WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/BFA/126 
14 October 2011 
 (11-5098) 
Committee on Budget, Finance and Administration  
  
 
REPORT OF THE MEETING HELD ON 11 OCTOBER 2011 
 
 1. The WTO Committee on Budget, Finance and Administration met on 11 October 2011 under 
the chairmanship of Mr. Pasi-Heikki Vaaranmaa (F inland).  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/3814 was adopted. 
I. REPORT OF THE EXTERNAL AUDITO R ON 2010 FINANCIAL STATEMENTS 
(WT/BFA/W/237) 
2. The Director-General highlighted the importa nce of governance to ensure an efficient 
management of resources.  He reminded the Comm ittee of the actions taken by the Secretariat to 
promote transparency, integrity and accountability.  It  included the establishment of the internal audit 
function in 2007.  He also stressed the central role  played by internal and external auditors and how 
they had served the Secretariat’s management and Members.  3. The Director-General pointed out that the Secret ariat was engaged in three projects that were 
going to further modernize and improve the system of governance.  The first project involved the 
implementation by the Secretariat of Internationa l Public Sector Accounting Standards (IPSAS) by 
2012;  the second project related to the modernization of the system of resource management to focus 
on activities and outputs;  and finally, the third project would deal with a review of the WTO Financial Regulations, that had only been slightly modified since the establishment of the WTO.  
4. The President of the French Court of Aud it first informed the Committee that the 2010 
financial statements had received a clean audit opinion.  The auditor th en indicated that the Secretariat 
had rapidly implemented a number of its recommend ations, especially regarding the presentation of 
the financial statements and the methodology for cal culating provisions for contribution in arrears. 
5. The auditor highlighted the impact of the adop tion of IPSAS with the recording of employee 
benefits liabilities.  The total liability for employ ee benefits amounted to some CHF 26 million at the 
end of 2010.  Provisions recorded against those liabilities had been increased by CHF 2.6 million in 
2010 to reach CHF 6.4 million.  The auditor also  assessed that the WTO Pension Plan was not legally 
and financially independent from the Secretariat.  Ther efore, the Secretariat would also need to record 
in its accounts an actuarial liability of some CHF 832 million related to the Pension Plan.  
6. The auditor finally reported on the results of  the performance audit carried out in the 
Informatics Division (IT Division).  It was acknowle dged that the Division was highly attentive to the 
needs of other services in the WTO by intervening e fficiently and rapidly.  Despite the considerable 
number of staff and resources available, the IT Division was still overwhelmed by the amount of 
work.  The IT Division was also relying on a large nu mber of short-term staff who had been recruited 
over periods of several years.   WT/BFA/126 
Page 2  
 
  7. The auditor recommended a greater level of strategic planning within the IT function, 
feasibility studies on outsourcing solutions and more  reliance on existing off-the-shelf solutions 
versus the internal deve lopment of applications. 
8. Two Members asked the Secretariat a set of questions to clarify the level of provisions, the 
impact of the implementation of IPSAS on contributi ons and staff benefits, the role of the central 
procurement function, the current status on short-te rm contracts in the IT Division and the overhead 
charges on trust funds. 
9. The Committee took note of the report and th anked the external auditor for the work 
performed.  
II. 2012-2013 BUDGET PROPOSALS HIGHLIGHTS 
10. The Director-General gave Members some preliminary indications regarding the budget 
proposal for the biennium 2012-2013 that would be finalized and released shortly.  He reminded 
Members that his approach on the budget continued to  be based on:  a) transparency;  b) spending 
restraint;  c) search of productivity gains;  and d) return to Members of savings achieved.  The global 
financial crisis combined with the rise of the Swi ss franc against most international currencies had led 
some Members to ask the Secretariat for a great leve l of restraint and ingenuity to present a reasonable 
budget proposal.  
11. The WTO was a Member-driven organization where Members determined the pace of 
negotiations and accessions, the level of dispute settlement activities, the technical assistance and 
monitoring needs.  All those activities had a significant impact on the budget of the Organization.  The Secretariat did not identify any notable reduction in the level of activity projected for the next 
biennium.  The overall level of activity was actually expected to increase slightly.  There was an 
urgent need to strengthen the resources to support the dispute settlement mechanism with the addition 
of two posts in the Appella te Body Secretariat and one post in th e Legal Affairs Division.  Monitoring 
and surveillance services would continue to be streng thened to cope with th e increase in Trade Policy 
Reviews and Regional Trade Agreements.  Finally , the completion of the Building Project would 
continue to impact the WTO budget, especially with the start of the reimbursement of the 50-year, 
CHF 60 million interest-free loan.  
12. The current economic climate provided a unique  opportunity for the WTO and Its Members 
to review critically the internal and external servi ces provided by the Secretariat.  The Secretariat had 
identified a number of actions that could be take n to streamline the operatio ns and could generate 
sufficient savings in order to achieve a zero nomin al budget growth in 2012 and a zero real growth in 
2013.  That objective would require the Secretariat and its Members to accept some adjustments in the 
services provided.  Half of the savings could be achieved through adjustments to services provided to 
Members and the other half through modifications to th e internal operations of the Secretariat.  Those 
measures would include the replacement of current verbatim minutes of meetings by summarized reports.  Other measures would include a shift fro m the traditional distribution of documents in 
printed form to electronic document distribution,  improvements in the scheduling of meetings, 
limiting the use of temporary assistance, implem entation of an harmonized document formatting 
standard and a range of changes in internal services within the Secretariat.  The Director-General was 
looking forward to a constructive dialogue w ith the Committee on the upcoming budget proposals.  WT/BFA/126 
 Page 3 
 
 
  III. ADMINISTRATIVE UP-DATES AND PROGRESS REPORTS AS AT 
30 SEPTEMBER 2011 
A. WTO  BUDGET AND FINANCE REPORT (WT/BFA/W/249) 
13. A member of the Secretariat indicated that 75 per cent of the 2011 budget had been 
committed at the end of the third quarter.  The bu dget was on schedule to be fully implemented by the 
end of the year.  The upcoming budget proposal woul d contain a more detailed review of the 2011 
budget performance.  He also presented the situa tion regarding Members' contributions as at 
30 September 2011, showing that CHF 153.8 m illion of the assessed CHF 194 million had been 
received, and that 78 Members or 51 per cent of the Membership had no outstanding balance.  The 
Secretariat had sent out reminder letters in September 2011. 
14. The cash situation showed that the WTO held  CHF 79 million on its bank accounts, including 
the Working Capital Fund and Extra-Budgetary Funds.  The situation was in lin e with prior years, and 
there were no short-term cash flow concerns.  Swiss franc interest rates remained very low. 
B. EXTRA -BUDGETARY FUNDS REPORT (WT/BFA/W/247) 
15. The Committee was informed that in the first nine months of 2011 a total of CHF 10.6 million 
had been received from twelve Members and an amount of CHF 19.5 million was available in the 
Doha Development Agenda Trust Fund (DDAGTF).  Contributions in 2011 had been consistently 
below the average of recent years.  The low level of contributions to the DDAGTF meant that current 
year receipts were likely to fall short of curre nt year expenditure for a second consecutive year. 
16. Since the end of September, the WTO had received the pledged contribution from France 
amounting to EUR 1,000,000.  The Secretariat hoped to  receive other formal pledges for 2011.  The 
expenditures recorded so far in 2011 for the implementation of the planned activities under the 
DDAGTF had reached CHF 16.5 million.  Several lo wer priority or under-subscribed activities had 
been cancelled, additional activities would be appr oved only on an exceptional basis between now and 
the end of the year.  At that point, roughly 70 per cent of the planned activities were completed or at some stage of active implementation. 
17. The other specialized trust funds were generally in a stable and healthy state.  However, the 
intended level of support for those funds for 2012 remained unclear.  The amount available in the 
dedicated trust fund established to cover expenditure related to the participation of LDC countries to 
participate in the 8
th Ministerial Conference in December 2011 was sufficient. 
18. A Member enquired about the specific actions ta ken by the Secretariat to identify new donors. 
Following the question of another Member, the Secretar iat confirmed that the rise of the Swiss franc 
had a positive impact on the cost of activities carried  outside of Switzerland.  However, the impact 
could not be precisely calculated. 
C. WTO  PENSION PLAN  
19. The Secretary of the WTO Pension Plan Manage ment Board reported that the position of the 
investment strategy at the end of September ha d been reviewed.  The investment adviser had 
demonstrated the probability that the Plan would ach ieve its long-term target of 3.5 per cent although 
there would be ups and down in the short-term .  With respect to the External Auditor's 
recommendations that the Plan should be fully sel f-financed, the Management Board had begun its 
consideration of a possible draft budget for 2012-2013.   WT/BFA/126 
Page 4  
 
  D. H
UMAN RESOURCES  
20. A member of the Secretariat presented an ove rview of human resources strategic priorities 
that comprised output planning, job profiling and be tter performance management.  It was planned to 
create an online system for setting out individual staff objectives and make them measurable.  A 
mid-year staff performance review had been la unched using the new online performance evaluation 
tool. The key features of the revised performance rewards policy were detailed.  The number of 
performance rewards awarded amounted to 79 and 83 for 2009 and 2010, respectively. 
21. A Member asked how many staff members had received a performance reward before the 
reform had been introduced and if the divisions th at were currently facing a heavy workload had been 
considered differently in respect with rewards.  Another Member enquired about the quality assurance 
process surrounding the performance reward system.  
E. BUILDING PROJECT REPORT  
22. A member of the Secretariat explained the situ ation regarding the renovation project.  A total 
of 403 offices had been renovated in the South an d North Wings.  The next phases would be the 
renovation of the remaining offices in the North Wing and Room F from October 2011 to March 2012 
and the conference rooms located in the "Salle  des Pas perdus" on the ground floor and the main 
entrance from April to September 2012.   
23. Some 270 staff would move from the annex of Chemin des Mines (CDM) to Centre William 
Rappard (CWR) in 2012.  With respect to the intra-mu ros project, there had been a soft-opening of the 
meeting room located in the South Courtyard during  the Public Forum.  The laying of the foundation 
stone for the new building had taken place on 12 Sept ember 2011.  That project had remained on time 
and within the budget.   
24. The Deputy Director-General recalled that the overall common facilities budget amounted to 
CHF 21.5 million.  The Committee had already auth orized certain expenditures from the Members’ 
Transition Operating Fund, including the equipping a nd furnishing of conference rooms located in the 
South Courtyard.  Those conference rooms had b een equipped with new technology facilities.  The 
contract for the supply of the common area furnitu re had also been competitively tendered.   
25. The remaining projects included the furnishing of  existing Conference rooms for an estimated 
amount of CHF 8 million.  The budget was expected to  be quite tight.  The Secretariat would study 
whether it would be possible to keep the existing c onference furniture in the meeting rooms located in 
the North Wing.   
26. The Swiss authorities through the FIPOI would manage the construction and the financing of 
the security perimeter surrounding the WTO.  Apar t from the fence and the terrace, the security 
perimeter would need to be complemented by a security building at the entrance of the WTO replacing the existing prefabricated huts.  The fundin g for that building had not been yet identified. 
27. Following a question from a Member, the Secretariat reported that the new temporary car 
park, replacing the existing car park at Sécheron, w ould be open as of January 2012.  Delegates would 
receive new badges to gain access to that car park.   WT/BFA/126 
 Page 5 
 
 
  IV. ADMINISTRATIVE MEASURES FOR MEMBERS IN ARREARS OF 
CONTRIBUTIONS  
28. A member of the Secretariat reported that 12 Members were under Administrative Measures 
at the end of September 2011, comprising three in Ca tegory I, two in Category II, one in Category III 
and six Members in Category IV (Inactive).  Sinc e the last meeting of the Committee in July, the 
number of Members subject to Administrative Measures had been reduced from 16 to 12.   
29. The Delegate of Guinea stated th at the arrears of contributions of her country had been settled 
and had thanked the Director-General for his role in engaging actions to meet the President and to 
achieve that result.   
30. Following the announcement made at the last m eeting of the General Council, Administrative 
Measures were fully implemented on 1st September 2011.  The Secretariat was hopeful that solutions 
would be found for Members who remained in Category IV.   
31. An update was also provided on the nine Members that had accepted payment plans.  Two 
Members were not fully complying with the terms of  the payment plans.  The Secretariat was closely 
following those two cases.  
V. OTHER BUSINESS 
 
32. The next meeting was scheduled for Monday 31 October 2011 at 3.00 PM.  The Delegations 
were invited to remain available in Novemb er in order to pursue the budget discussion.  
 
__________