WORLD TRADE  
ORGANIZATION   
WT/BFA/W/237 
30 June 2011  
 
(11-3229) 
Committee on Budget, Finance and Administration Original:   French 
  
 
     
 
    
 
    
REPORT ON THE FINANCIAL STATEMENTS FOR THE 
FINANCIAL YEAR ENDED 31 DECEMBER 2010 
AND PERFORMANCE AUDITS WT/BFA/W/237 
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  TABLE OF CONTENTS 
 
I.  INTRODUCTION .................................................................................................................. .. 3 
II.  CERTIFIED ACCOUNTS FOR 2010 .................................................................................... 3  
A.  M
AIN FINDINGS  ........................................................................................................................... 3  
B.  LIST OF RECOMMENDATIONS  ...................................................................................................... 4  
C.  FINANCIAL STATEMENTS  ............................................................................................................ 5  
1.  Preparation for the WTO's transition to IPSAS .................................................................... 5  
2.  Improving the notes to the financial statements .................................................................... 6  
3.  Financial st atements .......................................................................................................... ....... 8 
D.  INCOME  .............................................................................................................................. ......... 8 
1.  Statutory contributions  by Member States ............................................................................ 9  
2.  Plans for absorption of the de bt of certain Member States ................................................ 10  
3.  Contributions by Observers ................................................................................................... 11 
4.  Refund of tax by the Unit ed States of America .................................................................... 12  
E.  CHARGES  .............................................................................................................................. ..... 12 
1.  Levy on expenditure by trust funds ...................................................................................... 12  
2.  Procurement ................................................................................................................... ......... 13 
3.  Exchange losses ............................................................................................................... ........ 16 
4.  Staff costs ................................................................................................................... .............. 18  
F.  ASSETS  .............................................................................................................................. ........ 19 
1.  Management of the inventory of publications and souvenirs ............................................. 19  
G.  LIABILITIES  .............................................................................................................................. . 21 
1.  Management of obligations to suppliers and staff ............................................................... 21  
2.  Provision for expenditure committed but not paid .............................................................. 23  
H.  PLANNED EXTENSION TO WTO  HEADQUARTERS  ..................................................................... 24  
1.  Observance of the schedul es and budget fixed ..................................................................... 25  
2.  Financing the cost of equipping the new facilities ................................................................ 25  
3.  Financing heavy-duty maintenance costs ............................................................................. 26  
III. PERFORMANCE AUDITS ................................................................................................... 27  
A.  SUMMARY OF FINDINGS AND RECOMMENDATIONS  ................................................................. 27  
1.  Main findings ................................................................................................................. .......... 27 
2.  List of recomm endations ....................................................................................................... . 28 
B.  THE ORGANIZATION 'S IT SYSTEM  ............................................................................................ 28  
1.  The share of IT in the WTO's expenditure and staff numbers........................................... 28  
2.  Planning of the Informati cs Division's activities .................................................................. 31  
3.  Division of tasks between the Informatics Division and applications bought on 
the market .................................................................................................................... ............ 34  
4.  Compliance with the rules on competition, quality and safety ........................................... 38  
IV.  ACKNOWLEDGMENTS ...................................................................................................... 43  
V.  CONCLUSION .................................................................................................................... ... 43 
VI.  ANNEX:  FOLLOW-UP TO PREVIOUS RECOMMENDATIONS ................................ 44  
  WT/BFA/W/237 
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  I. INTRODUCTION 
1. A team of four external auditors examined the financial statements of the World Trade 
Organization (hereinafter "the Organization") fro m 4 to 16 April 2011.  This report presents the 
findings of this audit, which focused mainly on: 
(a) The presentation of the financial statemen ts, maintenance of the WTO accounts and 
linking of operations to the financial year; 
(b) collection of the Organization's income, especially statutory and voluntary 
contributions; 
(c) human resource management; 
(d) cash and cash equivalents; 
(e) procurement; 
(f) outstanding commitments;  and 
(g) provisions. 
2. The audit was conducted in compliance with in ternational auditing st andards (International 
Standards Auditing - ISA), as well as with the WTO' s Financial Regulations and the additional terms 
of reference governing the external audit of the WTO's accounts. 
3. The purpose of the audit was to determine with  reasonable assurance whether the financial 
statements contained any significant anomalies so as to enable the external  auditor to express his 
opinion to the effect that these financial statem ents had been drawn up in conformity with the 
financial information standards applicable. 
4. The auditors confirm that they had access to the accounts, supporting doc uments and all other 
relevant documentation. 
5. Every observation and recommendation was discuss ed with the officials concerned.  The 
closing conference took place on 15 April 2011. 
6. This report also resumes and updates the findings of the performance audit of the WTO's IT 
system, conducted by three auditors from 18 to 30 October 2010. 
II. CERTIFIED ACCOUNTS FOR 2010 
A. MAIN FINDINGS  
1. The presentation of the notes to the financ ial statements is clear and all the auditors' 
recommendations intended to complete the word ing of certain notes were immediately taken 
into account.  
2. The amount of arrears in statutory contributions by Member States has been reduced 
by means of plans to absorb the longest-standing  debts.  The provision for contributions in 
arrears is now calculated on a more realistic ba sis and also includes arrears in contributions 
by Observers.  WT/BFA/W/237 
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  3. The amount of real transfers from the trus t funds to the regular budget is decreasing, 
whereas it should be increased to cover all Secretariat expenditure relating to programmes 
financed through these trust funds.  
4. The risk of error noted in exchange op erations, which are not fully computerized, 
implies more stringent internal controls.  
5. Procedures for procurement and managi ng inventories are becoming better, but 
further technical improvements are required.  
6. The Organization abides by the plan for the transition to IPSAS decided by it.  There 
is still room for some technical progress concer ning, in particular, how charges paid in 
advance and stocks are dealt with in the accounts  
7. In 2010, the project for the refurbishment-extension of the headquarters complied 
with the planned schedules and budgets.  The cost  of equipping the new installations should 
be the subject of a comprehensive estimate and a financing plan  
 
B. LIST OF RECOMMENDATIONS  
7. Recommendation No. 1.  (i) In Note 4, "Receivables from Members and Observers", the 
year-by-year trend in these receivables and the provision for arrears in contributions should be 
explained in more detail;  (ii) in Note 12, "E mployee benefits", the updated amount of separation 
grants for which provision has to be made should be indicated ;  and (iii) the origin of the differences 
between Note 13, "Trust fund balance due to donors ", and the other financial statements should be 
explained . 
8. Recommendation No. 2.  A plan to absorb arr ears in contributions by Observers should be 
adopted. 
9. Recommendation No. 3.  Efforts should be pursued:  (i) to accelerate refund by the 
United States of the taxes of WTO staff who resided there;  and (ii) to obtain this refund according to 
the method advocated by the Administrative Tribunal of the International Labour Organization. 
10. Recommendation No. 4.  The percentage of the levy on trust funds to finance Secretariat 
expenditure should be increased. 
11. Recommendation No. 5.  (i) The procedure for certifying services provided should be 
reorganized;  (ii) the list of "suppliers" in the accounts management system should be updated 
annually;  (iii) the rights of buyers in the system should be limited;  and (iv) the " iProcurement " 
module in the Oracle  program should be utilized to com puterize the monitoring of orders. 
12. Recommendation No. 6.  (i) Regular analyses of movements in exchange losses and gains 
should continue;  and (ii) the internal control mech anism should include some tests for transactions in 
currencies for which the excha nge rates are entered manually. 
13. Recommendation No. 7.  The criteria for taking unpaid leave into account when calculating 
rental subsidy need to be clarified. 
14. Recommendation No. 8.  The necessary pro cedures for introducing IPSAS 12 for the 
management of inventories should be formally adopted. 
15. Recommendation No. 9.  Those "suppliers" acc ounts for which the debts have been settled 
should be closed.  WT/BFA/W/237 
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  16. Recommendation No. 10.  (i) The procedures for making accounting entries concerning 
charges paid in advance should be formally adopted through an internal note;  and (ii) an internal 
control system to detect inconsistencies in accoun ting balances, analyse them and make the necessary 
adjustments to the accounts should be introduced. 
17. Recommendation No. 11.  The WTO should adjust its budgetary and accounting practices for 
expenditure commitments and provisi ons for expenditure committed but  not paid, and should adapt its 
Financial Regulations to be consis tent with IPSAS 1 (paragraph 6), which provides that entries should 
be linked to the financial year concerned 
18. Recommendation No. 12.  The WTO should make a comprehensive estimate of the cost of 
equipping the new installations being completed a nd should propose a financing plan for these costs. 
19. Recommendation No. 13.  Before the end of the work the WTO should define more clearly 
the costs to be recorded as property plant and equipm ent and those to be left in the charges account. 
C. FINANCIAL STATEMENTS  
1. Preparation for the WTO's transition to IPSAS 
20. On 11 May 2009, the WTO Council adopted a plan for the gradual implementation of 
International Public Sector Accounting Standards (I PSAS), to be completed at the beginning of 2013 
with the presentation of financial statements fo r the 2012 financial year consistent with these 
standards. 
21. The first stages of this plan are going ahead in  accordance with the schedule adopted.  After 
having decided that presentation of the financial st atements for the 2009 account s should be consistent 
with IPSAS 1, the WTO planned to take the following  action in 2010 and 2011 in order to be able to 
determine an opening balance for the 2012 financial year in accordance with IPSAS: 
 Increase in the provision for employee benefits; 
 calculation of commitments for the pension pl an and the sickness insurance plan for 
retirees in accordance with IPSAS 25 (in Note 12 the WTO included the amount of its pension plan liabilities - CHF 492,183,000
1 - after-service health insurance - 
CHF 239,405,000 - in a table showing the provision for employee benefits.  These long-term benefits are not the subject of a provision in the OECD's accounts (which 
have long been consistent with IPSAS in this respect); 
 preparation for recording the WTO's asset s by setting thresholds for recording 
property, plant and equipment, identifying go ods that will not be fully amortized in 
2012 and bridging the gaps existing between the physical and accounting inventories; 
 revision of the Organization's Financial Re gulations to bring them into line with 
IPSAS and updating them with a view to  putting new Regulations before the 
Committee on Budget, Finance and Administration at the end of June 2011. 
                                                      
1 Swiss francs. WT/BFA/W/237 
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  2. Improving the notes to the financial statements 
22. In accordance with the first six recommendations in our previous report, the Secretariat has 
completed the notes to the financial statements.  These are drafted very clearly and show the desire to explain the trends noted to Member States so as  to enable them to have the fullest possible 
information on which to base their decisions, in conformity with IPSAS 1.  Nonetheless, some minor 
improvements have been proposed below: 
(a) Liabilities in the statement of financial position 
23. In accordance with Recommendation No. 1 in our previous report, liabilities in the statement 
of financial position should explicitly indicate that  "the amounts due to donors" from the trust funds 
correspond to deferred revenue, as clearly explained in Note 13 "Trust fund balance due to donors", 
although this did not appear from the provisional  financial statements.  In accordance with our 
recommendation, the Secretariat modified the financia l statements to this effect during the audit. 
(b) Note 4 on receivables from Member States and Observers 
24. Note 4 should include more precise indications to enable the figur es mentioned to be linked to 
those in the statement of financial position or to Note 14 on the Working Capital Fund.  To make it 
easier for the reader to understand, the following should have been explained: 
 The total amount of receivables mentioned in Note 4 (CHF 24.85 million) is the sum 
of the receivables from Member States (CHF 23.76 million) and from Observers (CHF 1.15 million), mentioned individually in the statement of financial position, 
plus receivables from Members under th e Working Capital Fund (CHF 63,274), 
mentioned in Note 14; 
 the provision for arrears in contributions fell from CHF 25.85 million at the end of 
2009 to CHF 15.89 million at the end of 2010 because of two contrary movements, 
although these cannot be distinguished as the No te is currently worded:  taking into 
account the risk of non-payment of contributions by Member States, adjusted according to the length of time they have  been outstanding, reduces the provision 
currently calculated on the basis of 100 per cent of arrears by CHF 11.03 million, and the provision of CHF 1.07 million for arr ears in contributions by Observers, which 
has not been done until now. 
(c) Provision for employee benefits 
25. The amount of the provision for employee be nefits, created in 2009, has risen from 
CHF 3.78 million to CHF 6.37 million, incorporating a larger share of staff entitlement for leave not 
taken:  in 2010, all the entitlement of tempor ary and permanent staff who had accumulated over 
20 days of untaken leave was incorporated (whereas  only the entitlement of permanent staff who had 
accumulated more than 40 days were taken into account in 2009).  The provision therefore covered 
41.75 per cent of these entitlements in 2010,  as against 16.84 per cent in 2009. 
26. The provision also includes all entitlement to education grants and home leave, as in 2009, 
and dependency allowances, for the first time.
2  The WTO does not yet take into account staff 
members' entitlement to removal allowances, retu rn to the home country for expatriates and 
                                                      
2 In 2009, these entitlements were, however, included in the provision for outstanding obligations at the 
end of the financial year.  WT/BFA/W/237 
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  separation from service grants:  Note 12 "Employee benefits" does, however, provide an estimate of 
the amount which these elements probably represent. 
27. It nevertheless indicates an amount for provision for separation grants that has not been 
updated (CHF 14.48 million), even though the Secr etariat has already calculated the updated amount 
(CHF 11.08 million), a much lower figure, which should replace the former one. 
Table 1.  Estimate of the total provision for employee benefits 
(in Swiss francs) 
 
Entitlement for which provision 
has to be made Total entitlement for which 
provision has to be made Provision for entitlement in 2010 
Untaken annual leave 9,725,321 4,060,500 
Education grant 1,186,400 1,186,400 
Home leave 1,075,500 1,075,500 
Dependency allowance 50,000 50,000 
Removal indemnity 3,010,702 0 
Separation grant 11,087,494 0 
Total 26,135,417 6,372,400 
Source : Auditor, based on the data in Note 12 to the financial statements. 
28. Contrary to Recommendation No. 5 in our previous  report, Note 12 to the financial statements 
still does not indicate the stages which the WTO inte nds to follow up to full implementation of the 
IPSAS, in the 2012 accounts.  The WTO has not ma de 100 per cent provision for employee benefits 
in order to avoid having to make too radical cha nges to its accounts and balances, but the method 
chosen leaves it with a very large overall amount , some CHF 19.76 million, for which provision has 
to be made in two stages, in the accounts for 2011 and 2012. 
(d) Note 13 on the trust fund balance due to donors 
29. The amount of trust fund expenditure mentioned in Note 13 (CHF 29.48 million) differs from 
the amount mentioned in the statement of financial performance (CHF 29.15 million).3 
Recommendation No. 1.  
(i) In Note 4, "Receivables from Members and Observers", the year-by-year trend in 
these receivables and the provision for arrears in contributions should be explained in more detail;  
(ii) in Note 12, "Employee benefits", the updated amount of separation grants for which 
provision has to be made should be indicated;  and 
(iii) the origin of the differences between No te 13, "Trust fund balance due to donors", 
and the other financial statements should be explained.  
The Secretariat accepted this recommendation immedi ately and amended the wording in the financial 
statements accordingly during the audit . 
                                                      
3 The refund of 10 per cent to the regular budget (CHF 235,452.80), the rental paid by the Integrated 
Framework (CHF 90,000) and the trust fund exchange losses (CHF 8,292) have been deducted from the amount mentioned in the statement of financial performance.  This presentation is normal because Note 13 shows all 
trust fund expenditure while the statement of financial performance shows the net expenditure of these funds. WT/BFA/W/237 
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  3. Financial statements 
30. In 2010, the statement of financial performance recorded a surplus (CHF 10.52 million) that 
was ten times higher than that in 2009 (CHF 0.99 million), because of the CHF 9.96 million decrease 
in the provision for arrears in contributions resu lting from the new method of calculation mentioned 
above, as recommended by the external auditors. 
31. Without this reduction, the surplus would only have been CHF 218,362, a 78.12 per cent 
decrease compared to 2009. 
32. Despite the tenfold increase in the surplus in 2010, the cash  flow situation showed a 
CHF 521,398 reduction in the amount of cash availabl e, the main reason being the trend in trust 
funds, which absorbed CHF 5.5 million of cash, whereas they had contributed CHF 4.28 million in 
2009 (in fact, these funds spent CHF 2.57 million more than in 2009 and the amount of voluntary 
contributions which replenish the funds decreased by CHF 4.94 million in 2010). 
33. The statement of financial position at 31 D ecember 2010 shows a 47.08 per cent increase in 
net assets (from CHF 20.55 million to CHF 30.23 m illion) because the assets increase as a result of 
the work on the refurbishment-ex tension of the headquarters, while  liabilities decrease because of the 
lower amount of statutory and volunt ary contributions paid in advance
4 and provisions. 
34. The trend in provisions is very uneven:  the provision for contributions in arrears, already 
mentioned, decreased by CHF 9.96 million and that for employee benefits increased by 
CHF 2.59 million because of the transition to IPSAS;  at the end of the financial year, the provision for outstanding obligations rose by CHF 6.1 mill ion, notably because of the CHF 4.5 million 
expenditure committed for the refurbis hment-extension of the headquarters, not paid out by the end of 
2010. 
35. As emphasized in our previous reports, the tr ansition to IPSAS will see the WTO's financial 
situation deteriorate because it will mean includi ng in the accounts the Organization's long-term 
commitments under the pension
5 and sickness insurance schemes, whose amount will probably 
exceed that of the Organization' s financial assets, land, buildings6 and equipment.  Nevertheless, 
pension commitments are implicitly covered by Memb er States under Article 21 of the Regulations of 
the Pension Plan:  " In the event of dissolution of the WT O, the General Council shall take the 
necessary steps to guarantee the benefits ac quired under these Regulations by participants and 
beneficiaries at the date of dissolution ."  The probable deficit in the statement of financial position 
will therefore in no way be comparable to that of a private company. 
D. INCOME  
36. The WTO has managed to reduce arrears in payment of statutory contributions by certain 
Member States by means of the debt absorption plans it has negotiated with them and it has made a 
                                                      
4 Statutory contributions paid in advance by Members and Observers fell from CHF 5.18 million to 
CHF 0.97 million and voluntary contributions paid in advance (included in the liabilities under the heading 
"Trust fund balance due to donors") fell from CHF 24.95 million to CHF 19.44 million. 
5 The latest interim report of the Mercer firm of actuaries, drawn up for the WTO pension scheme on 
9 July 2010, estimated pension fund commitments to be CHF 1,552 million at 31 December 2009 (compared to 
CHF 1,517 million at the end of 2008) and the fund's assets at CHF 358 million at the end of 2008 (compared to CHF 279 million at the end of 2008).  The WTO has asked the actuary to assess its pension and sickness 
insurance commitments in conformity with IPSAS. 
6 The value of the WTO headquarters, estimated by its headquarters agreement and its infrastructure 
contract of 17 May 1995 to be CHF 56 million, should be estimated at its "fair value", pursuant to IPSAS 17, 
taking into account the CHF 130 million for the planned refurbishment-extension work.  WT/BFA/W/237 
 Page 9 
 
 
  more realistic estimate for the relevant provisi on.  On the other hand, although there is now a 
provision for arrears in contributions by Observers, these continue to increase. 
1. Statutory contributions by Member States 
37. Pursuant to Regulation 12 of the Financial Re gulations, the contributions of the 153 Member 
States7 of the WTO are determined as a percentage of each country's international trade (imports plus 
exports) in relation to the total international trade of all WTO Members, according to a scale that is 
revised each year by the General Council.  The mi nimum contribution is set at 0.015 per cent of this 
trade.  Five reference years are taken into account, for example, 2003-2007 for the 2010 contributions. 
38. In practice, each year the Organization calls for the contributions determined in the scale 
minus, where applicable, each State's share of th e distribution of the Organization's budget surpluses 
at the end of the preceding financial year (prescrib ed by Regulation 26 of the Financial Regulations) 
and the amount of interest credited under the Early Payment Encouragement Scheme. 
39. The list below shows that in 2010 there was a slight improvement in the percentage of 
contributions paid in relation to assessed contri butions as compared to 2009 and a decrease in 
contributions in arrears (-12.13 per cent) and in accumulated arrears (-8.35 per cent).  These latter 
arrears accounted for 12.32 per cent of the amount of statutory contributions in 2010, as against 
14.41 per cent in 2009.  At 31 December 2010, 54 Member States out of 153 had payment arrears;  for 26 of these, they exceeded CHF 100,000.  The following were the highest amounts: 
 United States of America (CHF 4,907,097) ;  this debt only concerns 2010, the 
United States regularly pays part of its  annual contribution the following year); 
 Chad (CHF 1,382,203); 
 Sierra Leone (CHF 1,265,259); 
 Hungary (CHF 1,187,212, for 2010 alone); 
 Mauritania (CHF 1,184,095); 
 Venezuela (CHF 1,161,863); 
 Burundi (CHF 1,160,743). 
40. Of the 26 countries mentioned above, 16 have de bts dating back to the years preceding 2004 
and seven have debts preceding 1988. 
41. To encourage countries to pay their contributio ns rapidly, which are due on 1 January each 
year pursuant to Regulation 13 of the Financial Regul ations, the WTO pays them interest calculated 
between the date on which each one pays its c ontribution for the current financial year and 
31 December.  This interest is deducted from the amount of the assessed contributions with a two-year 
interval:  interest in 2008 lowered contributions for 2010. 
42. The WTO places countries in arrears into four categories, depriving them of a certain number 
of rights depending on the amount of their debt;  at the end of 2010, this procedure affected 11 countries. 
                                                      
7 Former Yugoslavia still counts as a Member of the WTO because  of its contribution arrears. WT/BFA/W/237 
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  Table 2.  Contributions by Member States assessed and paid in 2008 and 2009 
(in Swiss francs) 
 
  2009 2010 2010/2009 
% 
A. Statutory contributions by existing Member States 187,700,000 192,200,000 +2.40 
B. Statutory contributions by new Member States 0 0  
C. Distribution of the surplus among Member States 4,000,000 2,800,000 -30.00 
D. Interest earned and paid out to Member States 
with a two-year interval 830,378 1,327,420 +59.86 
E. Total contributions assessed (E=A+B-C-D) 182,860,622 188,072,580 +2.85 
F. Total contributions paid for the financial year 171,895,305 178,209,649 +3.76 
G. Arrears of contributions for the financial year 
(G=E-F) 10,974,317 9,862,731 -12.13 
H. Accumulated arrears of contributions 25,855,428 23,697,202 -8.35 
Source : Auditor, based on WTO data. 
2. Plans for absorption of the debt of certain Member States 
43. In accordance with recommendation No. 9 in ou r previous report, the Organization is seeking 
to make arrangements with countries in arrears for ab sorption of their debts:  the Director-General has 
proposed negotiations on such arrangements to all countries in category 4 and they have received 
proposals with specific plans.  In 2009, only one co untry (Gabon) signed an arrangement, eight others 
did the same or were about to do so in 2010.  Th e undertakings made have almost all been observed 
(see the table below). 
44. Negotiation of these plans resulted in writing off part of the debts preceding 1988, in 
accordance with a decision by the Council in 1994.  The debts written off represent 7.29 per cent of 
the original debt of the countries concerned. 
Table 3.  Plans for absorption of the debt of certain Member States being implemented 
(in Swiss francs) 
Member State 
 
Date of approval 
of the plan by the 
Council Duration 
of the 
plan in 
years Date of 
termination 
of the plan Total 
arrears prior 
to the plan Arrears 
written offAmount of 
the 
absorption 
plan Amount of 
each 
annuity 
payable Amount 
not paid, in 
violation 
of the plan
Burundi 
Estimated date 03/05/11 20 31/12/30 1,189,888 297,141 892,747 36,460  
Central African 
Republic 29/07/10 30 31/12/39 1,096,836 297,141 799,695 26,657 1,071 
Congo 
29/07/10 5 31/12/14 1,112,836 297,141 815,695 163,140  
Côte d'Ivoire 
04/05/10 10 31/12/19 828,578  828,578 82,858 62,726  WT/BFA/W/237 
 Page 11 
 
 
  Member State 
 
Date of approval 
of the plan by the 
Council Duration 
of the 
plan in 
years Date of 
termination 
of the plan Total 
arrears prior 
to the plan Arrears 
written offAmount of 
the 
absorption 
plan Amount of 
each 
annuity 
payable Amount 
not paid, in 
violation 
of the plan
Democratic 
Republic of the 
Congo 
Estimated date 03/05/11 5 31/12/15 757,854 296,941 460,913 92,183  
Gabon 
26/05/09 3 31/12/12 352,245  117,415 117,415  
Gambia 
21/10/10 10 31/12/19 995,455 297,141 698,314 69,831  
Niger 
14/12/10 15 31/12/24 899,452 194,652 704,800 46,990 8,842 
Togo 
21/12/10 5 31/12/14 506,436 73,153 433,283 86,657 7 
Total   7,739,580 1,753,310 5,751,440 722,191 72,646 
Source : Auditor, based on WTO data. 
3. Contributions by Observers 
45. The 31 Observer States pay a contribution corresponding to the minimum contribution by 
Member States (CHF 28,830 in 2010).  The amount of assessed contributions increased by 14.66 per cent (from CHF 844,650 to CHF 884 ,015) and contributions paid rose by 7.75 cent (from 
CHF 606,307 to CHF 633,349).  The rate of increase in arrears continued to be too rapid at 11.51 per 
cent (from CHF 1,036,798 to CHF 1,156,018). 
46. The largest amounts concern the following countri es, whose longest-standing debts date back 
to 1997, 1995 and 2001, respectively: 
 Sudan (CHF 308,781, as against CHF 279,951 in 2009); 
 Vanuatu (CHF 304,132, as against CHF 275,302 in 2009); 
 São Tome and Principe (CHF 248,239, as against CHF 219,409 in 2009). 
47. In view of the volume of these arrears, we confirm our recommendations in the two previous 
financial years that attempts be made to negotiate  plans with the countries concerned to absorb their 
arrears. 
Recommendation No. 2.  A plan to absorb a rrears in contributions by Observers should be 
adopted. 
 
The working group on administrative measures is  continuing to address the question and will report 
to the Committee on Budget, Finance and Administration. WT/BFA/W/237 
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  4. Refund of tax by the United States of America 
48. Staff members of the Organization are exempt from income tax.  In the case of the 
United States of America, whose residents are oblig ed to pay income tax, the WTO pays it in their 
place, as do other international organizations, and is then reimbursed by the American Government, 
pursuant to an agreement of 22 December 2000. 
49. In 2010, receivables for United States taxes amounted to CHF 3,997,814, a 33.52 per cent 
increase in comparison with 2009, despite the retirement of three staff members from the 
United States. 
50. This increase is mainly the result of payment of tax owing for 2010.  The United States made 
no refunds in 2010, despite a claim for CHF 3,058,1 92 sent on 6 October 2010 and informal meetings 
with representatives of the United States Mission in Geneva.  The following table gives details of the 
latest claim for a refund and highlights the long  period during which certain sums have been 
outstanding. 
Table 4.  Arrears in refund of tax by the United States 
(in Swiss francs) 
Year due 2004 2005 2006 2007 2008 2009 2010 Total claimed
Amount 
claimed 37,145 45,655 74,923 603,953 1,323,959 906,382 66,175 3,058,192 
 
51. The United States refunds according to the "first income method", contrary to the method 
advocated by the Administrative Tribunal of the In ternational Labour Organi zation.  This practice 
generates additional costs that cannot be recove red and shared among all Member States:  the 
additional costs recorded in th e accounts under staff costs amounted to CHF 85,150 in 2010, as 
against CHF 135,802 in 2009. 
Recommendation No. 3.  Efforts should be pursued (i) to accelerate refund by the 
United States of the taxes of WTO staff who resided there;  and (ii) to obtain this refund according to the method advocated by the Administrative Tribunal of the International Labour Organization.  
 
The WTO is pursuing its efforts, with the support of the United States Mission to the WTO. 
 
E. CHARGES  
1. Levy on expenditure by trust funds 
52. The WTO trust funds (also called extra-budgeta ry funds) are replenished through voluntary 
contributions by Member States.  They finan ce special programmes decided upon by some of the 
latter.  A 13 per cent levy that is not envisaged in  the WTO's Financial Regulations or Financial Rules 
but was decided by the General Council in 1996 and 1999 is imposed on expenditure by trust funds 
and is paid into the Programme Support Fund (which is  one of the trust funds but is purely financial).  
This Fund covers certain costs in the Organization's8 regular budget in support of the policies that are 
the subject of trust funds. 
                                                      
8 These costs are listed in our report on the 2009 financial statements.  WT/BFA/W/237 
 Page 13 
 
 
  53. In accordance with Recommendation No. 4 in our previous report, how this 13 per cent levy 
is used is explained in Schedule H to the financia l statements for the 2010 financial year.  The figures 
given in this Schedule, however, show that the am ount of the transfers actually made from trust funds 
to the regular budget has fallen, contrary to our Recommendation No. 33(iii) that there should be an 
increase in "the amount of the levy on voluntary contributions paid into the Organization's regular 
budget". 
Table 5.  Trend in the Programme Support Fund from 2009 to 2010 
(in Swiss francs) 
 
 2009 2010 
Opening balance 1,173,766 1,158,577 
Income during the financial year (13% levy) 3,094,029 3,399,602 
Total income 4,267,794 4,558,179 
Retrocession to other Organizations (A) 431,993 749,127 
Costs for 23 officials (B) 2,323,268 2,294,182 
Payment of various overheads for trust funds (C) 110,572 36,800 
Share of certain Secretariat costs (previous retrocession of 10% 
to the regular budget) (D) 243,384 258,998 
Total costs (E) 3,109,218 3,339,107 
of which costs lowering Secretariat charges (= E-A) 2,677,225 2,589,980 
Closing balance 1,158,577 1,219,071 
Source : Auditor, based on Schedule H to the financial statements for 2010. 
54. In fact, because of the sharp increase (+17.55 per cent) in reimbursement of costs to other 
organizations involved, inter alia , in WTO's training policy, the expenditure that lowers the 
Secretariat's charges decreased by 3.25 per cent. 
55. It would appear important to increase the 13 per cent levy on trust funds actually used to 
lower the Secretariat's charges so that these funds, financed through voluntary contributions by some 
Member States, are not subsidized by the statutory contributions paid by all Member States.9 
Recommendation No. 4.  The percentage of th e levy on trust funds to finance Secretariat 
expenditure should be increased. 
 
The WTO will review the share of the levy on trust fu nds used to finance Secretariat costs as part of 
the review of the Financial Regulations in 2011. 
 
2. Procurement 
56. The WTO is seeking to reinforce the role of th e Procurement Section, in accordance with the 
recommendations of both the external and internal a uditors.  For this purpose, the Section has recently 
distributed a "Procurement Manual", which sets out the ways in which the Organization's Financial 
Regulations are to be applied and is intended to  harmonize the sometimes divergent practices of 
divisions as a whole. 
                                                      
9 The performance audit in our report on the 2009 accoun ts highlighted the fact that some charges paid 
out of the regular budget for activities carried out us ing extra-budgetary funds were not covered by the 
13 per cent levy. WT/BFA/W/237 
Page 14  
 
  57. The Manual endeavours to make competition among suppliers systematic practice, in 
particular, by adopting framewor k agreements and open-ended c ontracts to replace the practice 
consisting of large numbers of separate orders given to the same suppliers. 
58. The Manual prescribes a list of operations to be carried out when issuing an order or a 
contract:  definition of requirements, drawing up of specifications, techniques for selecting the best 
offers, consultation of the legal service, involve ment of the contracts committee and rules for 
notifying award of the contract. 
59. The current reorganization of procurement pr ocedures will facilitate the implementation of 
the relevant IPSAS.  In this endeavour, special a ttention will have to be paid to the procedure for 
certifying the service rendered, which is the first opera tion to be carried out before payment is made.  
Currently, the Finance Section receives the invoice from the supplier and transmits it to the person 
issuing the order.  The invoice is then approved by  the service that has taken delivery of the goods or 
has received the service, and is then return ed to the Finance Section for payment. 
60. A less onerous procedure that would be more consistent with good practice would be for the 
service rendered to be certified first of all by the department procuring it, indicating the date of 
delivery, the volume delivered or the services rendere d, so that the Finance Section can then compare 
the invoice received with this certification (entered into the Oracle  program) before paying. 
61. In 2010, 1,047 orders were issued to 484 suppliers for a total amount of CHF 21,669,479.75.  
An analysis of a sample of 30 orders issued in 2010, chosen at random, led to the following findings: 
 The amounts on the invoices paid sometimes differed from the amounts on the orders;  
for example, eight invoices were paid for an amount lower than that obligated on the order and one invoice was paid for a higher amount;  the amount of the discrepancies 
noted represented 42 per cent of the total of the invoices; 
 in addition to this sample, the Procuremen t Section cited the example of an invoice 
for CHF 26,010 paid in connection with an order amounting to CHF 23,960 (BC 85 778 and invoice 20 100 391 of 22 September 2010 concerning an audiovisual service);  as this service is to be rendered again in 2011, the total amount of the invoice could exceed the CHF 50,000 thres hold above which the contracts committee 
must be consulted.  It was also noted that in 2010 the amount of the invoices relating 
to the computer maintenance contract with the WHO was CHF 50,000 higher than the amount of the orders, indicative of high ly unsatisfactory monitoring of this 
procurement; 
 invoices are paid within 30 days of the date of  their receipt in 81 per cent of the cases;  
if payment is later, neither interest on overdue payment by the WTO or penalties for 
late delivery by the supplier are imposed; 
 the amounts on all the invoices paid are correct and their approval was dated and 
signed by the beneficiary service; 
 delivery slips are kept by the beneficiary service;  WT/BFA/W/237 
 Page 15 
 
 
   buyers are not able to follow the order pr ocess step-by-step (late delivery, problems 
or disputes with suppliers), even though use of the " iProcurement " module in the 
Oracle  program would allow for such computerized monitoring10; 
 the database of suppliers in the Oracle  program is not used to its best advantage;  
only buyers have the authority to enter a new supplier;  the Finance Section enters 
financial information;  the same supplier may appear twice under different names;  
the database should be updated by the buyers annually so as to eliminate double 
counting and inactive suppliers; 
 for historical reasons, buyers have financia l rights usually restricted to the Finance 
Section and procurement rights on Oracle , which is contrary to the division of 
responsibilities normally provided by this system. 
62. The Secretariat is going to launch a new orderi ng and payment procedure, which will be tried 
out and evaluated in 2011 in relation to the s ubstantial procurement required for the headquarters 
extension project.  The reorganization of the various  stages in this chain should take place in parallel 
with the introduction of an internal monitoring m echanism adapted to the sp ecial risks faced by the 
WTO. 
63. Lastly, the role of the Procurement Section in following up contracts and their payment needs 
to be reinforced.  Reorganization along these lines s hould enable the problems noted to be resolved. 
Recommendation No. 5. 
(i) The procedure for certifying services provided should be reorganized; (ii) the list of "suppliers" in the accounts ma nagement system should be updated annually; 
(iii) the rights of buyers in the system should be limited;  and 
(iv) the " iProcurement " module in the Oracle  program should be utilized to computerize the 
monitoring of orders.  
 
The Secretariat has indicated that it will (i) review  the procedure for certify ing the service rendered 
as part of the introduction of a new computerized appro vals procedure;  (ii) review the procedure for 
managing the supplier database;  (iii) review the right of access to the sy stem for buyers in the 
financial module;  and (iv) implement the iProcurement module by the end of 2011.  
 
64. Two framework and open-ended contracts introduc ed in 2011 were examined:  an open-ended 
contract for international postal services and an open call for bids for making computer consultants 
available in cases of emergency (for an estimated  amount of CHF 2 million for one year, renewable 
twice). 
65. These call for the following positive remarks: 
 Very good traceability of all the procuremen t procedures, from the initial stage of 
defining the requirement up to the no tification to the supplier selected, and 
involvement of the legal service in following up the execution of the contract; 
                                                      
10 The performance audit of the WTO's IT system be low indicates that the Or ganization has purchased 
this module and pays the annual fees, but does not use it. WT/BFA/W/237 
Page 16  
 
   obligation to go through a service supplier, unless the section ordering the service 
specifically requests otherwise, and this is  only allowed if the contract cannot be 
fulfilled satisfactorily; 
 frequent negotiations with the supplier  concerning the commercial terms for 
discounts, reductions and end-of-year rebates. 
66. This type of contract puts an end to the costly practice of issuing urgent orders for computer 
or postal services, under satisfactory legal conditions. 
67. The WTO should use these examples as a model and generalize commercial negotiations with 
suppliers, particularly as regards discounts, reductio ns and end-of-year rebates, where the financial 
volume involved so allows. 
3. Exchange losses 
68. The exchange losses listed under expenditure in the 2010 statement of financial performance 
amount to CHF 618,465.  These have fallen by ha lf in comparison with 2009 (CHF 1,210,266). 
69. Part of the reason for this large decrease is  the reduction in assets in the Organization's 
foreign currency accounts, especially in euros, between 2009 (CHF 5,333,416) and 2010 (CHF 3,759,307). 
70. For the most part, they concern operations  covered by the regular budget (CHF 610,173), 
especially the translation of foreign currency bala nces in the WTO's bank accounts into Swiss francs. 
71. These translations are made each month and led to the following gains and losses: 
 Loss of CHF 504,048 for the euro account; 
 loss of CHF 137,669 for the United States dollar account; 
 gain of CHF 1,428 for the pound sterling account. 
72. Exchange losses for all the other foreign currencies only amount to CHF 1,297.95. 
73. Currencies of accounting and currency conversion ra tes are defined in Rule 7.7 of the WTO's 
Financial Rules. 
74. Accordingly, contributions received in a currency other than the Swiss franc are converted 
and credited at the bank rate of exchange at the time  of receipt, indicated by the value date.  The WTO 
exchange rate for the month in which the transactio n is recorded in the accounts applies to all other 
transactions. 
75. Strict application of these rules can result in an  atypical exchange lo ss, as underlined in the 
previous report. 
76. For example, a country paid its contribution of US$4,736,629 to the WTO on 14 May 2009.  
This amount involved over-payment of US$478,135.17
11, which was claimed by the Mission 
concerned on the same day. 
                                                      
11 United States dollars.  WT/BFA/W/237 
 Page 17 
 
 
  77. The two movements could have been consid ered as a single and sole transaction, a 
contribution with the surplus deducted, at the bank rate of 1.112. 
Table 6.  Recording excess paymen t of contributions in the accounts 
Cash  Debit 
US$4,736,629  US$4,736,629 
CHF 5,268,448   CHF 5,268,448 
 US$478,135  US$478,135 
 CHF 531,819  CHF 531,819 
 
 78. Refund of the excess paid was addressed in accordance with the WTO's Financial Rules as a 
common transaction and was thus at the WTO exchange rate for May 2009 of 1.136. 
Table 7.  Recording the refund of  the excess amount in the accounts 
Cash  Debit 
US$4,736,629    US$4,736,629 
CHF 5,268,448    CHF 5,268,448 
 US$478,135  US$478,135  
 CHF 543,161  CHF 543,161  
 
 79. This accounting rule resulted in an exchange loss of CHF 11,342, caused by the difference 
between the recording of the excess payment of US$478,135 (CHF 531,819) at the bank rate 
applicable to the date on which it was encashed a nd refund of the same amount of US$478,135 at the 
WTO exchange rate for May 2009 (CHF 543,161). 
80. A series of tests was conducted by the external auditors in 2011 to ensure that the accounting 
methods in effect were appropriate.  The sample  covered 13 transactions involving exchange losses 
and gains in the three main currencies and in th e Philippine peso.  The transactions related to 
end-of-month conversion of fore ign currency accounts and to invoices paid made out in foreign 
currency.  These tests led to the following findings: 
81. On Oracle  it is difficult to follow exchange moveme nts in the end-of-month balances for the 
three foreign currency accounts.  In fact, the sy stem originally adopted by the Secretariat was 
particularly complex:  the aggregated balance at the beginning of the month was recredited, then 
revalued at the end of the month taking into acc ount all the operations that had occurred in the 
interval.  The total amount of exchange losses was obtained by taking the difference between the 
amount recredited and the amount of the transactions for the month. 
82. This complex system was abandoned in 2011 a nd only the end-of-month revaluation after all 
the transactions have been completed was retained. 
83. Some invoices which are dated, recorded in th e accounts ("GL date") and paid in the same 
month should not be subject to any exchange loss.  The system, however, app ears to use the WTO rate 
for the following month, thereby creating an exchange movement.  For example, an invoice for US$31,044.37 (No. 24-28.05.10), dated 17 May 2010, with a "GL date" of 21 May 2010, was paid on 
21 May 2010.  The system attributed to it the WTO rate for June (1.158), resulting in an exchange 
loss of CHF 2,359.37. WT/BFA/W/237 
Page 18  
 
  84. Exchange rates for currencies other than the United States dollar, the euro or the pound 
sterling are entered into the system manually.  Mist akes in entering the figures are thus possible, but 
can be corrected by the staff member by mean s of a screen function and then following the 
notification from the bank.  For example, a sic kness insurance reimbursement of 71,207 Philippine 
pesos dated 8 March 2010 was recorded in the accounts ("GL" date) on 8 March 2010 and paid on 
17 March 2010.  The exchange rat es of 0.024251 and then 0.23173 we re applied successively by the 
Oracle  program, but the staff member noted the mist ake in the entry and the exchange loss was 
cancelled. 
Recommendation No. 6. 
(i) Regular analyses of movements in exchan ge losses and gains should continue;  and 
(ii) the internal control mechanism should incl ude some tests for transactions in currencies 
for which the exchange ra tes are entered manually.  
 
The Secretariat will continue to analyse exc hange gains and losses and introduce controls for 
transactions in other currencies . 
4. Staff costs 
85. The tests carried out in relation to staff costs re lated to net salaries, overtime, rental subsidy, 
education grant, child allowance, installation gr ant, separation grant, a nd negotiated termination 
indemnities.  The WTO has rigorous accounting proce dures for staff costs and few irregularities were 
detected in the course of the test s.  Some comments are called for,  however, in relation to rental 
subsidy. 
86. Out of the nine cases examined in order to veri fy the complicated calculation of this subsidy 
(which takes into account several pa rameters:  family situation, the net amount of the rent, the staff 
member's salary, and possibly that of his/her s pouse, how long the staff member has been at the 
WTO), three irregularities were noted: 
87. The subsidy for a staff member living in France, close to Geneva, paying rental in euros was 
not updated in line with the trend in the euro rate, which meant that the person concerned was 
over-paid CHF 1,035 over the year. 
88. The rent of a furnished apartment for which a s ubsidy was paid that included the value of the 
furniture, which should not be taken into account, as e xplicitly stated in the note of 26 June 2008 from 
the Director of Human Resources.  In this particul ar case, the anomaly did not have any impact on the 
amount of the subsidy paid, but in other instances it might have. 
89. A third case raises the problem of the temporary cessation of entitlement to a subsidy during a 
period of unpaid leave.  For example, a staff member arriving in Geneva may only receive this 
subsidy during the seven years following the date on which he/she becomes entitled to it, but in 
practice this rule has been modified by the Orga nization in cases of unpaid leave:  when the staff 
member resumes his/her post, the period of u npaid leave is not deducted from the seven years.12  This 
favourable interpretation by the WTO was formalized  in the note cited above using a formula that 
needs to be clarified:  " It should be noted that any periods of SLWOP [special leave without pay] 
during the period of eligibility will be taken into account ." 
                                                      
12 For example, a staff member whose entitlement commenced on 1 January 2001, who went on unpaid 
leave from 1 January 2003 to 1 January 2007, would see the entitlement extended until 1 January 2012.  He/she would thus have received the allowan ce from 1 January 2001 to 1 January 2003 and from 1 January 2007 to 
1 January 2012.  WT/BFA/W/237 
 Page 19 
 
 
  Recommendation No. 7.  The criteria for taking  unpaid leave into account when calculating 
rental subsidy need to be clarified. 
 
The Secretariat will define the criteria for taking into  account special unpaid leave when calculating 
the rental subsidy in 2011. 
 
F. ASSETS  
1. Management of the inventory of publications and souvenirs 
90. The recording of the inventory of publications and souvenirs in the WTO's accounts became 
more reliable during the 2010 financial year as a result of applying the new practice of monthly 
reconciliations - except during the summer holiday peri od and at the beginning of the financial year - 
of the inventory of publications and the purchase invoices handled by the Oracle  program.  An 
analysis of the monthly operations shows th e rigour with which the reconciliation was done. 
91. The Publications Section calculates the weighted  average cost of the value of the inventory 
using an Excel  spreadsheet and then enters the results of this calculation into Oracle .  As there is no 
automatic management of inventories, mistakes may be made.  Recently, however, it has become 
possible to obtain details of the transaction from Oracle , which facilitates verification by the service. 
92. As can be seen from the table below, at 31 December 2010, the WTO's inventory, before 
taking into account profits and losses but after reconciliation with the ph ysical inventory at the end of 
the year, amounts to CHF 498,459.17, an 8.7 per cent decrease in comparison with the inventory at the start of the financial year. 
Table 8.  Trend in the stock of publications and souvenirs from Janua ry to December 2010 
(in Swiss francs) 
 
 WTO 
publications Other 
publications Souvenirs Total 
     
Opening inventory (January 2010) 343,194.85 132,224.35 70,742.18 546,161.38 
     
Closing inventory (December 2010) 346,309.20 107,652.09 50,375.75 504,337.04 
     
Physical inventory of publications 
(December 2010) 345,238.00 103,664.86 49,556.31 498,459.17 
     
Adjustments:  publications less physical 
inventory 1,071.20 3,987.23 819.44 5,877.87 
Adjustments as a percentage of the 
physical inventory 0.31% 3.85% 1.65% 1.18% 
     
Profit and loss write-off 121,095.91 9,067.21 2,033.60 132,196.72 
     
Value of stocks at 31/12/10 224,14 2.09 94,597.65 47,522.71 366,262.45 
Source : Auditor, based on WTO data. WT/BFA/W/237 
Page 20  
 
  93. A random selection of three stock management transactions in Oracle  did not detect any 
errors, except as regards the attribution of a credit note with a supplier in relation to a reduction due 
because of two damaged copies of a publication.  This  credit note was not retroactively linked to the 
damaged articles category, but this will be done for future deliveries by the supplier that might affect 
other publications.  Under these cond itions, and even if this does not affect the stock as a whole, the 
valuation of the stock by category is slightly distorted. 
94. In 2011, the profit and loss write-off by the P ublications Section represented 26.5 per cent of 
the physical inventory at the end of the year.  Th e size of this operation can be explained by the 
outsourcing of the stock of publications in April 2011 following a call for bids that was won by the 
firm Turpin , which will keep the stock in its warehouses in London and distribute it.  The WTO will 
set objectives for this firm for the distribution of its publications. 
95. The WTO now only keeps in Geneva the stock of publications coming from the print shop 
and publications and souvenirs sold in the Bookshop. 
96. The aforementioned reform should not preven t the residual stock from being strictly 
managed, despite the reduced staff numbers in the P ublications Section.  A test covering the physical 
inventory of seven items resulted in a finding of ma lfunctioning concerning three types of publication: 
 For one of these, the stock valued in Oracle  was negative (-5 units) without this 
anomaly drawing attention, whereas the physi cal inventory comprised 22 units;  this 
anomaly can be explained by returns by members of the Organization, which were 
not entered in the accounts; 
 in another case, the variation between the physical inventory and the stock in the 
accounts was the result of mistakes by a temporary staff member; 
 in the last case, a variation of two units could not be explained. 
97. It should be possible to follow management of the stock kept in Turpin's  warehouses in 
London on-line, using the information regularly tr ansmitted by the firm.  In addition, the contract 
signed provides for the transmission of a quarterly report on management of the stocks, but does not determine what procedures are to be introduced and at what intervals the physical inventories and the 
reconciliation with the stock' s value will be conducted. 
98. The WTO should ensure that the stock kept in Geneva by the Bookshop and the print shop is 
properly managed through frequent inventories facil itated by the decrease in the numbers kept.  A 
stock card should be kept for each category, taking into account the items returned.  This card should 
be reconciled with the data recorded in Oracle  at least once a month. 
99. As soon as possible the procedure for estimating th e value in the accounts, for the circulation 
of information and for the physical inventory should be precisely defined with Turpin . 
100. The official designation of the persons responsib le for receiving the proceeds from the sale of 
publications and souvenirs and the definition of the scope of their personal liability will be indicated 
in the post description being drawn up.  In add ition, the economies of scale sought through grouped 
orders for publications by the Publications Sec tion and the Library (and the purchase of souvenirs by 
divisions and the Bookshop) have not yet been introduced, although there have been preliminary 
contacts among those concerned.  A first step has be en taken:  the person responsible for the Library 
now checks whether items are available from the Bookshop before issuing an order.  WT/BFA/W/237 
 Page 21 
 
 
  101. Lastly, consideration is still being given to introducing IPSAS 12 on recording inventories in 
the future accounting structure, which should be in place for the 2012 financial year. 
Recommendation No. 8.  The necessary pr ocedures for introducing IPSAS 12 for the 
management of inventories should be formally adopted. 
 The Secretariat will introduce IPSAS 12 fo r managing inventories at the end of 2011.  
 
G. L
IABILITIES  
1. Management of obligations to suppliers and staff 
102. There has been no significant change in WTO's current payables, listed in the "Payables" 
account.  They rose from CHF 4,059,961 at the end of the 2009 financial year to CHF 4,184,895 at 
31 December 2010.  These obligations are mainly to suppliers, whose share accounted for 76.3 per 
cent of the total at the end of 2010. 
103. In practice, the WTO records invoices being paid in an account that relates the obligations to 
the suppliers, which is closed when payment is paid .  The "payables to suppliers" account is part of 
the current liabilities accounts in the statement of fi nancial position and by definition it should always 
be in credit.  Advances to suppliers should appear in a "Prepayment, charges paid in advance" asset 
account at the end of the year. 
104. The overall balance, however, shows "suppliers' ba lances in debit.  After verification, it 
appears that these debit balances do not always refl ect the true situation of the accounts operations. 
105. In most instances, debit balances dating back several years (sometimes as far back as 2002) 
are the result of mistakes made when transcribing the company name of the supplier, the name used 
for the debit not being the same as  that used to note the payment.  For example, an account for the 
same supplier shows one line with a credit balance and another with a debit balance for the same 
amount.  These errors of transcription do not have any impact on the final balance in the overall 
"suppliers" balance, but affect the "aged trial balance" with entries that could have been settled since 
the year of payment. 
106. The table below shows the suppliers whose deb it balances have been settled but which still 
appear in the Organization's accounts. 
Table 9.  Debts in supplie rs accounts settled but not closed at 31 December 2010 
(in Swiss francs) 
 
Supplier Date of invoice/Date 
of payment Suppliers' balance 
(CHF) 
ADITAYA BIRLA MINACS IT Service UK-2003-04-061 29 February 2004 6,594.53 
PSI DATA SYSTEM LIMITED UK-2003-04-061 29 February 2004 -6,594.53 
AFP Europe-Africa Region Division 8052F200 5 April 2002 -1,620.00 
AFP Agence France Presse 8052F200 5 April 2002 1,620.00 
LENOVO UK 6623277722 26 October 2005 -2,062.25 
IBM UK LENOVO 6623277722 26 October 2005 2,062.25 
Source : Auditor, based on WTO data. WT/BFA/W/237 
Page 22  
 
  Recommendation No. 9.  Those "suppliers" a ccounts for which the debts have been settled
should be closed. 
 
The Secretariat settled suppliers'  accounts in May 2011. 
 107. The overall "suppliers" balance shows a de bit balance for the company INNONAT AG 
amounting to CHF 6,324 paid in advance for the rental  of an apartment in Davos, which was occupied 
for three days in January 2011. 
108. This debit balance is attributable to an acc ounting error, the amount not having been being 
entered in the proper account: 
 Recording of the advance in account 1.416 200  20 "charges paid in advance" against 
a "suppliers" account credit when the order was issued on 23 November 2010; 
 recording of the payment by debiting the "suppliers" account and crediting the "bank" 
account at the time of payment on 1 December 2010; 
 cancellation of the charge paid in advan ce by debiting the "suppliers" account and 
crediting the "prepayment, charges paid in advance" account. 
109. Obligations to the supplier Carlson Wagonlit Trav el amounted to a total of CHF 74,895.55 at 
31 December 2010, divided between debit and credit balances.  Verification showed that some errors 
in accounting entries are attributable, in particular , to failure to master the system for recording 
charges paid in advance, often assimilated to payments from suppliers. 
110. For example, the charges paid  in advance were wrongly cance lled and the suppliers account 
was debited in the amount of CHF 4,309.35. 
111. Other expenditure of CHF 3,882.85 was assimilate d to a credit and was directly entered as a 
debit in the "suppliers" account instead of the "charges paid in advance" account. 
112. These operations have no impact on the surplus account because they only affect the assets 
and liabilities account in the statement of financial pos ition, but they lead to a decrease in the balances 
in the credit account "charges paid in advance" and in the liabilities account "obligations to suppliers". 
113. A comprehensive revision of the way these opera tions are entered in the accounts would lead 
to an increase of CHF 12,426 in the "prepayments " line appearing among the assets in the statement 
of financial position (which would increase fro m CHF 521,057 to CHF 533,483) and an equal 
increase in the "payables" in the liabilitie s (CHF 4,197,321 instead of CHF 4,184,895). 
Recommendation No. 10.  (i) The procedures  for making accountin g entries concerning 
charges paid in advance should be formally adopted through an internal note;  and (ii) an 
internal control system to detect inconsiste ncies in accounting balances, analyse them and 
make the necessary adjustments in th e accounts should be introduced. 
 
The Secretariat will review its internal control pr ocedures concerning accoun ting entries for charges 
paid in advance.  As of the closure of the 2011 accounts, the liquidation of accounts procedure will include an analysis of the balances in these accounts. 
 114. IPSAS 1 (paragraph 6) provides that, in current account entries, events are recorded in the 
financial statements of the periods to which they relate.  A check of the accounting entries relating to  WT/BFA/W/237 
 Page 23 
 
 
  the invoice of the supplier Carlson Wagonlit B 400474723 of 20 December 2010 shows that an 
amount of CHF 1,345.35 represents a charge incorrectly  recorded in the 2010 financial year (entered 
in account 1.7A62030) instead of the 2011 financial year .  The effect of this operation is to reduce the 
surplus for this year by an equivalent amount.  The impact of this accounting error is not significant, 
however, and no adjustment of the accounts is recommended. 
115. The Organization should ensure respect for the pr inciple of linking charges and receivables to 
the financial year to which they relate by reinfo rcing the internal control system governing accounting 
procedures. 
2. Provision for expenditure committed but not paid 
116. The provisions for expenditure committed but  not paid increased by 74 per cent (from 
CHF 8,249,545 to CHF 14,356,233).  The provisions concerning the WTO and the Appellate Body 
account for a total of CHF 8,158,213, of which CH F 4,606,654 relate to the building project and 
CHF 25,100 to the Appellate Body. 
117. Provisions relating to extra-budgetary funds  represent CHF 6,198,019 and doubled in 
comparison with 2009 (CHF 3,096,058).  This sizeable  increase can be explained in part by the 
change in the method of accounting fo r advances to partner organizations. 
118. Prior to 2010, at the time it was paid the 80 pe r cent advance was divided between the charges 
accounts corresponding to the budget proposed by the partner organization.  Expenditure committed 
but not paid at the end of the year for projects th at had not been closed accounted for 20 per cent of 
the total amount earmarked for each project.  Th is amount was entered into the "provisions for 
expenditure committed but not paid" account. 
119. From the 2010 financial year onwards, these adva nces to partner organizations, which still 
correspond to 80 per cent of the amount of the pr oject, were recorded in an advances account 
(41560000 "extra-budgetary fund advances").  The advance is regularized when the documents 
substantiating the expenditure are submitted and entries are made in the corresponding charges 
accounts.  At the end of the year, commitments rela ting to non-regularized advances are all recorded 
as provisions for expenditure committed but not paid. 
120. Consequently, until 31 December 2009, the amount recorded in the "provisions for 
expenditure committed but not paid" account for pr ojects carried out with partner organizations 
corresponded to 20 per cent of non-regularized adva nces at the end of the year.  Since 2010, this 
amount has corresponded to the full amount of the projects. 
121. In implementation of IPSAS 3, a change in th e accounting treatment is considered to be a 
change in accounting policy.  It must be applie d retroactively, unless the amount of the resulting 
adjustment relating to previous financial years cannot reasonably be determined.  Any change in 
method must be accompanied by sufficient informa tion indicating for the year the nature of the 
change and its impact. 
122. In response to our provisional recommendation, the Organization amended Note 2 to the 2010 
financial statements in order to mention the change  in the method of recording advances relating to 
extra-budgetary funds in the accounts. 
123. For the WTO, the amount of the provision for expenditure committe d but not paid was 
CHF 3,526,459 at 31 December 2010,  not taking into account the Appellate Body and the building 
project. WT/BFA/W/237 
Page 24  
 
  124. An examination of a sample of provisions for expenditure committed but not paid relating to 
18 transactions for a total amount of CHF 911,473 s hows that expenditure commitments spread over 
the current and next financial years are considered as charges whose total amount is to be offset in the 
2010 financial year instead of being di vided between the years 2010 and 2011. 
125. Consequently, in the aforementioned sample, two orders (88232
13 and 8823414) issued for 
two computer consultants were entered into the charges account (7A614020) for a total amount of 
CHF 249,575, whereas CHF 8,940 concerned an oblig ation for services against the 2010 financial 
year and CHF 240,635 for charges against the 2011 financial year. 
126. These practices, although they are consistent with  Regulations 22 and 23 of the Organization's 
Financial Regulations, do not comply with IPSAS,  especially IPSAS 1 (paragraph 6), which provides 
that entries should be linked to the financial year concerned. 
Recommendation No. 11.  The WTO should ad just its budgetary and accounting practices for 
expenditure commitments and provisions for expe nditure committed but not paid and should 
adapt its Financial Regulations to be consiste nt with IPSAS 1 (paragraph 6), which provides 
that entries should be linked to the financial year concerned. 
 
The WTO will review its financial commitment proc edures when revising its Financial Regulations in 
2011. 
 
H. PLANNED EXTENSION TO WTO  HEADQUARTERS  
127. The project for the refurbishment-exte nsion of WTO headquarters comprises 
three overlapping stages: 
 Refurbishment of the headquarters (Centre William Rappard or CWR) from 
January 2009 to July 2012, commissioned by the Building Foundation for International Organisations (FIPOI); 
 the " intra-muros " extension of the headquarters (roofing over and equipping 
two internal courtyards), from July 2010 to December 2012, for which the WTO is the commissioning organization;  and 
 the " extra-muros " extension (construction of a new building and underground 
car park next to the CWR) from March 2011 to December 2012, also commissioned by the WTO. 
128. In accordance with our previous recommendati ons, supervision of the project has been 
reinforced and outsourced in part
15, inter alia , through the involvement of an overall supervisor and a 
project director, with the Swiss firm Pom+Consulting  assuming direct responsibility for overseeing 
the building sites.  This arrangement has enable d the timetable and budget set by the WTO to be 
respected so far, but WTO will have to face unfor eseen costs for equipping the new facilities and will 
have to adopt a financing plan for their maintenance. 
                                                      
13 Order 88232 for an amount of CHF 89,400 concerni ng a contract to develop a database.  The total 
duration of this contract is 120 working days, six of them in 2010 (from 15 to 22 December) and 104 in 2011.  The provision for the proportion not yet paid was CHF 70,775. 
14 Order 88232 for an amount of CHF 160,175 concerning a contract to develop a database.  The total 
duration of this contract is 215 working days, six of them in 2010 (from 15 to 22 December) and 209 in 2011.  The provision for the proportion not yet paid was CHF 155,705. 
15 The terms for supervision of the project were explained in detail in our previous report.  WT/BFA/W/237 
 Page 25 
 
 
  1. Observance of the schedules and budget fixed 
(a) Schedules 
129. The original timetable for the intra-muros extension site has essentially been observed, some 
works are even ahead of schedule (covering of the North Courtyard commenced earlier than 
expected), while others are behind schedule (fittin g out the South Courtyard because of the discovery 
of underground drains). 
130. The WTO has recently modified this timetable , requesting that the new conference centre 
planned for the intra-muros  extension be made available in September 2011 (because the usual 
conference rooms are being refurbished by FIPOI and will not be available at that time) and no longer 
at the end of the year:  the firm responsible for this  section of the site (HRS) was, therefore, asked to 
revise its work programme accordingly. 
131. Work on the extra-muros  extension commenced, as planned, in March 2011.  The timetable 
for completing this work is also being modi fied to enable a move from the annex in chemin des Mines  
in October 2012 instead of the end of December 2012.  The firm responsible ( Implenia ) was asked to 
agree to this.  The Informatics Division servers and the roneo  equipment are located in this annex and 
take a long time to move, but FIPOI has not yet ta ken any decision on whether or not to extend the 
Organization's lease. 
(b) Budget 
132. The WTO has had to negotiate with the two fi rms chosen following a call for bids for each 
extension in order to remain within the budget fixed (CHF 16.5 million for the intra-muros  extension 
and CHF 38.7 million for the extra-muros  work).  In particular, it had to reduce from CHF 43 million 
to CHF 38.7 million the amount proposed by the firm chosen for the latter site ( Implenia ), which 
meant it had to postpone the work on fitting out  the restaurant kitchens in the future extra-muros  
building, a postponement that increases the cost of the equipment work mentioned above by an equal 
amount. 
133. In carrying out the intra-muros  work, only some CHF 100,000 of unforeseen work had to be 
undertaken.  In the case of the extra-muros  extension, two modifications were decided upon when 
work commenced in order to incorporate a medium-vo ltage transformer into the future building and to 
use more energy-saving light fittings.  The cost of these two modifications, some CHF 500,000, is 
much less than the unforeseen expenditure programmed. 
2. Financing the cost of equipping the new facilities 
134. In December 2008, the General Council approved the creation of a reserve, the Members' 
Transition Operating Fund (the Fund) to finance th e additional operating costs incurred by carrying on 
activities in the main building during the refurbishmen t-extension work and the cost of installation in 
the new premises. 
135. These costs comprise16 "moving and installation costs fo r the IT, library, archiving and 
document printing infrastructure into the new build ing.  It would also comprise furniture and 
technological upgrades in the conference and meeting rooms, office furniture and equipment and 
security installations for the new building and underground parking". 
                                                      
16 See document WT/BFA/W/178/Rev.1 of 14 November 2008 on utilization of the 2007 surplus. WT/BFA/W/237 
Page 26  
 
  136. According to "Very preliminary estimates",  these costs amount to CHF 10.77 million 
(CHF 3 million for the additional costs and CHF 7.77 million for the installation costs).  In December 2008, following a proposal by the Director-General, the Council earmarked CHF 8,051,716 for the Fund, i.e. around 75 per cent of the cost originally estimated. 
137. Since then, the Secretariat h as conducted several studies to estimate the installation costs, 
which it now considers to be "CHF 16 million to CHF 18 million"
17, but this does not include the 
additional costs required to maintain operations in the WTO building during the work originally 
envisaged, which have been absorbed by the re gular budget.  No official document provides a 
breakdown of these charges, which do not appear to be definitive. 
138. The WTO has the following resources availa ble to finance these equipment costs: 
 The Members' Transition Operating Fund amounting to CHF 8 million (replenished 
by CHF 1,036,988 at the end of 2010 by  utilizing part of the 2009 surplus); 
 possible utilization of all or part of the 2010 surplus (CHF 10.28 million); 
 the balance in the margin for unforeseen expenditure for the two sites, if these 
continue to be properly supervised; 
 any other savings in the regular budget;  and 
 any "sponsorship" by Member States which agree to finance a particular item of 
equipment. 
139. At the end of 2010, the Secretariat proposed to finance the estimated cost of CHF 4.5 million 
for equipping the conference centre in the South Courtyard by utilizing the savings made in the 2010 
budget and to complete this amount by an allocation from the Fund amounting to a maximum of 
CHF 3 million. 
140. This proposal only covers a small part of th e total planned expenditure.  An exhaustive 
estimate of the equipment costs to be financed shoul d be made and a suitable financing plan prepared. 
Recommendation No. 12.  The WTO should make  a comprehensive estimate of the cost of 
equipping the new installations being completed and should propose a financing plan for these costs. 
 
The Secretariat will review the estimated cost of equipping the new installations and the financing 
needs during the second quarter of 2011 for presentation to Members of the Council.. 
 
3. Financing heavy-duty maintenance costs 
141. All expenditure on the refurbishment-extension work is entered in a credit balance ("ongoing 
work").  Most of it will have to be reclassified as  property, plant and equipment in the transition to 
IPSAS and some will be left as charges. 
142. Such an operation does not raise any particular problems as regards expenditure on the work 
itself, which should be capitalized.  But IPSAS 11 "Construction contracts" leaves it up to the entities 
concerned as far as indirect site costs are concerne d:  for this project, the charges relating to the 
                                                      
17 See document WT/BFA/W/220 of 16 November 2 010 on the Members' Transition Operating Fund.  WT/BFA/W/237 
 Page 27 
 
 
  overall supervisor and the firm ove rseeing the site may be treated as property, plant and equipment or 
not. 
143. The choice to be made is not a simple one:  the higher the value of property, plant and 
equipment, the larger the amortization. 
144. It would be useful if the Secretariat could es timate the cost of heavy-duty maintenance in the 
future and take this into account in the amount of  property, plant and equipment recorded.  For this 
purpose, it will have available the report to be submitted by the firm Pom+Consulting  when the work 
is finished regarding the sharing of costs among the various components.  The firm could be asked to 
provide an interim report while work is still going on in order to help the Secretariat to make an 
estimate of the amounts to be recorded as propert y, plant and equipment before the work is 
completed. 
Recommendation No. 13.  Before the end of the work the WTO should define more clearly the 
costs to be recorded as property plant and eq uipment and those to be left in the charges 
account 
 
In 2011, the Secretariat will define its approach to recording property, plant and equipment in the 
accounts in relation to the construction project. 
 
III. PERFORMANCE AUDITS 
A. SUMMARY OF FINDINGS AND RECOMMENDATIONS  
1. Main findings 
8. The WTO's Informatics Division is highly attentive to the needs of other services in the 
Organization:  it takes all their requests into a ccount rapidly and its help desk is efficient. 
9. There is another side to this level of qualit y:  the Division appears to be overwhelmed, 
despite the large number of staff and the larg e amounts spent, whose relative share is, for 
example, higher than that of the OECD's Informatics Division, an organization with comparable activities. 
10. This situation can be explained in the first place by insufficient strategic planning18: 
because it has not identified a limited number of pr iority actions, the Division is unable to deal 
with the manifold demands made on it by other services and provides them with an 
exceptionally comprehensive range of services. 
11. It can also be explained by the excessive ly large share of computer applications 
developed for the specific needs of the WTO, instead of being purchased on the market, 
whenever possible. 
12. Several recent examples show, however, that this trend is not irreversible:  the 
Secretariat has chosen applications available on the market or less costly internal solutions 
rather than developing the costly specif ic applications originally envisaged. 
 
                                                      
18 This finding is confirmed by the conclusions of the back-to-office report on the WTO's IT system by 
the firm Altime Charles Riley of 25 January 2011, after a survey conducted following that of the Court of Audit. WT/BFA/W/237 
Page 28  
 
  2. List of recommendations 
145. Recommendation No. 1.  With the assistance of  an outside consultant, the study on the 
possible outsourcing of some of the Informatics Division's activities included in this Division's "IT Strategy" for 2007-2009 and then postponed should be resumed. 
146. Recommendation No. 2.  Temporary staff for the Informatics Division should only be 
recruited as and when needed, in accordance with th e rule in force in the Organization, and that 
consideration be given to social measures for tem porary staff who have been working in the Division 
for a long time. 
147. Recommendation No. 3.  There needs to be proper strategic consideration to enable the list of 
the new services to be provided by the IT system an d the advances expected in IT systems and in the 
Informatics Division to be determined. 
148. Recommendation No. 4.  Before deciding on any new application, there should systematically 
be a comparison of the principal internal and extern al solutions possible, taking into account all the 
costs which the Organization will have to face in the future. 
149. Recommendation No. 5.  As soon as possible, a comparison of the integrated management 
system (IMS) software packages availa ble on the market should be undertaken. 
150. Recommendation No. 6.  We recommend that all documents relating to bids should 
systematically be dated. 
151. Recommendation No. 7.  The action plan proposed by a consultant in 2006 in order to 
improve the quality of the WTO's IT services, in a ccordance with the ITIL standard, should be fully 
implemented. 
152. Recommendation No. 8.  Basic training in the WT O's IT systems should be made compulsory 
for all new staff members. 
153. Recommendation No. 9.  A policy for protecting pe rsonal data should be defined and controls 
for its proper implementation should be introduced. 
B. T
HE ORGANIZATION 'S IT SYSTEM  
1. The share of IT in the WTO's expenditure and staff numbers 
154. In 2009, expenditure on IT amounted to CHF 14.9 million, or 6.90 per cent of the 
Organization's operating costs.19  It has increased by 24 per cent since 2005, at an annual rate of 
5.6 per cent, double that of the Organization's expe nditure as a whole (2.9 per cent annually over the 
same period).20  These costs include those of divisions ot her than that responsible for informatics 
(projects and operations), with the exception of the salaries of eight computer specialists working in 
these other divisions. 
155. This 6.90 per cent share is twice as high as the OECD's expenditure on IT (3.09 per cent in 
2009), although its activities at first sight appear comparable to those of the WTO. 
                                                      
19 According to the 2009 statement of financial performance, the total figure was CHF 215,838 million. 
20 Source:  note of 9 May 2010 from the Budget, Administration and Finance Division on the trend in 
expenditure on IT from 2005 to 2010.  WT/BFA/W/237 
 Page 29 
 
 
  156. The WTO's Informatics Division had 40 permanent staff and 11 temporary staff in 2009 
(14 in September 2010).  In addition, eight computer  specialists were working in other divisions:  
six in the Statistics Division and two in the communications and translation services.  These 59 staff members accounted for 8.17 per cent of the Organiza tion's total staff at the end of 2009 (722 staff 
members, including 60 on temporary contracts).  Th is share is also higher than that in the OECD:  
5.41 per cent of total staff (143 staff members, 50 of them temporary, out of 2,639). 
The Informatics Division states that there is an inter-organizational benchmarking project, the first 
phase of which consists of drawing up a joint qu estionnaire to enable an objective comparison to be 
made of the services, budgets and resources in each  organization.  Several or ganizations, including 
the WTO, are going to participate in a pilot group to finalize the questionnaire. 
 
Current staff numbers are exceptionally high because of the "refurbishment-extension" projects under 
way and the "transition" to version 7 of Windows software and version 2010 of Office software, which require additional resources for the deployment and ma intenance of two different environments.  The 
Informatics Division also points out that its servi ces in fact involve 900 to 1,000 persons:  for 
example, those persons receiving training, trainees and outside consultants have to be added to the 
number of WTO staff.  Lastly, the number of applications and systems to be maintained and the 
number of new personal tools (Blackberry, iPhone, iPad) grow year-by-year.  
 
157. The discrepancies between the two Organizations  cannot be explained by the difference in 
their respective levels of computerization:  in bot h cases, all administrative tasks (payroll and staff 
management;  following up the budget, the accounts a nd procurement;  security of the installations, 
telephony) are computerized, together with work  by substantive divisions (statistics and economics 
studies;  translation;  management of the archives;  arrangements for conferences).  These discrepancies can a priori be e xplained by the following factors. 
 The larger number of staff in the OECD (2,639 staff members compared to 722), 
which permits economies of scale; 
 the scope of the WTO's training and technical assistance activities, which involve 
numerous tasks that take up working hours (more on-line courses;  making computers available for training sessions organized at  headquarters and all over the world;  
computer equipment, databases and updati ng data sent to the "reference centres" 
provided to least developed countries); 
 the amount of computer support given for certain WTO meetings, which bring 
together a very large number of participan ts from the 153 Member States (ministerial 
meetings, international workshops); 
 the very large number of applications specific to the WTO, which only uses a small 
number of the modules in the Oracle  IMS program and only buys a few ready-to-use 
applications or services on-line (further deta ils on this aspect are given below).  The 
OECD, on the other hand, makes more use of the modules in its own IMS program, the SAP. 
 a particularly high risk of hacking into the WTO's computer networks as it is a prime 
target for those opposed to free trade. 
The Informatics Division points out that the WTO's initial investment in the Oracle IMS program was 
not very high, whereas the OECD probably invested much larger sums in its SAP IMS program. 
 WT/BFA/W/237 
Page 30  
 
  It emphasizes that a large part of the increase in its  operating costs is the result of the "transition" 
already mentioned and of several recent reforms in  the Organization;  the development of security 
installations (visitor registration and accreditation sys tem;  videosurveillance);  the modernization of 
the conference rooms (digital recording of meeti ngs and computerization of reservations for meeting 
rooms) and of the telephone installations;  the "ref urbishment-extension" project at headquarters, the 
management of two buildings, the introduction of  the secure remote access infrastructure, the 
increase in the number of videoconferences, and ma intenance of the numerous databases developed. 
 
158. The number of permanent staff in the Inform atics Division remains stable:  from 2005 to 
2006, it rose from 34 to 40 staff members (following the integration of six temporary staff) and in 
2010 there were still 40 permanent staff.  There is  little rotation of personnel among the permanent 
staff;  from 2006 to 2010, five permanent staff left  the service and were replaced by new recruits. 
159. The total number of temporary staff, on the other hand, increased from eight to 14 between 
2005 and 2010.  They remain in their posts longer than the maximum duration of 12 months allowed 
by the Staff Regulations for short-term temporary staff;  two of the 14 temporary staff working in 
2010 had been recruited in 2007, two in 2008, five in  2009 and five in 2010.  The Division would like 
to renew the current contracts of seven temporary staff to meet long-term requirements after 2010, 
those of four temporary staff until the end of th e "transition" (end of April 2011), and one temporary 
staff member until the end of May 2011 for a document-scanning project. 
160. The Division justifies the increase in the number of temporary staff by the "transition" already 
mentioned, the "refurbishment-extension" project , the current separation of activities spread over 
two buildings, the need to have a highly secure e nvironment, and the significant increase in the 
number of services requested of it by other services.  It cannot be denied that the Division really serves its "clients", but it is poorly equipped for th is because there is no proper strategic planning to 
deal with the demands made on it by putting priori ty tasks first and these have been inadequately 
defined (see below). 
161. In any event, the Division's temporary staff ar e not always recruited for specific temporary 
tasks, contrary to the Regulations governing sh ort-term staff and the provisions in circular 
W/BFA/W/123/Rev.2 of 8 December 2004.  They are in fact being used for permanent tasks (as organized at present).  The Division would like to extend their employment and integrate some temporary staff into the Organization's permanent staf f (consistent with the procedure laid down in the 
Staff Regulations governing vacant posts). 
162. To meet the demands made on it, the Informatics Division could use outside sources more 
frequently.  It had in fact taken the step of initia ting a draft study on outsourcing some of its tasks, 
included in the "IT Strategy" projects for 2007-2009, but postponed the study owing to lack of time and apprehension about its possible social consequences
21, as well as lack of motivation among its 
staff during the implementation of the crucial "tra nsition" and "refurbishment-extension" projects. 
163. This social concern is praiseworthy, but the logical procedure would be first of all to 
determine the optimum number of computer staff for each specific task and then to draw the 
consequences in terms of human resources (integra tion of staff into the Division's permanent staff 
and, if necessary, assistance for the conversion of st aff either within or outside the WTO).  Proper 
strategic consideration of the Organization's long- term IT needs and a study of the advantages and 
disadvantages of outsourcing some of the Informati cs Division's responsibilities are needed in order to 
                                                      
21 The Informatics Division would like to see the even tual outsourcing of some of its tasks preceded by 
the adoption of new job definitions in order to give its staff new career prospects.  These new jobs would basically concern "analysis of jobs within the Organization, the task of following up outsourcing contracts and 
strategic functions which should remain under the direct control of the WTO".  WT/BFA/W/237 
 Page 31 
 
 
  determine the desirable number of computer staff for each specific area.  It would appear advisable to 
utilize the services of an outside consultant. 
164. The excessive number of temporary staff is a recurring problem in the Organization as a 
whole, already mentioned in our letter of 17 Nove mber 2008 containing the final comments, in which 
it is indicated that several measures have been take n, in 2006 in particular, to absorb the temporary 
staff.  It would appear that the IT sector is an extreme example of practices already noted. 
Recommendation No. 1.  With the assistance of an outside consultant, the study on the possible 
outsourcing of some of the Informatics Division's activities included in this Division's 
"IT Strategy" for 2007-2009 and then postponed should be resumed. 
 
Recommendation No. 2.  Temporary staff for the Informatics Division should only be recruited 
as and when needed in accordance with the rules in force in the Organization and that consideration be given to social measures for temporary staff who have been working in the 
Division for a long time. 
 
The Informatics Division indicates that Recommendation No. 1 can be implemented as soon as the necessary funds for the study are made available to it. 
 
As regards Recommendation No. 2, the Inform atics Division's responsib ilities have increased in 
recent years.  If the contracts of long-term tem porary staff are not renewed, the Division will face 
problems concerning support and the quality of the service. 
 
2. Planning of the Informatics Division's activities 
(a) The principles 
165. Every three years, the Informatics Division prepares documents entitled "IT Strategy", the 
latest two being for 2007-2009 and 2010-2012.  It then  prepares "Strategic Plans" for the two years in 
each budget biennium (the latest is for 2010 and 2011). 
166. Decisions of a strategic nature may be put be fore an "IT steering committee", chaired by the 
Director-General, or an "advisory group", chaired by the Deputy Director-General responsible for the 
Informatics Division.  The precise responsibilities of these two bodies have not been formalized.  A 
"project selection group"
22 was set up in 2007, in implementation of the 2007-2009 "IT Strategy", to 
prepare decisions for the aforementioned group.   These three bodies are composed of those 
responsible in all the divisions.  Following a recommendation by the Informatics Division, the 
"selection group" is chaired alternately by representatives of other divisions. 
(b) The facts 
(i) The documents setting out the IT strategy do not all have the same scope 
167. The "IT Strategy" documents do not have the same scope.  There is little development of 
genuinely innovative strategic considerations;  in general, they focus on an examination of the 
short-term projects requested by other WTO services .  Their actual implementation is not the subject 
of any evaluation.  In fact, they are only implemented in part depending on the budget earmarked for IT each year. 
                                                      
22 "Portfolio Management Group ". WT/BFA/W/237 
Page 32  
 
  168. The 2007-2009 "IT Strategy" recalls the role of IT within the Organization in very general 
terms and proposes several promising goals such as: 
 Gradual integration of the WTO's IT systems; 
 prior creation of the "project selection group" to examine proposals for new projects 
coming from the various services, transmit its conclusions to the "advisory group" and review all the information and informatics systems in use with a view to 
recommending their elimination if they have become obsolete or no longer provide 
the expected return on investment; 
 creation of standardized forms ("business cases") for sections to put forward their 
requests for new projects;  these forms shoul d include a cost/benefit analysis of the 
proposals in question; 
 initiation of a study on outsourcing some of the Informatics Division's tasks, 
specifying, inter alia , what should be carried out abroad; 
 the quest for new talent, capable of adapting to recent IT developments; 
 optimizing maintenance costs. 
169. The major part of this document is, however, devoted  to "IT tactical plans", in practice to long 
lists of projects already identified during the 2006-2007 biennium (71 projects) or newly submitted (55).  There is virtually no pr ioritization of the various projects. 
The Informatics Division states that the proposed st rategy (2007-2009) is contained in the first 
nine pages of the document, which is sufficient for an organization of the WTO's size.  It explains that, 
at that time, in the same document ongoing project s were listed, together with projects requested by 
other divisions and those deferred owing to lack of human or financial resources, in order to provide 
exhaustive information on the status of each project. 
 
170. The 2010-2012 "IT Strategy" is much shorter;  it si mply refers to the targets in the previous 
"Strategy", giving this time a list of 24 projects de emed to be of "particular importance" by the 
Director-General and those in charge of various divisions, starting with two "green" initiatives on the 
part of the Director-General in favour of a "clima te-neutral" and "paperless" WTO, and then in an 
annex it presents the "2010 Strategic Plan" and the "2011 Strategic Plan", which were prepared in 
parallel at the beginning of the biennium. 
171. These two "Strategic Plans" are simply a list of non-prioritized projects, but with indicative 
costs;  each Plan contains 41 non-identical proj ects (they are often different stages of the same 
project), whose cost is sometimes estimated to be ze ro (in the case of measures to be taken within the 
Informatics Division).  Eight projects for 2011 had in fact already been mentioned.  The various projects were the subject of standardized forms th at were submitted to the "project selection group", 
which discussed them with the divisions concerned. 
172. Some of the projects are not innovative initiatives but  lists of costs that should be part of a 
maintenance budget;  for example, a CHF 56,000 proj ect regarding IDB and CT S integrated databases 
in the Statistics Division, contained in the 2009 "S trategic Plan" relates to the purchase of CD-ROMs, 
maintenance services, renewal of licences and minor adjustments to these databases. 
173. The "Strategic Plans" are in  fact used when the annual budgets are negotiated:  the 
Informatics Division presents all the projects in the "Strategic Plan" for the year to the "advisory  WT/BFA/W/237 
 Page 33 
 
 
  group", which defers some of them so that the lis t adopted does not exceed the sums earmarked for IT 
in the year in question. 
The Informatics Division states that it uses the same  documents for the Strategic Plans and for the 
budget discussion in order to facilitate discussion on prio ritization of projects (so that their estimated 
cost can be seen at the same time and also to show other costs).  It will, however, change this 
presentation in future in order to  emphasize the difference between what relates to the discussion of 
Strategic Plans and what relates to budget discussions. 
 
(ii) The lack of any evaluation of th e results of the IT Strategy 
174. No evaluation of the IT "Strategies" and "Plans " has been programmed.  It is not possible, 
therefore, to assess the state of progress in integr ating IT systems, particularly as the Informatics 
Division has long lists of services rendered and appli cations being used but no single document with a 
chart showing all the IT systems currently used and those envisaged in the long term. 
The Secretariat states that this lacuna will be rem edied soon as a result of the study initiated by the 
Director-General on "urbanization" of the WTO's IT  systems, although this is dependent on funds 
being available to carry out this work.  As to the integration of IT systems, the project is under way 
with regard to non-tariff measures, but requires additiona l funds.  This is also part of the study on 
urbanization. 
 
175. Some of the most promising measures defined in  2007 have not been implemented:  the study 
on outsourcing tasks, mentioned above, was postponed;   a stable number of permanent staff in the 
Division was objectively preferred to the quest for ne w talent;  maintenance costs have not been the 
subject of a global study23;  the promising work by the "selection group" has not been followed by any 
elimination of unused applications. 
The Informatics Division has finalized a document on the Organization's IT standards, which also 
covers maintenance contracts.  Th is was endorsed by the adviso ry group in September 2010 and has 
been submitted to the contracts committee.  
176. This group nevertheless undertook a study of a ll IT applications, classifying them into 
four categories depending on the value of the service given and the total cost.
24  Fortunately, it was 
found that no application was very costly and at the same time of little use, but 16 projects that were 
not particularly useful but cost little were identified,  together with 24 projects that were of some or 
little use and of low cost, but above all four projects that were of some or little use but whose cost was 
high.  Despite the consensus on this finding, within  the group, no application has been eliminated, at 
the request of the divisions concerned, wh ich remain attached to these applications. 
177. The "IT steering committee" met for the last time to adopt the 2007-2009 "IT Strategy".  It is 
logical that it should not have met after this b ecause the subsequent strategic documents were not 
particularly innovative.  The Director-General was nevertheless able to communicate his priorities and 
these were integrated into the 2010-2012 "IT Strategy ".  The "advisory group" meets at least twice a 
year to adopt the annual IT budgets  and to endorse the prioritization of the projects approved;  it is 
                                                      
23 The Organization's maintenance costs, irrespective of the division concerned, will be more clearly 
identified as a result of an initiative taken by the Proc urement Section, which is starting to centralize all 
WTO contracts and is seeking to identify systematically the dates when maintenance contracts end in order to 
consider whether it is preferable to renew them or to launch a new call for bids and to ensure the related costs 
remain within budget.  The Informatics Division has therefore given the Procurement Section a list of its 
maintenance contracts. 
24 This study was conducted on the basis of a document prepared by the Informatics Division. WT/BFA/W/237 
Page 34  
 
  also convened to consider the major projects and doc uments of the Informatics Division (for example, 
the "transition" project, the strate gic documents or IT standards). 
(iii) The need to define fewer and more long-term priorities 
178. The Secretariat should adopt an effective strate gic procedure for IT systems, determining its 
priorities in three areas: 
 The choice of the new services which IT should provide to the WTO's various 
divisions; 
 the list of technical advances to be made in these systems (especially as regards their 
integration - a project that is currently  under way for around a dozen applications 
relating to non-tariff measures);  and 
 the progress to be made by the Informatics Division (number of staff;  productivity;  
possible outsourcing of certain tasks). 
The Informatics Division states that this procedure wi ll shortly be taken into account as a result of the 
study initiated by the Director-General on "urbanizati on" of the WTO's IT systems.  With regard to 
the integration of systems, this is primarily a qu estion of analysis at the data level rather than a 
problem of technical progress. 
 
179. The priorities determined in these three areas need  to be listed in order, together with a 
timetable for their implementation.  Determining pr iorities is a collective effort that cannot depend on 
the Informatics Division alone.  Such an exercise is necessary, however, in order to give the Division 
a modicum of capacity to deal with the numerous  demands made on it, which cannot be filtered 
without first establishing a limited number of priorities. 
180. Lastly, it would be to the benefit of WTO's future "IT Strategies" if they were prepared at 
longer intervals (for example, every five years inst ead of every three years) and if they gave a 
longer-term vision of the Organization's development (over ten years, for example), the conclusions 
being updated by means of the "Strategic Plans". 
The Informatics Division is proposing to draw up four -year IT Strategies, which would enable them to 
be aligned with two financial periods.  It proposes  that the 2010-2012 strategy be replaced by a 
2012-2015 strategy, and so on. 
 
Recommendation No. 3.  There needs to be proper strategic consideration to enable the list of 
new services to be provided by the IT system and the advances expected in IT systems and in 
the Informatics Division to be determined. 
 
3. Division of tasks between the Informatics Division and applications bought on the 
market 
(a) The predominance of specific appli cations, usually developed in-house 
181. Some 60 per cent (53 out of 89) of the IT app lications used are specific to the WTO and are 
created by developers in the Informatics Division.  Other applications are either developed for the 
Organization's needs by an outside supplier of services, following an order issued by the 
Division (25/89), or ready bought on the market (11/89).  WT/BFA/W/237 
 Page 35 
 
 
  182. This predominance of "in-house" applicati ons can be attributed to the following: 
 The desire to meet the precise requirements of the WTO's divisions, deemed to be too 
specific to be covered by applications sold on the market; 
 the idea that work by developers in the Informatics Division does not cost anything 
because they are being paid in any case; 
 the lack of analytical accounting to estimate the real total cost of a project, including 
the hours worked by the Informatics Division (t he auditors were thus unable to obtain 
a breakdown of the latter's costs by project); 
 in the case of administrative systems, the perceived25 cost and complexity of the 
Oracle  program, of which the WTO only uses some of the modules for managing the 
budget and the accounts, human r esources and procurement. 
183. It is by no means clear that it is to the advant age of an organization with only 727 staff to give 
priority to special applications, whether these are developed in-house or externally.  In fact, such 
applications require many hours of work;  we were told of one inst ance in which the development of a 
new application in-house occupied a developer full-time for one year because of the numerous 
additional features requested by the division concerned on several occasions.  Moreover, the WTO is not big enough to amortize high development costs.  The number of staff and the cost of the Informatics Division can obviously be explained in part by the practices noted here.  Several cases denote, however, a recent trend towards questioning these practices and towards choosing less costly 
solutions. 
(b) Reversing this trend 
184. Acting together, the Informatics and Human Res ources Divisions and the Budget and Finance 
and Procurement Sections, after testing WTO-specifi c solutions, have in fact adopted less costly 
IT services purchased on the market or that only use tools already available within the Organization. 
(i) Database for staff evaluations 
185. In order to comply with a request from the Human Resources Division, which wanted a 
database for the annual staff evaluations
26, a preliminary call for bids was issued in March 2009 in 
order to establish parameters and individualize the corresponding features in the Oracle Human 
Resources  module.  As none of the bidders made offe rs that were technically and financially 
satisfactory, the call for bids was declared uns uccessful and new consultations were initiated in 
January 2010, after new specifications had been drawn up by an outside consultant.  Bids by 
three firms that were consistent with the technical requirements in the specifications turned out to be 
much more costly than the cost of the service estimated by the outside consultant (CHF 200,000);  they amounted, respectively, to CHF 783,272, CHF 542,160 and CHF 470,760, the lowest bid also 
                                                      
25 The divisions that are "clients" of the Informatics Division see the Oracle system as complex, 
although the Division itself does not do so and considers that Oracle , in fact chosen by the "client" divisions at 
the time, is a high-quality and efficient system, less onerous than the SAP system used like Oracle in many 
organizations (United Nations agencies, OECD) that are larger than the WTO.  The other divisions under-estimate the time needed to adapt an Oracle module to their needs, wher eas the time needed for 
adaptation would be at least as long for other IMS programs. 
26 The HRD wants the annual evaluations to be completed on-line and no longer on paper "forms" 
filled in by staff members and their supervisors, and to keep  these evaluations in a database so as to be able to 
use them for statistical purposes. WT/BFA/W/237 
Page 36  
 
  being the most satisfactory from the technical point of view.  There was, therefore, no follow-up to 
this second round. 
186. Following a further study requested from the same  outside consultant, a new call for bids was 
launched in August 2010 on entirely new bases with a view to selecting a firm that could provide the 
WTO with an on-line service.
27  The three bids received amounted, respectively, to CHF 52,870, 
CHF 62,530 and CHF 116,500 for services over two years.  This time, the highest bid was the most 
satisfactory from the technical point of view and wa s chosen.  Its initial cost is much lower than the 
solutions mentioned above, but it will be more co stly in the long term if the WTO extends the 
two-year contract it has signed as this service implies the payment of annual fees amounting to CHF 39,000, although the solution chosen will avoid the cost of adapting applications managed 
within the WTO. 
The Informatics Division states that this nevert heless raises problems of integration into the 
Integrated Management System program, interac tion between this new system and the IMS being 
asynchronous.  There have been in-house developments in order to transmit the Oracle HR data and 
to ensure their regular updating in the outside appl ication.  As yet, the question of retransmitting 
information to Oracle HR has not been envisaged.  
(ii) Applications for calculating property, pl ant and equipment and managing procurement 
187. In preparing the transition to IPSAS, the WTO will have to calculate the amount of its 
property, plant and equipment and amortize them.  In order to manage this new function, it was first 
of all envisaged that the Oracle  Fixed Assets  module, for which the WTO has user's rights, should be 
used (linked to other financial and accounting m odules) after being adapted.  The cost of this 
adaptation was estimated to be CHF 150,000;  this  large sum can be explained by the desire to 
computerize certain functions that had hitherto b een managed manually, for example, processing of 
purchase requests
28 and deliveries, at the beginning and end of the procurement chain.  This amount 
appears excessive in light of the small number of items to be treated as property, plant and equipment 
(150 at the most, according to the Budget and Finance Section) as the WTO had decided only to 
recognize property, plant and equipment that exceed ed CHF 5,000 and also to consider the possibility 
of aggregating property, plant and equipment fo r sensitive items costing less than CHF 5,000, for 
example, personal computers (so as to co mply with IPSAS 17, in accordance with 
Recommendation No. 17 in our report on the 2009 accounts). 
188. It was therefore decided to manage and amortiz e this property, plant and equipment using a 
single Excel  spreadsheet in the Budget and Finance Sec tion, which would use the information on the 
purchase of items to be recorded as property, plant and equipment available in the existing 
two technical databases concerning, respectively, in frastructure equipment and computer equipment.  
This solution, which involves no extra cost for the Informatics Division, leads to a saving of 
CHF 200,000.  It will, however, imply a cost for th e Budget and Finance Section, which has not been 
estimated, and a risk of errors because the data  in the two aforementioned databases are not 
homogenous and have to be completed in both cases. 
189. The Organization has also found a way of computerizing purchase requests, in accordance 
with the joint request by the Procurement and the Budget and Finance Sections, without the need for a 
costly adaptation of the Oracle  Fixed Assets  module.  It has decided to activate the " iProcurement " 
                                                      
27 This technology (" Software as a service" or SaaS ") consists in this par ticular case of storing and 
managing the staff evaluations on a database belonging to a private firm, with which the WTO communicates 
through the Internet. 
28 Every purchase starts with the issue of a purchase request by the division concerned.  After it has 
been ascertained that funds are ava ilable for the purchase, an order is issued by the Procurement Section.  WT/BFA/W/237 
 Page 37 
 
 
  module in Oracle , for which it pays the annual licence fee (CHF 9,573) but which it did not use, as 
can be seen from the inte rnal audit report of November 2008 on  the Procurement Section.  This 
module will also enable financial commitments to be initiated at a much earlier stage, when the 
purchase requests are issued (and no longer at the time the purchase orders are signed), to record 
on-line the dates on which orders are delivered or the services ordered are rendered, and to 
computerize the calculation of provisions for paya bles, which involve time-consuming calculations 
when closing the accounts. 
(iii) Evaluation of the IMS program 
190. The Informatics, Human Resources and Budget, Finance and Administration Divisions have 
decided to initiate an evaluation of the Oracle  IMS program, which has been in place for 12 years, 
within the next few years, looking at all the soluti ons available on the market before issuing a call for 
bids (in 2012), for which the specifications will be  drawn up by an outside consultant.  The choices 
available to the WTO are the future version of Oracle  being developed, probably to be called Fusion  
(with an obligatory transition to Oracle V 12  beforehand) or the use of a new system suitable for 
medium-sized organizations, pr eferably compatible with Oracle , to enable the numerous adapted 
applications in the current system to remain in service.  This appears an extremely positive step 
because if it has an IMS program better adapted to its needs, the WTO will be able to find solutions 
for computerizing and streamlining procedures, thereby gaining in efficiency and quality. 
The Informatics Division explains that this proj ect will first be put before the advisory group for 
prioritization, in the same way as  other projects proposed to it.  It adds that consideration of the 
procedures and specifications for this project  are also covered in the urbanization study. 
 
191. The various examples mentioned above show that  the solutions chosen were found by trial 
and error and present various risks that will subsequen tly have to be evaluated.  The use of specific 
solutions is occasionally inevitable:  for exampl e, the working group which studied the solutions 
available for managing travel at the WTO found that there was no appropriate Oracle  module and that 
the applications available on the market did not m eet the Organization's needs;  it was therefore 
decided, as in other international or ganizations consulted, that a cons ultant should be asked to develop 
a special application, after a call for bids had been issued. 
192. Despite their limitations, the examples given hi ghlight the shared concern of the divisions 
involved, acting together, to choose economical so lutions and to use applications and services 
available on the market (or already available in th e Organization) rather than to turn to costly 
internally or externally  developed applications. 
193. To avoid the aforementioned process of trial and error, it would be preferable at the outset 
systematically to compare the advantages, disadva ntages and cost of all possible solutions when a 
division requests a new IT service:  internal deve lopment of an application specific to the WTO, 
creation of such an application by a service provider, purchase of an application or on-line service 
available on the market, or utilization of a new IMS program in the Organization. 
The Informatics Division states that it is not possibl e to take this route without amending the rules on 
procurement, which do not allow it to discuss solutions in detail with each service provider 
individually. 
 194. To complete the process, such a comparison shoul d include an estimate of the cost of licence 
fees and maintenance, over several years, and in the case of internally developed applications the cost 
of the salaries and incidental costs for the sta ff members in the Informatics and other divisions. WT/BFA/W/237 
Page 38  
 
  Recommendation No. 4.  Before deciding on an y new application, there should systematically 
be a comparison of the principal internal and ex ternal solutions possible taking into account all 
the costs which the Organization will have to face in the future. 
 
Recommendation No. 5.  As soon as possible a comparison of the integrated management 
system (IMS) software packages available on the market should be undertaken. 
 
The Informatics Division suggests that there should first be a study on streamlining procedures and 
that specifications should be drawn up so that so ftware programs can be compared on the basis of 
precise criteria.  The same approach is  suggested in the urbanization study. 
 
4. Compliance with the rules on co mpetition, quality and safety 
(a) Procurement procedures 
(i) Management of calls for bids 
195. When considering the aforementioned calls fo r bids, it was noted that the Informatics 
Division's relevant contracts complied with the very  broad provisions in Chapter X - Procurement - of 
the WTO's Financial Rules and with good practice. 
196. The specifications are clear.  The time-limit given to firms for sending in bids is strictly 
observed;  in the second call for bids organized to select a firm to create a database for staff evaluations, for example, one firm's proposal, sent via the courier service DHL, was not opened 
because it reached the WTO the day after expiry of the time-limit for sending in bids, the documents 
and CD-ROMs it contained having been blocked at the customs. 
197. The technical and financial sections of the bids have to be submitted in separate envelopes.  
An ad hoc committee composed of competent persons  from several divisions first opens the envelopes 
relating to the technical criteria for the bids (the In formatics Division repeats its previous remark:  this 
procedure prevents it discussing details with the fi rms concerned), eliminates those which do not meet 
the specifications and classifies the other according to a precise scale of points (after having taken the 
necessary time to consider the technical aspects of th e bids).  Subsequently, it opens the envelopes 
with the financial proposals by firms that have not been eliminated for technical reasons and makes a 
final classification of the bids, taking into acc ount their respective technical and financial 
classifications according to the percentage determ ined for each criterion in the specifications.  The 
recommendations of these ad hoc committees are tr ansmitted to the Procurement Committee, which 
endorsed them in all the cases considered. 
198. The cases reviewed nevertheless call for a minor  recommendation:  all documents concerning 
bids (specifications, estimates of the cost of th e services, reports on the technical and financial 
evaluations of the bids, etc.) should be dated, which is not always the case. 
Recommendation No. 6.  We recommend that  all documents relating to bids should 
systematically be dated. 
 
(ii) The need to take into account  the special features of IT 
199. In the course of our enquiries, the Informatics Division emphasized the cumbersome nature of 
procurement procedures and expressed the concer n that the forthcoming introduction of a 
Procurement Manual by the Procurement Section would not  mean an end to this red tape.  It sent very  WT/BFA/W/237 
 Page 39 
 
 
  detailed comments to the Procurement Section with a view to amending certain parts of the Manual in 
order to take into account the special features of IT , notably the complexity of the technical evaluation 
of bids. 
200. To us, these concerns appear exaggerated:  th e Procurement Section has sent its draft Manual 
to all the WTO's services and will reply to them.  Requests for amendment of the Manual appear to us 
to target certain classic cases for wh ich national case law provides solutions. 
201. The Informatics Division has also sent the Procurement Section a document on 
"IT Standards"29, requesting that it be allowed to continue  to purchase certain IT equipment used in 
the Organization from certain firms without any new ca ll for bids until a particular date, determined in 
each case, when a new competition can be launc hed.  This document was reviewed by the 
Procurement Section and by the contracts committee, and endorsed by the advisory group in 
September 2010.  The "IT Standards" procedure is  acceptable, particularly as it corresponds to a 
recommendation by the internal audit unit in its report on procurement me ntioned above, requesting 
that WTO's suppliers be the subject of prequalification. 
202. If it is found that IT procurement procedures have slowed down after the future Manual has 
been in effect for a few months, some of its provi sions should be reviewed.  The risk of any slowdown 
in procedures will, however, be minimized by draw ing up the "Procurement Plans" requested of each 
division in order facilitate the programming of calls  for bids.  The Informatics Division has drawn up 
such a document each year since 2009, which is transmitted to and discussed with the Procurement 
Section. 
(iii) An exemption from the rules on competition:  relations between the WTO and the 
International Computing Centre (ICC) 
203. The WTO's Procurement Committee allows one important exception to the rules on 
competition, in favour of the International Com puting Centre (ICC), a Geneva-based international 
organization, set up and administered by interna tional organizations (cu rrently over 25), whose 
representatives compose its Management Committee. 
204. The WTO has been a member since 1976.  Its IT Director represents it on the Management 
Committee.  Relations between the two organizati ons are governed by a WTO mandate and by an 
agreement (" Memorandum of Understanding "), both signed in December 2001, and by framework 
agreements (" Master Service Delivery Agreements ") signed for each biennium.  The current 
framework agreement for the 2010-2011 biennium, involving a total sum of US$2,823,573 for services rendered over two years, was the subject of a retroactive request to the Procurement 
Committee for a waiver from competition procedur es on 8 January 2010;  the previous framework 
agreement, for the 2008-2009 biennium, had been the subject of an identical retroactive request on 
4 February 2009.  The reason for these requests is the cost, complexity and security risks represented 
by any possible transfer of the ICC's services to another provider and by the modest costs of the 
services of the ICC, which is a non-profit-making body.  It is indicated in this connection that the ICC 
recently won a call for bids issued by the World Health Organization to host its new IMS program 
(Oracle  E-Business ) and that the United Nations Developmen t Programme (UNDP) has transferred to 
the ICC hosting of its integrated management system program ( Oracle-PeopleSoft "), which was 
previously entrusted to a private firm. 
205. The services provided by the ICC relate in partic ular to Internet access, hosting of its Internet 
sites and part of the Intranet, management of the system enabling staff to work remotely and securely, 
the mobile telephone network, and the Blackberry  messaging service.  Some 40 servers are used for 
                                                      
29 IT Standards.  WT/BFA/W/237 
Page 40  
 
  these services to the WTO.  The ICC hosts 25 of the WTO's applications and, inter alia , provides a 
first line of defence again frequent attacks by h ackers seeking to penetrate and disrupt the WTO's 
networks. 
206. It should be noted, however, that the net cost  of the ICC's services annually (taking into 
account the refunds by this body every two year s) increased by 74 per cent between 2005 and 2009 
(from CHF 0.64 million to CHF 1.12 million), at an annual rate of 14.8 per cent, almost three times as 
much as the increase in the average expenditure of the Informatics Division (5 .6 per cent).  According 
to the Division, this can be explained by the large number of additional services that have been 
installed at the ICC on behalf of the WTO. 
207. In view of these costs, the Organization should consider the possibility of bringing 
competition into play under conditions comparable to those envisaged for its IMS program, asking a 
consultant to study alternative so lutions and possibly issuing a call for bids for all or some of the 
services provided by the ICC, according to specifications drawn up with the assistance of this consultant. 
(iv) Control of the quality and functi oning of the computer help desk 
208. In 2006, the Informatics Division contracted a consultant to undertake a review of the 
consistency of its IT systems with the ITIL standard (" Information Technology Infrastructure 
Library "), which lists all good practices in relation to the organization of IT systems, assessing their 
efficiency, the level of risk and the quality of the services provided. 
209. The audit highlighted several departures from good practices, including the lack of 
formalization of procedures or policies (for example,  no formal policy for dealing with incidents) or 
the lack of follow-up tools and performance indicators. 
210. The note attributed by the consultant (1.66 out of 5) was low, but his report explained that the 
weakness was caused by the absence of a project to implement the ITIL standard up until then.  Since 
then, all members of the Division have followed courses on the ITIL standard and ITIL-consistent 
policies have been developed but not  yet implemented for the functioning of the help desk and dealing 
with incidents. 
The Informatics Division is aware of these lacunae, but has been unable to implement the two-year 
plan of action submitted by the consultant because of work overload. 
 
Recommendation No. 7.  The action plan proposed by a consultant in 2006 in order to improve 
the quality of the WTO's IT services in accord ance with the ITIL standard, should be fully 
implemented. 
 
The Informatics Division points out, however, that it will be difficult for it to embark upon this action 
plan because of its workload in 2011 and the fact that the person coordinating the project has retired (while awaiting a decision by the HRD on filling this post).  The action plan requires working 
sessions bringing together several members of the Division and it will be very difficult to achieve 
Note 3 without the necessary resources. 
 
211. The WTO computer support office (" IT help desk ") has a heavy workload:  from 
January 2006 to September 2010, it logged 51,261 calls .  This large number of calls is not the result of  WT/BFA/W/237 
 Page 41 
 
 
  the poor quality of the IT systems, but rather of their frequent modification and all sorts of changes30, 
the creation of new applications, handling comple x documents, the moves caused by the headquarters 
refurbishment-extension works and the lack of e xperience on the part of certain users.  A large 
number of calls are in fact requests for explana tion of the functioning of new applications or 
reactivation of equipment that has been moved, or come from temporary staff members.  In order to 
limit these, a section with replies to "frequently asked questions" has been put on the Intranet and 
proposals for training are sent to those who systematically ask similar questions.  Training in the WTO's IT system at various levels is available to all the staff, but is not compulsory.  An optional 
course to introduce the WTO, which covers IT, is  offered to all new staff members (whether 
permanent staff, trainees or temporary staff).  B asic training in the WTO's IT systems should be made 
compulsory for all new staff. 
A large number of calls do not relate to real  incidents but to new requests for services. 
 
Recommendation No. 8.  Basic training in the WTO's IT systems should be made compulsory 
for all new staff members. 
 212. Intervention by the help desk is followed up using the " Incidents " module in the " BMC 
Service Desk Express " software, which generates statistics.  The adoption of other modules in this 
software to make it easier to individualize requ ests for intervention and the solutions provided is 
planned under the two-year action plan mentione d above concerning implementation of the ITIL 
standard.  In addition, since early October 2010, the Informatics Division h as sent user satisfaction 
questionnaires to those receiving support from the he lp desk;  the low level of response to this 
questionnaire is an indicators of users' satisfaction. 
(b) IT security 
213. The measures taken by the WTO to guarantee the security of its IT systems cover the whole 
gamut of risks.  Physical access to control centr es, data centres and rooms housing the servers is 
restricted through a system of electronic badges onl y given to authorized computer specialists, and 
also by the presence of WTO guards. 
214. The confidentiality of the data stored and exch anged is protected by a system of passwords 
containing at least eight characters, changed twice yearly and not reusable.  The number of attempts at authentication is limited to ten.  The person in char ge of IT security may require that a password be 
changed if any particular risk is detected.  Clear  instructions are given to staff.  Access to the 
confidential databases requires special codes only gi ven to restricted lists of officials.  The 
applications accessible to the public and to Memb er States are the subject of special security 
measures. 
215. Protection against computer viruses and intr usion by hackers is guaranteed through a 
three-level mechanism, continually updated, with in the ICC and then in individual servers and 
computers.  It should be mentioned, however, that  this was only partly successful in preventing an 
intrusion in 2010, aided by some 40 servers.  Warnings are regularly sent to staff
31, the latest in the 
name of the Director-General, and a system to detect IT intrusion is being studied. 
                                                      
30 Introduction of new versions of office softwa re;  network connection and disconnection for 
temporary staff;  access to securiti zed directories on the network;  in creasing number of videoconferences;  
annual replacement of a large number of personal com puters;  support for users for certain office software 
features or problems, etc. 
31 It would appear that intrusion is facilitated by apparently anodyne links inserted into e-mails, on 
which it suffices to click by mistake in order to trigger the intrusion. WT/BFA/W/237 
Page 42  
 
  216. Protection against major breakdowns is guaranteed  as follows:  the three services deemed to 
be the most critical (the authentication system, e-ma ils and the central storage of data) are duplicated 
in the installations situated, on the one hand, in the chemin des Mines , where the Informatics Division 
is currently located, 300 metres from the Centre William Rappard (CWR), which is 
WTO's headquarters, and, on the other, in the CWR itself.  The equipment in the chemin des Mines 
will be placed in another part of the headquarters when the current refurbishment-extension work is 
completed so that all WTO staff can be located in  one place.  These three services can be reactivated 
within a few minutes if there is a major breakdown.  Other applications can be reactivated within 
ten working days (or even four days for the most  important) using the data stored each night on 
magnetic tapes and kept in a Swiss bank safe. 
217. The WTO has given up the idea of having a full-scale "hot" emergency site, far from its 
headquarters, to protect it against the most serious incidents (destruction of its IT equipment as a result of an attack or nuclear explosion) because of the high cost of such sites and the back-up 
procedures. 
218. In 2008 and 2009
32, the WTO asked the firm Microsoft  to audit its IT systems, with particular 
emphasis on security.  A new audit is planned for the end of the current "transition" (involving 
changing to version 7 of Windows  software, to the 2010 version of Office  software and to the latest 
version of a large number of office applications at work stations, as well as the transfer of the servers to 2007/2008 Windows Server  versions.  These audits proposed several measures, whose scope is 
sometimes not easy for a non-expert to apprehend:  a summary of the auditors' most important recommendations and the measures envisaged to comply with them should be submitted to the 
"advisory group". 
219. As an international organization with jurisdicti onal immunity, the WTO, in principle, does not 
have to comply with domestic legislation on the protection of personal data, particularly the 
Swiss Federal Law of 19 June 1992 on the protection of data.  But any staff member or any person 
who considers that he/she has suffered injury as a re sult of the information contained in the databases 
may bring civil or criminal proceedings against the WTO, and the Swiss Federal authorities could 
request that its immunity be lifted, which would to say the least be harmful to the Organization's 
image.  Its staff members may also bring a case before the Organization's Joint Appeals Board and 
then before the Administrative Tribunal of the Intern ational Labour Organization.  There is currently 
no internal policy covering this aspect. 
220. It would therefore be desirable to supervise u se of such data, notably the following aspects: 
 Access to data; 
 how long they are kept; 
 the purpose of collecting information; 
 the security measures taken. 
221. An appropriate supervisory structure with  a person responsible for it should ensure 
observance of this policy by those in possession of the data and any service providers. 
Recommendation No. 9.A policy for protecting p ersonal data should be defined and controls 
for its proper implementation should be introduced. 
                                                      
32 "Risk and Health Assessment Program for Microsoft Exchange Services ".  Report of 
12 November 2009.  WT/BFA/W/237 
 Page 43 
 
 
  IV. ACKNOWLEDGMENTS 
222. We sincerely thank the members of senior management and staff of the WTO for their 
welcome and for the precise information that they su pplied to us in the context of our enquiries. 
V. CONCLUSION 
223. On the basis of the audit conducted, the extern al auditors certify that, in their view, the 
accounts for the financial year 2010 present fairly the financial position of the WTO as at 
31 December 2010. WT/BFA/W/237 
Page 44  
 
  VI. ANNEX:  FOLLOW-UP TO PREVIOUS RECOMMENDATIONS 
Table 10.  Follow-up to the recommendations of the external auditors on the 
2009 financial statements 
 
Recommendation Response of the Secretariat Comments of the auditors 
1. The liabilities in the statement 
of financial position and Note 13 to 
the financial statements should explicitly indicate that the amounts 
due to donors correspond to 
deferred revenue. Note 13 to the 2009 financial 
statements was immediately 
amended accordingly. Agreed.  Recommendation 
implemented. 
2. The trend in the deferred 
revenue balance compared to the 
amounts due to donors should be 
explained in Note 13 to the financial statements. Note 13 to the 2009 financial 
statements was immediately 
amended accordingly Agreed.  Recommendation 
implemented. 
3. A breakdown by Member State and by trust fund of the voluntary contributions paid in 
advance and recorded under 
deferred revenue should be given in a note or an annex to the financial 
statements. Schedule E to the 2009 financial 
statements was immediately amended accordingly. Agreed.  Recommendation 
implemented. 
4. The financial statements should indicate how the 13% levy 
on trust funds is used. Each year, the WTO Secretariat 
gives every donor an additional 
report for each fund, including the 
Programme Support Fund.  These reports show in precise detail each 
fund's activities and costs.  The 
Secretariat, together with the external auditor, will consider the 
level of detail needed for the 2010 
consolidated accounts. Recommendation in fact 
implemented in the 2010 financial 
statements. 
5. The WTO should indicate in a 
note to the financial statements the stages it intends to follow in order gradually to make provision for 
untaken paid leave before the 
International Public Sector Accounting Standards (IPSAS) 
come into effect.  These stages 
should be calculated as a percentage of the full provision to 
be made when the IPSAS are 
implemented. The WTO Secretariat is following a 
gradual approach, taking into account the resources available and complying with the Financial 
Rules.  The Secretariat will 
consider introducing an approach based on a percentage of the total 
provision. Recommendation implemented in 
part.  The procedure followed is explained in the 2010 financial statements (Note 12) but it is not 
based on a percentage of the full 
provision.  WT/BFA/W/237 
 Page 45 
 
 
  Recommendation Response of the Secretariat Comments of the auditors 
6. The WTO should correct the 
error made in its accounting entries 
(which was rectified in its financial 
statements) concerning the amount of the advance to the Working 
Capital Fund made by Member 
States and should explain this error 
in Note 14 to the financial 
statements. The WTO Secretariat immediately 
corrected the accounts and the 
restatements for the 2008 and 2009 
financial years and explained these corrections in Note 2 to the 2009 
financial statements. Recommendation implemented. 
7. Note 4 to the financial 
statements should list the various 
components of receivables from 
Member States, including the payments expected for the Working 
Capital Fund. Note 4 to the 2009 financial 
statements was immediately 
amended accordingly. 
 Recommendation implemented. 
8. The provision for 
contributions in arrears should be 
calculated taking into account the 
Organization's assessment of the risks of non-payment (confirmation 
of a recommendation for the 
previous financial year). Before the end of 2010, the 
WTO Secretariat will submit to the 
Committee on Budget, Finance and 
Administration an amendment for calculating the provision for 
contributions in arrears so that it 
can be put it into ef fect for the 2010 
accounts. Recommendation implemented in 
the 2010 accounts. 
9. The WTO should adopt a plan to absorb contributio ns in arrears by 
Observer States. The working group on 
administrative measures is addressing the question and will 
report to the Committee on Budget, 
Finance and Administration. Recommendation implemented in 
the 2010 accounts. 
10. The total amount of voluntary contributions received in the course of the preceding financial year and its breakdown by donor country and 
by trust fund should be shown in an 
annex to the financial statements (confirmation of a recommendation 
for the previous financial year). The distribution of the balance 
remaining in each of the extra-budgetary funds to donors at the end of the year is determined by 
the agreements signed with the 
donors.  In general, these specify that the remaining balance is 
distributed pro rata to the voluntary 
contributions received during the year plus the amount in the donor 
credit at the end of the previous 
financial year and interest.  Additional information will be 
added to the 2010 financial 
statements. Recommendation implemented in 
the 2010 accounts. 
11. The WTO should pursue its efforts to (i) accelerate refund by the United States of the taxes of WTO staff who resided there;  
(ii) obtain this refund according to 
the method stipulated by the Administrative Tribunal of the 
International Labour Organization 
(partial confirmation of a recommendation for the previous 
financial year). The WTO is pursuing its efforts, 
with the support of the United States Mission to the WTO. 
At the end of 2010, the debit had 
risen to CHF 1 million as no payment was received in 2010.  The 
arrears for past tax years go back to 
the 2007 fiscal year , i.e. three years 
of arrears.  WT/BFA/W/237 
Page 46  
 
  Recommendation Response of the Secretariat Comments of the auditors 
12. The WTO should (i) verify all 
accounting operations resulting in 
exchange rate variations;  and 
(ii) consider a method for calculating such differences, 
limiting the possibility of error as 
far as possible. Exchange gains and losses are 
recorded in conformity with WTO's 
accounting procedures.  The WTO's 
Financial Rules specify that contributions paid in foreign 
currency are converted at the day's 
bank rate and that other transactions 
are converted at the rate called the 
WTO exchange rate.  The Rules also refer to exchange gains and 
losses as a result of revaluation of 
the foreign currency balances.  
An internal and external analysis on 
the SI was conducted in 2010. Recommendation implemented. 
13. The WTO should (i) publish a 
list of delegations of authority 
given to its officials and keep this list up to date;  and (ii) ensure that 
supporting documents are 
submitted for the allowances it pays. The WTO is in the process of 
finalizing a document that provides 
a list of delegations of authority.  This list will be updated so that 
staff members are aware of their 
respective responsibilities.  Regarding the second point, the 
WTO requires the submission of 
supporting documents for the indemnities it pays and will pursue 
its efforts in this regard. Recommendation accepted and 
being implemented. 
14. Note 3 to the financial 
statements showing the breakdown 
of cash and cash equivalents should 
be brought into line with the overall balance as regards the amount of 
short-term investment and 
on-demand deposits. Note 3 to the 2009 financial 
statements was immediately 
amended accordingly. Recommendation implemented. 
15. Note 3 should in future be 
supplemented by comments 
concerning the financial targets, 
investment-related risks and the 
supervision exercised. Note 3 will contain additional 
information on the cash 
management policy in the 2010 
financial statements. Recommendation accepted and 
being implemented, not relevant in 
2010 when the cash was placed in 
deposit accounts. 
16. The WTO should record interest on its foreign currency investments at the exchange rate in 
effect on the day the interest is 
received. The Secretariat currently uses the 
monthly exchange rate furnished by the United Nations for all 
transactions other than 
contributions received.  The Secretariat will cons ider the change 
to the rate applicable to interest in 
foreign currency.  Since 
1 January 2010, the Secretariat has 
changed how interest received in foreign currency is recorded by 
using the exchange rate for the 
month of receipt. Recommendation accepted (in a 
form other than that proposed).  WT/BFA/W/237 
 Page 47 
 
 
  Recommendation Response of the Secretariat Comments of the auditors 
17. Computer equipment of a 
value not exceeding CHF 5,000 
should be aggregated and recorded 
under property, plant and equipment, in accordance with 
paragraph 18 of IPSAS 17. The Secretariat has finalized its 
approach to monitoring the 
property, plant and equipment 
accounts in 2010 and recorded the opening position at the beginning of 
2011.  In the first instance, the 
WTO is aggregating in the same 
category assets of a value of 
CHF 2,500 to CHF 5,000 acquired in a single batch.  In the course of 
the transition to a new IT system in 
2013, the WTO will consider lowering the thresholds for 
property, plant and equipment. Recommendation implemented. 
18. Assets should be grouped into 
several categories for recording as 
fixed assets and each category's 
period of amortization should reflect its economic lifespan. The Secretariat will take into 
account the economic lifespan of 
assets in order to determine their 
term of amortization. Recommendation accepted and 
being implemented. 
19. An interface should be created between the accounts management system and the databases for monitoring property, plant and 
equipment. The Secretariat is evaluating the 
various options for monitoring the property, plant and equipment account.  In any ev ent, the data will 
be reconciled with those in the 
accounting systems.  In the course of the transition to a new IT system 
in 2013, the WTO will consider 
incorporating a module for 
managing property, plant and 
equipment. Recommendation applied in a form 
other than that proposed;  during the audit of the IT system, the auditors found that the solution 
chosen for monitoring property, 
plant and equipment was the most economical. 
20. The WTO should modify its accounting system so as to record 
charges when goods ordered are 
delivered or when services commissioned are provided in order 
to calculate automatically the 
charges to be paid at the end of the 
financial year. The Secretariat will consider 
changing its accounting system in 
order to record charges when the 
goods are delivered or the service is provided. Recommendation accepted and 
being implemented. 
21. The WTO should amend Regulation 23 of its Financial Regulations in order to be able to 
record provisions carried over for 
charges payable by deducting them from the charges account. The Secretariat will consider the 
necessary changes to its Financial Regulations and submit them to 
Members in 2011. Recommendation accepted and 
being implemented. WT/BFA/W/237 
Page 48  
 
  Recommendation Response of the Secretariat Comments of the auditors 
22. In order to use travel costs as 
efficiently as possible and exercise 
better control over them, the WTO 
should (i) update Administrative Memorandum 
No. 957 OFFICE (05)/58 of 
1 September 2005, notably by 
requiring the systematic submission 
of supporting documents to substantiate any travel expenditure;  
and (ii) encourage its travel agency 
to obtain lower rates for certain destinations and accordingly 
consider adjusting the agency's 
remuneration. The Secretariat has undertaken a 
review of its travel policy, which it 
hopes to finalize in 2011.  It will 
also consider the possibility of applying a remuneration policy to 
encourage the lowest fares.  It is not 
yet aware of any system currently 
available on the market. Recommendation accepted and 
being implemented. 
23. The WTO should (i) draw up 
a list of persons authorized to 
certify expenditure committed;  and (ii) at the end of each contract, 
draw up a list of all the costs 
incurred in connection with this contract. All expenditure committed and paid 
by the Secretariat undergoes several 
checks at different levels, not only in the divisions but also in the 
Budget and Finance Section.  Only 
a limited number of persons are authorized to certify expenditure in 
the divisions and they will be 
formally designated.  The Procurement Section deals with all 
calls for bids and sends out orders 
and contracts.  Expenditure on procurement is followed up 
annually as part of the budget 
monitoring process.  The introduction of a final report at the 
end of the contract will be made a 
formality for multi- year contracts. Recommendation accepted and 
being implemented. 
24. The WTO should keep 
statistics on the number of videoconferences organized by the ITTC and introduce a policy to 
develop this particularly economic 
method of information and training. Around ten videoconferences were 
organized in 2010.  They were linked to courses in the regions during which an intervention 
accounting for ½ day or less of 
work provided support for experts in the field (savings in cost, time 
and fatigue).  It has generally been 
found, however, that apart from these special cases, for targeted 
briefings lasting one day and given 
by several divisions, complex modules requiring one or more days 
of work were not adapted to this 
tool, and there was lack of 
interaction with participants. Recommendation implemented.  WT/BFA/W/237 
 Page 49 
 
 
  Recommendation Response of the Secretariat Comments of the auditors 
25. The WTO should set a 
quantified target for the proposed 
policy to reduce the number of 
reference centres. For this objective, we have 
indicated that we were refocusing 
the reference centres programme on 
LDCs and countries without a permanent mission in Geneva.  The 
number of reference centre 
missions was fixed at ten per year 
for the period 2010-2011. 
 See the statistical document on the 
audit carried out by the ITTC. Recommendation implemented. 
26. The WTO should make it a 
rule to undertake prior screening of candidates for each training course. Prior screening of candidates 
became general practice in 2010 for all three-month trade policy course, 
and for four-week regional trade 
policy courses organized for the 
Eastern and Central European 
region, Central Asia and the Caucasus (the similar course 
planned for the Arab countries and 
the Middle East having been cancelled). 
 
Candidates were screened for the thematic courses organized in 
Geneva.  Furthermore, this 
approach was also followed for specific regional activities.  The 
introduction of ongoing training, 
which comprises three levels of difficulty for two distinct branches 
(generalists and specialists) should 
lead to systematic prior screening of candidates for the higher levels 
of training in 2011. 
 
Gradual implementation in 2011, 
expected to become general practice in 2012. Recommendation implemented. 
27. The WTO should take 
measures to monito r systematically 
the individual results of each training course and should award 
diplomas and not simply 
end-of-training certificates. 
 This possibility, which already 
existed for remote training, will be extended following the introduction of ongoing training in order to 
ensure monitoring of the learning 
process for each candidate who has taken part in an activity under this 
framework.  This is closely linked 
to Recommendation No. 26 above. Recommendation accepted and 
being implemented. WT/BFA/W/237 
Page 50  
 
  Recommendation Response of the Secretariat Comments of the auditors 
28. The WTO should draw up a 
performance indicator based on the 
results obtained by all the 
participants in each training course after having undertaken the 
monitoring suggested in 
Recommendation No. 27 in order to 
assess the effectiveness of the 
training courses given. The Secretariat explains that other 
indicators are also used for certain 
activities such as the courses in 
Geneva (results of quizzes) or on-line courses (examinations, 
number abandoning the course).  
The Secretariat is also introducing 
management by results. Recommendation accepted and 
being implemented. 
29. The WTO should formalize its methods for evaluating the 
long-term results of its training and 
technical assistance activities and report on the results of such 
evaluations in the annual reports on 
these activities. This recommendation has been 
implemented.  The Technical 
Cooperation Audit Unit put the 
methods for assessing the long-term results of training and technical 
assistance activities on a formal 
basis at the beginning of 2009.  The 
results of the evaluations conducted 
in this respect in 2009 are set out in the latest annual report of the Unit 
(WT/COMTD/W/174, section V). Recommendation implemented. 
30. The WTO should adopt a 
strategy to intensify its training and technical assistance activities for 
the Arab, Middle East, Central and 
Eastern Europe, Central Asia and the Caucasus regions. As part of the preparation of the 
Biennial Technical Assistance Plan for 2012-2013 and in order fully to 
integrate the two regions mentioned 
in the approach to ongoing training which came into effect in 2010, the 
WTO is considering extending the 
three-month regional courses to 
these regions.  The content and 
length of the courses are currently the subject of consultations within 
the Secretariat in order to ensure 
that they correspond to the second level of training for generalists, 
which is the target audience, 
following compliance with the prerequisites (level 1 of training, 
on-line). Recommendation accepted and 
being implemented. 
31. The WTO should revise its various ITTC training modules and 
harmonize their contents and levels 
so as to ensure that the mandatory passage between on-line and 
face-to-face training and between 
different levels of training functions properly. The ITTC's organizational chart 
was finalized in 2010. 
 
This should serve as the basis for work in order to complete this 
exercise, which will begin 
sometime in 2011. Recommendation accepted and 
being implemented.  WT/BFA/W/237 
 Page 51 
 
 
  Recommendation Response of the Secretariat Comments of the auditors 
32. In the annual programmes of 
the Technical Cooperation Audit 
Unit, the WTO should incorporate a 
follow-up to the new approaches in the biennial training and technical 
assistance plan as regards the 
selection and screening of 
participants and the arrangements 
for mandatory passages between training courses. The Technical Cooperation Audit 
Unit already audited the regional 
trade policy courses in 2008-2009 
and even though this audit was conducted before there was any 
question of progressive learning, it 
was decided to focus in 2010 on the 
three following activities:  
Introduction to the WTO on-line course (first level in the new 
strategy for the generalist and 
specialist branches) and the WTO (equivalent to the intermediate level 
for generalists) and the first 
advanced trade policy courses (the highest level of training in the 
generalist branches).  These audits 
focused in particular on real progression in the training offered 
and led the Technical Cooperation 
Audit Unit to make a number of recommendations concerning the 
content of the programme and the 
teaching methods used.  The activities developed prior to the 
introduction of the progressive 
learning strategy indeed need to be 
reorganized so that they really 
respond to needs at the level of training assigned to them 
subsequently.  The Technical 
Cooperation Audit Unit also recommended a different teaching 
approach within the framework of 
the new advanced trade policy courses in order to avoid simply 
repeating the preceding level.  
According to the Technical Cooperation Audit Unit, this 
in-depth revision of the respective 
programmes for the activities concerned calls on the one hand for 
serious consideration by the 
Secretariat of the concepts and knowledge which each level should 
impart so that the syllabus provides 
an effective response.  Existing 
activities cannot usefully be 
reorganized unless such consideration has been undertaken 
beforehand. Recommendation accepted and 
being implemented. WT/BFA/W/237 
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  Recommendation Response of the Secretariat Comments of the auditors 
33. The WTO should (i) show all 
the expenditure on training and 
technical assistance costs financed 
under the budget and by extra-budgetary f unds in a note 
attached to the specific financial 
statements;  (ii) determine rules for 
sharing of training and technical 
assistance costs between the budget and extra-budgetary funds;  and 
(iii) increase the amount of the levy 
on voluntary contributions financing Secretariat costs. The forthcoming presentation of the 
budget by activity and the 
consolidation of budgetary and 
extra-budgetary financial statements will give a global picture 
of the WTO's technical assistance 
costs according to the different 
forms of financing. 
 The Secretariat may also revise the 
rules on the sharing of training and 
technical assistance costs and the method for the levy retroceded to 
the regular budget with a view to 
making a proposal to Members in connection with the 2012-2013 
budget. Recommendation accepted and 
being implemented, reiterated in 
connection with the 2010 accounts. 
34. The WTO should (i) take into 
account the non-attendance of 
participants when  deciding where 
future similar training sessions should be held;  (ii) require 
confirmation of participation in 
training courses within strict deadlines so as to be able to obtain 
the best possible terms for the 
cancellation of hotel reservations;  and (iii) negotiate agreements with 
hotels so as to limit any losses if 
reservations have to be cancelled. (i) Coordination meetings are 
organized regularly to assess 
the situation at the regional 
level before deciding on the venue for future sessions. 
 
(ii) The WTO now applies a rule 
providing that any activities for which the percentage of 
selection of candidates for 
regional workshops does not reach 80% within the 
time-limit fixed should be 
postponed or even cancelled.  In 2010, this approach 
allowed costs for late 
cancellation of hotels to be limited.  The time-limits for 
replying are also strict and 
stringent. 
 
(iii) The conditions/terms for 
cancellation of hotels are clear and not negotiable by 
the hotels, viz:  zero charge 
only for cancellation four weeks before the date of 
commencement of the 
activity. Recommendation implemented.  WT/BFA/W/237 
 Page 53 
 
 
  Recommendation Response of the Secretariat Comments of the auditors 
35. The WTO should avoid 
programming several training 
activities intended for the same 
public over the same period in order to take into account 
participants' availability. Following the reorganization of the 
Institute for Training and Technical 
Cooperation in 2008, the head of 
the technical assistance coordination section convenes 
monthly meetings of a working 
group composed of 
decision-makers in each division.  
These meetings provide a forum for serious consideration of the WTO's 
technical assistance goals and for 
an exchange of information on the postponement or cancellation of 
planned activities. Recommendation implemented. 
36. A procedure for the closure of 
technical assistance projects should 
be introduced. Since the first quarter of 2010, 
technical assistance projects have 
been systematically closed in the 
accounting system. Recommendation implemented. 
37. There should be better 
coordination among the various 
divisions involved in technical 
assistance and training if projects are postponed or cancelled. Following the reorganization of the 
Institute for Training and Technical 
Cooperation in 2008, the head of 
the technical assistance coordination section convenes 
monthly meetings of a working 
group composed of decision-makers in each division.  
These meetings provide a forum for 
serious consideration of the WTO's 
technical assistance goals and for 
an exchange of information on the postponement or cancellation of 
planned activities. Recommendation implemented. 
38. The WTO should analyse the 
performance of its distribution network with a view to streamlining 
it. Since July 2010, the WTO has been 
reorganizing its distribution network.  As of 4 April 2011, 
storage and external distribution 
have become the responsibility of 
the firm Turpin  Distributions 
Services, with which a contract was signed on 1 March 2011. Recommendation accepted and 
being implemented, reiterated in connection with the 2010 accounts. 
39. The WTO should formally appoint two persons responsible for collecting proceeds from the sale of publications and souvenirs in the 
Bookshop, defining the scope of 
their personal liability for handling 
funds. In 2011, the HRD intends to draw 
up job descriptions for all posts at the WTO.  Accordingly, it has asked the IERD to provide a job 
description and this 
recommendation will be taken into 
account. Recommendation accepted and 
being implemented. 
40. Purchases of works separately by the Bookshop and by the Library, as is presently the case, 
should be grouped. The Bookshop and the Library are 
consulting on the implementation of this recommendation in 2011. Recommendation accepted and 
being implemented. WT/BFA/W/237 
Page 54  
 
  Recommendation Response of the Secretariat Comments of the auditors 
41. The purchase of all 
promotional items for sale or for 
free distribution should be 
centralized. The majority of souvenirs bought 
by the divisions goes through the 
Library. Recommendation accepted and 
being implemented. 
42. Proceeds from the sale of publications should go to the service concerned. The Secretariat is currently 
reviewing the accounts and financial management of the distribution and sale of publications 
in order to obtain a better picture of 
the costs and benefits in the light of the service required. Recommendation accepted and 
being implemented. 
43. The WTO should introduce an accounting system for publications produced by the print shop that also 
includes personnel costs. During the transition to IPSAS, the 
Secretariat will review its policy for recording publications-related 
costs. Recommendation accepted and 
being implemented. 
44. The WTO should make framework agreements a permanent 
and general feature and should 
systematically make a comparison of the respective real costs of 
internal and external solutions. In 2010, a framework agreement 
was signed with Cambridge, the 
largest supplier. Recommendation implemented. 
45. The WTO should put in place 
a detailed accounting procedure for updating inventories and evaluating 
the human resources needed to 
implement it. The Publications and Finance 
Sections have reviewed the division of responsibilities concerning the 
accounts and the inventories. Recommendation implemented. 
46. The WTO should follow up 
the reforms adopted in relation to management of inventories. 
 In 2010, an accounting procedure 
for the monthly reconciliation of stocks between the Finance and Publications Sections was followed.  
This procedure allowed an 
adjustment of less than 2% between the physical inventory and the 
accounts. Recommendation implemented. 
 
__________