RESTRICTED  
 
WT/BFA/W/393  
10 June 2016  
(16-3159)  Page: 1/54  
Committee on Budget, Finance and Administration   
 
  REPORT OF THE INDEPENDENT EXTERNAL AU DITOR ON THE AUDIT OF THE FINANCIAL 
STATEMENTS OF THE WORLD TRADE ORGANIZATION (WTO) 
FOR THE YEAR ENDED 31 DECEMBER 2015 
1  EXECUTIVE SUMMARY .................................................................................................. 3  
2  SCOPE AND APPROACH  OF THE AUDIT ......................................................................... 5  
2.1  Scope of  the Audit ...................................................................................................... 5 
2.2  Audit Objectiv e and Approach....................................................................................... 5  
2.3  Audit Conclusion ......................................................................................................... 6  
3  FINANCIAL AUDIT ........................................................................................................ 7  
3.1  General ..................................................................................................................... 7  
3.2  Contri butions ............................................................................................................ . 7 
3.3  Financial Positi on/Perform ance ..................................................................................... 9  
3.3.1  Statement of Fi nancial Position .................................................................................. 9  
Assets and Li abilities ........................................................................................................ . 9 
Cash and Cash Equivalents ................................................................................................. 9  
Inventor ies ................................................................................................................... .. 11 
Advances and prepayments ............................................................................................... 12 
Building .......................................................................................................................... 12 
CWR building is granted by the Canton of Geneva and the FIPOI as a 99-year-surface 
right ......................................................................................................................... ..... 12 
WTO has no suitable stocktaking system, depreciation is ca lculated manually ........................... 13 
Assessed contributions re ceived in advance ......................................................................... 13 
Short-term empl oyee benefits ........................................................................................... 14 
Loan .......................................................................................................................... .... 15 
WTO received an interest-fr ee loan of CH F 60 milli on ............................................................ 15 
Pension Be nefits ..............................................................................................................  16 
ASHI .............................................................................................................................. 16 
Net assets (total) ............................................................................................................. 16 
3.3.2  Statement of Fi nancial Performance .......................................................................... 16 
Revenue and Expenses ..................................................................................................... 16 
4  PERFORMANCE AUDIT ................................................................................................ 20  
4.1  Internal Co ntrol System ............................................................................................. 20 
Focus and pr ocedure ........................................................................................................ 20 
Establishing an Office of Internal Oversight .......................................................................... 20 WT/BFA/W/393 
 
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  Staffing of the posts in the OIO .......................................................................................... 21 
Risk Mana gement ............................................................................................................ 22 
Strategic Review .............................................................................................................. 22 
4.2  Information Technology, Se curity and Conf identiality ...................................................... 23 
Focus and pr ocedure ........................................................................................................ 23 
IT Governance ................................................................................................................. 23 
IT Security ...................................................................................................................... 26 
Information Confidentiality ................................................................................................ 27 
4.3  Facility Management / Safety and Security Activities ....................................................... 28 
Focus and pr ocedure ........................................................................................................ 28 
Facility management st rategy and framework ...................................................................... 29 
Staff distribution .............................................................................................................. 30 
Backup si tuation ..............................................................................................................  32 
Pending repairs and projects re lated to constr uction works .................................................... 33 
Links and interactions between FMS and SSS ....................................................................... 34 
5  CASES OF FRAUD OR  SUSPECTED FRAUD ................................................................... 35  
6  FOLLOW  UP ................................................................................................................ 3 5 
6.1  Uncollectibl e Contributions .......................................................................................... 35 
6.2  Adjustments and ad ditions in the notes ........................................................................ 35 
6.3  US tax reimburs ement for WT O staff ............................................................................ 35 
6.4  IPSAS-compliant WTO financial statements ................................................................... 36 
6.5  Performance audit: Procurement .................................................................................. 36 
6.6  Performance audi t: IT Gove rnance ............................................................................... 37 
7  ACKNOWLE DGEMENT ................................................................................................. 37  
LIST OF ABBREVIATION S AND ACRO NYMS .................................................................... 38  
ANNEX ......................................................................................................................... .. 39 
 WT/BFA/W/393 
 
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  1  EXECUTIVE SUMMARY 
My team and I have audited the financial statements of the WTO 1.  My team and I have audited the financial statements of the World Trade Organization 
(hereinafter "WTO") for the financial period from 1 January to 31 December 2015. These 
comprise: 
 the statement of financial position; 
 the statement of financial performance; 
 the statement of cash flows; 
 the statement of changes in net assets; 
 notes and annexes to the financial statements. 
Responsibility of Management 
2.  The Director-General is responsible for the preparation of the financial statements in 
accordance with the Financial Regulations of the WTO. 
Responsibility of the External Auditor 
3.  My responsibility, under Chapter XIII of the Financial Regulations, is to express an opinion on 
these financial statements based on my audit. 
Scope of the audit 
4.  The audit included the examination, on a test basis, of evidence supporting the amounts and 
disclosures in the financial statements. It also included an assessment of the underlying accounting principles, and significant estimates made by the Director-General, as well as an evaluation of the overall presentation of the financial statements. 
I have conducted my audit in conformity wi th the International Standards on Auditing 
5.  I conducted my audit in conformity with International Standards on Auditing (ISA) as adopted 
and amended by the International Organization of Supreme Audit Institutions (INTOSAI) and 
issued as International Standards for Supreme Au dit Institutions (ISSAI). These standards oblige 
me to comply with ethical requirements and to plan and carry out the audit to obtain reasonable assurance that the financial statements are free from material misstatement. 
My audit provides a reasonable basis for the audit opinion 
6.  The ISA, as well as the ISSAI, require the audito r 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 includes assessing the accounting 
principles and significant estimates made by the Director-General, as well as evaluating the overall 
presentation of the financial statements. I believ e that my audit provides a reasonable basis for 
the audit opinion. 
The financial statements present fairly the financial position 
7.  As a result of my audit, I am of the opinion that the financial statements present fairly, in all 
material respects, the financial position as at 31 December 2015, that they have been prepared in 
accordance with International Public Sector Accounting Standards (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 the Secretariat is responsible for and which it is using for accounting and the preparation of the financial statements is working properly and 
according to ISSAI-standards (even though I had no chance to verify that in the course of this 
audit), especially concerning IT security (see also my recommendations both in the 2014 report and in this report). WT/BFA/W/393 
 
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  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 statem ents as a whole. Therefore I have placed an 
unqualified audit opinion on WTO´s financial statements for 2015. 
Areas covered by this report 
9.  My report includes observations and recommendations intended to contribute to the 
improvement of financial management. For 2015, my audit work has mainly covered the areas 
described in the following paragraphs. 
Overall financial situation (Part 3) 10.  In accordance with Chapter XIII of the Financial Regulations, I present an analysis of WTO´s 
financial statements. In Part 3 of my report I comment on the overall financial situation. 
Performance audit areas covere d 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 internal control systems, IT-security and governance and 
facility management. 
WTO delivered financial statements in accordance with IPSAS 
12.  The financial statements for the year ending 31 December 2015 are prepared and presented 
in accordance with IPSAS. 
Cases of fraud or suspected fraud (Part 5) 13.  The Secretariat reported that it did not have any information on cases of fraud or suspected 
fraud. During our audit, my team detected one case of suspected fraud in the context of home 
leave. Related figures showed an unexpected high amount and possibly a suspected improper use of home leave allowance. 
Follow Up (Part 6) 
14.  My team reviewed the pending implementation of recommendations made in last year’s 
report. 
Acknowledgement (Part 7) 
15.  I wish to convey my appreciation for the cooperation and assistance extended by the Director-
General, the Management and staff of the Secretariat. I am very grateful for their assistance during the entire external audit process. WT/BFA/W/393 
 
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  2  SCOPE AND APPROACH OF THE AUDIT 
2.1  Scope of the Audit 
Principles governing my audit 16.  My staff and I have audited the financial statem ents of the WTO for the financial period from 
1 January to 31 December 2015. These statements comprise the statement of financial position, 
the statement of financial performance, the statem ent of cash flows, the statement of the changes 
in net assets and notes and annexes to the financial statements. We also examined the related 
financial accounts and transactions. 
Responsibility of Management 17.  The Director-General is responsible for the prepar ation and fair presentation of these financial 
statements in accordance with WTO’s Financial Regulations, and with such internal controls as 
Management determines are necessary to ensure th e preparation of financial statements that are 
free from material misstatement, whether due to fraud or error. 
Responsibility of the External Auditor 
18.  I am responsible for expressing an opinion on  the financial statements based on evidence 
obtained during my audit. I planned and performed the audit in such a way as to obtain reasonable assurance that the financial statements are free from material misstatement. 
Audit of the financial statements 
19.  The financial 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 Regulation 44 of  the Financial Regulations) that I deemed 
necessary with respect to the efficiency of parts of procurement, information technology, internal 
controls, facility management, security service and the financial consequences of existing 
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 cate gorised and recorded in accordance with WTO’s 
Financial Regulations; and whether the financial statements presented fairly the financial position 
as at 31 December 2015. 
Substantive testing convinced me of  the correctness of WTO's records 
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. WT/BFA/W/393 
 
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  2.3  Audit Conclusion 
I found no material weaknesses. I have plac ed a 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 reported additional findings to the Management 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 2015. WT/BFA/W/393 
 
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  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 transactions. From a total of 64.999 transactions we eliminated 
automatically generated bookings using the audit software “IDEA”. We clustered all transactions 
and took a random sample of a significant number of the remaining transactions. We checked whether invoices and the related documents had been  filed in accordance with the regulations and 
cross-checked the basis for payment and the nece ssary approvals. Some of the transactions 
examined gave cause for criticism. The Secretariat was able to clarify all open questions: 
 One transaction was accounted for the wrong year. The WTO recognized that in this case all 
procedures - installed to avoid such errors - failed. Another sample, regarding home leave, 
showed an unexpected high amount and possibly a suspected improper use of home leave allowance. Our request concerning this issue prompted the WTO to initiate additional internal 
investigations. WTO decided that this case should be handled by the Office of Internal 
Oversight OIO. The OIO will inform the External Auditor on the outcome of this investigation. 
 No “black list” or “sanction list” used by the WTO 
26.  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 implementing a “black list"  
27.  I recommend considering the implementation of a black-list or sanction list as this is common 
practice in other international organizations. 
I report on WTO’s financial development 
28.  In the following paragraphs, I report on tr ends and tendencies and provide background 
information. For that purpose, my staff carried out an analysis of several of the Organization’s key figures and their trend. 
3.2  Contributions 
2015 budget was approved in November 2013 29.  WTO activities are financed from the regular budget covering expenses and income for a 
biennium, this time 2014-2015. The 2014 and 2015 budgets were approved by the General 
Council in its meeting on 26 November 2013. The budget is financed from assessed contributions 
and miscellaneous income. The 2015 approved  budget amounted to CHF 197 million and 
represents the second year of the biennium 2014-2015. 
Calculation of contributions 30.  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.  WT/BFA/W/393 
 
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  Reviewing of contributions 
31.  I reviewed contributions for 2015 
2015 Assessed 
Contributions* % Outstanding 
Contributions % 
Member States 195.6  15.7  
Observers 0.7  0.2  
Total 196.3 92 15.9 8 
Source: WTO Financial Statements 2015; in mil lion CHF; *(Differences due to rounding). 
In 2015, assessed Member States' contri butions amount to CHF 195.6 million 
32.  Assessed contributions by Member States amou nt to CHF 195.6 million, contributions by 
Observers are CHF 0.7 million. At the end of 2015 WTO has 162 Member States; two new Member 
States, Seychelles and Kazakhstan, formally acce ded in 2015. There are 24 Observers of WTO 
(two Observers became Members in 2015). 
33.  Assessed contributions paid in advance by Members and Observers amounts to 
CHF 16.3 million. In 2015, due to the negative inte rest rate of the Swiss National Bank (SNB), 
Members gained no interest. Negative interests were covered by the WTO budget and not charged 
to the Members. 
Outstanding contributions totalled CHF 22.9 million 
34.  The outstanding contributions totalled CHF 22.9 million - coming from a peak in 2003 with a 
total of CHF 31.5 million outstanding contributions and CHF 19.3 million in 2014. 56 out of 162 Members and nine Observers (with one inactive observer) out of 24 had similar payment 
arrears as in 2014, seven Members accepted a payment plan to suspend Administrative Measures, 
and one Member has been put back under Admini strative Measures due to non-compliance with 
the agreed payment plan. One Member fully paid off its arrears. Details of Administrative Measures 
and their different levels are defined in Annex B of WTO´s Financial Regulations. 
Administrative Measures for Members/Observers in arrears 
35.  Pursuant to Regulation 14 in the WTO Financial Regulations Members and Observers with 
arrears shall be subject to administrate measures. Furthermore there might be (inactive) Members 
without a payment plan with long-term outstanding contributions (e.g. states no longer in 
existence). As required by IPSAS uncollectible co ntributions shall be completely written off. 
Uncollectible contributions have been written-off 
36.  Following a recommendation in my last report, uncollectible contributions amounting to 
CHF 830,439 of former Yugoslavia have b een written-off as at 31 December 2015. WT/BFA/W/393 
 
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  3.3  Financial Position/Performance 
Table 1 - Statement of Financial Po sition as at 31 December 2015* 
(in million CHF) 
 2015 2014 2013 
Current Assets    
Cash and cash equivalents 120.6 107.7 83.5 
Receivables from Members 14.4 9.9 12.7 
Receivables from Observers 0,6 0,5 0.6 
Inventories 0.4 0.4 0.4 
Other receivables 5.6 3.6 5.6 
Advances and prepayments 5.3 5.2 5.0 
Non-Current Assets    
Building 127.3 118.4 119.1 
Work in Progress - Building - - - 
Work in Progress - Equipment - - 2.0 
Equipment 15.4 16.9 16.9 
Intangible assets 0.5 0.6 0.3 
Pension Plan Assets 496.3 487.6 441.3 
TOTAL ASSETS  786.5 750.8 687.4 
Current Liabilities    
Payables 6.6 3.5 3.7 
Accruals 2.8 1.0 1.2 
Assessed contributions received in 
advance 16.3 13.9 8.0 
Voluntary contributions refundable  35.7 32.6 33.6 
Short-term employee benefits 12.6 12.6 12.7 
Grant 0.1 - - 
Non-Current Liabilities    
Loan 56.4 57.6 58.8 
Pension benefits 855.6 1,209.6 852.7 
ASHI 245.5 342.9 247.1 
Other Long-term employee benefits 9.3 10.6 9.0 
Funds 8.1 4.3 6.0 
TOTAL LIABILITIES  1,249.1 1,736.9 1,281.9 
NET ASSETS (462.6) (986.1) (594.5) 
WCF 10.8 10.7 10.6 
Actuarial gain (loss) 248.3 (226.1) 155.5 
Accumulated surplus (778.0) (770.7) (760.5) 
Provision for right of use - CWR 59.8 48.5 49.1 
Extra Budget Fund Allocation -3.4   
TOTAL NET ASSETS  (462.6) (986.1) (594.5) 
*  (Differences due to rounding) 
Source:  WTO Financial Statements 2015 and 2014. 
3.3.1  Statement of Financial Position 
Assets and Liabilities My team examined the statemen t of assets and liabilities. 
37.  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 WT/BFA/W/393 
 
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  Overall cash situation with a total of CHF 120.6 million is sufficient 
38.  WTO´s overall cash situation is sufficient. Compared to the balance in the previous year, total 
cash and cash equivalents increased by CHF 12.9 million from CHF 107.7 million in 2014 to 
CHF 120.6 million as at 31 December 2015 (CHF 83.5 million in 2013). Cash and cash equivalents 
include cash in hand and cash accounts at bank. 
Cash deposits in CHF increased in 2015 39.  The increase in 2015 is mainly due to a ca sh deposit amounting to CHF 115.1 million 
(CHF 103.5 million, in 2014). 
40.  Other currencies (USD, EUR and GBP) are of minor importance for WTO. In 2015 the total 
amount of assets in other currencies was equivalent to approximately CHF 5.5 million. 
The SNB lowered the interest rate to -0.75 per cent 
41.  On 15 January 2015, the Swiss National Bank (S NB) announced to lower the interest rate by 
0.5 percentage points to -0.75 per cent. 
Following the SNB decision main partner banks introduced negative interest rates as of 
1 April 2015 
42.  Following the SNB decision WTO´s main banking partners introduced negative interest rates 
of -0.75 per cent on the accounts in CHF for account balances exceeding CHF 50 million as of 
1 April 2015. 
For WTO there is a risk of negative in terests of up to CHF 1 million per annum 
43.  According to the financial statements, WTO's cash and cash equivalents amount to 
CHF 120 million. In 2015, cash assets fluctuated between CHF 100 and 160 million. Because of the 
new monetary policy of the SNB (see above) the WTO faced negative interests for the first time in 
2015. Currently the WTO is benefiting from an ex emption limit of CHF 70 million by the UBS, and 
CHF 40 million with Credit Suisse resulting in negative interest of approximately CHF 400,000, 
based on average cash balances for 2015, after fact oring in the thresholds at which no interest is 
levied. 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 million per annum if the 
exemptions are no longer granted. 
I recommend several options to reduce ri sks and to prevent negative interests  
44.  To reduce risks and to prevent negative in terests 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 
exemption’s for negative interests (this could be more effective together with other 
international organizations and institutions based in Geneva e.g. the UN). 
Receivables from Members and Observers Provision for arrears amounts to CHF 8.5 million 
 
45.  Receivables from Members and from Observers (r eceivables from non-exchange transactions) 
include a provision for outstanding contributions. The provision for arrears from Members and Observers amount to CHF 8.5 million (CHF 8 million from Members; CHF 0.5 million from 
Observers). WT/BFA/W/393 
 
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  Payment plans are covering arrears of CHF 3.5 million 
46.  There are seven Members following the agreed payment plan with total arrears of 
CHF 3.5 million. There are additional 12 Members in different categories of Administrative Measures, eight in category I (after one but less than two full year's outstanding contributions); 
four are in category III (after three full year's outstanding contributions). 
Inventories Inventories consist mainly of WTO publications and co-publications 
47.  Inventories within current assets for WTO are mainly publications and co-publications totalling 
CHF 0.4 million. Not all inventories are held inte rnally; a part of the WTO publications and co-
publications are stored at a third party storage facility. 
In 2015, adjustments and write offs amount to CHF 30.000 
48.  Minor inventory adjustments and write offs (about CHF 30.000 in 2015) are made as a result 
of a difference between value in the financial accounts and value of the physical inventory. 
Other receivables 
Recoverable United States taxes amount to CHF 3.0 million 
49.  Other receivables include recoverable taxes, e.g. from the United States (US) or Switzerland. 
In 2015 other receivables totalled CHF  5.6 million (2014: CHF  3.6 million); CHF 4.3 million of the 
2015 total were recoverable US taxes. 
WTO pays estimated US tax for staff in advance 50.  Staff members of WTO, like those of other international organizations are exempt from 
income tax. Nevertheless, the US requires its ci tizens 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. 
51.  The WTO Secretariat's method of calculating reimbursements is different from the method 
used by the US Government, although the WTO me thod is validated by the International Labour 
Organization (ILO). 
Different reimbursement methods result in a write-off for WTO 
52.  In 2015, the amount non-reimbursable for the WTO totalled CHF  236,447 (2014: 
CHF 98,194). The WTO had spent USD 100.176 for tax and legal advisors during the period 2008-
2012 in order to gain an US-tax refund of USD 259.196 pertaining to lump-sum pension distributions in 2008. The US-tax authority refused to refund the aforementioned taxes and 
consulting costs, arguing that the lump-sum distributions were not covered by the Tax 
Reimbursement Agreement between the WTO and US. The write-off including administrative costs and legal advice for the WTO shared by all Members States totals CHF 370,153. 
I recommend that the WTO Secretariat agree with the US Gov. on a similar 
reimbursement method  
53.  I recommend, just like in my report for 2014, that efforts be pursued to accelerate the 
refunding procedure and to negotiate and agree with the US Government on a similar reimbursement method based on the ILO approa ch. Additionally, I recommend evaluating the 
prospects to succeed in a refund claim in advance, in order to avoid disproportionally high costs for 
tax and legal advisors. WT/BFA/W/393 
 
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  In April 2016 WTO received a reimbursement of USD 2.5 million by the US Treasury 
Department 
54.  In April 2016, WTO received a reimbursement of USD 2,520,538 from the US corresponding to 
almost the full amount of long term tax claims. This issue is reported in note 25 “events after the 
reporting date”. 
Advances and prepayments Advances and prepayments amount to a total of CHF 5.3 million 
55.  In 2015, advances and prepayments with a total of CHF  5.3 million include staff advances 
made for salary, travel and education grants representing CHF 3 million; advances relating to trust funds activities with an amount of CHF 1.5 milli on and other advances (e.g. payments made to 
suppliers, consultants and insurances) of CHF 0.8 million.  
Non-Current Assets 
Building The net carrying amount for building as at 31 December 2015 is CHF 127.3 million 
56.  With regard to non-current assets, a balance sheet item of high value is “building” with a net 
carrying amount of CHF 127.3 million (2014: CH F 118.4 million). The accumulated depreciation 
concerning buildings as at 31 December 2015 amount to CHF 7.2 million (depreciation for 2015 
only: CHF 2.6 million). 
Registration of the CWR contract imposes an exceptional reverse of the depreciation of 
CHF 11.5 million  
57.  The infrastructure contract between WTO and Swiss authorities concerning the Centre William 
Rappard (CWR) building was signed on 7 August 2015. The registration defines the 99-year-timeframe of ownership for WTO. It imposes an exceptional reverse of the accumulated 
depreciation of CHF 11.5 million starting with the date of registration. 
CWR building is granted by the Canton of Geneva and the FIPOI as a 99-year-surface 
right 
58.  WTO headquarters building at 154 rue de Lausanne, Geneva has two buildings: the old 
building of CWR and the new building constructed by the WTO itself. The CWR building and the land were granted by the Canton of Geneva and the Building Foundation for International Organizations (FIPOI) as a 99-year “surface right”. Regarding the recommendations made by the 
External Auditor in 2012 (IPSAS implementation) th e WTO entered an asset of CHF 60 million in 
their statement of financial position for 1995 as well as a counterpart item as liability of 
CHF 60 million and depreciated the asset and the corresponding liability by 1/99th annually, in 
accordance with IPSAS 17. Regarding the infrastruc ture contract the 99-year “surface right” is 
starting as from the date of registration (7 August 2015) in the land register. 
I recommend entering an asset of CHF 60 m illion and entering a corresponding equity of 
CHF 60 million as liability in line with IPSAS 17 
59.  Given the current situation we recommend th e following (in accordance with IPSAS 17): 
 entering an asset of CHF 60 million (or an es timated equivalent value of the CWR building 
and the use of the land), position “CWR building”; 
 depreciating the asset by 1/99th annually so as  to bring the value of the use of the building 
down to zero at the expiry of the surface righ t, starting in 2015 (in 2015 pro rata  for four 
months); WT/BFA/W/393 
 
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   entering a corresponding equity of CHF 60 mil lion (or the estimated equivalent value) as 
liability. 
Equipment 
 
Equipment totals CHF 15.4 million 
60.  The total value of equipment amounts to CHF 15.4 million (2014: CHF 16.9 million). The most 
significant items are furniture (CHF 6.7 million), au dio visual equipment (CHF 5.7 million), security 
equipment (CHF 1.6 million) and IT  equipment (CHF 1.0 million). 
No regular physical inventory for assets (exception: publications) 61.  For equipment assigned to non-current assets there is no procedure for a regular physical 
inventory. Only for inventories (see above) categorized as current assets there is a regular 
physical inventory. 
WTO has no suitable stocktaking system , depreciation is calculated manually 
62.  The WTO records goods as assets in two separate computer data files, one for IT and one for 
non IT assets. The stock value entered in the system  is the value of the purchase order, not of the 
invoice. The calculation of depreciation is base d on the invoices. Therefore, the department of 
finance enters the value of the invoices. Depreciation is calculated manually. The WTO has no 
suitable stocktaking system in place. An overal l update and general check and correction of data 
on venues where the assets were placed was done for IT assets only in 2014. We were informed that the WTO is planning to implement softwa re, which supports comprehensive stocktaking. 
I recommend to WTO implementing a prop er system which contains all assets 
63.  I am of the opinion that stocktaking is indispensable. Therefore I recommend to WTO 
implementing a proper system which contains all assets. In order to improve the process and to 
avoid errors arising from manual calculations, the software for stocktaking should provide for 
automatic calculations of depreciations. 
Pension Plan Assets Fair value of Pension Plan assets: CHF 496.3 million 
 
64.  At the beginning of 2015 (31 December 2014) the fair value of Plan asset was 
CHF 487.6 million. With all expenses, contributi ons and benefits paid the fair value as at 
31 December 2015 was CHF 496.3 million. 
Benefits paid in 2015: CHF 19.7 million 
 65.  Benefits paid from the Plan amount to CHF 19.7 million (2014: CHF 17.9 million). 
Liabilities 
Current Liabilities 
Assessed contributions received in advance 
Contributions paid in advance: CHF 16.3 million 
66.  The total amount of contributions paid in advance by Members and Observers is CHF 16.3 
million (2014: CHF 13.9 million). This includ es interest (earned by Members in 2014) of 
CHF 77.000 earned through the Early Payment Scheme implemented by the General Council to 
encourage early payment. In 2015 (due to negative interest rates) Members gained no interests.  WT/BFA/W/393 
 
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  Short-term employee benefits 
Short term employee bene fits total CHF 12.6 million 
67.  Short term employee benefits comprise dependency allowance, untaken annual leave, 
education grant and home leave. The total as at 31 December 2015 amounts to CHF 12.6 million. 
The provision for staff bonus amounting to CHF 839.100 was initially included in the position 
"payables"; I preferred a reclassification as "short-term employee benefits" in the financial statements. This recommendation was already implemented by the Secretariat during our audit. 
Short-term Employee 
Benefits 31/12/2015 
(In million CHF) 
Dependency allowance 0.05  
Untaken annual leave 9.15 
Education grant 1.40 
Home leave 1.01 
Separation grant 0.20 
Provisional for Bonus 0.84 
Total 12.64 
 WTO is paying home leave for beneficiary staff 
68.  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: Australia, Austria, Canada, China, Ge rmany, Peru and Zimbabwe (in total 66 cases). 
According to the information from HR and the travel  unit, the WTO is paying HL for contracted staff 
biennially based on a lump-sum amount or the proved cost (option A or option B). For the checked HL all staff opted for a lump-sum amount covering all entitlements (option A). WT/BFA/W/393 
 
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  The lump sum depends on th e requirements of staff… 
 69.  The calculation of the lump-sum is based on a percentage (80%) of the estimation for a full 
economy fare flight ticket for a selected destination adjusted by the number of dependents and 
other factors. The table below shows an extraction of some full economy fare tickets used in 2014 
and 2015 as basis of the home leave formula.  As th e current policy only provides that the basis of 
the calculation is the full economy fare flight ticket. There is no obligation to check the best value 
for money and to claim the HL in advance.  As a result, WTO paid in 2014 and 2015 a wide range 
of amounts (lowest and highest) for the same HL countries as documented in the table. The variation of the price mainly depends on the date when the estimation for such full economy fare 
was calculated in the Galileo system (software used by the travel unit). As a consequence, 
estimations calculated in peak seasons (e.g. Christmas) or in different years generated such 
variances. 
Country HL city Calculation date Value of a single air 
ticket 
full economy 
fare(CHF) 
– Galileo software 
estimation 
Australia Brisbane  (12/2014) 7.150 
 Canberra  (11/2015) 11.442 
Austria Innsbruck  (04/2015) 1.436 
 Vienna  (10/2015) 3.202 
Canada Montreal  (10/2015) 3.744 
 Kamloops (12/2013) 9.457 
China Beijing (11/2014) 5.505 
 Wuhu (12/2013) 10.353 
Germany Bonn (12/2013) 1.279 
 Hamburg (12/2014) 2.591 
Peru Lima (11/2015) 5.812 
 Lima (09/2014) 8.619 
Zimbabwe Harare (09/2015) 3.250 
 Harare (10/2013) 8.128 
 …resulting in a wide range of home le ave even for the same country or town 
 
In six cases calculations were made after the HL start. In two cases the HL took less than one week.  
I recommend reviewing the rules for home le ave. A benchmark with other international 
organizations is recommendable  
70.  I recommend to WTO reviewing the rules for HL, especially the calculation of the lump-sum. 
In this process it would be recommendable to compare the options with other international organizations (benchmark) and, for example, to annually fix an amount for most of the potential 
HL destinations (countries, big cities) to prevent inequalities. WTO should consider the results and 
recommendations of the current investigation by the Internal Audit respective the HL picked up by 
our sample check.  
Non-Current Liabilities 
Loan 
WTO received an interest-free loan of CHF 60 million 71.  The 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). WT/BFA/W/393 
 
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  The duration is 50 years; annual repayment is CHF 1.2 million 
72.  The loan is interest-free; its term is 50 years. WTO started repayment in 2013 with 
CHF 1.2 million (1/50 of CHF 60 million); in 2015 WTO repaid another CHF 1.2 million. The total of 
the residual debt as at 31 December 2015 is CHF 56.4 million. 
Pension Benefits 
Pension benefits total CHF 855.6 million 73.  The WTO Pension Plan is a defined benefit plan. The value of its commitments according to 
IPSAS amounts to CHF 855.6 million as at 31 December 2015 (2014: CHF 1,209.6 million). The 
most important change in 2015 was the actuarial gain of CHF 382.5 million. 
Discount rate as an essential assumption increased from 1.1% to 2.75% 74.  Actuarial assumptions changed significantly compared to the valuation as at 31 December of 
the previous year. In particular, the key date-related discount rate increased from 1.1% to 2.75% 
(for ASHI (see below) and pension) due to the modified calculation method introduced in 2015. The expected long-term rate of return on Plan assets is unchanged at 3.5%. 
ASHI 
ASHI total CHF 245.5 million 75.  The After Service Health Insurance (ASHI) benefits are calculated, just like the pension 
liability, by consulting actuaries. At the end of  2015 the liability totalled CHF 245.5 million (2014: 
CHF 342.9 million). 
Actuarial gain in 2015: CHF 112.1 million 76.  The reduction mainly results from the above mentioned change in the discount rate from 
1.1% to 2.75%, which led to an actuarial gain of CHF 112.1 million at the end of 2015 (2014: a 
loss of CHF 84.3 million). 
Net assets (total) 
Net assets/equity of the period is CHF (462.6) million 
77.  Considering all assets as at 31 December 2015 (CHF 786.5 million) and all liabilities 
(CHF 1,249.1 million) there is a negative total net assets/equity of CHF (462.6) million (2014: 
CHF (986.1 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.  
3.3.2  Statement of Financial Performance 
Revenue and Expenses 
The table below shows comparative figures of 2013, 2014 and 2015 78.  The IPSAS equivalents of income and expenditure are revenue and expenses (as shown in the 
Statement of Financial Performance). The tabl e presents the figures for 2013, 2014 and 2015. WT/BFA/W/393 
 
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  Table 2 – Statement of Financial Pe rformance as at 31 December 2015* 
(in million CHF) 
 2015 2014 2013 
Revenue     
Contributions / Members 195.6 195.6 195.6 
Contributions / Observers 0.7 0.7 0.7 
Voluntary contributions to trust funds 20.5 21.2 21.0 
Revenue from publications 0.7 0.3 0.3 
Other revenue 2.8 0.6 0.3 
Extraordinary revenue - 2.5 6.5 
Income portion/grant received - - 13.0 
Pension Plan revenues 19.2 20.5 18.4 
Total Revenue 239.4 241.7 255.8 
    
Expenses    
Staff expenditure (134.7) (129.5) (184.6) 
Actuarial cost for ASHI (14.8) (11.5)  
Actuarial cost for pension (18.8) (33.8)  
Temporary Assistance (20.6) (20.6) (23.7) 
Supplies /other Service Costs (16.3) (14.7) (16.8) 
Travel & Hospitality (12.8) (12.3) (12.7) 
Implementing Partners (4.7) (5.6) (4.7) 
Contribution to ITC (18.5) (18.5) (18.1) 
Ministerial Conference Operating Fund 
(variation) 0.6 (0.6) 0.6 
Appellate Body Operation Fund 
(variation) (0.3) (0.1) (0.9) 
Depreciation (6.3) (5.5) (4.7) 
Provision for contributions in arrears 0.9 (0.03) 4.2 
Depreciation of provision for right of 
use - CWR - (11.3) 0.6 0.6 
Financing Costs (0.08) (0.04) (0.03) 
Write off and previous year 
adjustments (1.2)   
Loss on foreign exchange transactions 0.3 0.3 (0.1) 
Total Expenses  (246.0) (251.9) (260.8) 
    
Surplus (deficit) for the Period (6.6) (10.2) (5.1) 
 Source: WTO Financial Statements 2015 and 2014; *(Differences due to rounding). Staff expenditure from 
2014 split in actuarial cost for pension and ASHI and staff expenditure. 
Revenue 
Total revenue amounts to 239.4 million 
79.  Revenue at year-end totalled CHF 239.4 million (2014: CHF 241.7 million). 
Contributions in 2015 total CHF 196.3 million 80.  The most significant revenue item are contributions from Members and Observers amounting 
to CHF 196.3 million (CHF 195.6 + 0.7 million) as in 2014. 
Voluntary contributions on trust funds amount to CHF 20.5 million 
 
81.  Voluntary contributions on trust funds decreased from CHF 21.2 million in 2014 by 
CHF 0.7 million to CHF 20.5 million in 2015. WT/BFA/W/393 
 
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  Expenses 
Total expenses amount to CHF 246.0 million 
82.  Total expenses as at 31 December 2015 are CHF 246.0 million (2014: CHF 251.9 million). 
Staff expenditures of CHF 168.3 millio n represent more than two thirds 
83.  More than two thirds of the expenses (68%) are chiefly due to staff expenditures with a total 
of CHF 168.3 million (2014: CHF 174.7 million). 
In 2015 expenses for ASHI amount to CHF 14.8 million and for pension CHF 18.9 million 
84.  For improving transparency I recommended that more explanations and more details to the 
different types of staff expenditures be given. Now the expenditures for ASHI (CHF 14.8 million) and pension (CHF 18.9 million) are expressed separa tely in table 27 and explained in note 19 and 
in table 58. 
Expenditure for temporary assist ance amounts to CHF 20.6 million 
85.  Another important item within expenses is temporary assistance with an amount of 
CHF 20.6 million (2014: CHF 20.6 million). 
Termination indemnities paid in 2015: CHF 2.6 million 
86.  In our 2014 audit we identified six cases of substantial termination indemnities paid. We had 
been told that those were particular cases and negotiated termination indemnities would not incur 
very often. In our audit of the financial year 2015 there were even more – nineteen – cases with 
a total volume of CHF 2.6 million. Due to limited availability of HR we could neither verify the information given to us nor discuss all details and questions concerning this topic during our audit. We are planning to examine together with other HR-related topics the issue of termination 
indemnities in detail in our next audit. 
The Building Renovation Fund was in itially offset against expenditure 
87.  The first draft of the Statement of Financial Pe rformance contained an expenditure of CHF 3.4 
million offset against a non-current liability (Bui lding Renovation Fund (BRF)). This expenditure 
was split into consulting firms, air & rail transportation, rental and leasing of equipment and supplies. Thus, the BRF was – from the accounting point of view – a provision for future 
extraordinary building and maintenance costs. In detail the BRF is supposed to “cover the 
foreseeable costs of medium and long-term building and infrastructure projects”, “to finance the costs of extraordinary but necessary building and infrastructure maintenance of the single site, including the costs of future projects, undertaken with a view to introducing improvements or 
enhancements to the site”.  
A provision like this can only be recognized if there is an obligation as a result of a past 
event 
88.  According to IPSAS, such provisions cannot be  established since this would require an 
obligation against third parties as a result of a past event (see IPSAS 19.22 ff.). With respect to the IPSAS-related financial statements, the reductio n of the BRF-provision by CHF 3.4 million (as 
induced by my team) decreased the deficit for 2015 from CHF -9,986 million to CHF -6.586 million. 
WTO's contribution to the ITC: CHF 18.5 million 89.  The WTO´s contribution to the International Trade Centre (ITC) is another significant expense 
and as at 31 December 2015 amounts to CHF 18.5 million just like the year before. WT/BFA/W/393 
 
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  ITC is a jointly operated and controlled entity 
90.  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 as a jointly controlled entity in general WTO has to 
consolidate ITC. 
New IPSAS standards 35-37 co ncerning consolidation 
91.  In January 2015 IPSASB (the IPSAS Board) published new IPSAS standards concerning 
consolidation (IPSAS 35), investments in associ ates and joint ventures (IPSAS 36) and joint 
arrangements (IPSAS 37). Concerning the new IPSAS standards an entity that is a controlling 
entity shall present consolidated financial statements. 
There is no control, no joint control or si gnificant influence acco rding to IPSAS 35-37 
92.  The entity (WTO) does not control (IPSAS 35) the other entity (ITC) in terms of the ability to 
use power; there is no joint control (IPSAS 37) in terms of a joint agreement sharing control; and 
there is no significant influence (IPSAS 36) in terms of e.g. representation in a governing body of 
ITC or participation in policy-making processes. 
No consolidation required by new IPSAS standards 
93.  Following the new and more detailed line of arguments I come to the conclusion that 
consolidating ITC is not required by the new IPSAS standards. Therefore I accept as IPSAS compliant that WTO is not consolidating ITC. 
Net result / surplus (deficit) for the period 
Net result (deficit) for the peri od amounts to CHF (6.6) million 
94.  The net result (deficit) for the period 2015 is CHF (6.6) million compared to CHF (10.2) million 
in 2014 and after CHF (5.1) million in 2013.  WT/BFA/W/393 
 
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  4  PERFORMANCE AUDIT 
4.1  Internal Control System 
Focus and procedure There are several elements of an Internal Control System 
95.  The audit included several elements of the WTO’s Internal Control System. It covered the 
Office of Internal Audit, the Risk Management and the Strategic Review. 
96.  My team and I analyzed the documents concerning the above-mentioned issues and we 
conducted interviews with the responsible staff. The fieldwork was carried out in November 2015 and in March and April 2016. 
Establishing an Office of Internal Oversight 
Establishment of the Office of Internal Oversight (OIO) 
97.  During the last years, the External Auditor monitored the transition from an Office of Internal 
Audit (OIA) to the establishment of an Office of Internal Oversight (OIO) as well as the proposed 
establishment of an Audit Committee. In the 2012 audit report, the External Auditor recommended 
that WTO issue documents indicating the procedures to be followed for conducting investigations 
within the WTO, where necessary, on matters that are not strictly budgetary and financial, and addressing complaints to management. Future annual internal audit plans should be drawn up with 
reference to the WTO risk management framework which the Secretariat is preparing in 
coordination with the External Auditor.  
Following these recommendations, the WTO established the OIO on 30 November 2015 “… in order 
to provide for a professional, independent, ob jective and documented assessment through all 
appropriate means, of management practices, expenses, budgetary control and allegations of misconduct in all its forms.”. 
The WTO expanded the tasks of the former Offi ce of Internal Audit (OIA) but it is not 
providing the new OIO with more audit staff 
98.  Although the WTO expanded the tasks of the former OIA it has not provided the new OIO with 
more audit staff so far. The structure of the OIO is confirmed with a Head, an Internal Auditor and 
an Administrative Assistant. The recruitment process for the Auditor has not yet been initialized.  
Benefits and costs of an Audit Committ ee are elaborated by a working group 
99.  On 25 September 2015 the Committee of Budget, Finance and Administration (CBFA) decided 
to install a working group which will  assess the need, or lack thereof, for establishing an Audit 
Committee. It will assess the benefits and costs of an Audit Committee for the Members and the Secretariat.  
Draft of an Audit Work Plan for the period 2016 to 2018 was presented. 
100.  At the meeting of the CBFA on 14 April 2016, the Interim Head of the Office of Internal 
Oversight presented a report on the nine open au dit areas of the former OIA and closed eight of 
them. Furthermore the draft of an Audit Work Pl an for the period 2016 to 2018 was presented to 
the CBFA. It contains five audits and five  follow-up audits: The implementation of 
recommendations of the IT security assessment conducted in 2014 will be monitored by a follow-up audit. Three new audits are based on the risk re gister of the WTO, one of them with a low risk 
level. One proposal is to audit the risk manageme nt and as mentioned above five follow-up audits 
are planned.  WT/BFA/W/393 
 
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  OIO is in compliance with the recommendations of the External Auditor 
101.  I appreciate the above mentioned activities co ncerning the establishment of the OIO and the 
discussions about an Audit Committee, which are in compliance with the recommendations of the External Auditor.  
Evaluating the number and qualif ication of staff necessary to  fulfil the tasks of the OIO 
102.  I recommend to WTO evaluating the number and qualification of staff is necessary to fulfil 
the tasks of the OIO. This evaluation should take place after an adequate period of practical 
experience with complete staff. The number of staff should be adequate to the risk potential of the 
WTO. A comparison with other international organizations, as the WTO did already, might be an indicator.  
Reviewing the new Audit Work Plan 
103.  I will monitor how the concept of the OIO will work in practice, and whether the WTO will 
decide to establish an Audit Committee. I recommend reviewing the new Audit Work Plan to ensure that it is based on comprehensible criteria like volume of costs or level of risk as well as on 
the provided staff-capacity.  
Staffing of the posts in the OIO According to the INTOSAI guidelines the WTO must have an effective Internal Audit in 
place 
104.  My audit is based on the guidelines of the International Organization of Supreme Audit 
Institutions (INTOSAI). According to the INTOSAI guidelines for the internal control standards in the public sector (INTOSAI GOV 9100) all institutions using public funds must be expected to meet 
their responsibility for the appropriate use of funds by means of effective internal controls. It is 
important for an independent international institution like the WTO to have an Office of Internal Audit in place that works effectively as a part of the Internal Control System as well as an element 
of good governance. 
All posts of the OIO were vacant. No deputy for the OIO. No internal audit reports for 
the years 2014 and 2015 
105.  The contract of the Head of the OIA of the WTO ended on 31 March 2015. The post of an 
Audit Officer was vacant since 31 July 2015. My staff and I looked into the activities of the WTO to 
fill vacancies of Internal Auditors. Furthermore, we asked which audits were not finished yet and which audits have to be prolonged. In November 2015, we pointed out that it was not adequate 
that both positions were still not filled and that the WTO had not appointed a deputy for the OIO 
yet. We further criticized that there were no internal audit reports for the years 2014 and 2015. I advised the WTO in 2015 to establish a replacement person until the positions in the OIO were 
filled. 
Interim Head of OIO and an admin staff were placed 106.  In April 2016 the recruitment procedures were still ongoing. Since December 2015 the Office 
is staffed with one person experienced in internal auditing, on an interim basis up to May 2016. In 
addition, in order to avoid a similar situation to the current prolonged vacancy of the Office, an admin staff has been assigned to the Office with liaison functions. I appreciate that the WTO has found a solution to close the temporary gap of Internal Audit work. 
Accelerate the procedure of recruiting a pe rmanent Head of the OIO and an Internal 
Auditor. Identify important or critical  positions and settle replacement rules 
107.  I expect that the WTO will accelerate the procedure of recruiting a new permanent Head of 
the OIO and an Internal Auditor. I recommend to WTO identifying important or critical positions in 
the WTO in general and to adopt replacement rules for these posts. WT/BFA/W/393 
 
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  Risk Management 
The WTO established a risk management policy  for the entire Secretariat at the end of 
2012 
108.  The WTO established a risk management policy for the entire Secretariat at the end of 2012 
with the objective to strengthen its internal gove rnance structure and its internal control system. A 
Risk Officer has been appointed. She is responsible to regularly consult staff across the Secretariat to identify, analyze and monitor risks and maintain the Secretariat’s risk register. 
Risks of damages in the WTO building were  not listed in the risk register. After 
discussion with the WTO the risks relating to facility management and security and 
safety services were added 
109.  In November 2015 my team inspected the build ings of the WTO. They recognized some 
damages such as water damages caused by the leaky roof. We noted that the measures the WTO 
had taken to address these damages were not adequate. We found not only financial but also technical and security risks. We discussed this  with the WTO Risk Management, because these 
risks had not been listed in the risk register yet.  As a consequence the risk register for the year 
2015 contains the new risk relating to facility management and security and safety services: “Failure or damage of building structural syst ems and non-structural elements”. Most of the 
damages we detected have not been completely repaired until April 2016 (see chapter 4.3 Facility 
Management). 
Measures to mitigate risks concerning IT-security were delayed or outstanding 
110.  The WTO has classified risks concerning IT-security as critical over a period of three years. 
Concrete measures to protect the WTO from these risks were delayed or outstanding (see chapter 
4.2 IT Security). 
111.  In my opinion the risk management of the WT O is an important element of the Internal 
Control System of the WTO. It is essential that the proposed risk mitigation measures are taken 
faster. 
Proposed risk mitigation measur es should be taken faster 
112.  I recommend focusing more on that issue. I will continue monitoring the process and the 
effects of risk management. 
Strategic Review The Director-General launched a Strate gic Review of the WTO Secretariat 
113.  In December 2013 the Director-General launched a Strategic Review of the WTO Secretariat. 
Its aim was to generate ideas for reforming and strengthening the Organization against the background of rising demands and unchanged reso urces. The chosen approach endeavors to make 
the staff at all levels throughout the Secretariat stakeholders of this process. 
Up to April 2016 13 results of the strategy were published on the intranet. Results are 
not related to the core business of the WTO 
114.  Following an internet survey to establish the ten most urgent issues, the four top subjects 
were identified: rules, mobility, promotions and management. All four subjects were discussed and then transferred to working groups. These working groups were open to all staff and attracted an 
average of 30 participants per group. They operated in a self-organized way and had a varying 
number of meetings. Up to April 2016 13 results of the strategy were presented in the Intranet. 
Amongst them e. g.  
 Performance-Based Promotions — OFFICE 16/14 — 25 February 2016 Notice to staff, 
administrative memorandum no. 975. WT/BFA/W/393 
 
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   Office of Internal Oversight ("OIO") — OFFICE(15)/101 — 30 November 2015. 
 Internal staff mobility OFFICE(15)/72 — 3 September 2015 Notice to the Staff. 
The published results are not related to the core business of the WTO. 
It is not transparent how the results are connected and how they enhance the strategic 
approach 
115.  I appreciate that the WTO started this initiative for a Strategic Review. However, the WTO 
has not drafted and published an overarching do cument which connects the results listed on the 
Intranet. Furthermore, there is a lack of document s on the strategy or on updated joint objectives 
or on a vision. Hence it is not accessible how the results are connected and how they enhance the strategic approach. In my opinion the initiative should have been more concentrated on the core business of the WTO. 
Summarize the idea, the objectives and the ac hieved results of the Strategic Review and 
extend the initiative to the core business 
116.  I recommend in a first step publishing an overarching document, which significantly 
summarizes the idea, the objectives and the achiev ed results of the Strategic Review. Furthermore 
I recommend to WTO extending the initiative by aspects which concern the core business of the WTO to reach the objective of a Strategic Review. 
4.2  Information Technology, Security and Confidentiality 
Focus and procedure Audit Scope and Audit Methodology 117.  My team continued auditing the handling of information and the Information Technology (IT) 
of the Secretariat as part of my performance audit. Primarily we examined the development 
concerning the Secretariat’s IT governance, information and IT -security and regarded aspects of information confidentiality. 
118.  Therefore my team looked into the efforts made by the Secretariat to optimize its IT. They 
analyzed modifications of existing documentation concerning IT, information security and information confidentiality and took note of the attempts 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). 
Set of criteria and Audit Objectives 119.  Taking into account the WTO’s role as an independent international institution and the 
importance of IT for its business, I applied relevant internationally acknowledged management 
s t a n d a r d s  a s  c r i t e r i a  o f  m y  a u d i t .  T h e  m a i n  o b j e c t i v e s  o f  t h e  a u d i t  w e r e  t o  e v a l u a t e  appropriateness of the Secretariat’s IT govern ance approach to assess whether adequate 
measures have been taken to ensure IT and information security and to find out whether 
information and data -confidentiality are ensured. 
IT Governance 
Conclusions and recommendations of my previous report 
120.  In my report for the year 2014 I stated that in the Secretariat there were weaknesses in 
adopting of IT standards, business strategy and IT  policy framework. I made clear that inadequate 
policies and unstructured processes may cause improper or malfunctioning IT that could result in 
material and non-material damages such as delays, increasing workload and expenditures. I 
recommended, amongst others. WT/BFA/W/393 
 
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   applying international standards and best practices for the IT environment; 
 defining and documenting a general business strategy as a requirement description in regard 
to a needs-based IT environment; and 
 setting up an appropriate IT policy framewor k, aligned with a general business strategy. 
Reaction and activities of the Secretariat with regard to the adoption of IT standards 
121.  The Secretariat agreed that standards needed to  be applied. In a first step, the Information 
Technology Solutions Division (ITSD) commissioned a company to support management in 
conducting an assessment of the maturity of ITSD’s processes against the COBIT standard. It also 
reviewed the components that were most critical to improve. The IT management team chose to focus its effort on four processes (service ma nagement, incident and problem management, risk 
management and human resource management) ba sed on this analysis. However there was no 
specific commitment of the Information Technology Steering Committee (ITSC) that had the 
leadership to assign resources or to prioritize this task. Also no overarching roadmap of implementation was developed. The task was integr ated in the “4 Year Plan” of the draft of the 
announced “2016-2019 IT strategy”. 
Reaction and activities of the Secretariat with regard to the definition of business 
requirements 
122.  Concerning my recommendation to define and document a business strategy, the Secretariat 
did not provide comments in its comments on my previous report. WTO staff told my team that they were following another approach to meet the business requirements. Taking into consideration the “sensitive environment” of WTO “neither the member states nor the senior 
management were interested in making binding specifications” so that the development of a 
business strategy was not supported by WTO. 
The most likely approach to work on business and IT requirements in a strategic manner was the 
attempt to create a “WTO - Enterprise Architecture ”. The current draft took into account topics like 
the Secretariat's common purpose, architecture prin ciples, standards, target architecture and the 
optimizing of resources. However, when ITSD presented this approach in a document at an 
advanced stage it was turned down by the ITSC arguing that there were no benefits for the 
organization in establishing an enterprise architecture. 
Reaction and activities of the Secretariat with  regard to the set-up of an appropriate IT 
policy framework 
123.  Commenting my recommendation regarding the set-up of an appropriate IT policy 
framework, the Secretariat “agreed with the need to describe the existing structure, procedures and systems, the need to review and document  business requirements and evaluate various 
feasible solutions and the need to have a long term IT Strategy”. This should be realized by the 
development of the above mentioned “WTO - Enterp rise Architecture” and the development of the 
“2016-2019 IT strategy”.  
Actually I noted that the enterprise architecture was cancelled by the ITSC (see above) and in April 
2016, the “2016-2019 IT strategy” still was a draft.  
Current approaches of the Secretariat to enhance IT governance 124.  Practicing a bottom up approach some actions were taken in response to the above COBIT 
assessment and an end-user satisfaction survey . The most important results were taken into 
account when drafting the “2016-2019 IT strategy”.  Hence, the available draft of this strategy 
includes some statements and approaches designed to enhance the Secretariat’s IT governance.  
For example, the Secretariat stated that “the strategic directions will help us move from being 
reactive to being more strategic in the use of  our resources” and that there was a need to 
“optimize the work we do to collect, consolidate and cross reference the data we hold in silo 
databases and documents, and improve how we diss eminate and exploit it”. The Secretariat stated 
also that there was a common agreement to re-architect the applications and to re-architect the data with the aim to reduce the number of the currently about 100 applications while increasing WT/BFA/W/393 
 
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  the delivered service. As to “proactive work” the Secretariat also promised to “define a blue print 
of what systems, which data and how they cross referenced to support our mandate.”  
My team was also told by management staff that another strategic approach was developed by 
WTO: There were discussion sessions on strategic and scenario planning at director level. The aim 
of these sessions is “to assist senior management to explore possible futures and identify potential 
drivers for change in the WTO”. 
Important inputs to achieve a sound IT st rategy and IT policy framework were still 
missing 
125.  The draft “2016-2019 IT strategy” mainly describes and refers to existing unit based 
initiatives and projects, of which financial provision and advancement have to be decided year by year. The intended chapter “strategic goals” was still lacking. There was neither a set of applicable 
standards nor a perspective of additional documents or other governance instruments to complete 
a future policy framework. Neither in the draft “2016-2019 IT strategy” nor in another document was a real long-term IT strategy or a vision of a future IT landscape with  clear targets defined. 
In this respect, important basic information of the current state were still lacking: There was 
neither a basic analysis or complete overview of the requirements of the business units of the WTO 
(instead of a detailed business strategy) nor a complete transparent line-up of the applications 
already in place. Information did not include the num ber of users, software products used, dates of 
implementation, system configurations required, warranty and maintenance data etc... that would 
be part of an overarching assessment.  
Although the “2016-2019 IT strategy” contains some positive approaches, the 
Secretariat has to broaden and intensify the e fforts to reach an appropriate level of IT 
governance 
126.  Even though the draft “2016-2019 IT strategy” contains some positive approaches and takes 
important IT governance tasks into account, the Secretariat has to broaden and increase the 
efforts to reach an appropriate level in adopting  IT standards, satisfying business requirements 
and creating an IT policy framework.  
Currently, the draft “2016-2019 IT strategy” does  not represent an overarching forward-looking 
strategy document as a central part of, together with the other available IT policies, a sound standard-oriented IT governance framework. Since the well advanced enterprise architecture was not put into place and no business strategy or overarching IT strategy was defined, management 
of WTO and of the Secretariat lacks a decisive instrument to lead the IT activities in an adequate 
way. Consequently, the management chose not to take leadership in the strategic development, design and use of IT for fulfilling the tasks of the organization and managing IT-related risk.  
In this regard I appreciate the initiative taken by directors to discuss strategic and scenario 
planning topics. This could be a feasible new approach to reflect current structures and to explore future strategies for the WTO. 
Recommendations 
127.  I take up some of my earlie r recommendations and recommend: 
 applying relevant 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 implementing them in current and future structures and 
documents; 
 defining and documenting a general business stra tegy 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 is not be feasible for WTO, 
business requirements concerning IT should be analysed and collected across the whole WT/BFA/W/393 
 
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  organization with a common approach and also specified and documented in an overarching 
IT strategy; and 
 setting up an appropriate IT policy framework, aligned with the general business strategy or 
rather specified business requirements, cont aining 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 finalizing and implementing the available drafts of the “WTO Enterprise Architecture” and the “2016-2019 IT strategy”. 
IT Security 
Conclusions and recommendations of my previous report 128.  In my report for the year 2014 I stated several deficiencies in IT security. In times of 
increasing risks of external and internal attacks to the IT of governmental and non-governmental 
organizations management should be aware of its responsibility for an efficient and secure IT 
environment. Loss of availability, confidentiality or integrity of data could affect material and non-material damages such as delays, increasing workload and expenditures but also misinformation, 
declining work ability, failure of work results and eventually damage to the reputation of the 
organization. 
In 2014, the WTO was informed by means of th e IT security assessment about several gaps 
between the internationally acknowledged requiremen ts of the ISO/IEC 27001 IT security standard 
and the status of IT security implemented in the Secretariat. The report of the review points out 
that, amongst others, there are weaknesses of the security configuration of the ERP system and, 
some high priority, weaknesses in various areas of WTO IT security governance. The responsible 
management agreed to the recommendations that should have been implemented in order of their 
respective priority during the year 2015. 
I strongly recommended to the Secretariat foll owing the recommendations of the IT security 
assessment as soon as possible and encouraged OIA to proceed with the follow up of the relating 
IT security audit. 
Activities of the Secretariat to implement the recommendatio ns concerning IT security 
129.  The Secretariat implemented recommendations co ncerning the security configuration of the 
ERP system. Responsible staff told my team that they would also conduct an independent security 
audit of the ERP system.  
The Secretariat started implementing the recommendations on IT security governance. As 
examples: 
 the mandate of the existing IT Steering Committee has been extended to cover governance 
of information security (representing the new Information Technology and Security Steering 
Committee / ITSSC); 
 the charter of the new committee defines roles and responsibilities concerning IT security; 
 the overarching “Information Security Policy”, which will define information security 
governance framework for the WTO Secretariat, and the “Information Classification Policy”, 
which will provide standards and guidance on the classification of information, are in progress; and 
 the need for additional resources has been recognised by the management so that an IT 
security staff will be recruited. 
Evaluation of the current status of activi ties: The implementation of recommendations 
was severely delayed 
130.  Although I welcome these efforts I noted that implementation of the recommendations was 
severely delayed. At this point of time it is foreseeable that the majority of recommendations will WT/BFA/W/393 
 
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  either be implemented in an appropriate scale more than a year later than intended or in the worst 
case not at all. Consequently the described lack of IT security will persist and threaten IT- i.e. the 
working environment of WTO. 
Exploring the reasons for this situation I wish to place focus on two major issues:  
(1) Since the staff of OIA left WTO at the beginning of 2015 an internal audit project to follow up 
on the IT security assessment was terminated (see chapter 4.1 Internal Control System).  
(2) The unit responsible for IT security had no adequate resources to handle the number of 
subjects in time. In addition, responsible staff was busy preparing and conducting the 2015 
Ministerial Conference. This workload of about three months resulted in a delay of IT security tasks.  
Recommendations 
131.  Since the staffing situation concerning internal audit (see chapter 4.1 Internal Control 
System) is progressing and there will be staff reinforcement in the IT security area, currently the perspective of achieving the necessary improvemen ts seems to be much better than in the last 
year. 
I therefore recommend that OIO and IT security staff focus on implementing the IT security 
assessment’s recommendations to achieve a sign ificant improvement of the WTO IT security. 
I recommend also that management take more in to account that for some staff members the bi-
annual held Ministerial Conferences create an extensive extraordinary workload in addition to their regular duties. I suggest including these tasks in personnel requirement assessments. 
Information Confidentiality 
I started to address the topic of Information Confidentiality 
132.  I started to address the topic of information co nfidentiality within WTO. Initially my team 
aimed to get an overview regarding regulations and current practices to ensure information 
confidentiality across WTO. 
The Secretariat drafted a new “Inf ormation Classification Policy" 
133.  In an effort to improve IT security governan ce, the Secretariat drafted a new “Information 
Classification Policy” and an accompanying “Technical Standard”. The intention of the Secretariat 
was to replace the existing “Policy on the Securi ty Classification” as of 25 March 2008 (OFFICE 
(08)/15). The draft document has so far been presented to all directors. The directors may ask final questions or give final advice. These inputs are to be integrated in the final draft, which is to 
be finalized by the ITSSC before presenting them  to the Director General (DG). Finally, the DG 
may adopt the policy formally. 
Considering the current draft in a first approach , my team suggested placing more emphasis on 
the aspect of potential risks in the new policy because this aspect was not clear enough. The 
responsible WTO staff agreed to this suggestion and promised to include this topic in the approval 
procedure. 
Classification requirements are defined in the Informat ion Classification Policy; 
Procedures for electronic data depend on the underlying informatio n system; Procedures 
for non-electronic data depend  on the organizational unit 
134.  My team asked for copies of confidential information in form of paper documents as well as 
in form of data. They also requested to be pr esent once when WTO staff store these papers and 
data, to learn how this is done. Furthermore my team wanted to have a look at the documentation of the relating processes. WT/BFA/W/393 
 
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  The interviewed staff of the Information Technology Solutions Division were not directly able to 
furnish the requested copies or show the processes for handling confidential data.  
My team were told that classification requir ements were defined by the above Information 
Classification Policy in a general way only. The specific processes and procedures of classification, 
writing, printing, sending, storing and destruction of confidential electronic data depended on the 
underlying information system; equivalent processes and procedures for non-electronic data depended on the respective organizational unit.  
An overview or a line-up of these proc esses and procedures was not available. 
WTO staff applied good practices in their da ily work; Otherwise there was no procedure 
documentation for the relating processes 
135.  My team wished to test how to deal with information confidentiality and therefore audited the 
disposal of desktop and laptop computers. They noted that WTO staff applied good practices in 
their daily work by reformatting every hard disk wi th an adequate tool before the disposal of the 
device. In certain cases, e.g. when reformatting  was not feasible, hard disks were destroyed so 
that a misuse of data was practically excluded.  
Apart from that, no guideline or other procedure documentation for the relating processes was 
available. It is therefore likely that in case of unexpected absences or staff leaving WTO (see 
chapter 4.3 Facility Management Activities) these processes might not work anymore because the 
relevant knowledge was held by very few officials. 
I appreciate the approaches to update the WTO’s policies concerning Information 
Confidentiality 
136.  I appreciate the current approaches to update WTO’s policies concerning information 
confidentiality. However, the documentation of the processes was not adequate to counteract the risks threatening confidentiality of data and information. Additionally handling confidential 
information is not standardized within WTO. 
I recommend providing the WTO staff with guidelines and appropriate procedures 
137.  I recommend providing WTO staff with extended guidelines and appropriate procedures how 
to deal with confidential information. I will study this topic more closely over the next years. 
4.3  Facility Management / Safety and Security Activities 
Focus and procedure Audit focus: facility management activities , organisational structure, procedures and 
regulations 
138.  As part of performance audit this audit focu sed on the WTO’s facility management (FM) 
activities, its organizational structure, procedures and relevant regulations for FM. My team 
analyzed policies, guidelines and other relevant documentation such as files and records held by 
the WTO Secretariat. My team conducted interviews with responsible management and expert staff of the sections Facility Management Services (FMS) and Safety and Security Services (SSS). 
Facility management standards 
139.  To take into consideration best practices in FM the auditors applied the relevant 
internationally acknowledged standards of the EN 15221 series (ISO/TC 267 Facilities management). The standards set up relevant terms and definitions and serve as a guidance to 
organize FM activities. WT/BFA/W/393 
 
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  Audit objectives 
140.  The main objectives of the audit were to evaluate the current approach of FM in the 
Secretariat and the use of internationally acknow ledged norms, standards and best practices for 
FM, the development of staff distribution and current open issues related to the construction 
projects finished in 2013. 
Facility management st rategy and framework 
Facility management definition 
141.  The European Standard EN 15221 defines FM as “the integration of processes within an 
organization to maintain and develop the agreed services which support and improve the effectiveness of its primary activities.” FM aims to optimize the costs and performance of assets and services. The field of facility management can be divided into two components: Space and 
Infrastructure (WTO: FMS) and People and Orga nization (WTO: SSS, Conf erence and Visitors 
Services etc.). 
Application of standards ensure ef fectiveness and efficiency of FM 
142.  The use of appropriate FM standards ensures that FM organization is well directed and that 
resources are used sustainably. Hence it is essential to establish clear policies, which should be documented, e. g. within an “FM policy framework”. An integral part of the policy framework 
should include a designated FM strategy (bot h for FMS and SSS) which is tailored to the 
organization's mission and business strategy. To achieve an effective and efficient use of resources an “FM policy framework” should particularly contain the following elements:  
 organizational structure and the minimum required staff;  
 definition of FM processes at a strategic, tactical and operational level, based on the FM 
strategy with clear responsibilities, documented workflows and professionally monitored outputs;  
 description of the relevant facility services;  
 assignment of internal and external responsibilities for facility services based on a defined 
systematic decision-making procedure;  
 training plans to ensure process activities are fulfilled by suitably skilled personnel;  
 availability of a high level reporting process to the senior management in order to reflect 
efficiency and effectiveness of the FM organisation results. 
Status in the WTO: no FM strategy, FIPOI as a “third player” 
143.  The Secretariat stated it had not adopted the relevant FM standards and had currently no 
specific overarching FM strategy in place. It further mentioned that the recent FMS activities rather respond to current issues than proactively support managing maintenance. Nevertheless, some 
improvements to implement strategic aspects have been initiated. Especially I would like to 
mention the specification of the costs needed for medium and long term extraordinary maintenance. In this matter, the Secretariat relies  on the expertise of the FIPOI. According to the 
recently changed infrastructure contract the Swiss authorities will continue to provide 
CHF 1.2 million annually through the under management of FIPOI. This is designated for extraordinary maintenance of the upgraded CWR buil ding and the new security perimeter. In this 
regard the FIPOI has to be considered as a “third player” within WTO’s FM activities. 
FM guidelines and policies in place 
144.  WTO policies and guidelines currently applicable are  WT/BFA/W/393 
 
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   regarding FMS: 
o policy for the organization of receptions;  
o procedures for the on-line help request system for non-IT problems, including 
requests for interventions regarding FM  
o fixed assets guidelines;  
o mailing procedures  
 regarding SSS policies, guidelines or procedures on: 
o video surveillance, travel security, all emer gencies (e. g. medical, fire, evacuation, 
demonstration, intrusion, suspicious parcels or letters);  
o other standard operational procedures (e. g. access controls, persona non grata, fire 
safety equipment, alarms, visitors access, VIP escort). 
FM guidelines and policies in the WTO do not apply FM standards, ri sk of inefficiencies 
145.  Analyses of WTO policies and guidelines in place revealed inconsistencies of the current 
WTO’s FM approach compared to the guidance pr ovided in the relevant FM standards (see paras 
above). In particular the lack of an overarching FM  strategy and of the description of the existing 
structures, procedures and staff requirements leads to unclear roles and responsibilities presenting a risk of inefficiencies. My team noted that for seve ral outsourced facility services (e. g cleaning or 
safety and security services) procedures and respon sibilities were well described. In contrast to 
this, contract management for internal facility services lacks such documentation. 
Need for appropriate coordination with FIPOI 146.  From the strategic point of view, I appreciate the efforts undertaken to estimate the cost of 
medium and long-term extraordinary maintenance in cooperation with FIPOI. Cooperation between 
FIPOI and WTO is currently based on issue-related meetings. I would like to point out the necessity of an appropriate and well-docume nted coordination between FIPOI and WTO. 
I recommend applying internationally acknowle dged FM standards to the WTO, initiating 
an “FM policy framework” an d improving the internal and external coordination and 
communication 
147.  I recommend to the Secretariat applying internationally acknowledged FM standards and 
best practices 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 Se cretariat to initiate and periodically update and 
enhance a generic “FM policy framework” using documents already available as input. The 
framework should include the designation of an FM  strategy, the organizational structure and the 
minimum required staff, defined processes and facility services. Considering the role of FIPOI within the WTO’s FM activities and the impact of upcoming extraordinary maintenance / 
construction projects to the WTO I recommend to  the Secretariat evaluating the appropriateness 
of a possible launch of an “FM Committee”, subseq uently following the beneficial experiences of 
the former “Construction Building Committee”. This could also be a step towards improving the 
internal and external coordination and communication regarding WTO’s FM activities. 
Staff distribution Duties and organization of WTO’s sect ion Facility Management Services (FMS) 
148.  The mission of FMS is to ensure a functional, safe and comfortable work environment for all 
those who work for the WTO, with a client-oriented approach in an environmentally-friendly and 
cost-effective way that supports the Secretariat in achieving its objectives. The section is responsible for the following services:  
 building maintenance service: maintenance of all the technical facilities;  
 space and events management service: organizing workspaces, event management and 
provision of furniture and office supplies; and  WT/BFA/W/393 
 
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   mailing service: receipt and distribution of ma il and internal distribution of documents. 
FMS: staff has decreased from 27 to 23 149.  FMS section was established in August 2012, when WTO took over the maintenance 
obligations from the FIPOI, resulting from chan ges of the infrastructure agreement between WTO 
and Swiss authorities. Between 2012 and 2016 the number of staff has changed. In August of 
2012 FMS started with 27 staff members. In January 2016 FMS had a total of 23 staff members (- 15 per cent). According to DG´s structure plan the number of FMS staff will be reduced to 18 by 
2020 (additional - 22 per cent). 
Duties and organization of WTO’s sectio n Security and Safety Services (SSS) 
150.  The mission of SSS is to provide physical security and safety services for the WTO staff 
members, delegates and visitors to its site, thereby supporting the WTO Secretariat in achieving 
its objectives. The services of the section include:  
 welcome pavilion (welcome, control and identification for registration and accreditation and 
electronic access control);  
 special security operations (travel security and emergency assistance for WTO travellers, fire 
safety (prevention and protection) and X-Ray scanning); and  
 uniform and guards operations (security control centre with video surveillance and alarms 
systems, patrols and access controls, medical first aid and any other emergency and security 
perimeter guarding). 
SSS: staff has decreased from 8 to 2 151.  In 2011, SSS had eight staff members. The number of staff decreased to two in 2016. 
Reduction of posts on a case to case basis,  within FMS and SSS there is no strategy 
reflecting minimum staff requirements 
152.  Regarding staff reductions in the recent years FMS and SSS explained the workload had not 
been reduced accordingly. In fact the workload is  to increase, following the approach of FMS to 
enhance managing extraordinary medium and long-term maintenance. For FMS and SSS it was and still is difficult to retain posts of leaving staff members vacant for permanent replacement. The 
related decisions to keep or to eliminate such posts have usually been negotiated between 
FMS/SSS and senior management on a case by case basis. Within FMS and SSS there is no overarching strategy reflecting minimum staff requirements. 
Current practice does not consider the impo rtance of facility management for the WTO 
153.  The current practice of the Secretariat to reduce the staffing level of the sections involved 
does not consider the importance of a sustainable and consistent approach for FM. Reducing the number of posts on case by case decisions does not automatically ensure that productivity will 
subsequently improve. The absence of an overar ching strategy regarding staff requirements may 
also lead to losses of important knowledge. 
I recommend initiating an overarching conc ept reflecting minimum staff requirements 
for FM 
154.  I recommend to the Secretariat initiating an overarching concept reflecting minimum staff 
requirements for its FM activities including the fields of staff expertise needed. The Secretariat 
should base further staffing decisions on this strategy. If needed, the number of staff of the 
relevant sections has to be increased again. WT/BFA/W/393 
 
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  Backup situation 
Demand of backup plans, staff re placement in case of absences 
155.  Organizations ought to have backup plans to pr ovide continuity and uninterrupted service in 
case of sudden or planned absences of staff memb ers. In case a WTO staff member is absent on 
annual leave or sick leave, the staff member is normally replaced by a backup from within the 
individual unit or division. In case of anticipate d absences due to illness, the individual unit or 
division has the option to request designating an other staff member on a short term appointment. 
In practice Human Resources (HR) Division consider s sick leave replacement in case of absence of 
a staff member for more than two weeks and pref erably more than a month. The WTO possesses 
no written procedure on this matter:  
Function without backup for several months within FMS 
156.  Within FMS, inventory recording was not done from May to November 2015 due to sick leave 
of a staff member. My team noted that FMS did not provide sufficient backup and did not request 
the replacement of another staff member on a short term appointment in cooperation with HR 
Division. After mentioning the issue, FMS stated  that two other staff members were currently 
trained on the function. In general, backup documentation of FMS does not provide backups for all functions. 
Critical backup situation within SSS 
157.  SSS currently consists of two staff members. Within SSS the head of unit appointed in 
November 2015 is the sole officer in charge for the relevant duties. The appointment of a deputy 
head has not yet been provided for. The other sta ff member may retire in 201 6. Having no internal 
backup, the responsibilities of the head of unit include contract management of the outsourced 
safety and security services of an annual value of CHF 3.5 Mio. Compared to that, the highest 
volume of a contract managed by an individual staff member sums up to annually CHF 900.000 for 
cleaning services within the remit of FMS. Within SSS, the function of the fire safety officer is 
performed by outsourced personnel. 
In practice backup situation is not sufficient 
158.  The backup situation of FMS and SSS is not sufficiently organized. The backup 
documentation in place does not provide for the designation of backup staff and of detailed duties for several functions. Even more relevant is that the backup plans do not ensure that the backup personnel have been adequately trained for the specific function. Formal processes would help in 
terms of advising and training staff adequately. 
Outsourced function of fire and safe ty officer has disadvantages for WTO 
159.  Regarding the outsourced key function of the fire  safety officer it could be advisable to have 
this function insourced to strengthen the staff situation within SSS. SSS and FMS state, based on 
their experience, that safety instructions were  generally better followed  by WTO staff members 
when these instructions come from internal staff members rather than from an outsourced 
provider. Outsourced staff is primarily obliged to a private company which may have different 
interests than the WTO. 
I recommend ensuring sound and reliable backup plans and introducing a written 
guidance on replacement of staff on extended absences 
160.  I recommend ensuring that the relevant units are in possession of sound and reliable backup 
plans to provide continuity and uninterrupted services in case of absences of staff members. Especially the backup sta ffing situation of SSS should be strengthened immediately. In this regard 
I expect that the WTO Secretariat evaluates and cons iders the function of the fire safety officer to 
be insourced. I further recommend introducing a written guidance on replacement of staff for extended sudden or planned absences including extended sick leave which shall:  
 underline the importance to ensure that the original duties are continuously fulfilled;  WT/BFA/W/393 
 
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   point out that backup or replacement is active within an adequate range of time taking into 
account the priority of duties; 
 describe the responsibilities and required procedur es of HR Division and the individually units 
involved. 
Pending repairs and projects related to construction works 
Renovation-extension works were complete d in 2012/2013; necessary repairs are still 
pending 
161.  The acceptance of renovation-extension works on the Centre William Rappard (CWR) building 
and on the New Building took place in April 2012, the approval of the terrace of the New Building 
in March 2013. Directly related to the former construction works necessary repairs of defects or damages are still pending in 2016:  
 Leakage of the roof of the Northern Courtyard Atrium. 
 Instabilities of the wooden deck terrace of the New Building; and  
 Defects on the green roof of the Southern Courtyard Conference Centre.  
 Additionally the signage of the building is still incomplete. The signage project started 
after completion of construction works. 
Deficiencies of the Atrium-roof and the wooden  terrace expected to be addressed by end 
of 2016 
162.  The WTO Secretariat stated that the leakage of  the Atrium-roof and the instability of the 
wooden deck were covered by construction guarant ees within the defect liability periods and repair 
works were in progress. For the terrace deck, the construction company has provided an interim 
solution in April to ensure the use of the terrace  until autumn 2016. My team noted that regarding 
the deck problems the WTO Secretariat sought solutions with the construction company from 2013 until 2015 for more than two years on several issues. In 2015 the WTO Secretariat started 
implementing a general contractor approach to find a general solution. The WTO Secretariat 
expected both problems to be solved by end of 2016. 
Damage of green roof of Southern Courtyard Conference Centre not yet fixed, interior 
signage of the buildings not yet finished 
163.  The WTO Secretariat considered the visible defects of the planting layer on the sloping edges 
of the green roof as an unforeseeable maintenance issue. Correspondence with the general contractor to clarify the legal responsibilities does not exist. My team did not find any notable 
improvements regarding the green roof since the en d of 2014. The signage project is still ongoing. 
Procedures to eliminate deficiencies or damages should be strengthened 
164.  I acknowledge the complexity of designating resp onsibilities of construction related defects 
or damages and finding and executing feasible solutions. Considering this in practice, the 
processes and duration of the solution procedures have to be strengthened and shortened in order to reduce the risk exposure of WTO to occurring de fects or damages. In this regard I welcome that 
WTO Secretariat appointed the deputy head of FMS in February 2016, who is in charge of building 
maintenance services and provides legal expertise. 
I recommend improving efforts to address co nstruction works related deficiencies or 
damages and initiating a written procedure on the termination of the defects liability 
periods 
165.  I recommend to the Secretariat improving its efforts to definitely address the construction 
works related shortcomings (Atrium roof and w ooden terrace) by the end of 2016. I recommend 
additionally initiating a written documented procedure regarding the termination of the deficiency 
liability periods in principle to ensure that possible defects are inspected and claimed to the general contractor before the defect liability peri ods end. I expect the planting layer of the green 
roof to be fixed and the signage project to be finished as soon as possible in order to show a 
professional image and a high standard of th e buildings to all users of the WTO premises. WT/BFA/W/393 
 
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  Links and interactions between FMS and SSS 
Responsibilities for duties and budge t within the link between SSS and FMS 
166.  My team studied the links and coordination be tween FMS and SSS. Within its large scope of 
responsibilities SSS also reveals malfunctions of the building and its equipment by its 24/7 security 
patrols and safety inspections. In order to ensure a regular well maintained building SSS reports 
malfunctions to FMS via help requests, including proposals for steps to improve the security infrastructure. FMS is addressed to finance these repairs within its budget. The exemption refers to 
technical equipment which is directly linked to safe ty and security and is fi nanced from the budget 
of SSS.  
Inconsistencies within the link between SSS and FMS 167.  In operation the link between FMS and SSS revealed inconsistencies:  
 FMS has to finance repairs addressed by SSS from its budget and is de-jure in charge as far 
as the building infrastructure and equipment are concerned. Still the responsibility for 
decision-making regarding administration and procurement remains de-facto within SSS.  
 Before 2016 the focal point of FMS supported SSS in administration with the procurement 
section. This support ended in January 2016 without any agreement on compensation. SSS estimates that the administrative support to deal with the procurement section equals 50% 
of a fulltime equivalent 
Interaction between FMS and SSS could be improved 168.  Interaction between FMS and SSS could be improv ed. In cases where projects on behalf and 
under management of SSS are financed from the FM S budget, the expertise of FMS especially in 
the building maintenance services should be drawn on. Similarly, requests which refer to the SSS 
budget should be evaluated considering a weighted  decision taking into account the needs of the 
requesting unit. This is essential for the processes of decision making in general and application of 
legislation, procurement and execution of works in detail. 
Decision-making body should take into co nsideration argumentation of both units 
169.  It is of significant importance that the resp ective decision-making body (e. g. section, 
division, Contracts Committee) takes into consideration input and argumentation of both units 
involved, FMS and SSS, no matter which budget the re quests refer to. In this regard I would like 
to mention the positive effect of regular weekly meetings of SSS and FMS since February 2016. 
I recommend evaluating the current links  and interactions between FMS and SSS 
170.  I recommend to the WTO Secretariat evaluating the current structures, links and interactions 
between FMS and SSS in order to develop step s to improve the links between FMS and SSS. WT/BFA/W/393 
 
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  5  CASES OF FRAUD OR SUSPECTED FRAUD 
One case of suspected fraud detected  
171.  The Secretariat reported that it did not have any information on cases of fraud or suspected 
fraud. During our audit, my team detected one ca se of suspected fraud. The case regarding home 
leave showed an unexpected high amount and po ssibly a suspected improper use of home leave 
allowance. The WTO used our request concerning this issue to initiate additional internal investigations. WTO decided that that case should be handled by the Office of Internal Oversight 
OIO. The OIO will inform the External Audi tor on the outcome of this investigation. 
6  FOLLOW UP 
I follow-up on the last report  
172.  In my last report on the audit of the 2014 financial statements I commented on a number of 
aspects. My team reviewed the implementation of these recommendations. 
6.1  Uncollectible Contributions 
Contributions uncollectible shall be written-off 
173.  Recommendation: Due to IPSAS contributions uncol lectible shall be written-off completely. 
Write-off of outstanding contri butions of former Yugoslavia 
174.  The members were informed of the intention to write off outstanding contribution from 
former Yugoslavia as at 31 December 2015 in order to be compliant with Auditor's 
recommendation. In the meantime, the Secretariat will continue its effort to recover this outstanding contribution vis-à-vis the Joint Committee for obligation of Former Yugoslavia.  
Conclusion  
175.  I appreciate the actions taken.  
6.2  Adjustments and additions in the notes 
I suggested several adjustments and additions in the notes 
176.  Recommendation: I suggested several adjust ments regarding the figures, phrases and 
presentation concerning short term employee benefits, staff expenditures and temporary assistance.  
The Secretariat agreed 
177.  The Secretariat accepted the recommendation and provided additional information and 
tables. 
Conclusion 
178.  I appreciate the implementation. 
6.3  US tax reimbursement for WTO staff 
Accelerate US tax reimbursement for WTO staff 
179.  Recommendation: Pursue efforts to accelerate re fund by the United States of the taxes of 
WTO staff; and to obtain this refund according to  the method advocated by the ILO Administrative 
Tribunal. WT/BFA/W/393 
 
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  Recommendation from my po int of view still open 
180.  This recommendation is still an open issue. In spite of activities by the WTO Secretariat the 
process of reimbursement is still far from satisfactory. In April 2016, WTO received a reimbursement of USD 2,520,538 from the US correspo nding to almost the full amount of the long 
term tax claims. This issue is reported in note 25 “events after the reporting date”. 
Conclusion 181.  I appreciate the actions taken. But due to the fact  that it is still an ongoing implementation I 
defined a recommendation in the report on the 2015 financial statements and I will further monitor 
activities and developments. 
6.4  IPSAS-compliant WTO financial statements 
New relevant IPSAS Standards 35-37 
182.  The entity (WTO) does not control (IPSAS 35) the other entity (ITC) in terms of the ability to 
use power; there is no joint control (IPSAS 37) in terms of a joint agreement sharing control; and there is no significant influence (IPSAS 36) in terms of e.g. representation in a governing body of 
ITC or participation in policy-making processes. 
I analysed the situation 183.  Following the new and more detailed line of arguments I come to the conclusion, that ITC 
consolidation is not required in the new IPSAS st andards. Therefore I accept as IPSAS compliant 
that WTO does not consolidate ITC. 
Conclusion 184.  The recommendation is closed. 
6.5  Performance audit: Procurement 
Recommendations concerning procurement pla nning and the requisition of consulting 
services implemented 
185.  Recommendations: Concerning my audit of WTO Procurement I recommended specifying 
procedures for needs assessment and the requirements of procurement planning. I recommended defining clear responsibilities and ensuring high  level managerial approval of the Procurement 
Plans. Concerning the requisition of consulting services I recommended to the WTO-Secretariat 
strengthening its internal coordination and control. 
Recommendations concerning amendments of contracts and contract management still 
ongoing 
186.  Concerning amendments to contracts I recommended the Secretariat implementing 
procedures to ensure that requesting units always have to involve the Procurement Section in advance before they accept modifications of a purchase order. I also recommended establishing an 
automatic notification to the Procurement Section if the amount of the purchase order diverges 
from the amount requested in the invoice. Concerning contract management I recommended developing a procedure to ensure that appropriate documentation is achieved and availability, 
reliability, and integrity of information and records on all procurements are safeguarded. I also 
recommended evaluating the organizational links between the procurement section and the requesting divisions. WT/BFA/W/393 
 
- 37 - 
 
  Conclusion 
187.  I appreciate the actions taken and the implementation of recommendations concerning 
procurement planning and the requisition of consulting services. Projects and activities to implement open recommendations have started and are currently ongoing. 
6.6  Performance audit: IT Governance 
Recommendations concerning the adoption of IT standards, IT strategy and security 
188.  Recommendations: Concerning my audit of IT Governance I recommended applying 
international standards and best practices for the IT environment in combination with the 
establishment of its IT policy framework. I recommended that the Secretariat set up an appropriate IT policy framework that should be aligned with the business strategy. 
Ongoing implementation of recommendations 
189.  I strongly recommended following the recommend ations of the IT security assessment as 
soon as possible. 
Conclusion 
190.  The implementations of my recommendations ar e still ongoing or have not yet started. I 
audited this year IT, IT security and confidential ity and will monitor the implementation of open 
issues and recommendations concerning IT governance and all other IT issues. 
7  ACKNOWLEDGEMENT 
I am grateful for the support received during the audit 191.  I wish to express my appreciation for the cooperation and assistance extended by the 
Director-General, the management and staff of the WTO. I am very grateful for their assistance 
during the entire external audit process. WT/BFA/W/393 
 
- 38 - 
 
  LIST OF ABBREVIATIONS AND ACRONYMS 
ASHI    After Service Health Insurance (benefits)  
BRF    Building Renovation Fund CHF    Swiss Francs 
COBIT   Control Objectives for Information and Related Technology 
CWR    Centre William Rappard DDG    Deputy Director General 
DDAGTF   Doha Development Agenda Global Trust Fund 
DG    Director General DGO    Office of the Director-General EUR    Euro 
FM    Facility Management 
FMS    Facility Management Services  FIPOI    Building Foundation for International Organizations  
GATT    General Agreement on Tariffs and Trade 
GBP    Great Britain Pound HL    Home Leave 
HRD    Human Resource Division 
IAS    International Accounting Standards IFAC    International Federation of Accountants  ILO    International Labour Organization 
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  
ISACA   Information Systems Audit and Control Association  ISMS    Information Security Management System  
ISSAI    International Standards for Supreme Audit Institutions 
IT    Information Technology ITC    International Trade Centre ITIL    IT Infrastructure Library 
ITSC    IT Steering Committee  
ITSD    Information Technology Solutions Division ITSP    Information Technology Security Policy 
LAN    Local Area Network 
MOF    Ministerial Operating Fund MTOF    Members Transition Operating Fund 
NBV    Net Book Value 
OIA    Office of Internal Audit  OIO    Office of Internal Oversight PM    Procurement Manual 
PMI    Project Management Institute  
SSS    Safety and Security Services SNB    Swiss National Bank 
UBS    Union Bank of Switzerland 
UN    United Nations US    United States 
USD    United States Dollar 
VAT    Value Added Tax WCF     Working Capital Fund WiP    Work in Progress 
WTO    World Trade Organization 
   
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- 39 - ANNEX 
 
List of Recommendations 
Issue Reference: 
Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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). WTO discussed the topic during 
the first session of the CBFA of 
2016 and informed the members of the intention of write off 
outstanding contribution from 
former Yugoslavia in order to be compliant with Auditor's 
recommendation. In the 
meantime, the Secretariat will continue its effort to recover this 
outstanding contribution vis-à-vis 
the Joint Committee for obligation of Former Yugoslavia. done 
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 to the Secretariat asking 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   
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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, to pursue 
efforts to accelerate the refunding procedure and to negotiate and 
agree with the US Government on a similar reimbursement method 
based on the ILO approach. Correspondence to the US is 
continuously sent as reminder for 
the reimbursement. Recently the 
US sent information stating their decision of not reimbursing an 
amount of about 370k CHF as 
l u m p  s u m s  w e r e  n o t  p a r t  o f  t h e  
agreement on tax reimbursement. 
The amount was written off. 
In April 2016, WTO received a 
reimbursement of USD 2,520,538 
from the US corresponding to almost the full amount of the long 
term tax claims. This issue is 
reported in note 25 “events after the reporting date”. 
The Secretariat will continue its 
efforts to receive prompt 
reimbursement by the US 
Treasury Department. Ongoing  
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   
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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 deta ils to the different types of staff 
expenditures be given. The Secretariat accepted the 
recommendation and included 
Table 62 in the report with details 
concerning staff expenditures including trust funds. done 
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 assistance 
including trust funds. done 
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 telling any other fact. I recommend to WTO 
negotiating with ITC or with the UN and clearly defining 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. According to new IPSAS standards 
35-37 consolidation is no longer 
required by the EA (details see Report). closed   
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
Procurement 
planning 4.1 / 2014 The WTO Secretariat has to ensure that the divisions define their 
needs on a reliable basis before allocating the divisional budgets. I 
recommend to WTO specifying 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 to WTO defining clear 
responsibilities and establishing high level managerial approval of 
the procurement plans. All PPs have been presented 
except the ITSD which is 
scheduled by mid-May. done 
Requisition of 
consulting 
services  4.1 / 2014 To minimise risks of duplication of efforts, impropriety and fraud in 
the requisition of consulting services, I recommend to the WTO-
Secretariat strengthening 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 in L:\Restricted\SSA List 
to be shared between HRD staff and Procurement. This folder is 
managed by HRD and contains all 
the individuals who have SSA contracts with the WTO. The 
Procurement 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 
also add a declaration to the contracts asking the individual 
consultant to declare whether they 
have any other contracts with the WTO.  done   
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
Amendments to 
contracts  4.1 / 2014 I recommend to the Secretariat implementing 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 
automatic notification to the Procurement Section if the amount of 
the purchase order diverges from the amount requested in the 
invoice. Modification of the price impacts 
both Budget Section and 
Procurement Section.  
The requesting units have been 
informed accordingly in order to 
assure the involvement of the key 
actors in case of such variation. 
Concerning the second topic, it is 
more a question of financial rules 
rather than procurement.  
Financial rules are under 
discussion in order to update them 
according to the new Financial 
Regulation and to integrate 
elements of improvement such as 
those indicated in the 
recommendation. Currently in the 
invoice settlement policy (which is 
also under review) there is a 
margin of CHF 500 of discrepancy 
acceptance. Ongoing  
Contract 
management 4.1 / 2014 I recommend developing a procedure to ensure that appropriate 
documentation is achieved and availability, reliability, and integrity 
of information and records on all procurements are 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. The project has started and is 
ongoing. Ongoing    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
Adoption of IT 
standards 4.2 / 2014 I recommend to the Secretariat applying international standards and 
best practices for the IT environment in combination with the 
establishment of its IT policy fr amework (see above). In doing so, 
the Secretariat should consider its individual characteristics like its 
size and its tasks and customize the suitable standards according to 
its requirements. Only in exceptional cases the Secretariat’s special 
requirements should justify an exception or extension, it may define 
and document these special guidelines for itself. Depending on their 
importance and nature, different standards can be defined to be 
used compulsory or optionally. However, some substantial 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 be monitored in an 
appropriate manner. We assessed the maturity of our 
processes against the COBIT 
standard and also reviewed the 
ones that were most critical to 
improve. 
The IT management team , with 
the help of an external consultant, 
focused its effort on four 
processes based on this analysis: 
Service management 
Incident and problem 
management 
Risk management 
Human Resource management 
In addition, we also agreed to 
drive some improvements in one 
area of vendor management 
(strategic sourcing for projects) 
and on training (part of service 
management). Ongoing    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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 requirement 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 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. A draft strategy for the period 
2016-2019 has been drafted and 
shared with the ITSC. 
It is planned to complete it by end 
Feb 2016. Ongoing  
IT security 4.2 / 2014 I acknowledge the Secretariat's efforts to improve WTO’s IT security 
in order to reduce the IT enviro nmental risk exposure. I strongly 
recommend that the Secretariat follow the recommendations of the 
IT security assessment as soon as possible. Without interfering with 
the ongoing audit of the OIA on this matter I will continue to 
monitor the improvement of WTO’s IT security.  Ongoing    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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 
sanction list as this is common practice in other international 
organizations. Because of the relatively small size 
of our organization and the fact 
that the WTO Procurement Section 
is much smaller than those of the organizations having a blacklisting 
system in place, it would not be 
efficient to implement the audit 
recommendation  
Cash situation / 
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 balances 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 million 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) A new investment policy has been 
designed in order to allow 
investments in foreign currencies 
in order to generate positive 
interest to partly cover the 
negative interest generated under 
the CHF. Additionally, investment 
ratings have been lowered from 
A+ to A- and the duration of 
investments has been increased to 
36 months. 
 
Negotiations have been 
undertaken with the FIPOI last 
year in order to advance the 
yearly repayment of the loan from 
December to January. However, 
no premature repayment was 
possible. According to the contract 
signed for the building loan 
between WTO and FIPOI, no 
premature repayment of the loan 
is possible, except in the case of    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
departure of the WTO from 
Geneva or closure of the WTO. 
The new investment policy was 
signed by the Director of 
Administration on 9 May 2016 and 
is currently pending for being 
signed by the DDG. 
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 annually 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.  
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 WTO implementing a system which contains all 
assets. The Secretariat accepts the 
recommendation. In particular, the 
purchase of a system to track all 
assets was approved in the 
procurement plan of 2016. A 
procurement process will be 
launched by the end of the year.    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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. The analysis of the lump sums showed 
a wide variation of home leave paid amounts even for the same 
country or town. 
I recommend reviewing the rules for home leave. A benchmark with 
other international organizations could be helpful. The Secretariat will assess the 
current policy related to the Home 
Leave in order to incorporate the 
auditor's recommendation.  
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 to the WTO evaluating the number and qualification of 
staff necessary to fulfil the tasks of the OIO. I recommend reviewing 
the new Audit Work Plan 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 Secretariat will assess staffing 
requirements of the newly created 
OIO once the appointed Director 
will take up duties and decide on 
the best structure for the Office.  
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 for the years 2014 and 2015. Since 
December 2015 there is an Interim Head of OIO one administration 
staff was placed. 
I recommend the WTO to identify important or critical positions in 
the WTO in general and to settle replacement rules for these posts. The Secretariat welcomes the 
Auditor's recommendation for 
succession plans to be set up for 
critical positions within the 
Organization.  Nonetheless, we would like to point out that the 
circumstances that led to the 
current state of affairs could not be foreseen. The previous Head of 
the OIO completed her mandate 
on 31 March 2015.  Four months later,   the deputy also 
unexpectedly and left the WTO.     
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
An initial recruitment effort for the 
post of Head of OIO was 
unsuccessful as the selected 
candidate declined the.  Pending the results of the second 
recruitment process, two staff 
members were assigned to the 
OIO as Acting Head of the OIO 
and Support personnel respectively.  
 
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 include mitigating measures faster. Risk Officer held  discussions with 
the Managers of Facility 
Management and Safety and 
Security Services.  In this regard, 
a new risk in the management 
category was added to the 2015 
risk register. 
The Secretariat will assess how to 
implement mitigating measures 
faster.  The 2016 risk register will 
therefore include the following 
new risks: (1) roof leakage of 
North Courtyard Atrium, (2) 'under 
structure' of new building wooden 
deck terrace, and (3) signage 
completion. 
There are no technical defects or 
damages on the rooftop garden of 
the South Courtyard Conference    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
Centre. 
 
IT governance 4.2 / 2015 My team analysed  modifications of existing documentation 
concerning IT, information security and information confidentiality 
and took note of the attempts 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 formally 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 implem ent them in the existing and 
future 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 Reco1: The Secretariat Agrees 
with recommendation. 
The plan the secretariat is 
following is along these lines: 
Formal Incident and request 
management implementation by 
end 2016, elimination of legacy platform and leveraging of an ITIL 
compliant tool to improve our 
Software Asset management and Contract Management in 2016 
(Manage engine/Service desk 
plus), problem manager role established in 2016 and effective 
beg 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 strategy would 
be useful for IT strategy and planning. ITSD participates with 
other Divisions to the discussions 
about strategic and scenario planning.    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
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 
strategy”. Reco3: The 2016-2019 IT strategy 
was developed after talking to all 
business Divisions about their 
requirements, reviewing the existing systems, evaluating the 
results of a user survey and 
evaluating 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. 
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 recommend also that management take more into account that for 
some staff the two-yearly held Ministerial Conferences are an 
extensive extraordinary workload in addition to their regular duties. 
I suggest considering these tasks in regard to the analysis of 
personnel requirements. The Secretariat agrees with the 
recommendation and the work 
plan of the Security Officer is in 
line with this recommendation. 
Concerning the second 
recommendation about personnel 
requirements, the 2016-2019 
project planning included in the IT 
Strategy takes into account 
Ministerial conference resource 
requirements   
Information 
confidentiality 4.2 / 2015 In connection with the improv ement of IT Security Governance, the 
Secretariat drafted a new “Information Classification Policy” with an 
accompanying “Technical Standard”. I appreciate the current The Secretariat agrees with this 
recommendation. An on-line 
training for all WTO Staff is being    
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Chapter, 
Year Recommendation WTO´s Comment / 
Implementation Status 
approaches to update the WTO’s policies concerning information 
confidentiality. However the documentation of the processes was 
not adequate to counteract the risks for confidentiality of data and 
information. 
I recommend providing the WTO staff with extended guidelines and 
appropriate procedures how to deal with confidential information. prepared: The content is based on 
a UN common curriculum which is 
being adapted to WTO case. We 
are waiting for the delivery of the e-Learning platform that HR is 
setting-up. 
In addition, the guidelines once 
approved will be available on the intranet. 
Facility 
management 
strategy and 
framework  4.3 / 2015 My team analysed WTO’s Facility Management (FM) activities, its 
organisational structure, procedures and existing regulations for 
Facility Management 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 it has not adopted the relevant FM standards and 
has currently no specific overarching FM strategy in place. It further 
mentioned the recent FMS activities rather react to current issues 
than to support proactively managing the maintenance. 
I recommend the WTO Secretariat applying internationally-accepted 
FM standards and “best practises” 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 initiating and 
periodically updating and enhancing a generic “FM policy 
framework” considering the already existing documents as input. I 
further recommend improving the internal and external coordination 
and communication.  The terms of reference to hire a 
consultant who assist in the 
formulation of a facility 
management strategy over the 
medium and long term are 
presently being worked on.  This 
consultant should help FM 
management staff to plan and 
apply internationally-accepted FM 
standards.  Currently, the 
standards being applied, and to 
which the FMS are in compliance, 
are based on the FM Monitor 
manual produced by POM+ 
consultants who are nationally 
recognised important entities in 
the field of Swiss FM standards 
and who carry out national studies 
to produce a Swiss standard FM 
manual which is updated yearly.  
Staff distribution  4.3 / 2015 The reduction of post s actually is on a case to case basis, within 
FMS and SSS there is no concept reflecting the necessary minimum The reduction of posts in FM and 
SSS is a direct result of the trend    
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staff requirements. 
I recommend initiating an overarching concept reflecting the 
minimum staff requirements for FM. within the Organization to limit 
expenses and the need to transfer 
posts from some sections to 
shore-up resources in the legal 
divisions, as per the call of 
members.  In this regard, the FM 
section relinquished 2 posts in 
December 2015.    In November 
2016, the Director and Section 
Heads of AGSD will discuss and 
develop the strategic workforce 
plan of AGSD, that will in turn 
inform the optimal structure.  This 
will be discussed with HRD. 
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 to ensure sound and reliable backup plans and to 
introduce a written guidance on replacement of staff on extended 
absences. Concerning the backup in FMS, 
nevertheless, the updating and 
tracking of the FMS inventory 
continued to be carried out and 
recorded in a separate file 
throughout the absence of the 
staff member. Upon return from 
sick leave, the staff member duly 
updated the database. 
It is to be noted that new software 
to track and manage inventory is 
presently being purchased by the 
WTO which will be operation as of 
early 2017 and for which 3 FMS 
staff members will be trained in its 
use. 
Concerning the backup for SSS, 
HR should issue the VN for the 
Security Coordinator (deputy 
Security manager) by end of May.    
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Implementation Status 
The incumbent of this post should 
also act as the deputy and the 
back-up of the Security Manager. 
In the meantime, the Director of 
AGSD is the back-up for any 
emergency in the absence of the 
security manager. 
Pending repairs 
and projects 
related to construction 
works  4.3 / 2015 The renovation-extension works were completed in 2012/2013, but 
necessary repairs of defects are still pending. 
I recommend improving efforts to solve construction works related 
defects or damages and initiating a written procedure on the 
termination of the defects liability periods. The causes and responsibilities of 
pending defects have been 
identified and solutions agreed with constructors  
Links and 
interactions 
between FMS 
and SSS  4.3 / 2015 My team observed the links and coordination between FMS and SSS. 
Within its large scope of responsibilities SSS also reveals 
malfunctions of the building and it s equipment by its 24/7 security 
patrols and safety inspections. In order to ensure a regular well 
maintained building SSS reports malfunctions to FMS via help 
requests, including proposals for measures which might improve the 
security infrastructure. We noticed inconsistencies within the links 
between SSS and FMS. The interaction between FMS and SSS could 
be improved. 
I recommend the WTO Secretariat evaluating the current structures, 
links and interactions between FMS and SSS in order to provide 
measures to streamline the links between FMS and SSS. A meeting between SSS and FMS 
is being programmed to discuss 
ways of streamlining operations 
between the two Services.  
Thereafter, and by end of 1st 
semester of 2016, options of 
possible solutions will be 
presented to the Director of AGSD 
for action. 
  
 
 
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