RESTRICTED  
  
WT/BFA/W/562  
 
28 June 2021  
(21-5195) Page: 1/12 
Committee on Budget, Finance and Administration  Original: French  
 
 
REPORT OF THE INDEPENDENT EXTERNAL AUDITOR S ON FOLLOW -UP OF THE EXTERNAL 
AUDITOR S' RECOMMENDATIONS  
The Report of the Independent External Auditor on the follow-up of the External Auditors ' 
recommendation is attached.  
  WT/BFA/W/562  
 
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   WT/BFA/W/562  
 
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EXTERNAL AUDIT OF  
THE WORLD TRADE 
ORGANISATION  
 
 
FOLLOW -UP OF THE EXTERNAL 
AUDITOR’S RECOMMENDATIONS  
(ordered on the date of submission of the 
audit report on WTO’s 2020 accounts 
and Pension Plan)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
COURT OF AUDITORS REFERENCE: CoE 2021 -2 
 WT/BFA/W/562  
 
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BLANK PAGE  WT/BFA/W/562  
 
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3  
 
TABLE  OF CONTENTS  
 
 
 
 
I. GENERAL OBSERVATIONS  ................................ ................................ ...............  4 
1.1. Follow -up procedures  ................................ ................................ ........................  4 
1.2. Implementation of recommendations  ................................ ................................ . 4 
II. FOLLOW -UP OF RECOMMENDATIONS ................................ ............................  5 
2.1. Financial audit recommendations  ................................ ................................ ...... 5 
2.2. Recommendations associated with performance a udits  ................................ .... 7 
III. CONCLUSION  ................................ ................................ ................................ .. 10 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 WT/BFA/W/562  
 
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4 I. GENERAL OBSERVATIONS  
 
1.1.  Follow -up procedures  
1. This document for the follow -up of the external Auditor’s recommendations is drawn up in 
accordance with the provisions of the mandate entrusted to the French Court of Auditors by 
the General Council, specified in the letter of commitment dated 24 November  2020 signed 
jointly by the Court of Auditors and the World Trade Organisation (WTO).  
2. It includes information on the status of all recommendations issued by successive external 
auditors, recorded on the date of submission of the 2020 audit reports of the WTO and the 
Pension Plan. The recommendations were not implemented on the date of the closing of the 
previous follow -up report. It covers all recommendations issued both in the financial audit 
reports (WTO and Pension Plan) as well as in the performance au dit reports.   
3. As of 2020, the external Auditor will assign each of his recommendations a degree of 
priority of implementation forming an integral part thereof, according to the following reading 
grid: 
- Priority 1:  fundamental point requiring special attent ion of the governing bodies and 
the immediate action of the general management;  
 
- Priority 2:  point which must be implemented but the implementation may be 
delayed depending on the circumstances;  
 
- Priority 3:  point of improvement of controls, accountability or management, brought 
to the attention of the general management.  
4. Only priority recommendations 1 and 2 are mentioned in the annual follow -up report 
provided to the governing bodies. Depending on their qualitative importance, priority 3 
recommendations may either be recorded for information in the audit reports sent to the 
governing bodies or be sent only to the general management in a letter of observation. All 
recommendations are nevertheless subject to follow -up due diligence every year.  
 
1.2. Implementation of recommendations  
5. According to the principles set out in the international auditing standards of the 
International Organisation of Supreme Audit Institutions (INTOSAI1), the external Auditor is 
strictly committed to issuing recommendations, the implementation of which is likely to 
significantly improve the handling of issues to which they relate, the recommended 
implementation schedule of which takes into account both the risks associated with the 
shortco mings identified and, if applicable, the legal or organisational constraints weighing on 
the divisions responsible for their operational application, and the implementation, and 
therefore the follow -up of which can be (quantitatively or qualitatively) clea rly measured.
 
1 International Organisation of Supreme Audit Institutions.  WT/BFA/W/562  
 
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5 6. Since the external Auditor reports only to the governing bodies, the recommendations that 
he/she issues are intended for them in the first place; they fall within the scope of their 
supervisory duty and increased direction of Organisational m anagement.  
7. It is therefore important that these recommendations be endorsed by the governing bodies 
so that they constitute clear guidelines and road maps for implementation for the 
Organisation's Secretariat. Unless a recommendation is explicitly rejecte d by the governing 
bodies, which always have the last word in this regard, the external Auditor considers that the 
unreserved approval of a report implies a directive for the Secretariat to implement the 
recommendations it contains.  
8. The status of the reco mmendations depends on the degree of their implementation:  
- closed: the recommendation was fully implemented under the conditions under 
which it was formulated and the objective it was aiming for,   
- ongoing: implementation has started in the recommended dir ection but actions 
are yet to be finalised,  
- open: implementation has not started (for any reason whatsoever),  
- lapsed: an old unimplemented recommendation, whose implementation would 
prove to be unsuitable for the new management conditions, may lapse or b e 
superseded by a new recommendation that better meets the reference quality 
criteria (see paragraph 6).  
 
II. FOLLOW -UP OF RECOMMENDATIONS  
2.1. Financial audit recommendations  
9. The review of the status of the financial audit recommendations shows that out of ten 
active recommendations as of the date of the previous report, seven were fully implemented 
to date (i.e. 70%). For the rest, one recommendation was still being implemente d, and two 
remained open as implementation had not yet begun. The three recommendations not fully 
implemented concern the control of the “disability” risk, and its financial consequences, when 
the declaration of disability of a staff makes the Organisation  liable to pay compensation.  
10. The external Auditor had first recommended that this risk be incorporated into the risk 
register so that appropriate action plans could be adopted to control it. The Secretariat 
considers that this risk is covered by the registration of health insurance commitments after 
cessation of service (ASHI2 - risk F007) in the Risk Registry of insufficient coverage.
 
2 After Service Health Insurance.  WT/BFA/W/562  
 
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6 11. The “disability” risk, which responds to a completely different management logic and 
procedure (self -insurance), is not included in the ASHI scheme: it cannot therefore be 
seriously considered that it was, as recommended, identified and registered in the risk register 
in order to be able to design control and effectively ensure it. The recommendation to r eassess 
the coverage of this risk may as always be considered to be in the process of being 
implemented since the Secretariat has stated that it is in discussion with its insurance agent 
(Cigna) to optimise it.  
12. Finally, the recommendation to adopt a compl ete and documented actuarial method to 
assess the provision for disability risk has not been implemented and is the subject of a 
repeated priority 1 recommendation in the 2020 accounts audit report.  
13. Given its wording (“formally claim the reimbursement of amounts due by the Government 
of Argentina”), the recommendation regarding the recovery of amounts due for the 
organisation of the 11th Ministerial Conference (MC) is considered to be implemented, since 
the request was made in October 2020. However, it wou ld be appropriate to document the 
recoverability of this debt and, if applicable, to examine the conditions for its possible 
cancellation.  
Table 1:  Summary of the implementation of recommendations (financial audits)  
Subject  Implementation  Ongoing  Open  Total Year  
/observation 
no. 
      Prepare an action plan to control the 
effects of an increasing volume of 
unpaid contributions  x    3.2/2017  
3.2/2018  
(45) 
Extend the use of the MobileXpense 
application  x    4.1/2017  
(51) 
Include the risk of disability at work in 
the risk register and adopt appropriate 
measures to control the consequences 
thereof    x  3.3.1/2018  
(60) 
Review the financial regulations 
(administrative measures in the event 
of payment default)  x    3.2/2019  
(76) 
Comply with the double signature rule 
on the bank account (DG)  x    3.3.1/2019  
(77) 
Formally claim the reimbursement of 
amounts due by Argentina for the 11th 
Ministerial Conference  x    3.3.1/2019  
(78) 
Apply actuarial methods to establish 
the disability risk provision    x  3.3.1/2019  
(79) 
Risk of disability at work – optimise 
insurance coverage   x   3.3.1/2019  
(80) 
Improve the presentation of provision 
for risk in the notes to the financial 
statements  x    3.3.1/2019  
(81) WT/BFA/W/562  
 
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7 Subject  Implementation  Ongoing  Open  Total  Year  
/observation 
no. 
Submit a proposal for reduction and 
reallocation of the 3 Doha Development 
Agenda Global Trust Fund reserve to 
CBFA  x    3.3.1/2019  
(82) 
Financial sub -total 7 1 2 10  
 
2.2. Recommendations associated with performance audits  
14. The performance audits that have followed since 2018 have produced 28 
recommendations to be followed, of which 20 (71%) can be considered as implemented. This 
rate of implementation is relatively satisfact ory considering, on the one hand, that the 
recommendations generally concern consistent aspects of management (consultants, trust 
funds, compensatory management, etc.) calling for structural work to globally overhaul certain 
internal texts or procedures, a nd on the other hand, that since certain recommendations relate 
to ongoing reforms (in particular Human Resources management information system) and that 
the schedule of implementation work often depends largely on the project’s own schedule. 
However, the implementation of certain recommendations calls for comments.  
 
15. The Secretariat considers that the recommendation regarding the allocation of 
compensation for persons not directly dependent is implemented. In reality, it contests this 
recommendation, considering that the requirements imposed by the external Auditor would be 
complicated and too expensive to implement for the expected benefit. The argument is 
admissible and the external Auditor agrees to withdraw this recommendation. The issue raised 
will nevertheless be monitored during the audit of the accounts for the coming financial years.  
 
16. The recommendation relating to annual leave including, in particular, a reorganisation of 
the practice of advance on leave entitlements is conside red to be implemented. If it is actually 
implemented on some of the aspects mentioned by the external Auditor, it is not implemented 
on (a) the alignment of the leave period over the calendar year, (b) the issue of advances on 
leave entitlements. On point (a) the Secretariat rightly points out the difficulty encountered by 
staff from the southern hemisphere, when the leave period is based on the calendar year. Its 
refusal to implement this part of the recommendation is justified. However, it does not provid e 
any evidence documenting the withdrawal, or supervision of the practice of the advance on 
leave entitlements by a formal regulation. Since this aspect is significant, the external Auditor 
considers that the recommendation continues to be “in the process of implementation”.  
 
17. Considering that the recommendation to conclude an agreement with the Pension Fund 
for the financial compensation of early retirement cases is implemented, the Secretariat 
extrapolates the actual status of the subject. Guidelines in v iew of the conclusion of an 
agreement with the Pension Fund are certainly being finalised by the Secretariat. But these 
are only preparatory actions and the agreement is not signed, so the recommendation cannot 
still be considered as implemented.  
 
 
 
 
3 Budget, Finance and Administration Committee.  WT/BFA/W/562  
 
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8 Table  2: Summary of the implementation of recommendations (performance audits)  
 
Subject  Implementation  Ongoing  Open  Total  Year  
/observation 
no. 
      Unify consultant recruitment 
procedures (between HR and AGSD)  x    4.2/2017  
(55) 
Finalise the description of HR 
processes, the responsibilities of the 
process owners   x[*]   4.1/2018  
(62) 
Document all HR processes in the form 
of instructions   x[*]   4.1/2018  
(63) 
Prescribe a consistent and appropriate 
format for staff files, and limit access to 
them   x[*]   4.1/2018  
(64) 
Consolidate the system and application 
architecture of the HR domain  x[*]    4.1/2018  
(65) 
Prepare an acquisition process to 
optimise the HR IT infrastructure  x[*]    4.1/2018  
(66) 
Reduce the number of salary scales in 
effect as quickly as possible  x    4.1/2018  
(67) 
Review the conditions for the allocation 
of compensation for a secondary 
dependent person by considering the 
economic and social status of the 
beneficiaries  x    4.1/2018  
(69) 
End the Summer school program ; 
otherwise, supervise it by clear, fair 
and transparent rules for identifying 
needs, recruitment  x    4.1/2018  
(70) 
Improve control of the volume and 
management of annual leave not 
taken, in particular by educating 
directors of their responsibilities in this 
area x    4.1/2018  
(71) 
Review staff rules to align the period 
for taking leave for the calendar year, 
check the accumulation of leave 
entitlements carried forward and set 
out formal rules for the allocation of 
advances on leave entitlements   x   4.1/2018  
(72) 
Evaluate and revise the regulations 
concerning leave in households to 
avoid systemic weaknesses making it 
sensitive to fraud   x   4.1/2018  
(73) 
Ensuring that the staff benefiting from 
leave in the households actually spend 
two calendar weeks in the country 
where they declare that they have 
taken leave  x    4.1/2018  
(75) WT/BFA/W/562  
 
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9 Subject  Implementation  Ongoing  Open  Total  Year  
/observation 
no. 
Notify termination decisions in a timely 
manner to avoid having to pay 
additional compensation  x    4.1/2019  
(83) 
 
Enter into an agreement with the 
Pension Plan on the compensation 
conditions for early retirement staff   x   4.1/2019  
(84) 
Ensure that the Secretariat is diligently 
informed of the cost of conventional 
segregation, including compensation 
due to the Early Retirement Pension 
Plan x    4.1/2019  
(85) 
Finalise the standardisation of 
consultant recruitment procedures 
(2018 recommendation repeated in 
2019)  x    4.1/2019  
(86) 
End a consultant contract that does not 
comply with staff regulations  x    4.1/2019  
(87) 
When the recruited consultants are 
parents of the organisation’s staff, 
ensure a fair and transparent 
recruitment process; decisions should 
be made by the CEO or the DDGA  x    4.1/2019  
(88) 
Ensure that only consulting companies 
can be selected according to the 
purchasing processes in force  x    4.1/2019  
(89) 
Conclude framework agreements for 
long-term recurring needs  x    4.1/2019  
(90) 
Streamline special allocation funds by 
closing those that are inactive, merging 
those whose activities are similar or 
identical funders; take advantage of 
this to harmonise management 
procedures   x   4.2/2019  
(91) 
Implement control of multi -year 
voluntary contributions to account for 
them in accordance with the IPSAS 23 
standard  x    4.2/2019  
(92) 
(Trust  funds) Adopt a standardised, 
harmonised and transparent procedure 
for all high-amount purchases    x  4.2/2019  
(93) 
(Trust  funds) Train all purchasing 
officers in all divisions to ensure 
regularity of the procedures, good 
knowledge of the organisation's tax 
exemption regime and better 
consideration of economic factors.  x    4.2/2019  
(94) WT/BFA/W/562  
 
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10 Subject  Implementation  Ongoing  Open  Total  Year  
/observation 
no. 
(Trust  funds) Check the tax exemption 
requests for the 2019 and 2020 deliveries 
and the interest in requesting the 
reimbursement of taxes paid in the same 
years  x    4.2/2019  
(95) 
(Trust  funds) Check all temporary contracts 
(items L) to ensure that they are not 
automatically transformed into permanent 
contracts for failure to have monitored that 
the four -year limit has been exceeded  x    4.2/2019  
(96) 
(Trust  funds) Develop a strategy, based on 
the identification of structural needs, to 
transform certain temporary contracts (items 
L) into permanent contracts and to limit the 
others to four years  x    4.2/2019  
(97) 
Performance sub-total 20 7 1 28  
[*] Action under the HRIS (Human Resources Information System) project  
 
 
 
III. CONCLUSION  
 
18. The implementation of the external Auditor’s recommendations may be considered 
satisfactory in consideration of the constraints on an international organisation when 
significant changes in usage, procedures and tools are to be considered.  
19. Except in a few cases (three  cases), where there are differences in the assessment of the 
implementation status, the Secretariat has adopted a pro -active attitude with regard to the 
recommendations made.  
20. Even rare cases (two cases), where the Secretariat puts forward serious arguments to 
challenge the relevance or feasibility of certain recommendations show the importance of the 
procedural comment made in paragraph 7 of this report.  
21. The external Auditor t hanks the teams of the Administration and General Services division 
for their assistance and willingness to document the follow -up of recommendations.  
 
End of follow -up report.  
 
 
 
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