RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/105 
3 November 2008 
 (08-5317) 
Committee on Budget, Finance and Administration  
  
 
REPORT OF THE MEETING HELD ON 9 OCTOBER 2008 
  
1. The WTO Committee on Budget, Finance and Administration met on 9 October 2008 under 
the successive chairmanships of Mr . Tony Lynch (New Zealand) a nd Mr. Henning Stirø (Norway).  
The terms of reference and composition of the Co mmittee are set out in document WT/L/44/Rev.1.  
The agenda contained in document WTO/AIR/ 3235 was adopted with one item under 'Other 
Business'. 
I. ADMINISTRATIVE UP-DATES AND PROGRESS REPORTS AS AT 
30 SEPTEMBER 2008 
A. C
ASH SITUATION AND STATEMENT OF OUTSTANDING CONTRIBUTIONS – PROGRESS REPORT  
B. CONTRIBUTIONS OF OBSERVER COUNTRIES TOWARDS THE COST OF SERVICES PROVIDED BY 
THE SECRETARIAT – PROGRESS REPORT  
2. A member of the Secretariat presented the cash  situation, the statement of outstanding 
contributions from Members as at 30 September 2008 and a statement regarding the contributions of 
Observer countries towards the cost of services provide d by the Secretariat.  As at the reporting date, 
the total of funds available (WTO and extra-budgeta ry funds) stood at CHF 62 million.  Contributions 
received from Members amounted to CHF 139 million for the current year and CHF 9 million for prior years, while those from Observers amounted to CHF 344,000 for the current year and CHF 80,000 for prior years.  The Working Capital Fund stood at CHF 9.9 million as at 30 September 2008.  The Secretariat pointed ou t that seven Members (Cape Verde, Chad, the 
Democratic Republic of the Congo, Djibouti, Guin ea-Bissau, Niger and Tonga) still had outstanding 
advances to the Working Capital Fund amounting to  CHF 222,000 as at 30 September 2008.  Five of 
the seven Members belonged to Category IV (Inactive Members).  
C. H
UMAN RESOURCES MATTERS  
3. A member of the Secretariat presented the progress report CRP(08)20 and explained that the 
new Learning and Development Programme tackled three major areas:  (i) a mentoring programme 
for newly recruited staff;  (ii) performance mana gement including coaching for managers, supervisory 
skills training, mid-term review of objectives and top-down objective setting, and;  (iii) technical 
training which had so far been conducted with two divisions.  It was added, that several learning 
activities had been evaluated as part of the pilot ev aluation project and that the conclusions would be 
provided in a year-end report. 
4. An up-date on temporary assistance positions financed from regular budget as well as from 
extra-budgetary funds was also provided. 
5. One Member expressed the concern that long temporary assistance contracts such as one 
lasting for already 34 months could eventually pose a problem with the ILO Tribunal. WT/BFA/105 
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  D. WTO
 PENSION PLAN 
6. The Secretary to the WTO Pension Plan presented progress report CRP(08)19 and explained 
that, following the outcome of the actuarial va luation as at 31 December 2007, the Management 
Board had continued its discussions with respect to me asures to maintain the actuarial balance of the 
Plan.  Possible options to be examined would be adjustments to the normal retirement age, early 
retirement reduction factor, lump sum computation method and contribution rate.  In addition, the 
possibility of covering death and disability risks outsi de the framework of the Pension Plan was being 
investigated. 
7. With respect to the review of the investment strategy of the Plan, it was reported that the 
Management Board had heard presentations by two fund managers and had r esumed its consideration 
of an alternative manager for one  of the global equity mandates. 
E. STATUS OF EXTRA -BUDGETARY ACTIVITIES : 
i) Technical Assistance Activity as at 30 September 2008; 
ii) Doha Development Agenda Global Trust Fund (DDAGTF). 
8. Another member of the Secretariat presented documents CRP(08)21 and CRP(08)22 and 
informed the Committee that, as at end of  September, funds in the DDAGTF totalled 
CHF 22.1 million, including CHF 7.8 million rolled over from 2007.  With the pledged contributions from Germany, the Netherlands and Romania, to talling CHF 2.3 million, the target amount of 
CHF 24 million agreed for 2008 would be slightly exceeded.  Furthermore, the Secretariat had had 
indications from Denmark, Ireland and the Unite d Kingdom for possible contributions in 2008. 
9. On the expenditure side, Members were inform ed that the DDAGTF had registered a total of 
CHF 17.4 million for the implementation of the technical assistance activities contained in the 2008 
Plan.  According to estimates by the Secretariat, the year-end balance remaining in the Fund would be 
sufficient to cover the 25 per cent reserve required fo r 2009, i.e. CHF 6 million.  It was furthermore, 
outlined that the Secretariat intended to postpone the implementation of some regional activities in 
order to avoid possible financial difficulties in the early months of the year and that that might have 
adverse effects on the full and proper implementation of the planned activities.  However, this seemed 
to be the only solution, given the slow receipt of voluntary contributions and their unpredictable 
nature.  The Chair encouraged traditional donors a nd other Members to come forward with timely 
contributions to allow the work of the GTF to continue. 
10. The Committee took note of the various reports. 
II. BUILDING PROJECTS OF THE WTO 
11. A member of the Secretariat reported that the architectural competition had been launched and 
had been posted on the WTO website.  Furthermor e, the renovation works were on schedule and the 
details for moving staff to the building on Chemin  des Mines (CDM) had been finalized with the 
move to be completed at the end of the year.  By February, the south wing of the CWR building 
would be in full renovation mode. 
12. With respect to the revised co st estimates for the removal to CDM, it was explained that, at 
the time of the first estimate (May 2008), the negotia tions with the Swiss authorities had not yet been 
concluded and it had therefore been difficult to get reliable figures.  The total difference with regard 
to the May estimates presented to the CBFA amounted  to CHF 1.4  million and was mainly comprised 
of costs for the move of the IT data centre, the installation of telephones and electricity, structural 
modifications, cabling for IT and security, work  on additional space and a back-up generator.   WT/BFA/105 
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  However, it was confirmed that these costs could be  absorbed by the existing budget for 2008.  With 
respect to the additional space rented at CDM, it was explained that, in order to ensure that the CWR 
renovation work proceeded as smoothly as possible whilst ensuring the security and safety of the 
staff, it had been necessary to rent some add itional space for about 40 staff in the CDM. 
13. Several Members appreciated that the extra cost could be absorbed by the existing budget, but 
expressed their hope that there would be no further unforeseen cost increases. 
14. A representative of the FIPOI explained that  the CDM alterations had been completed and 
that there would be no additional costs.  He conf irmed that the extra cost resulted from the move of 
very important services such as IT, electricity and security, which was very complex, but that the issue had been handled very efficiently.   
15. The representative of the Swiss authorities tha nked the Members for their interest in the 
project.  He reported that everything was procee ding according to schedule in Bern and that the 
parliamentary process was under way.   
16. Upon a request by a Member with respect to the prospect of obtaining the necessary approvals 
for the building project, the representative of the FIPOI replied that the procedure for obtaining the 
building licence for the renovation was moving ahead  favourably.  He did not see any immediate 
obstacles, but pointed out that changing the classi fication of the land required for the new building 
seemed to be rather complex as the legislation had to be modified.  Nevertheless, comments from state and city department with regard to the new draft law had already been received and the 
presentation of the draft law to the public enquiry was being prepared in order to take place in 
November.  However, he added that the outcome of  the public enquiry was difficult to predict, but 
that the CBFA would be updated regularly. 
III. ADMINISTRATIVE MEASURES 
17. The Chairman reported that he considered whet her to deal with that issue through a working 
group on arrears or to take up the question in inform al meetings of the Committee.  For reasons of 
transparency, he had finally decided to consider th e revision of the administrative measures in the full 
Committee.  He further proposed to defer this item to the first meeting in 2009. 
18. The Committee took note of the report. 
IV. FINANCIAL MATTERS 
A. D
IRECTOR -GENERAL 'S BUDGETARY AND FINANCIAL REPORT FOR 2007  AND REPORT OF THE 
EXTERNAL AUDITOR THEREON  
19. A member of the Secretariat presented document WT/BFA/W/168 and informed the 
Committee that the financial year 2007 had ended w ith an overall surplus of CHF 12 million.  This 
amount was composed of a (i) budgetary surplus of CHF 8 million, of which CHF 7.2 million or 
89 per cent pertained to Section 1 'Work Years', (ii) a decrease of the provision for contributions in arrears of CHF 2.3 million, (iii) contributions from the two new Members Tonga and Vietnam of 
CHF 0.5 million and (iv) an excess of miscellaneous income of CHF 1.4 million,  reduced by a write-
off and an adjustment for publications of CHF 0.2 million. 
20. The above-mentioned budgetary saving included a saving of CHF 7.6 million for the WTO 
Secretariat resulting from an over-spending on 'Temporary Assistance' of CHF 0.3 million, offset by an under-spending under 'Work Years' of CHF 6.7 m illion.  This under-spending was mainly due to 
the fact that the salary increase for 2007 had been pr ojected at 2 per cent but had finally only been 
1.08 per cent, a saving on vacant posts and the non- utilization of the provision for the Restructuring WT/BFA/105 
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  Plan of CHF 1 million.  Additional savings on administrative costs of CHF 0.9 million and of 
CHF 0.2 million in Part C – 'Other' as well as a saving on ITC led to the overall surplus of CHF 7.6 million.  The saving under the budget for th e Appellate Body amounted to CHF 0.4 million.  
Customary transfers between sections were requested to cover over-expenditure in certain sections by 
budgetary savings in others.  It was further explaine d that the closing balance of the Appellate Body 
Operating Fund (ABOF) amounted to CHF 0.96 million.  
21. The Committee was further inform ed that the report of the External Auditor had covered a 
number of issues, including comments and recommendati ons with regard to US tax, the write-off of 
obsolete inventory of the bookshop, a review of the translation services, additional expenditure 
incurred by the Avenue de France project, liquidity management and leasing.  As 2007 marked the 
end of the mandate of the Austrian Court of A udit, a follow-up of all the recommendations made 
during their mandate from 2002 to 2007 was also provided. 
B. R
EPORT ON EXTRA -BUDGETARY FUNDS FOR 2007  AND REPORT OF THE EXTERNAL AUDITOR 
THEREON  
22. The report on extra-budgetary-funds for 2007 (document WT/BFA/W/169) was also 
presented, providing detailed information on all extr a-budgetary funds in the WTO, both in aggregate 
and on a fund-to-fund basis. 
23. The Committee took note of the reports and recommends to the General Council the 
approval of  the transfers between budgetary sectio ns as outlined in paragraphs 39 and 46 of 
document WT/BFA/W/168.  The Committee furt her recommends that the General Council 
approve the audited accounts for 2007 and convey to the External Auditor their thanks for the 
valuable assistance provided in the audit of these accounts.  
V. SECRETARIAT VERSION.3 
24. A member of the Secretariat informed the Comm ittee that the Director-General would make 
an announcement with respect to a more streamlined and efficient organization in the following week.  
Globally, the Plan included the consolidation of so me divisions and some other streamlining measures 
such as the shifting of functions among divisions in or der to better align certain functions together.  It 
also involved certain personnel actions as part of th e overall streamlining with some staff considered 
for early separation in line with the WTO Staff Ru les, the guiding principles described in document 
WT/BFA/W/137 of October 2005 and the financial r esources provided by Members.  It was added 
that the separations were in the best interest of the Organization and the outcome of the restructuring 
exercise provided for an improved alignment of the number of staff and the positions in the divisions 
across the Secretariat.  As a net result of this ex ercise, 8 positions would be freed up, including four 
senior-level professional posts and several senior-l evel support posts, allowing the Secretariat to 
redeploy these posts to areas where there was greater demand and to recruit new staff at lower grades. 
25. The Director-General would also announce some  revisions to administrative procedures and 
personnel policy. 
VI. WTO INTERNAL AUDIT 
26. A member of the Secretariat presented the new Head of the Office of Internal Audit and 
explained that this new position had been created  following a recommendation by the External 
Auditor.  After extensive preparatory work, the positi on of Head of the Office of Internal Audit was 
advertised in July 2007 and the new head took up he r duties in March 2008.  The Office consisted of 
the head, another certified internal auditor and a s upport position.  An internal audit charter as well as 
an internal audit plan had been developed and submitted to the Director-General and the Members.    WT/BFA/105 
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  27. The Head of the Office of Internal Audit explai ned that the Office of Internal Audit reported 
directly to the Director-General and that its role was to:  (i) promote the confidence of Members in the 
integrity of the Organization's activities in budgetary a nd financial matters;  (ii) to execute the Internal 
Audit Charter;  (iii) to liaise with the External Aud itor by reviewing internal controls at a greater level 
of detail, and;  (iv) to provide recommendations  to improve operations as well as the follow-up of 
their implementation.  Members would have the oppor tunity to contribute to the audit planning, and 
an annual summary report would be provided to the Committee. 
28. Several Members were pleased to see the re porting relationship to the Committee.  One 
Member referred to the revision clause which allo wed the audit charter to be changed with the 
approval of the Director-General but provided no  opportunity for Members to comment before the 
changes were made.  That Member indicated th at it should be possible for the CBFA to propose 
amendments. It was also suggested that Members be  given access to internal audit reports.  Members 
also welcomed the Internal Audit prior ities set out in documents WT/BFA/W/175 and 
WT/BFA/W/176. 
29. In reply, the Secretariat said that the views of the Director-General would be sought on the 
suggestions made by the Members. 
VII. OTHER BUSINESS 
30. The Chairman announced that he would be leaving his post as Deputy Head of Mission in 
Geneva and hence his position as Chairman to the CBFA.  He thanked the Members and the 
Secretariat for their excellent support.   
31. He further informed the Members that, followi ng informal consultations conducted by the 
Chairman of the General Council, Mr. Henning Stir ø from Norway had been proposed as Chair of the 
Budget Committee for the remainder of his term.  He proposed that Mr. Stirø be elected by 
acclamation.  The Committee so agreed and expressed its deep appreciation for the excellent work of 
the outgoing Chairman. 
32. The elected Chairman assumed the Chair and thanked the Committee for its confidence.  
 
POINTS FOR DECISION:  Paragraph 23 
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