RESTRICTED  
  
WT/BFA/W/460/Rev.1  
 
7 Novem ber 2018 
(18-6990) Page: 1/10 
Committee on Budget, Finance and Administration    
 
PROPOSAL FOR THE ACCUMULATED  BUDGETARY SURPLUS  
Revision  
1  OVERVIEW  
1.1.  The WTO has an accumulated budgetary surplus , as at 31 December 2017,  of 
CHF 52.026 million.  This is the accumulated difference between the approved budget and actual 
expenditure for each  of the 6 years  spanning from  2012 to 2017. In accordance with Financial 
Regulation 23, the Director -General  proposes that the total sum of the accumulated b udgetary 
surplus  be transferred to the Working Capital Fund.  
1.2.  The accumulated budgetary surplus was a  major point of debate during meetings of the various 
ASHI Working Groups1 as well as the Committee on Budget, Finance and Administration.   
1.3.  In November 2017, t he Working Group on an ASHI Fund, made the following two 
recommendations to the CBFA:  
o that a Spec ial Reserve Account (SRA)  be established for ASHI; and .  
o that, as consensus was not reached in the Working Group on the funding models, that the 
discussion be further taken up in the CBFA.  
1.4.  Taking the above into consideration , the Director -General  had propo sed an allocation of the 
accumulated budgetary surplus to three areas: the build-up of ASHI Assets;  cash dedicated to 
covering cash flow needs that may arise during the course of  the year, due to a deficit between 
contributions received and expenditures incurred; and a portion to augment the Working Capital 
Fund.  
1.5.  Some Members were not accepting of any allocation to ASHI Assets.  This proposal seeks to 
address the various concerns a nd preferences expressed by several Members.   
1.6.  The proposal is motivated by the following considerations:  
o  to cover the Organization 's operational needs during periods when sufficient contributions 
have not arrived from Members; and  
o  to avoid loss of funds due to negative interest.  
1.7.  The balance of the Working Capital Fund as at 31st December 2017 was CHF  10.88 million. This 
amount is part of the Organization's cash pool and is managed  according  to the WTO Treasury 
Management Policy.  The authorized investments under this policy are as follows:  
o a minimum of 70% in cash and cash equivalents2;  
o a maximum of 30% in bonds; and  
o 0% in equities.  
 
                                                
1 These are the ASHI Working Group, the ASHI Strategy Development Monitoring Group and the 
Working Group on an ASHI Fund.  
2 The cash and cash equivalent holdings are predominantly in Swiss Francs.  WT/BFA/W/460/Rev.1  
 
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  1.8.  The above  asset allo cation is appropriate for short -term funds which are mainly geared to 
operational expenses. For long -term holdings , exposure to equities and bonds would contribute to 
positive returns.  
1.9.  If the CHF 52.026 million in the  accumulated  budgetary surplus is transferred to the Working 
Capital Fund the balance will be approximately C HF 63 million. Were this amount to continue being 
invested according to the Treasury Management Policy, there would be loss of capital due to negative 
interest.  It is, therefore, important to allocate the funds in the Working Capital Fund , that are not 
likely to be needed in the short term,  to asset classes that may yield positive returns. This could 
partly offset the negative interest  paid to the Swiss banks for cash holdings . In view of this , the 
proposed asset allocation of the Working Capital Fund is:   
o 50% to 60% in cash  and cash equivalents ; 
o 20% to 40% in equities; and  
o 0% to 2 0% in bonds.  
 
The actual asset allocation will be determined in consultation with an Investment Advis or. 
 
1.9.1 Cash and cash equivalent holdings: The average monthly expenses of the WTO 
approximate  CHF 19 million. The norm for most entities is to hold between 1 and 2 months' 
monthly expenses in cash in order to ensure availability of funds in periods where there is a lag 
between contributions received and expenses that results in inadequate funds to cover expenses. 
50% to 60% of the CHF 63 million that would be in the Working Capital Fund would range  from 
CHF 31.5 million to CHF 37.8 million. These amounts are close to 2 months ' expenses.  Such 
amount s would have to be held mainly i n Swiss Francs because 92% of the Organization's 
expenditure is in Swiss Francs. 8% of the expenditure can be held in other currencies, mainly 
USD3 and EUR.  
 
1.9.2 Equities: The investments in equities are geared towards getting exposure to possible 
improved returns by investing in the long -term. This will allow for some compensation of the 
amounts levied by Swiss banks through negative interest. Equities  provide the highest potential 
returns, relative to cash and bonds, over the long term. On the dow nside, equities  are more 
volatile and riskier than cash and bonds.  
 
1.9.3 Bonds: Investing in bonds will allow for diversification and predictable returns since bonds 
pay a fixed interest a t regular intervals. In addition, the prices of bonds and equites  move in 
opposite directions. Therefore, the mix of bonds and equities will cushion negative returns.  The 
bond portfolio will comprise of holdings with varying dates to maturity. The date to maturity of  
specific bonds, at their time of purchase, would be at least 3 years.  
 
1.10.   An Investment Policy for the Working Capital Fund will include specific details regarding the 
asset classes which can be held.  
2  FINANCIAL REGULATION  23 
2.1.  Definitions of various  terms used in Financial Regulation 23:  
2.1.1 Approved expenditure: In this context, approved expenditure refers to the approved 
budget.  
 
2.1.2 Actual expenditure: the total amount of money spent from the approved budget.  
 
2.1.3 Approved miscellaneous income: projected revenue derived from varied sources, other 
than Member contributions, that will be included in the regular budget. These include sale of 
publications; royalties; savings or refunds from the previous year's obligati ons; rental of 
meeting rooms; contributions from Observers; and overhead fees collected for the 
management of Trust Funds.  
 
2.1.4 Actual miscellaneous income: miscellaneous income that is actually earned during the 
financial year.  
                                                
3 In 2017, the interest earned through USD money -market investments amounted to USD 86,500.  WT/BFA/W/460/Rev.1  
 
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2.2.  Financial  Regulation 23  reads as follows:  
"Budgetary savings shall be transferred to the Surplus Account. Budgetary savings are 
defined as the difference between approved expenditure and the corresponding actual 
expenditure as presented in the WTO financial statements for the per iod. The actual 
expenditure does not take into account the variations in the actuarial provisions for the 
long-term liabilities associated with staff pensions and after service health insurances if 
they have not been included in the approved budget.   
 
The difference between the approved miscellaneous income and the corresponding 
actual miscellaneous income as presented in the WTO financial statements for the period 
as well as the variation of the provision for contributions in arrears shall also be 
transferred to the Surplus Account.  
 
If at the end of a financial period the Surplus Account shows a credit balance, the 
Director -General shall make proposals to the Committee with regard to its use which 
may be:  
 
a) application as income against the budget for the second financial period following 
that in which the surplus occurs, thereby reducing Members' contributions;  
b) transfer to the Working Capital Fund; or  
c) use for any other purpose decided upon by the General Council.  
 
A deficit in the Surplus Account at the end of a financial period shall be covered, to the 
extent possible, by transfer from the Working Capital Fund. Any part of the deficit left 
uncovered after transfer from the Working Capital Fund shall be included as an 
appropriate credit in the budget for the next earliest possible financial period."  
 
2.3.  Prior to the implementation of International Public Sector Standards (IPSAS), the budgetary 
savings were often equivalent to the financial result. Any variations between the budgetary savings 
and financial result4 were due to adjusting for provision for arrears in contribution. No other 
adjustments were required.    
2.4.  Subsequent to the implementation of IPSAS, the financial regulations were revised. Notably, 
the financial regulation that related t o the Surplus Account was amended with the underlined text in 
point 2.2 above . The underlined text excludes expenses that are part of IPSAS -compliant Financial 
Statements. As a result, Financial Regulation 23  retain s the Pre -IPSAS concept of equating budge tary 
savings to the financial result .  
2.5.  Financial R egulation 23 also stipulates that budgetary savings should be transferred to a 
Surplus Account and that if such Surplus Account has a credit balance (is positive) a proposal has 
to be made for applying it. There is ambiguity as to  whether the Surplus Account ought to be deemed 
to be synonymous with  accumulated  budgetary savings  or not. It ought to be noted that the closing 
balance of the Surplus Account as at 31st December 2017 , as shown in the Statement of Financial 
Position  amounted to a  deficit of CHF  837.34 million.  
2.6.  The annual Financial Performance Report comprises of the following comprehensive sections: 
Budget Performance; Expenditure per Output Chapter; Performance of Trust Funds; and Financial 
Statements.   
2.7.  The B udget Performance  Section  culminat es in budgetary sa vings (or a budgetary deficit) . The 
Financial Statements, which are audited by the External Auditors , include  the following: the 
Statement of Financial Position5; the Statement of Financial Performance6; the Statement of Net 
Assets/Equity; the Cash Flow Statement ; Notes to the Financial Statements; and Schedules.  
                                                
4 Financial  result = total budget – total expenditure in the Statement of Financial Perfo rmance (Profit 
and Loss Account ). 
5 This is the same as a Balance Sheet.  
6 This is the same as a Profit and Loss Account.  WT/BFA/W/460/Rev.1  
 
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  2.8.  In accordance with IPSAS, t he expenses in the Statement of Financial Performance include the 
annual actuarial costs for pension and  those for ASHI  and adjustments in the value of property, plant  
and equipment relating to acquisitions and depreciation . Therefore, the net financial result in the 
Statement of Financial Position differs from the budgetary savings  in the Budget Performance  
Section . In fact, since the implementation of IPSAS, budgetary  savings have been realized in each 
year, at the level of the Budget Performance Section . However, total overall expenditure in the 
Statement of Financial Performance has exceeded total revenue, leading to a financial deficit  in each 
year.  
2.9.  Below is a brief assessment of what the implications of possible options for utilization of the  
accumulated  budgetary surplus, would be:  
2.9.1 Leave things as they are: The current Treasury Management Policy will continue to be 
applied. Therefore , at least  70% of the  accumulated budgetary surplus of CHF  52.026 million 
would  be held in cash , mostly in Swiss Francs . This would continue to expose the organization 
to negative interest.  The current benchmark rate by the Swiss National Bank is -0.75%. The 
WTO Secretariat ha s negotiated terms, with its commercial banking service providers, which 
resulted in a threshold cash amount below which no interest is charged. The negative interest 
attributable to CHF  63 million for the period from 1st January 2018 to 30 September 2018 is CHF 
197,0007. According to current projections by economists, the negative interest rate 
environment in Switzerland will continue until 2022.  
 
2.9.2 Application as income against the budget for the second financial period following that in 
which the surplus occurs, thereby reducing Members' contributions : this would increase the 
negative equity  position  in the Statement of Financial Position from CHF  514 million to a much 
higher figure (approximately CHF  566 million). Perpetuating the extent of the shortfall in the 
Statement of Financial Position  is not advisable as it lacks prudence.  
 
2.9.3 Transfer to the Working Capital Fund: This would not have any impact on the net equity  
position . Furthermore,  the money in the Working Capital Fund can be released  on an ad hoc  
basis for several purposes, including cash cover for short -term cash flow needs within the 
financial year, resulting from expenditure exceeding revenue received as well as cash shortfalls 
that may result from delay s or deferment of contributi ons by key contributors . The Working 
Capital Fund can further be invested in other asset classes, namely bonds and equities in the 
percentage ranges  indicated in paragraph 1.9 . This would  partially  offset the exposure to 
negative interest  on the amount of the Working Capital Fund  which would be  held in cash and 
cash equivalent s. 
 
3  ADDITIONAL INFORMATION  
3.1  Cash situation as at the end of September 2018  
CHF (in 
million)  Item  
125.9 Balance in the Current A ccounts as at 30/09/2018  
-25.1 Amounts belonging to Trust Funds  
-11.8 The amount of the Building Renovation Fund  
-2.0 Amount pertaining to the Appellate Body Operating Fund  
-0.6 Ministerial Operating Fund  
-1.4 Special Reserve Account for Medical Premiums  
84.9 Sub-Total available balance in the C urrent Accounts  
-52.0 Accumulated Budgetary Surplus  
32.9 Available Balance i n WTO  the Current Accounts to cover regular expenditure  
                                                
7 It should be noted that some of the funds in the Working Capital Fund will continue to be held in cash  (in 
Swiss Francs) . If the cash holdings are 60% of the Working Capital Fund, this will be equivalent to CHF 37.8 
million. The negative interest applicable to this, over the nine months to 30th September  2018 would 
approximate CHF 78,200.  
 WT/BFA/W/460/Rev.1  
 
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  3.1.  Taking the cash situation as at the end of the third quarter of 2018 as an example, the available 
balance i n the WTO current accounts is CHF 1 25.9 million. However, not all of th is cash can be used 
to bridge shortfalls in contributions. CHF 25 million pertain s to the Trust Fund balances, CHF 14.4 
million pertain s to the three WTO Operating Funds, and CHF 1.4 mi llion relate s to the reserve set 
aside for the medical premiums.  If the accumulated budget ary surplus w ere to be  returned to 
Members, the Organization  would be at risk of not having sufficient balances to pay monthly 
expenses. For example, if no substantiv e contributions were received in October  and November , it 
would be necessary to tap into the Working Capital Fund.  
3.2  Total annual receipts 201 1 – 2017 (in MCHF)  
Figure 1 Total a nnual receipt s 2011 - 2017 (in MCHF)  
 
 
3.3  Total outstanding contributions at year-end 2003 - 2017 (in MCHF)  
Figure 2 Members' outstanding contributions at year -end 2003 - 2017 (in MCHF)  
 
 
192.0196.4198.8 198.3
191.1201.8
178.4
2011 2012 2013 2014 2015 2016 2017
31.5 31.3 31.0
27.6
25.3 25.4 25.9
23.725.925.1
22.0
19.323.7
16.533.8
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017WT/BFA/W/460/Rev.1  
 
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  3.4  Net contributions per month 2015 -2018  
 
 
 
3.2.  As we can see, in the period between April (March in 2015) and October  for each of the years 
from 2015  to 2018 , the monthly balance of receipts after deducting the expenditure is negative.  
4   THE WORKING CAPITAL FUND  
4.1.  Chapter IX of the Financial  Regulations relates to the Working Capital Fund. According to  
Financial Regulation 24, the Working Capital Fund can be financed through assessed advances made 
by Members; and any sums which the General Council may decide should  be paid into it from time 
to time.  
4.2.  Financial Regulation s 26 and 27  authorize the Directo r-General to advance  amounts  from the 
Working Capital Fund , in the following instances :  
(a) such sums as may be necessary to finance budgetary appropriations pending receipt of 
contributions . Sums advanced in this regard shall be reimbursed to the Working  Capital Fund as 
soon as receipts from contributions are available for the purpose.  
(b) in exceptional circumstances and subject to prior authorization of the General Council, such 
sums as may be necessary to finance commitments relatin g to extraordinary expenditure.  In 
this case, the sum advanced shall be reimbursed to the Working Capital Fund by including an 
appropriate credit in the budget for the next earliest possible financial period.  
 
4.3.  The table below shows the instances  when funds were drawn -down against the Working Capital 
Fund:  
  
Amount (in CHF)  Year of Repayment  
1995 6,049,950  1996 
1996 - Not Applicable  
1997 6,974,575  1998 
1998 - Not Applicable  
1999 - Not Applicable  
2000 - Not Applicable  
2001 5,095,538  2003 
2002 1,000,789  2003 
2003 1,243,808  2006 
2004 3,036,427  2006 
2005 309,983  2006 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2015 30.78 21.38 -0.64 0.06 -8.68 -10.85 -8.93 -10.16 -14.92 -8.09 11.05 12.03
2016 11.41 18.46 16.30 -2.77 -8.67 -8.55 -7.16 -4.25 -10.60 -15.56 5.13 19.44
2017 32.71 2.37 13.45 -0.99 -8.29 -8.90 -13.04 -15.32 -15.43 -3.03 5.18 -4.05
2018 54.71 8.36 -2.17 -5.78 -3.04 -6.97 -13.86 0.00 0.00 0.00 0.00 0.00-20.00-10.000.0010.0020.0030.0040.0050.0060.00Net Contributions per Month 2015 -2018 *
(million CHF)
2015
2016
2017
2018WT/BFA/W/460/Rev.1  
 
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  4.4.  In most  of the above  cases, the funds were required to top up the deficit in the Surplus Account , 
at the end of the year,  resulting from various issues such as increased provisions for contributions 
in arrears ; the establishment of the DDAGTF buffer account ; and expenses for Trust Funds not 
adequately covered from Trust Fund revenue . There has not  been any withdrawal of fund s from the 
Working Capital Fund  since 2006 . 
4.5.  The Working Capital Fund resources can be used for a wide range of needs including short -
term cash flow needs as well as long -term extraordinary needs. It is in light of this that:   
4.6 The Committee on Budget Finance and Administration  (CBFA)  recommends to the 
General Council that the WTO Accumulated Budgetary Surplus as at 31  December  2017, 
amounting to CHF  52.026 million, be transferred to the Working Capital Fund.  
 
The CBFA  further recommends that advances f oreseen to be made by the Director -General 
under Financial Regulation 26(b) will be considered by the CBFA, which will make a 
recommendation to the General Council for its prior authorization.  
 
With reference to Financial Regulation 27, the replenishment of sums taken from the 
amounts transferred from the WTO Accumulated Budgetary Surplus, and advanced to 
cover extraordinary expenditure, as per Financial Regulation 26(b), will require a decision 
by the General Council on recommendation by the CBFA.  
 
5  PROPOS ED INVESTMENT GUIDELINE S FOR THE WORKING CA PITAL FUND  
5.1.  At the establishment of the WTO, the Working Capital Fund had an opening balance of 
CHF 6.4 million , which was transferred from the GATT. As at 31st December 2017, the balance in 
the Working Capital Fund stood at CHF  10.88 million. Increases in the Working Capital Fund have 
resulted from assessment on New Members and interest earned on the pre -existing balance. There 
have been no prior specific action s to augment or manage the Working Capital Fund balances. If the 
recommendation in paragraph 4.6 above is endorsed by the CBFA and approved by the General 
Council, the Working Capital Fund balance would approach  CHF 63 million. This significantly 
increased  balance would justify a more dedicated approach for the management and investment of 
the Working Capital Fund.  
5.2.  The asset allocation  for the Working Capital Fund will be premised on the following:  
o the operational needs of  the WTO Secretariat, requiring a certain amount to be held in cash  
(in Swiss Francs) . The norm for international organizations is to hold 1 to 2  months' 
expenditure in cash.  
 
o funds not anticipated to be required in the near  term will be invested in long -term asset 
classes, specifically equities and bonds.  
 
5.3.  An Investment  Policy  for the management of the Working Capital Fund  will be developed , in 
consultation with an Investment Advisor,  and a recommendation will be made by the CBFA for  its 
approval by the General Council. Appendix 1 of thi s paper is a draft for the CBFA to deliberate upon.  
5.4.  The Committee  on Budget Finance and Administration recommend s that an 
Investment Policy be developed to govern the investment management of the Working 
Capital Fund  and that such Investment Policy be sub mitted to the General Council for its 
approval.  
 
 
_______________  
 
 
 
 
 
 WT/BFA/W/460/Rev.1  
 
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APPENDIX 1: DRAFT INV ESTMENT POLICY FOR T HE MANAGEMENT OF  
THE WORKING CAPITAL FUND  
 
1  PURPOSE  
1.1.  The purpose of the Working Capital Fund Investment Policy is to describe the process that will 
be followed for the management of the investments of the Working Capital Fund. The investment 
management of Working Capital Fund will be governed by the Committee on Budget, Finance and 
Administration.  
2  ASSET ALLOCATION  
 
2.1 Investments shall be premis ed, by order of importance, on the following three non -exclusive 
criteria:  
 
2.1.1 Capital preservation . The conservation of capital is the primary objective when 
investing funds.  
2.1.2 Liquidity of capital . The level of cash and investments which are easi ly convertible to 
cash shall allow for readily available funds  to cover payments, with specific attention to the 
receipt of Members' contributions and cash  flow requirements.  
2.1.3 Expected return suitable for the portfolio . A yield consistent with the type of 
investment .  
  
2.2 The objective of the Working Capital Fund's asset allocation is to determine the amount of money 
that should be kept as cash to meet ongoing requirements of the Organization and how much of the 
cash that is not immediately required should be invested in other asset classes. The trade -off 
between having enough liquidity to meet the demands of the Organization and the risk that it is 
costly to hold high cash balances  in Swiss Francs  in terms of lower investment/interest income or 
negat ive interest charged, has to be managed.  
The allowable range for asset allocation of the Working Capital Fund is as follows:  
 
Asset Class  % to be held  
Cash and Cash Equivalents  50% to 60%  
Listed Bonds  0% to 20%  
Listed Equities  20% to 40%  
 
The asset allocation will be reviewed immediately if there are major changes in the regular  budget. 
If necessary, p roposals will be made to the Committee on Budget, Finance and Administration if for 
its recommendation to the General Council.  
 
2.1  Cash and cash  equivalents  
This can include the following:  
 
• Current accounts in Swiss Francs; and  
• Money market funds.  
The aim of the cash and money market investments is to prevent exchange rate risk whilst reducing 
loss of capital due to negative interest. In order to limit counterparty risk, funds shall be deposited 
with at least two internationally recognized financial institutions with ratings of A-8 or better.  
                                                
8 A- for Standard & Poor's and Fitch is equivalent to A3  for Moody's.  WT/BFA/W/460/Rev.1  
 
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2.2  Listed Bonds  
Investments can only be made in a diversified portfolio of Government and corporate bonds with a 
credit rating of BBB9 or better.  
  
2.3  Listed Equities  
Investments can only be made in a well -diversified portfolio of listed equities.  
 
2.4  Prohibited Investments  
2.4.1 Investment in illiquid assets is prohibited. Such assets include direct property/real  
estate, speculative assets (such as art, antiques or gems), structured investment s, private 
equity, derivatives or any other hedging products.  
 
2.4.2 Investing directly in individual equities, even if listed, is prohibited.  
 
2.4.3 Short selling, stock le nding, options, borrowing and leverage are prohibited.  
3  PERFORMANCE BENCHMAR K 
The performance of the returns of the Working Capital Fund will be measured against a weighted 
average benchmark comprising of the following:  
 
Asset classes  Benchmark  Weight  
Cash and Cash Equivalents  CHF Cash Returns  60% 
Bonds  SBI Global AAA -BBB 
Index10 10% 
Listed Equities  MSCI World Index 
(including reinvestment 
of dividends)  30% 
Total   100%  
 
4  AMOUNTS ADVANCED FRO M THE WORKING CAPITA L FUND  
 
4.1 The Director -General is authorized to advance such sums as may be necessary to finance 
budgetary appropriations pending receipt of contributions.  Sums advanced as above shall be 
reimbursed to the Working Capital Fund as soon as receipts from contributions are available for the 
purpose.  
 
4.2 In exceptional circumstances, and subject to prior authorization of th e General Council, the 
Director -General can advance such sums as may be necessary to finance commitments relating to 
extraordinary expenditure.  The Committee on Budget, Fina nce and Administration will review such 
requests from the Director -General and make relevant recommendations to the General Council.   
Sums advanced in this  type of case shall be reimbursed to the Working Capital Fund by including an 
appropriate credit in t he budget for the next earliest possible financial period.  
 
5  GOVERNANCE  
5.1 The governance of the investment management of the Working Capital Fund is vested in the  
Committee on Bud get, Finance and Administration, which shall exercise financial oversight  through:  
(a) the development of the Working Capital Fund Investment Policy and its recommendation for 
approval  by the General Council; and (b) monitoring the management of the investments of the 
Working Capital Fund.   
 
                                                
9 BBB for Standard & Poor's and  Fitch is equivalent to Baa for Moody's.  
10 Swiss Bond Index for issues with rating from AAA to BBB. The time to matur ity is mixed from 1 year 
to 15+ years.  WT/BFA/W/460/Rev.1  
 
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  5.2 The administration and manageme nt of the investments of the Working Capital Fund will be 
outsourced to firms with the necessary and relevant  expertise and competence. These include asset 
consultants, investment advisors and investment management firms.  
 
5.3 The management of the portfol io shall be outsourced to the same investment advisory firm as 
that appointed by  the WTO Pension Plan Management Board. The investment advisory firm shall 
send quarterly reports to the WTO Secretariat relating to the investments for the Working Capital 
Fund. The reports should contain the following minimum information:  
 
5.3.1 The current portfolio composition, showing a summary of asset classes and all individual 
investment mandates.  
 
5.3.2 Performance of each investment since the beginning of the year as w ell as annualized 
performance since inception; over the last 5 years; over the last 3 years; and over the last 
12 months.  
 
5.3.3 Attribution of performance by asset class and holdings, indicating the main contributors 
and detractors to performance returns.  
 
5.3.4 Summary of changes made in the portfolio since the previous report, together with the 
rationale for significant changes.  
 
5.3.5 Key assumptions (e.g. economic and financial markets) over the period and future 
expectations.  
 
5.3.6 An explanation of any deviation from this Investment P olicy.    
 
5.4 Cost sensitivity is an integral part of the strategy , and, costs should be maintained as low as 
possible without hindering the Working Capital Fund's capacity to achieve its objectives.  
 
5.5 There will be  regular formal reviews of the portfolio by the Committee on Budget, Finance and 
Administration. The interval between two review dates shall not be more than 6 months.  
 
5.6 The Office of Internal Oversight and the External Auditors s hould include treasury and investment 
management arrangements in their risk based audits.  
 
6  EFFECTIVE DATE  
The effective date of this Working Capital Fund Investment Policy is XXX.  
 
7  REVIEW  
The Working Capital Fund Investment Policy will be reviewed at least every 2 years.  
 
 
 
__________