RESTRICTED  
  
WT/BFA/155  
 
18 July 2016  
(16-3834)  Page  
Committee on Budget, Finance and Administration   
 
  
 
REPORT OF THE MEETING HELD ON 21 JUNE 2016 
 
The Committee on Budget, Finance and Administration (CBFA) met on 21 June 2016 under the Chairmanship of Ambassador Inga Ernstsone (Latvi a). The Terms of Reference and composition of 
the Committee are set out in document WT/L/44/REV.1. The agenda contained in document 
WTO/AIR/BFA/9 was adopted. 
1  2015 FINANCIAL PERFORMANCE REPORT – WT/BFA/W/392 1.1.  Officials from the Secretariat presented the financial performance report for the year 2015.  
The 2015 budget amounted to MCHF 197.2 and the budgetary expenditure to MCHF 192.6, 
displaying a budgetary saving of MCHF 4.6. Thos e budgetary savings mainly resulted from vacant 
posts in the beginning of 2015. These decreased during the second quarter, as recruitment 
accelerated.  The Secretariat notified the Committee on particular savings achieved on 
expenditures related to contractual services, telecommunications, postal and technical assistance, among others, which had been accomplished th rough enhanced efficiency. The Secretariat 
explained that building maintenance expenditure ex ceeded the budgeted amount due to the fact 
that WTO had become the beneficial owner of th e premises it operates from. Previously, the 
Centre William Rappard fa cilities were owned by the Swiss Confederation. 
1.2.  The Committee's attention was drawn to the negative interest charged by the WTO's banking 
services providers since 31 March 2015. For the year 2015, the financial impact of the negative 
interest could be kept at CHF 42,000 due to negotiations with the WTO's main banks and the lag in time for implementing the changes. Without the special conditions negotiated by the WTO, the 
financial impact would have been far beyond CHF 100,000. The Secretariat indicated that it was 
carefully monitoring the situation. 
1.3.  The Secretariat explained the distinction between the budgetary surplus (MCHF 4.6) and the 
negative financial result (MCHF -6.7), elaborating that the latter includes there are some 
expenditures required to be reflected in accord ance with IPSAS e.g. depreciation, provision for 
contributions in arrears etc. which are not incorporated when the budget is prepared. 
1.4.  The Secretariat highlighted that the methodology for determining the discount rate used for 
calculating actuarial liabilities for the pension plan and After Service Health Insurance was revised 
in 2015 in order to reduce the high volatility noted in previous years. The new approach  is based on the tenets used by the Swiss Chamber of Pension Plan Experts. This employs a combination of 
a smoothed average over some years and the spot rate, whereas the previous methodology 
involved using only the spot rate. 
1.5.  The Secretariat concluded by emphasizing th at the qualifications that had been placed on 
previous financial statements were reversed. Thus, the External Auditors had expressed an 
unqualified opinion on the financial statements.  
1.6.  Members thanked the Secretariat for the report.  1.7.  The Secretariat  and the External Auditor invited the Committee to reflect on necessary steps 
to be taken to arrest the negative financial result. A Member stated that it  deemed it 
inappropriate that the financial performance report contained assertions about future activities related to dispute settlement in a financial report which ought, for all intents and purposes, to be 
confined to the period under review, being 2015. The Secretariat recalled that additional 
information on dispute settlement had been prev iously asked for by Members. The Secretariat WT/BFA/155 
 
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  then informed the Committee that relevant adjustments would be made to the concerned 
paragraph.  
2  2015 EXTERNAL AUDITOR REPORT - WT/BFA/W/393 2.1.  The representatives of the German Supreme Audit Institution (the Auditor) expressed their 
gratitude for the collaboration of the Director Ge neral and the Secretariat during the audit. The 
Auditor said that the 2015 report was focused on the audit of the WTO 2015 financial statements and a performance audit regarding Facilities Management (FM), Security Services, IT Governance 
and Risk Management. On the basis of the audi t conducted, the Auditor certified the 2015 WTO 
financial statements without any reservation. The Auditor assessed that the financial statements provided a clear and transparent presentation of the financial position and performance. 
2.2.  The Auditor highlighted some of his key findings and associated recommendations. The 
Auditor reassured the Members that the Secretariat took note of those recommendations and 
intended to implement most of them. The Auditor concluded by informing the Committee that the financial statements of the WTO Pension Plan for the year 2015 were also certified without any 
qualification. 
2.3.  Members thanked the External Auditor and his team for the comprehensive report. A Member 
expressed appreciation for the close cooperation between the Secretariat and the External Auditor. 
The same Member also recognized that the Secretariat had made important efforts in the 
management of the WTO infrastructure, resulting in significant savings.  
2.4.  Some Members wanted to know what the value added would be if the WTO established an 
Audit Committee, considering that the External Audit covered many WTO issues in its 2015 report. 
Other Members enquired whether the scope of the External Auditor could include matters related 
to the Organizational Review and Human Resources policies. 
2.5.  The Auditor responded that an Audit Commi ttee would be able to intervene more often in 
comparison with the External Auditor. In response , the Secretariat emphasized that the Office of 
Internal Oversight is fundamental in ensuring ongoing audits.  
2.6.  A Member informed the Committee that hi s country's authorities were working on new 
guidelines and procedures for reimbursement of ta xes to the WTO as per the requirements of his 
Government and that those measures would meet the External Auditor's recommendation.  
2.7.  The Committee was also informed that a Facilities Management Strategy would be developed 
in the coming months.  
2.8.  Some Members then raised the issue on paperless environmental and requested  the 
Secretariat to look into that issue and make sure that the WTO Members distribution list was updated. The Secretariat assured Members that a meeting would be arranged across concerned 
Divisions to discuss this further and put appropriate measures in place.  
2.9.  Several Members expressed concern regarding IT Security and IT Governance. The Director 
of the IT Solutions Division informed the Committee that External Auditor's recommendations were 
being taken on board. Members observed that there was scope for development in that area. He 
then reported on the IT Strategy and developmen ts in IT Governance. The IT Director concluded 
by stating that he would make presentations to  the CBFA on a regular basis, to update the 
Committee. 
2.10.  Some Members observed that diversity within the WTO could be improved. Some Members 
enquired whether the External Auditor could look into some Human Resources issues and  policies, 
including this one. A Member observed that diversity has a much broader scope than gender and 
nationality. He added that diversity should not on ly be applied to the recruitment policy but to the 
work place, including internal mobility. The External Auditor stated that they would consider a performance audit in the Human Resources area, in future.  WT/BFA/155 
 
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  2.11.  The Secretariat stated that it was committed to diversity and expressed the limitations 
emanating from the fact that the number of posts is finite and that the process can only be gradual as and when Members of st aff separate form service.   
2.12.  The Chairwoman thanked the External Au ditors on their work and presentation. The 
Committee took note of the report and proposed the following recommendation to the General 
Council. 
2.13.  The Committee recommends that the General Council approve the transfers 
between budgetary sections as outlined in paragraphs 2.31 and 2.39 of document 
WT/BFA/W/392. The Committee further reco mmends that the General Council approve 
the audited accounts for 2015. 
3  ORAL UPDATE FROM THE CHAIR OF THE WTO PENSION PLAN BOARD 
3.1.  The Chair of the WTO Pension Plan Management Board updated the Committee on the on-
going work within the Board. He reported th at the Pension Plan Management Annual Report, 
containing the 2015 audited financial statements, would be submitted to the next General Council 
meeting. The Chair took the opportunity to thank the WTO Pension Plan Secretariat for its 
contribution to the organization. Subsequently, the Chair of the WTO Pension Plan informed the Committee about modifications to be made to the WTOPP's internal rules. He added that those 
changes would not affect the rights of the WTO Members or Pension Plan participants. He then 
stated that the revised rules would also be submitted to the General Council. The Chair concluded by notifying the Committee on further vacancies for recruitment within the Pension Management Board and invited Members to contact the Pension Plan Secretariat to express their interest. 
3.2.  The Committee took note of the report. 
4  PROGRESS REPORT OF THE WORKING GROUP MONITORING THE ASHI STRATEGY 
DEVELOPMENT 
4.1.  The Chair of the Monitoring Group on Af ter Service Health Insurance (ASHI) Strategy 
Development updated the Committee on the progress made by the Monitoring Group.  
4.2.  The Chair of the Monitoring Group reported  that the Strategy Development Team, of the WTO 
Secretariat, had met six times since the last update. The Chair listed the progress made by the 
Secretariat such as refining the proposed principle underlying ASHI; consulting with staff and retirees; exploring cost control options; conducting analytical work on future demographic scenarios; and completing the bidding process for a new management contract for the Medical 
Plan. The Chair concluded by saying that the Secret ariat reported that further work would arise in 
those areas as well as focussing on the governance, management and administration of the medical plan and financing measures. He informed the Committee that the Monitoring Group was 
satisfied with developments made by the Secretar iat and agreed that a future meeting would take 
place in July to discuss the initial financing aspects of the medical plan. 
4.3.  The Committee took note of the report. 
5  PROGRESS REPORT ON THE WORKING GROUP CONCERNING AN AUDIT COMMITTEE 
5.1.  The Chair of the Working Group concerning  an Audit Committee updated the CBFA on the on-
going work of the Working Group. The Members of  the Working Group had identified and drafted a 
document, that was sent to all Members, reflecting the roles and responsibilities for an Audit 
Committee. Though the Working Group had met se veral times and more intensively in recent 
weeks, Members had not reached consensus regarding whether the WTO should or should not have an Audit Committee.  
5.2.  The Working Group Chair informed the CBFA  that the Working Group aimed to meet before 
the end of June to finalize the draft document on roles and responsibilities. The Chair of the 
Working Group requested the CBFA to extend  the deadline of the Working Group from 
30 June 2016 to 30 September 2016. The Committee took note of the report and so agreed.  WT/BFA/155 
 
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  5.3.  The Chairwoman thanked the Chair and the Members of the Working Group. 
6  2015 ANNUAL REPORT ON GRADING ST RUCTURE AND PROMOTIONS IN THE WTO 
SECRETARIAT - WT/BFA/W/395 
6.1.  A member of the Secretariat updated the Committee on the grade structure and promotions 
within the WTO Secretariat. The overall grade stru cture showed professional and support staff in 
grades 1 to 12. As of December 2015, the WTO employed 713 staff, with 95% funded from the 
regular budget and 5%, corresponding to 37 staff, funded from extra-budgetary funds. 
Categorization by grades and gender were also highlighted. It was also noted that the average 
grade of professional staff has decreased to 8. 5, compared to 8.7 two years ago and that the 
average grade of professional staff was 9.24 in 1995. 
6.2.  On the issue of staff mobility, the Secretariat indicated that 21 inter-divisional staff 
movements were completed in 2015. Additionally, 65 posts were advertised internally and 
externally, of which 42 were at the professional level. In 2015, 28 staff members applied for and obtained a position at a higher grade. The Committee was also informed that 46 staff separated 
from service in 2015.  
6.3.  Several Members welcomed the Human Resources report. One Member wished to know the 
allocation per trust fund of the 37 posts funded  by extra-budgetary funds. One Member inquired 
what the cost implication was for shifting staf f from support to professional positions. The 
Secretariat answered that it implied costs, but it had to be considered that higher qualified staff needed to be recruited to perform professional tasks and provide high quality services to the 
Members, while at the same time noting that overall, the grade structure is now lower than in the 
past. Another Member asked why among 38 appointm ents in 2015, 23 external candidates were 
recruited. The Secretariat answered that these hi res mainly related to the reinforcement of the 
dispute settlement system.  
6.4.  On the diversity issue, one Member noted that the trend was going in a good direction. He 
inquired about promotions that took place before 2007 in order for Members to have a broader view on promotions. The Secretariat noted all Members' suggestions and stated that it would 
incorporate these in future reports.  
6.5.  The Committee took note of the report. 7  PROGRESS REPORT ON THE ORGANIZATIONAL REVIEW OF THE  
WTO SECRETARIAT 
7.1.  Deputy Director-General (DDG Brauner) updated the Committee on the on-going progress 
made within the Organizational Review. He stressed the fact that the Organizational Review was specifically for human resources and financial aspects. He then informed the Committee about the 
Bonus Working Group and its progress to date. He also informed Members about the establishment 
of a working group tasked with assessing the Performance Evaluation System.  
7.2.  Subsequently, DDG Brauner presented the current WTO grade structure, comparing it to the 
past peaks and the WTO structure approved by th e Director-General which is to be implemented 
over time. He underlined that the Director-General was monitoring the situation carefully. He informed the Committee of the distribution of th e 30 promotions earmarked for 2016, by grade. To 
conclude, DDG Brauner informed the Committee of the mobility exercise that the Secretariat would 
be putting in place from October 2016. He then indicated that mobility was also practiced through 
expressions of interest that enabled staff members to move laterally without any effect on the grade structure.   
7.3.  One Member inquired about the status of th e job profile exercise. The Secretariat stated that 
it was working on identifying benchmarks to compare various tasks performed by staff as a lead up to the job profile exercise. 
7.4.  The Committee took note of the report and encouraged Senior Management to keep updating 
the Committee. WT/BFA/155 
 
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  8  REVISED TREASURY MANAGEME NT POLICY - WT/BFA/W/394 
8.1.  A Member of the Secretariat informed the Committee of revisions that had been made to the 
Treasury Management Policy, underlining that the revisions were intended to enable the 
Secretariat to take appropriate measures to stem the negative interest charged by banks. 
8.2.  In response to concerns expressed by some  Members, the Secretariat reassured them that its 
approach was prudent and low risk and that the Se cretariat had the requisite expertise to manage 
the issue. 
8.3.  The Committee took note of the Report. 
9  OTHER BUSINESS 9.1.  DDG Brauner informed Members that a new Chief of the Office of Internal Oversight would 
assume the position in September 2016. 
9.2.  Deputy Director-General Shark invited Members to liaise with their capitals and encourage 
their Governments to contribute to replenish the LDCs Trust Fund used to cover participation of delegates from eligible countries to participate at Ministerial Conferences.  
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