change to adjust the calculation of the 
DSA advance in Mobilexpense in course 
of development.  Implementation to follow 
as soon as the development will be 
operational.  Revised Travel Policy still 
with the JAC for consideration.  
 on-
goin g 
53 Application for 
authorization  4.1 / 2017  Applications  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 shortly before the start, this should be justified 
accordin gly in the travel request.  June 2018  
 
The Secretariat will reinforce the message 
of submit in duly time the travel request 
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 about the 
end of Phase 1 of Mobile expense and 
about the new features of the system (i.e. 
automatic closure of open reports after 30 
days).  In that communication the 
importance of t he minimum 10 days for 
travel authorization will be highlighted 
too. on-
goin g 
 
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54 Open travel 
expense reports  4.1 / 2017  Travel expense reports in Mobi leXpense are considered "open".  
I recommend making  a settlement as soon as possible, which means when 
cases are technically completed.  June 2018  
The Secretariat agrees on the observation 
and will implement it by the second 
quarter of 2019.  
February 2019  
Automatic settlement of open expense 
reports is now ready for implementation.  
In March 2018 a communication will be 
sent to relevant stakeholder to announce 
the beginning of this process as of 1st 
April 2019.  on-
goin g 
55 Recruitment 
process for 
consultants  4.2 / 2017  There are two different processes in the two responsible divisions  for 
consultants . 
I recommend standardizing recruitment processes for individual consultants 
according to the Procurement Guidelines.  June 2018  
The Secretariat agrees on 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 . 
 
 still on -
going 
 
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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.  The Secretariat accepts the 
recommendation and will implement it as 
soon as possible   
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.  
I recommend that WTO should present accruals and provisions separately in 
its financial statements.   The Secretariat accepts the 
recommendation and will implement it in 
the 2019 Financial Performance Report.   
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.   The Secretariat accepts the 
recommendatio n and will implement it in 
the 2019 Financial Performance Report.   
59  Accruals and 
provisions  3.3.1 / 2018  As I already recommended in 2017  (no. 46) , WTO should review its 
calculation regarding to 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 and claims from the 
WTO Pension Plan (r etirement, 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 accepts this 
recommendation due to the fact that these 
provisions were based in order to 
implement a previous recommendation by 
the External Auditor -   audit 
recommendation 33 " provision for 
invalidity case" which has been closed 
(Aud it report 2016, paragraph 3.1.1.).   
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 . The secretariat will revise its risk register 
to take account of this recommendation.   
 
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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 incorrect ly 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.   The Secretariat accepts the 
recommendation and will implement this 
recommendation.   
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 workflows. Additionally, in parts of the processes 
I detected interface problems, duplication of efforts, and redundant 
workflows. I apprec iate that WTO already has carried out a significant work 
in terms of process mapping and the development of Standard Operating 
Procedures as well as 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 th e processes and 
clarify the roles and responsibilities. On that basis, the Human Resources 
Division should coordinate the finalized process description internally with 
all process participants. The consensual version of process descriptions 
should then be authorized accordingly.  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 work 
was done, in collaborat ion 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 external consul tant 
resulted in recommendations to develop 
Standard Operating Procedures. This is in 
progress. The project is estimated to 
conclude in 2020. 
  
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 be 
govern what kind of essential information shall be documented and in which 
form.   Agreed. The WTO Secretariat will finalize 
the necessary documentation by 2020 as 
this is a component of the HRIS proj ect.  
 
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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.  
 Agreed. The WTO 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 that the documents are 
maintained in the same format. 
  
65 Heterogenic 
(IT-) 
infrastructure – 
payroll process  4.1 / 2018  The use of a heterogenic, fragmented and non -interconnected landscape is 
neither effective nor efficient. Negative effects of a heterogenic system 
landscape may be error susceptibility, interface losses, redundant data, low 
data reliability and data incons istencies. Furthermore, media interruptions 
may lead to a lack of internal control within the Human Resources Division.  
I recommend that WTO finalize t he HR -process description 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.   
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 an 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 develop  a performance description to en sure that the 
procurement  process will be based on requirements defined for an effective 
HRMS (second  step).  
 
 What is covered in this recommendation is 
already part of the scope of the HRIS 
project.   
 
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67 Salary scale  4.1 / 2018  The Human Resources Division use d 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 its first fixed -term 
contract. In 2019 WTO could already reduce 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 
to ensure better comparability an d maximum transparency.   Agreed. Implementation will be gradual, 
over the years.   
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 not implements valid and measurable indicators according to the 
agreed objectives, it will be really dif ficult 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 achievement ev aluation in line with the  
objectives  agreed .  The performance evaluation system has 
been reviewed and the relevant 
documentation is being assessed by the 
Joint Advisory Co mmittee.    
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 consider 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 abolish this 
regulation.  
I recomme nd 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 only, taking The dependency allowance is detailed in 
the staff regulations and staff rules 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  
 
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into account the economic status of the staff member as well as the social 
situation of the final beneficiaries. WTO also might be considering 
abolishing this regulation.  type of allowance are required to submit 
documentary evidence justifying their 
eligibility on an annual basis.  
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.  The WTO Secretariat will benchmark 
agains t other international organizations, 
with a view to assessing the 
recommendation in an objective manner.   
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 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 several years.  These include: 
statistics sent to directors, reminders to 
staff etc. Furthermore, any leave 
reimbursements is limited to a maximum 
of 60 days at the time of separation. The 
Secretariat will continue to emphasize the 
importance of annual leave management t o 
staff and directors.   
 
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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 ar e 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 s tudies 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 excess ed 
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 
reduced 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 paymen t restrictions for untaken annual leave.     The WTO agrees to work towards aligning 
the leave cycle with the calendar year and 
to assess measures of governing untaken 
leave.   
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  (also see no .19). 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 und adjust the rul es and guidelines for HL because 
detected systemic problems and vulnerability to fraud in 2017.      The Secretariat agrees and is in the process 
of finalizing its review of the new Home 
Leave policy.  
 
       
  
 
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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 b y OIO to bring the new rules and regulations in line with 
other comparable regulations of International Organizations (Benchmark) as 
well as to avoid excessed payments and misconduct.    
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.  The Secretariat agrees and is in the process 
of finalizing its review of the Home Leave 
policy.  
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 rec ommend 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.       The S ecretariat is reviewing the issue of 
the two calendar weeks for Home Leave.  
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