A/61/5
ORIGINAL: ENGLISH
DATE: JULY 23, 2020

Assemblies of the Member States of WIPO
Sixty-first Series of Meetings
Geneva, September 21 to 29, 2020

REPORT BY THE EXTERNAL AUDITOR
prepared by the Secretariat

1.
The present document contains the “Report by the External Auditor”(document WO/PBC/31/3), submitted to the WIPO Program and Budget Committee (PBC) at its
thirty-first session (September 7 to 11, 2020).
2.
Any decision of the PBC in respect of those documents will appear in the “List ofDecisions Adopted by the Program and Budget Committee” (document A/61/6).

[Document WO/PBC/31/3 follows]

WO/PBC/31/3
ORIGINAL: ENGLISH
DATE: JULY 23, 2020

Program and Budget Committee
Thirty-First Session
Geneva, September 7 to 11, 2020

REPORT BY THE EXTERNAL AUDITOR
prepared by the Secretariat
1.

This document comprises the following items:(i) The Independent Auditor’s report which contains the opinion of the External Auditor
on the financial statements of the World Intellectual Property Organization (WIPO) for theyear ended December 31, 2019; and(ii) Report of the External Auditor for the financial year 2019 to the 61st Series of
Meetings of the Assemblies of the Member States of WIPO (also known as the“long form report”). This report contains the External Auditor’s recommendations arisingfrom the audit work undertaken during the year 2019/20.

2.

The following decision paragraph is proposed.
3.
The Program and Budget
Committee recommended to theGeneral Assembly and other
Assemblies of the Member States of
WIPO, to take note of the “Report by
the External Auditor” (document
WO/PBC/31/3).
[Report by the External Auditor
follows]

WO/PBC/31/3
page 3
INDEPENDENT AUDITOR’S REPORT TO THE
GENERAL ASSEMBLY OF THE WORLD INTELLECTUAL PROPERTY ORGANIZATION
Opinion on financial statements
I have audited the financial statements of the World Intellectual Property Organization for theyear ended 31 December 2019, which comprise the statement of financial position, thestatement of financial performance, statement of changes in net assets, statement of cash flow,
the statement of comparison of budget and actual amounts – revenue for the year then ended,
the statement of comparison of budget and actual amounts – expenses for the year then ended,
the statement of comparison of budget and actual amounts – revenue for the biennium thenended, the statement of comparison of budget and actual amounts – expenses for the biennium
then ended, and the related notes, including the significant accounting policies.
In my opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the World Intellectual Property Organization as at 31 December 2019 and ofits financial performance and its cash flows for the year then ended in accordance with
International Public Sector Accounting Standards.
Opinion on regularity
In my opinion, in all material respects, the revenue and expenses have been applied to the
purposes intended by the General Assembly and the financial transactions conform to theOrganization’s Financial Regulations.
Basis for opinion(s)I conducted my audit in accordance with International Standards on Auditing (ISAs). My
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of my report. Those standards require me and mystaff to comply with the Financial Reporting Council’s Revised Ethical Standard 2016. I am
independent of the World Intellectual Property Organization in accordance with the ethicalrequirements that are relevant to my audit of the financial statements. My staff and I havefulfilled our other ethical responsibilities in accordance with these requirements. I believe thatthe audit evidence I have obtained is sufficient and appropriate to provide a basis for my
opinion.
Responsibilities of Management and Those Charged with Governance for the financial
statements
Management is responsible for the preparation and fair presentation of the financial statementsin accordance with International Public Sector Accounting Standards, and for such internal
control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the WorldIntellectual Property Organization ability to continue as a going concern, disclosing, asapplicable, matters related to going concern and using the going concern basis of accounting
unless management either intends to liquidate the World Intellectual Property Organization or tocease operations, or has no realistic alternative but to do so.

WO/PBC/31/3
page 4Those charged with governance are responsible for overseeing the World Intellectual Property
Organization’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
My responsibilities are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue anauditor’s report that includes my opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs will always detect amaterial misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, I exercise professional judgment and maintainprofessional scepticism throughout the audit. I also:•

identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide abasis for my opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error, as fraud may involve collusion,forgery, intentional omissions, misrepresentations, or the override of internal control.

•

obtain an understanding of internal control relevant to the audit to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the World Intellectual Property
Organization’s internal control.

•

evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

•

conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that may cast significant doubt on
the World Intellectual Property Organization’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor’s report. However, future events
or conditions may cause the World Intellectual Property Organization’s to cease tocontinue as a going concern.

•

evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

I communicate with those charged with governance regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that I identify during my audit.

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page 5
Other Information
Management is responsible for the other information. The other information comprises
information included in the Annual Financial Report, the Statement on Internal Control andAnnexes. My opinion on the financial statements does not cover the other information and I do
not express any form of assurance conclusion thereon. In connection with my audit of thefinancial statements, my responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or myknowledge obtained in the audit or otherwise appears to be materially misstated. If, based on
the work I have performed, I conclude that there is a material misstatement of this otherinformation, I am required to report that fact. I have nothing to report in this regard.

(signed) Gareth Davies
Comptroller and Auditor General
National Audit Office,157-197 Buckingham Palace Road,
Victoria,
London. SW1W 9SP
United Kingdom
Date: 29 June 2020

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JUNE 2020

World Intellectual Property Organization

External Auditor's Report on the 2019 WIPO
Financial Statements

WO/PBC/31/3
page 7

The aim of the audit is to provide independent
assurance to member states; to add value to the WIPO's
financial management and governance; and to support
your objectives through the external audit process.

The Comptroller and Auditor General is the head of the National Audit Office (NAO), the United
Kingdom's Supreme Audit Institution. The Comptroller and Auditor General and the NAO are
independent of the United Kingdom Government and ensure the proper and efficient spending of
public funds and accountability to the United Kingdom's Parliament. The NAO provides external audit
services to a number of international organizations, working independently of its role as the Supreme
Audit Institution of the United Kingdom.

WO/PBC/31/3
page 8Contents
Introduction

9

Key observations

9

Financial management

13

Governance and internal control

18Part Two23

External Offices

23Part Three33

Other matters for the Governing Bodies

33

Prior Year Recommendations

33

Acknowledgments

34

Appendix One

35

Follow-up of prior year recommendations

35

WO/PBC/31/3
page 9Introduction
1. The World Intellectual Property Organization (WIPO) was established in 1970 by
the 1967 WIPO Convention. The history of WIPO can be traced as far back as the1883 Paris Convention for the Protection of Industrial Property. The purpose of WIPO
is to lead the development of a balanced and effective international intellectual
property system. As of May 2020, the organisation comprised some 193 Member
States and is financed primarily through fees charged for its services through its treaty
unions, particularly the Patent Cooperation Treaty, Madrid and Hague Unions. WIPO
also receives assessed and voluntary contributions.
2. We have audited the financial statements of WIPO for the financial year ended
31 December 2019, in accordance with Chapter 8 of the Financial Regulations andRules of WIPO. The audit was conducted in conformity with International Standards
on Auditing. Those standards require that the C&AG and his staff comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance as towhether the financial statements are free from material misstatement.
3. In addition to our opinions on WIPO’s financial statements, this report presents
the key findings and recommendations arising from our work, including ourobservations on financial management and governance. We have also looked at theOrganization’s arrangements to determine its External Office Network, given theimportance and time that Member States have dedicated to its consideration. We havealso followed up the progress made implementing recommendations raised inprevious financial periods (appendix one).
4. The original drafting language of this report is English. The English version is theauthoritative text.

Key observations
5. As a consequence of COVID-19, the final stages of the 2019 audit werecompleted remotely. While it was not without challenge and resulted in additional effort
by both Finance Division and the NAO team, we have been able to obtain sufficientappropriate evidence to support our audit opinion. Given the practical issues that
remote working has presented, this is a significant achievement and reflects hard workand effort by the Secretariat in difficult circumstances. Some of our ambitions for the
performance audit were curtailed by these circumstances. We will return to planned
topics in our audit of 2020.

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page 10

Audit opinion on Financial Statements
6. Our audit comprised the examination of the 2019 financial statements and theassociated transactions and events for that year. It was conducted in accordance with
International Standards on Auditing and the Financial Regulations. We provided an
unqualified audit opinion, without modification, on the financial statements. The
financial statements remain of high quality, supported by sound systems of internal
controls and reporting.
7. In 2019, WIPO undertook a review of its Annual Financial Report and Financial
Statements to streamlined content, focusing on the significant aspects of financial
performance and financial health. We worked with management to help securechanges which have been achieved this within the reporting requirements of IPSAS.
We encourage further consideration as part of the ongoing process of improvement.

Financial performance
8. WIPO enjoyed another successful financial period in 2019, with a retained
surplus of CHF97.7 million, doubling the level of surplus achieved in the previous year.
Together with other movements within the financial statements net assets increased to
CHF 364.2 million. Revenues increased to CHF 457.0 million driven by higher demandfor publications through the Patent Cooperation Treaty and Madrid systems.
Unrealised gains on investments saw a significant increase of CHF42.1 million.
Expenditures increased to CHF 401.5 million, driven largely by increases to staff costs
resulting from the outcome of International Labour Organization Administrative
Tribunals and changes to the basis of estimation for employee benefits.
9. The end of 2019 also marked the close to the biennium budget period with WIPO
delivering a budget surplus some CHF 196.9 million over the period. This represented
a variation of CHF93.2 million on the Original Biennium Budget and 60.6 on therevised forecast. The variation was primarily due to the increases in investment
income.
10. Over the last five years the net assets of WIPO have increased by some 78.1 per
cent, largely driven by increased use of the patent systems. WIPO continues to enjoy
a strong financial position and positive cashflows, supported by a steady pipeline of
future revenue streams. During the year the Programme and Budget Committee
established a target to fund 50 per cent of the Organization’s long-term employee
benefit liabilities, which represents a clear plan to meet these commitments andreduce the risk that they would need to be resourced by contributions from Member
States. The prudence of this position is brought into sharp focus when considering the
economic volatility which has driven financial markets during the Covid-19 pandemic.
11. Despite the pandemic, we have continued to see a strong pipeline of applications
in early 2020 and management expect this to continue. Together with the healthy
reserve position and relatively high levels of cash resources which could be liquidated
at short notice, we concluded that management’s assertion around the going concernof WIPO remained appropriate. The Organization is well placed to weather the current
uncertainty.

WO/PBC/31/3
page 11Governance and internal control
12. Governance and internal control are essential mechanisms which provide the
Director General and Member States with the assurances to enable them to discharge
their oversight responsibilities and safeguard resources. We have continued to notethe strength of WIPO’s internal controls and further positive developments have takenplace within 2019. These have included exploring the use of analytical techniques toconfirm compliance with internal controls at the entity and process level. This work toassure the internal controls is overseen by a specific team reporting to the Controller.
The outcomes from this work demonstrate the continuing effectiveness of theframework and management’s commitment to enhancement.
13. We continue to support the further use of business intelligence tools to analysetransactions as a means of providing comprehensive and systematic assurance.
WIPO has engaged consultants to further develop analytic tools and has identified 20
areas where it expects to deploy analytics to support internal controls during 2020.
Management considers that its control environment has continued to function normallyduring the lockdown period within the virtual operating environment which it has
deployed. We will consider the operation of the control environment during lockdown
as part of next year’s audit.
14. WIPO’s Statement on Internal Control continues to be a strong source of
assurance for Member States. It benefits from the comprehensive processes
established to assure the effective operation of controls. These processes continue tobe enhanced and embedded and during 2019 it was strengthened by the adoption of
the Accountability Framework. In our view, WIPO can further develop the Statement
by providing greater prominence on areas to be enhanced and by looking to futurerisks. The process for compiling the Statement is underpinned by an increasing
evidence base to support the written representations supplied by senior management.
The results of the control self-assessment process indicate continued improvementwith 89 per cent of process controls considered deployed and operational. The
alignment of Internal Oversight Division’s reporting cycle in 2020, in line with ourprevious recommendation, will further enhance the assurance in future years.
15. During 2019 WIPO has made further advances in the area of fraud prevention
and detection, delivering 15 of the 17 objectives in its Anti-Fraud Roadmap. Work isplanned to link fraud risks to existing controls in order to identify gaps in the control
framework. Fraud risks have been included within the Enterprise Risk Management
System, giving them visibility will ensure greater focus on mitigation measures. Some
89 per cent of staff have now undertaken mandatory fraud awareness training.
Overall, WIPO continues to be proactive in its approach to fraud prevention.

External Offices
16. Noting the interest which Member States have taken in respect of the External
Office network. Member States plan to commission an external review of the network
and in support we have reviewed the current approach to its development,
performance reporting and monitoring within the results based framework.

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page 12

17. In 2019, the network consisted of six offices, with a further office opening inJanuary 2020. Activities of each office vary and overall budgeted spend for 2019 was
CHF 8.5 million. The full cost is understated, however, as the contributions andsupport from the host countries is not valued and reported in the financial statements.
18. Our review identified the absence of a clear strategy to underpin thedevelopment of the network. We would expect such a strategy to focus on the priority
and value attached to a location in achieving WIPO’s overall strategic objectives> Thisshould incorporate flexibility to expand or contract the network as necessary, as
objectives are met and evolve. There is also an absence of clear weighted criteria to
inform the decision-making process. The role of the Secretariat is limited to theprovision of a basic ‘factual report’, without recommendations. Proposals from
Members States are not submitted in a consistent format and consequently there is nobasis for an objective comparison. In our view, this has contributed to protracted
discussions on the development of the network. We have recommended that a clear
strategy is developed to support decision making. This should be focused on costeffective delivery against the primary objectives of the Organization. A more activerole for the Secretariat should also be considered.
19. WIPO has a process in place to manage the external office network to avoid
duplication, maximise value and to ensure appropriate and proportionate oversightfrom Geneva. We have identified the importance of ensuring the whole network is
integrated with Regional Bureaux and the Offices, sharing work plans and exchanging
information working in partnership with headquarters. We see scope for further
enhancement to internal reporting and for a greater focus on measuring performanceagainst programme and budget workplans, other key metrics and outcomes. There
would also be value in the validation of the outcomes and performance of the external
offices.
20. Accountability of the network can be enhanced by considering a more focusedemphasis on individual external office workplans and associated indications of impact.
Alongside the more common measures applied across all offices, we see benefit in amore tailored framework to reflect local priorities. We have also recommended thatindicators are developed to measure the satisfaction of key stakeholders in the locality
as an extension to the wider WIPO Perception Survey. Better data will inform Member
States on whether offices are achieving their objectives.
21. The Program and Budget Committee has committed to an evaluation of the
network of external offices in 2021. We understand that the terms of reference for thisevaluation will be agreed during 2020. Our report details some areas where we feelthe evaluation could focus to enhance the data available to better inform the decisionsof the Member States on the evolution of the network.

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Financial management
Overall audit results
1.1
The External Auditor has audited WIPO’s financial statements for the year
ended 31 December 2019 which comprise the Statement of Financial Position,
Statement of Financial Performance, Statement of Cash Flow, Statement of Changes
in Net Assets, Statement of Comparison of Budget and Actual Amounts and therelated notes. The audit opinion confirms that the financial statements present fairly, inall material respects, the financial position of the Organization as at 31 December
2019 and of its financial performance and cash flows for the year then ended. It also
confirms their preparation in accordance with International Public Sector AccountingStandards and that, in all material respects, the transactions underlying the financial
statements have been made in accordance with the Financial Regulations and applied
to the purposes intended by Member States.
1.2
Building on the track record of good quality financial statements andimprovements in prior years, management has continued to produce high quality
financial statements this year. The inclusion of the Director-General's report at thefront of the financial statements continues to draw attention to the key balances andtransactions in the financial statements to allow for scrutiny and consideration by
Member States.
1.3
In the circumstances of the Covid-19 Pandemic, the attainment of an
unqualified audit opinion in time for the governing body sessions is a particularachievement. It represents hard work in ensuring the availability and access to
information to enable the audit to progress successfully.

Financial performance
1.4
In 2019 WIPO recorded an overall surplus for the year of CHF 97.7 million(2018: CHF 42.5 million) which, together with CHF 3.9 million of revaluation gains on
post-employment benefit liabilities, increased net assets to CHF 364.2 million at
December 2019 (2018: CHF 261.4 million). Revenue in 2019 of CHF 457.0 million(2018: CHF 433.6 million) represents an increase of 5.4 per cent from the previous
year. The main reasons for the increase were the higher demand for publications
through the Patent Cooperation Treaty and Madrid systems of 5.2 per cent and 3.4 percent respectively.
1.5
WIPO also benefitted in 2019 from a strong recovery in the financial markets.
In 2018, the poor performance of investments in Swiss Franc bonds led to net
investment losses of CHF 15.3 million. In 2019, due to a recovery in the markets,
WIPO reported net investment gains of CHF 42.1 million. We comment further on
WIPO’s financial health below.

WO/PBC/31/3
page 141.6
During the same period, WIPO’s expenditure increased by 6.8 per cent from
CHF 375.8 million to CHF 401.5 million. This was mainly because of an increase inpersonnel expenditure of CHF 21.9 million due to increases in the liabilities for WIPO’s
employee benefits and impact of the outcome from a judgement by the International
Labour Organization’s Administrative Tribunal (ILOAT) on post adjustment.
1.7
WIPO’s employee benefits are valued each year by an independent actuary.
To more accurately reflect the reality of the transactions and to harmonize with other
United Nations organizations, WIPO have reviewed and refined some of theassumptions and methodologies applied for the valuation of the after-service healthinsurance (ASHI), the accrued annual leave and the repatriation grant accrual. The
two most significant changes related to the valuation of the accumulated annual leaveaccrual and the use of a blended discount rate instead of one solely based on Swiss
Francs for ASHI. The changes to the annual leave accrual resulted in an additional
liability of CHF7.1 million on the basis that staff members retain leave each year
during their service to build up the ability to take a maximum lump sum pay-out of
accrued leave when they separate. The liability is now a fairer reflection of the actual
future cost to the organisation of these liabilities. These changes are explained further
in Note 10 to the financial statements.
1.8
International staff recruited in Professional and higher grades receive postadjustment in addition to base salary. The International Civil Service Commission(ICSC) established post-adjustment is to harmonise the purchasing power of all staff
at the same grade across all duty stations, factoring in exchange rates and differencesin prices between locations. During 2019, the ILOAT decided that changes in the PostAdjustment Multipliers (PAMs) previously applied were not appropriate and therefore
should be set aside. As a consequence, WIPO retrospectively paid increased postadjustments, which totalled approximately CHF 5 million, for applicable staff fromMarch 2018.

Financial position
1.9
The improved performance of investments and the operational surplus havecontributed to gross assets increasing by 13.0 per cent to CHF 1,225.9 million at 31
December 2019 (2018: CHF 1,084.9 million). This significant increase in value arises
predominantly from the surplus reported above. During 2019 gross liabilities
increased by 4.6 per cent to CHF 861.6 million (2018: CHF 823.5 million). This was
mainly due to an increase in WIPO’s employee benefit liabilities of CHF 22.1 million
and additional PCT deferred revenues of CHF 16.9m. In addition, there were actuarial
gains from its post-employment benefit liabilities of CHF 3.9 million.
1.10
The combined effect was to increase net assets to CHF 364.2 million at
December 2019 (2018: CHF 261.4 million). Over the previous five years WIPO’s net
assets have increased by 78.1 per cent, representing a sustained period of financial
growth for the Organization.

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page 15

Financial health
1.11
We use ratio analysis of an organization’s financial health on all ourinternational audits to show how financial positions change over time (Figure 1). They
express the relationship of one item of account against another. For example, there
are CHF 0.56 of current assets for every CHF 1 of current liabilities. This might
normally be a cause for concern, but this low level is mitigated by the significant
pipeline of future work evidenced by the high value of advance receipts (CHF 313.8
million). This means it would be unlikely for WIPO to require the liquidation of longerterm investment holdings. Should the need arise, these longer-term investments could
be liquidated, without penalty for cash-flow purposes.

Figure 1: WIPO Key financial ratios 2015-2019
Ratio

2019

2018

2017

20164

2015

0.56

0.60

0.68

1.29

1.19

1.42

1.32

1.25

1.17

1.40

0.38

0.44

0.53

1.13

1.07

Current ratio
Current assets:
Current liabilities
Total assets: Total
liabilities
Assets: Liabilities
Cash ratio
Cash and cash
equivalents:
Current liabilities

Notes
1. A high current ratio indicates an entity’s ability to pay off its short-term liabilities.
2. A high assets to liability ratio is a good indicator of solvency.
3. The cash ratio is an indicator of an entity’s liquidity by measuring the amount of cash and cash equivalents there arein current assets to cover current liabilities.
4. Liabilities were restated in 2016 due to the adoption of IPSAS 39.

Source: Audited Financial Statements of WIPO

1.12
While the financial position at 31 December 2019 was sound, there has beensome significant uncertainty in the financial markets as a consequence of theworldwide Covid-19 pandemic after the end of the financial period. We haveconsidered events after the reporting date and have reviewed WIPO’s disclosures set
out in Note 22 to the financial statements. We are content that these are a fairreflection of the situation facing WIPO. We have seen a strong pipeline of applicationsin the first few months of 2020 and management expect this to continue. Together withthe strong reserve position, we concluded that management’s assertion that it wasappropriate to prepare the financial statements on a going concern basis remained
appropriate, this is set out in Note 2.

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1.13
Overall, and as set out by the Director General in the Foreword to the 2018/19
Program Budget, WIPO enjoys a sound financial situation. The Organization has
healthy reserves which are significantly backed by cash and investments. It has
earmarked funds (Strategic Cash and Investments) of some CHF 190.2 million for its
accumulated liabilities to provide after-service health insurance to former staff
members which currently total CHF 313.7 million. In the 29th session of the Programand Budget Committee1, it was decided that the additional funds would be earmarked
to ensure coverage equivalent to 50 per cent of long-term employee benefit liabilities.
Although WIPO has been enjoying a period of growth in its revenues it is prudent tofund a high proportion of these liabilities given that WIPO relies on a continuation of its
current business model, which is not guaranteed. Funding these minimises long-termrisks to Member States in having to make good these liabilities through assessed
contributions if revenues fall.

2018-2019 Program and Budget performance
1.14
The Program and Budget for WIPO is prepared each biennium on a modified
accrual basis. Statement V of the financial statements presents a comparison of thebudget and actual amounts for both 2019 and for the 2018-2019 biennium. A
reconciliation of the budget performance to the revenue and expenditure figures
reported in the performance statement (Statement II) is presented in Note 18 to thefinancial statements.
1.15
The original budget for the biennium 2018-2019 was approved by the General
Assembly with allocations for revenue and expenditure of CHF 829.6 million and CHF
725.9 million respectively. This provided a budgeted surplus of CHF 103.7 million.
Budget revisions led to a final forecast budget surplus of CHF 136.3 million. Finalbudget outturn increased the forecast surplus by some CHF 60.6 million, a
combination of increased revenues and expenditure savings.

Figure 2: 2018-2019 Budgetary performance of WIPO (CHF Millions)
Original
BudgetRevisedBudgetOutturn(Excess)/

Income

829.6

862.2

903.3

41.1

Expenditure(725.9)(725.9)(706.4)

19.5

Net result

103.7

136.3

196.9

60.6

Surplus

Source: Audited Financial Statements of WIPO

1.16
or the biennium 2018-2019, WIPO achieved revenue of CHF 903.3 million andincurred expenditure of CHF 706.4 million on a budget basis, resulting in a surplus of
CHF 196.9 million. This budgeting surplus compares with a surplus presented on an
1

WO/PBC/29/7

WO/PBC/31/3
page 17

IPSAS basis of CHF 140.2 million. A reconciliation between the IPSAS and budget
surplus is presented in note 18 of the financial statements. WIPO present explanations
for both changes between the original and final budget after transfers, and material
variances between the budget and actual amounts within the 2018-19 WIPO
Performance Report.

Changes to accounting policies and presentation
1.17 WIPO, in responding to our previous recommendation on enhancing theusability of the financial commentary and the disclosures within the financial
statements, has undertaken a detailed review of the existing format and presentationand has aggregated less significant areas and refocused its disclosures to enhance
the focus on more significant areas. During 2019, WIPO shared its proposed changes
and we concurred that they were sensible and made the financial statements moreaccessible to the user. In March 2020, WIPO presented high quality financial
statements in advance of the agreed deadline. In our view, the revised Financial
Report and Financial Statements have enhanced their quality, while remaining
compliant with the requirements of IPSAS. We believe there is scope to further review
the content of the Financial Report and focus it more on the current year performanceand with less commentary on historical activity.
1.18
The IPSAS Board, which sets the accounting standards is encouraging users
to seek to streamline disclosures, to help reduce complexity and ensure focus on the
more important elements of the statements. In our view, WIPO should review thecontent of the annual report and financial statements for continued relevance andimportance each year and discuss any proposed changes with the external auditor
and the IAOC.
1.19
During 2018, the IPSAS Board issued a new financial reporting
standard on financial instruments (IPSAS 41). The standard is required to be
implemented by all users of the IPSAS framework for financial periods starting from 1
January 2022. This new standard establishes new requirements for classifying,recognising and measuring financial instruments which are defined as any contract
giving rise to both a financial asset of one entity and a financial liability of anotherentity. For WIPO alongside its investments, financial instruments also include working
capital balances, such as receivables, payables and current accounts. The standardaligns IPSAS reporting with the more commercially focused International Financial
Reporting Standards.
1.20
WIPO continues to be proactive with the adoption of new
standards and during 2019 reviewed the impact of adopting IPSAS 41. It concluded
that the impact was not significant and therefore took the decision to adopt thestandard early as of 1 January 2019. For WIPO, the changes did not impact thevalues reported in the Statement of Financial Position, nor in the comparative figures.
WIPO has reviewed all its financial instruments and assigned them to the relevant
classification under the new standard and the impact of this can be seen in Note 2 tothe financial statements. We have confirmed the revised classification is appropriate.

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1.21
For some organisations potentially more significant is therequirement to estimate future “Expected Credit Losses” for all financial assets
whereas the previous requirement was to consider existing impairment indicators. The
Credit Losses are the difference between the cash flows from the contractual terms
and the expected cash flows based on what the entity expects to receive. Given thenature of WIPO’s business model we are content that the existing impairment policy
does not create any significant differences to an Expected Credit Loss model.
R1: WIPO should annually review the content of the Financial Report and
Financial Statements and discuss proposed changes at the relevant meeting of
the IAOC in advance of preparing the annual financial statements.

Governance and internal control
1.22
Last year, in the first year of our mandate we outlined oursummary of the key elements of internal control and governance within WIPO. We
identified some good practice and highlighted that this would be an area we would
return to given its importance to Member States in their oversight responsibilities. Dueto restrictions resulting from the Covid-19 pandemic we have not been able to takeforward all discussions in the way we had intended, but we have summarised the key
areas of development we have identified during our audit. We intend to examine theseareas in more detail during our 2020 audit, alongside a substantive review of theOrganization’s procurement activities and control. This will take account of the way inwhich the Organization has embedded its new policies around the prevention of
conflicts of interest.

Internal control
1.23
During the course of our audit we have continued to note thestrength of the internal controls which the Organization has established and thecommitment to developing and enhancing them. Key elements of this work areunderpinned by the further development during 2019 of analytical techniques and theuse of data analysis which WIPO are exploring to strengthen and demonstrate thecompliance with the internal control framework. WIPO has also strengthened the way
in which it operates the second line of defence, in particular the review of the entityand process level controls which takes place to ensure that they operate effectively.
This is overseen by a specific team reporting to the Controller. We have reviewed theconclusions of this work, which remains a very proactive evaluation of the control
environment and we noted some important features and developments during theyear. While we had initially planned to undertake more detailed testing to enable us tocomment on the robustness of the checks performed, Covid restrictions have led us todefer this work until next year.
1.24
To aid proactive oversight of the control environment and toboost the second line of defence, management is developing its use of BusinessIntelligence tools to support the operation of its internal controls. In our view data

WO/PBC/31/3
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analytics are an effective and cost-efficient tool to monitor activity across entire
populations of transactions and controls. In doing so they provide a more complete
and systematic level of assurance.
1.25
With support from an external consultant in 2019, WIPO has
identified 20 areas in which data analytics can support the effective operation ofinternal control. These covered areas such as personnel information, role monitoring,procurement and duplicate records. While development on these tools is expectedduring 2020-21, a proof of concept for five of these controls has been developed
covering payment approvals, related requisitions, supplier registration and healthcheck and budgetary control on spending. We are encouraged that WIPO intends toshare its experience using data analytics among other United Nations organizations.
Management intend to scope the remaining 15 controls during 2020 and we shallreport on their implementation and operation in our audit of the 2020 financial
statements. In support of this work, we have provided management with details ofsome of the analytic tests we consider useful within the HR/payroll and procure-to-pay
business processes.
1.26
Overall, we would continue to highlight the strength of WIPO’s
commitment to reviewing and improving the control environment. The approach tointernal control and the proactive monitoring of compliance through the use of data
analytics is particularly important at times when controls might be weakened or
circumvented. The unique situation of lockdown will require an assessment of how
these controls have continued to operate effectively, and we will review evidence forthis in our audit next year.
The Statement on Internal Control
1.27
The Statement on Internal Control provides a critical discipline inbringing together the suite of assurances to demonstrate the fulfilment of the DirectorGeneral’s responsibilities in respect of internal control. The prominence of theStatement has increased through its publication alongside the financial statements,
which now ensures that the veracity of what is disclosed is encompassed by theexternal auditor’s opinion on the consistency of other reported information. The
processes which underpin the Statement have also continued to be enhanced andembedded.
1.28
In 2019 the format of the Statement changed, reflecting thelinkage between the Statement and the development of WIPOs Accountability
Framework. This is an important development as it provides a linkage between theaccountability framework and financial reporting. As we previously recommended, we
believe the Statement can be further developed by both reporting on areas which
need to be improved and in looking ahead at future risks, for example the greater useof analytics and anti-fraud measures. Following our recommendations last year, work
is underway to align the reporting year of IOD so that in future years their work anannual opinion more closely links to the financial reporting year. WIPO informed usthat its control environment has continued to operate as normal during the Covid-19
pandemic. Directive, preventive and detective controls continued to operate throughWO/PBC/31/3
page 20

technological means. With the Organization transitioning to a temporary virtualenvironment, WIPO deployed forward looking administrative controls, with
developments such as digital signatures and electronic approvals. As part of our 2020
audit, we will review the effectiveness of changes to the control environment.
1.29
WIPO has established sound mechanisms to provide assurance
to the Director-General in making his assertions to Member States. Senior
management within WIPO are required to sign Management Representation letters to
the Director-General as part of a pyramid of assurance. A key source of assurance isthe process to self-assess the Entity Level Controls (ELCs) controls which operate
throughout WIPO and Process Level Controls (PLCs) which apply at the level of thebusiness process. During 2020 WIPO’s analysis of these controls has demonstrated
improvement, with 98 per cent of ELCs achieving level 3 or above (deployed andreliable). The majority of controls are directive in for the form of regulations andprocedures. In 2019, Information Security controls were enhanced and the controls
around internal justice were codified for inclusion within the assessment process. It is
important that WIPO continues its drive to initiate detective controls to supplement theassurance that policies and procedures are being followed. This is achieved throughWIPO’s third line of defence, IOD’s risk-based plans and oversight from IAOC.
1.30
Central to the assurance underpinning the Statement is theassurance around the Process Level Controls, and the results of the self-assessment
has shown that 89 per cent of these controls are deemed at least deployed andreliable. In 2019, a greater proportion of those self-assessments were supported by a
substantive evidence base and linked to a risk assessment. We note that a number ofthe controls are being further enhanced through the use of analytics and that there is atrend to enhance the proportion of detective controls, supplementing the existing
preventative controls. This reflects the impetus for use of analytics to bolster thesecond line of defence, which we regard as a positive development within WIPO,
which should provide Member States with greater confidence in the operation of thecontrol environment.
Fraud detection and prevention
1.31
Member States and donors continue to expect high standards ofpropriety from the international organisations they govern and fund. The risk of fraud
and the UN system response to this were again major elements of the discussions
held amongst auditors of the UN system in the UN Panel of External Auditors in 2019.
As we previously reported, WIPO has a strong commitment to fraud prevention anddetection. The Director General approved a fraud risk roadmap in March 2018,
building on work done by the organization since 2012 and lasting through to the 20222023 biennium. Actions under this road map include preventative, detective andresponse measures for the organization to implement.

WO/PBC/31/3
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Figure 3: Timeline of the WIPO Anti-Fraud Roadmap

Source: WIPO Anti-Fraud Roadmap
1.32
At the end of the 2018/19 biennium, WIPO had achieved 15 of its
17 objectives within its Roadmap. While actions relating to the regular communicationof frauds to staff to raise awareness and establishment of its case management
system for recording incidents are yet to be completed, other areas on the Road Map
have been brought forward. This includes work on linking internal controls to fraudrisks and undertaking entity level fraud risk assessments. In our discussions with
WIPO there is a clear commitment to being leaders in this area, and it is important that
this commitment is sustained during the current period of economic uncertainty.
1.33
WIPO engaged an external consultant to work with staff during
2018 to complete a fraud risk assessment. This was translated into 30 new fraud risks
that were entered into the Enterprise Risk Management system to be managed by theorganization. As an organisation with a centralised system of controls, the review
focused on processes at WIPO’s headquarters in Geneva. It is important that the risk
assessment and approach to fraud prevention is embedded within the external office
network as well. While our audit has not identified specific issues within the network, it
is important that the Offices are fully included within the risk assessment process.
1.34
One area where the system often fails to invest is training staff
on fraud prevention and detection. WIPO has sought to arise awareness of fraud
matters amongst its staff through intranet resources, posters in WIPO’s offices andmandatory fraud awareness training. This training was launched in May 2019 to becompleted by the end of 2019. At 31 December 2019, 70 per cent of staff hadcompleted the training and passed the quiz. WIPO informs us that by April 2020 thishad risen to 89 per cent and they continue to follow up with those staff who have nottaken and passed the training.
1.35
During the year we met with the Ethics Officer to gain a better
understanding of the role of the WIPO Ethics Office. As part of our audit we reviewed

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the results of the circularisation of key management personnel to identify related party
disclosures for the financial statements. There were no conflicts which would
materially impact the financial statements. We will review the work of the Ethics Officelater in our mandate.
Internal Oversight Division
1.36
We regularly liaise with the Internal Oversight Division andreview their reports to ensure that our work is complementary and to minimise any
duplication of audit effort. We make detailed enquiries of IOD where their work
identifies internal control weakness and consider the impact of this on our own risk
assessment. We also discuss the risk of fraud and the results of internal audit andinvestigation work that have identified suspected fraud, or irregularities. The work of
IOD is important for us in assessing the quality and completeness of the assurances
which form part of the Statement on Internal Control.
1.37
Fraud at WIPO is reported quarterly by IOD to the Risk
Management Group, with the specifics of cases provided in summary or redacted
form. Instances of reported fraud are rare and generally result in misconduct cases.
IOD reports annually to the Program and Budget Committee on the results of its
investigation work.
WIPO Independent Advisory Oversight Committee
1.38
During the year we continued to attend and meet with the
Independent Advisory and Oversight Committee, sharing our audit plans and thedetails of our financial audit observations. To ensure transparency and to support our“no surprises” philosophy, we encouraged the Committee to invite the Secretariat tothe sessions where we present our plans and findings. We believe this has helped todevelop the quality of the discussions and provides an opportunity for the Secretariat
to engage directly in the issues that we identify.
1.39
In line with best practice, the Committee also holds privatesessions with us providing an opportunity for them to question us more openly on ourwork. Our regular attendance at the Committee provided them with reports to help
facilitate their work in assessing our audit coverage and enable them to form a view on
the quality of the assurance we provide, and our commitment to international auditing
standards.

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Part Two
External Offices
Background2.1
We have monitored the considerations of the Program and Budget Committee
and noted the interest of Member States in the creation of the WIPO external offices. In
the previous year we looked at Human Resources and how the department was
positioned in the context of WIPO’s Results Based Framework. Given the Member State
interest, we have undertaken a review of WIPO’s strategy for its external offices and wehave also considered how these fit within the results framework. Our report is aimed at
supporting the Programme and Budget Committee in its development of a future termsof reference for the review of the network.
2.2
WIPO defines an external office as any office outside its Geneva headquarters
and its UN liaison office in New York. At the end of 2019, WIPO had six external offices
operating in Algeria, Brazil, China, Japan, the Russian Federation and Singapore. A
Nigerian office opened in January 2020. The Singapore Office serves the 10 states that
make-up the Association of South East Asian Countries (ASEAN) whereas all otheroffices are country focused.
2.3
WIPO’s Medium-Term Strategic Plan (2016-21) aimed to establish ‘up to three’
new external offices in each of the 2016-17 and 2018-19 biennia, subject to the approvalof Member States. In the event, two offices, Algeria and Nigeria, were approved. The
Strategic Plan reiterates that WIPO’s network of external offices should add clear value
and efficiency and effectiveness to programme delivery, based on the 2015 ‘guiding
principles’ set by Member States.
2.4
Decision-making in relation to the expansion or contraction of external offices
is led by Member States through the Program and Budget Committee. Since 2013, theSecretariat has adopted a more cautious approach to exercising its strategic role inrelation to the external offices’ portfolio, with the view that this is a Member State-driven
process.
2.5
WIPO’s external office program is incorporated into its overall results
framework. For the 2018-19 biennium, WIPO budgeted to spend CHF 8.5 million on
external offices as part of Program 20 (External Relations, Partnerships and External
Offices) in the Program and Budget (CHF 10.1 million in 2020-21) and CHF 0.4 million
on their co-ordination by headquarters personnel (Program 21). Spending on external
offices, while expected to grow, represents a small proportion of total WIPO expenditure(1.2 per cent of total proposed expenditure in 2018-19). WIPO’s external office costs

WO/PBC/31/3
page 24are substantially subsidized by host governments and this serves to lower the thresholdat which their benefits outweigh costs. WIPO does not have comparable information on
the full costs of these offices. Costs of the different offices vary significantly, and there
have been changes over two biennia (Figure 4).).

Figure 4: Budgeted spend on external offices, 2018-19 and 2020-21(CHF 000s)
2,500

2,000

1,500

1,000

500

Algeria

Brazil

China

Japan

Nigeria

RussiaSingapore

Program biennium 2018-19

300

1507

1726

1039

300

1268

2328

Program biennium 2020-21

739

1615

2167

1235

739

1434

2162

Notes
1

Host governments provide office accommodation at zero cost in Algeria, China, Japan (Japan Funds-in-Trust),
Nigeria, Russian Federation and Singapore.

2

Algeria Office opened in February 2019 and the Nigeria office opened in January 2020.

3

Staffing of external offices as set out in the Program and Budget 20-21 is as follows: Algeria, 1; Brazil, 4; China,
5; Japan, 2; Nigeria, 1; Russian Federation, 4; and Singapore, 4. Includes temporary positions.

4

Excludes budgeted Headquarters co-ordination costs, part of WIPO Program 21 (Executive Management). For
2018-19, these were CHF 427 thousand (of which CHF377 thousand was for personnel). The budgeted numberof posts in Office of Director General's External Offices Coordination Unit was 1.75 FTE.

5

Approved budget, not actual spending.

Source: NAO analysis of WIPO Secretariat information.

External office strategy
2.6
An external offices strategy should provide a clear plan of action to achievedefined goals and focus resources. It should be logically derived from the priorities set
out in WIPO’s strategic plan. We would expect a strategy to combine a focus on theexisting portfolio, including a measure of its priority and value to achieving WIPO’s
overall strategic objectives and to establish criteria used to inform decisions on the
expansion or contraction of offices. The strategy might include consideration on their fit
with programmatic objectives and priorities; affordability, deliverability, workforce,

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technological, property, security and legal considerations; and alignment withcustomers, partners and other stakeholders.
2.7
Program 20 of WIPO’s Program and Budget 20-21 describes cross-cutting
implementation strategies for all the external offices and subsequently for eachindividually. WIPO’s focus for the portfolio as a whole is on:Ensuring that the network provides “a seamless extension of theOrganization”, contributing to WIPO’s results framework.



Facilitating any additional new external offices in accordance with Member
State decisions.



Directing activity to those areas where external offices are thought to havecomparative advantage through their geographical proximity, relationships
with stakeholders and understanding of local needs, requirements andlanguages – across as many as 19 of 29 WIPO programs.2

Supporting the future evaluation of the external office network by Member
States through the Program and Budget Committee.

2.8
The strategy for the expansion or contraction of the network is set out in theguiding principles agreed by Member States. These principles include:

Outlining the objectives for external offices: that they should besustainable, provide an adequately sized network, add value and offer
complementarity.

The process for Member States wishing to propose an external office:inviting them to provide a rationale and mandate and to outline what theoffice would do and how it would add value, considering local priorities.



The broad criteria Member States should use in making decisions on thelocation of new offices: reflecting that “due consideration” should begiven to the principle of a sustainable, equitable and efficient
geographical network and for development purposes, to regions without
an external office and to “locations where users of WIPO Premier Global
IP services are located.”

2 External offices do not have a role in relation to programs under Strategic Goals V (World reference

source for IP information and analysis), VI (International cooperation on building respect for IP) and IX(Efficient administrative and financial support).

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The Secretariat providing a “separate, technical, factual report”: toidentify consistency with the 2015 guiding principles, the budget
implications and possible efficiency savings of each case.

Evaluation of the size and performance of the network: to be undertakenby the Program and Budget Committee every five years.

2.9
The guiding principles do not establish an overall framework to support theOrganization’s strategic approach to the development of the network. The focus is on
the opening of individual offices with limited consideration of their strategic importanceand how the network provides measurable added value to achieving overall strategic
objectives. There has been little consideration of the circumstances in which the
network may be subsequently reduced and the triggers for when an office may beclosed because it has achieved its engagement objectives. While setting out the broad
criteria to be considered in decisions about new offices, the principles do not provide amethodology for evaluating these criteria or relevant weighting that might applied.
2.10
The Program and Budget Committee has not specified a clear role for the
Secretariat, requesting that they should provide a ‘factual report’ and, by implication,that it should avoid exercising any judgement. While it is entirely within the remit ofMember States to reserve these matters to themselves, it should not follow that the
Secretariat is limited in the substantive support it can provide in giving objective
recommendations. The absence of this support may risk contributing to protracted
discussion and decision-making. In 2016 and following receipt of 18 proposals from
Member States, WIPO’s Member States agreed to open offices in Algeria and Nigeria3.
The Algeria Office opened in early 2019. The Nigeria Office opened in January 2020
following delays finding suitable accommodation.
2.11
Despite agreeing principles in 2015, in our view, WIPO’s approach to external
offices remains characterised by prolonged discussion over many years. The
Secretariat’s role in supporting Member States’ recent discussions has been based ona view that they have limited authority to execute decisions in this area, and as suchthey have offered much less guidance than they would do for other developments within
WIPO. It has limited its commentary on external office decision-making to providing abasic and factual technical report on proposals. For example, the Secretariat has notissued a standard template for Member States to use when submitting their external
office proposals. This procedure would define specific information and evidence
requirements, to enable consistent comparison of proposals.
2.12
On receipt of new office proposals and in preparing its report for member states,
the Secretariat has elected not to provide commentary on technical and financial
sustainability because proposals contained limited reliable data to enable comparisons..
It took the view that it was difficult for them to independently compare proposals using
a set of objective indicators. As a result, Member States have no validated objective
information to inform their decision making.

3 WO/PBC/25/22 p55

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2.13
In our view, there are risks to WIPO’s current approach to determining the
optimum network of external offices:

The methodology for balancing potentially competing decision-making
criteria is not adequately prescribed. This may reflect an underdeveloped
strategic case built on evidence.



The technical skills of the Secretariat are currently under-utilised.

There is a significant opportunity cost for the Organization related to
protracted negotiations which may not be proportionate.

2.14
The recent decision by Member States to postpone further deliberations on
external offices until after the results of an evaluation in 2021 would seem sensible.
R2: WIPO should consider the development of a clearer strategy for offices
outside of Geneva taking full account of the business and operational priorities
identified in its next strategic plan and establishing clearer criteria to support
the decision-making process.
R3: Following a more clearly articulated strategy, WIPO should consider
changes to the balance of responsibilities between Member States and theSecretariat in relation to external office decision-making.
2.15
In light of the existing ‘Guiding Principles Regarding WIPO External Offices’,
the Secretariat believes that these two recommendations should be considered by theMember States.

External offices governance
2.16
A fundamental principle is that WIPO’s external offices network should add
value and should complement and not duplicate WIPO’s headquarters-based activities.
This requires effective governance and administrative arrangements. The Secretariat
has taken steps to formalise its approach to managing the network:Establishing an External Office Coordination Unit in the Office of the
Director General, headed by a Director, reporting to the Chief of Staff.

Nominating senior managers to act as supervisors of individual external
offices with overall co-ordination resting with the Chief of Staff.



Deploying Global Office Architecture to improve IT connectivity andintegration between external offices and headquarters.

Videoconferencing between external offices and headquarters; withrepresentatives from external offices participating in Secretariat Town Hallmeetings and Director General-led management meetings.

Promoting mobility of personnel between headquarters and external
offices.

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Attendance at annual WIPO General Assemblies by Heads of external
offices to improve how offices engage with the Secretariat and Member
States and to receive training.



Inviting external offices to submit bi-monthly reports summarising recent
activities and plans with the Coordination Unit sharing these more widely.

2.17
Each external office produces an annual work plan in line with the expected
results and implementation strategies set out in Program 20 of the biennial Programand Budget. The Secretariat’s External Offices Coordination Unit reviews work plans
with input from the Program Performance and Budget Division, prior to their approvalby the Director General.
2.18
Our assessment is that the Secretariat has implemented a structured response
to its governance of external offices. Nevertheless, a truly integrated approach requires
ongoing communication across the Secretariat. For example, the sharing of activities
between Regional Bureaux and external offices depends on negotiating areas of focus
and ways of working, recognising the respective capabilities and resourcing of external
offices and headquarters teams. The proposed evaluation of the external offices
network in 2021 could explore whether such integration is achieved in practice.
2.19
We believe there is scope to better focus the reporting by external offices intheir bi-monthly reporting. The Coordination Unit reviews, edits and consolidates
reports but there is a lack of data validation to ensure that reporting is robust. We notethat the Independent Oversight Division has not undertaken an audit of external offices
in recent years and there may be value is some independent validation of data reported.
2.20
We also note that the reports of the external offices are narrative heavy and do
not clearly focus on the activities or stakeholder interactions which would best
demonstrate external offices’ contribution to WIPO’s overall Program and Budget. As afurther example of the potential for improvement, these reports do not closely align withexternal office work plans agreed as part of the Program and Budget process, reducing
their usefulness as an accountability document.
R4: WIPO should consider measures to enhance the activity reports and plansproduced by external offices by:

ensuring these follow closely the activities agreed in Program andBudget work plans, enabling a clearer assessment of external officeprogress.
adopting a ‘plan on page’ discipline to these reports recording key
metrics, activities and engagements and key next steps in line with theagreed work plan.
reviewing the frequency of the formal reporting of external officeactivities, if supplemented by other more regular communications.

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R5: WIPO’s Independent Oversight Division should consider the value inundertaking an audit of external office operations and the flow of information
between offices and the headquarters.

Measuring the performance of external offices
2.21
Effective performance measurement arrangements provide a further means of
ensuring that external offices are contributing fully to WIPO’s results framework. We
note that the cross-cutting implementation strategies for the external office portfolio asa whole, described in Program 20 of the Program and Budget, are high-level and focus
on ways of working rather than substantive interventions4.
2.22
Program 20 sets out an implementation strategy for each external office andthe individual expected results to which each external office contribute together with
relevant performance indicators. Each external office has separate baselines andtarget. Annual Program and Budget performance reporting provides data on individual
external office performance.
2.23
While sharing some common characteristics such as their potential to provide
local representation and engagement and to support a more responsive customer
service, the priorities and activities of external offices will vary according to theiroperating context. The NAO acknowledges that it is appropriate for external offices tohave some common measures, but their individual operating context implies that eachshould also have individually tailored results and indicators.
2.24
Accountability would be improved if each external office had tailored expected
results and performance indicators, drawing on the wider pool of expected results andindicators used in the WIPO results framework. This more tailored approach should, inturn, underscore the development of individual external office work plans. We illustrate
the value of a more segmented approach using one of several potential ‘measures’ of
the different operating environment for external offices: patterns of IP treaty accession
by external office host countries (Figure 5).

4 Reference to supporting the evaluation of the WIPO external office network to be conducted by the

Program and Budget Committee in 2021 is an exception. See page 124 of the Program and Budget 202021.

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Figure 5: Accession to treaties by external office host countries

Notes:
1

An uneven pattern of accession across host countries indicates the value of a more tailored performancemeasurement regime

2

A shaded cell indicates that the host country identified has acceded to the relevant treaties.

3

Position as at 31 January 2020. NAO understands that China is close to acceding to the Hague System.

4

The treaties listed are those currently referred to in Program 20 under Expected Results and Performance

Indicators.
Source: NAO analysis of information supplied by WIPO Secretariat.

2.25
There are 14 indicators used to measure external office performance within
Program 20. Four of these indicators measure the percentage of stakeholders reportingan “enhanced understanding” of IP systems following their engagement in external
office activities (workshops etc.). While focused on outcomes – and the change causedby an external office – these measures do not provide any indication of the volume ofstakeholders with an enhanced understanding. A more meaningful indicator might also
refer to the number of stakeholders describing an enhanced understanding. In this way
indicators would begin to provide greater detail of the contributions made following
participation in external office activities. Expected results and performance indicators
can be taken from WIPO’s existing results framework to maintain the principle of cooperation and synergy across programs
2.26
Given external offices potential for a significant role in facilitating better
engagement with stakeholders, indicators should exist to measure the stakeholder
assessment of the contribution made by the offices to an improved understanding andengagement. A more structured analysis of performance might incorporate a regularsurvey of external office stakeholders using a set of consistent questions over time. A
survey could build on the existing organization-wide WIPO Perception Survey
conducted in relation to Program 19 (communications), ensuring adequate tailoring ofsampling and question themes.

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2.27
Improvements to these indicators to measure this kind of data would help toprovide more objective criteria for identifying the relative merits of the individual offices
and the overall network. This would help inform decision making and the value which
they bring to the organisation and provide useful data to inform and guide any further
expansion of the network.
R6: Alongside existing indicators and measures, WIPO should consider
establishing specific result areas and performance indicators relevant to eachexternal office, reflecting the unique circumstances of their implementation
priorities and the local context.
R7: WIPO should consider regular independent surveys of host country
stakeholders to measure their views on the contributions from the external
offices, to identify trends and movements and to ensure they remain relevant
and focused on WIPO core objectives.

Evaluation and feedback
2.28
WIPO’s results framework is a key part of its mechanisms to collect data to
inform and manage business improvement. The data on performance is used toprioritise resource and effort in line with business objectives. Alongside this, evaluation
is key to assess performance and the effectiveness of the resources dedicated toachieving objectives. Evaluations examine the implementation and impacts ofprogramme interventions and their intended and unintended effects and costs. The
results that flow from evaluation are an important source of information for accountability
purposes and are a means to improve existing interventions and to better design thosefor the future.
2.29
WIPO’s Program and Budget Committee has committed to an evaluation of the
network of external offices in 2021. We understand that the terms of reference for thisevaluation will be agreed by the PBC during 2020. While Members will have their own
priorities in determining the scope of the review, those commissioned to conduct theevaluation will need to consider:

How they might best assess the additional contribution or impact
external offices make to the overall achievement of objectives;the extent of any process evaluation showing how external offices
operate in practice and work with other stakeholders;

the overall costs incurred in maintaining arrangements, and the relative
cost benefits against other means of achieving similar outcomes; andan assessment of any business risks which flow from the maintenance or
expansion of the network.

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2.30
An evaluation of the impact of external offices will need to address
measurement challenges linked to the varying operating contexts and focus of each
office’s work and the challenge of disaggregating the additional impact of external
offices from WIPO’s wider operation and the role of national IP offices. A processevaluation potentially adds insight into how external offices do their work, and if andhow they complement the work of others and whether this is in line with expectations.
A process evaluation can help to refine an intervention to improve its chances ofsuccess and could inform the criteria for strategic decision-making in relation to the
network.
2.31
Given the scale of the related external office activity, WIPO should be mindfulof the complexity of its evaluation and this should be proportionate to the level ofresource dedicated to this programme. A sound review would provide criticalinformation from which WIPO could develop a coherent strategy for the future of theexternal office network and a sound basis for future decision making. It is important thatin creating this strategy it incorporates a framework against which the Secretariat canbetter support the Member States decision making and the assessment of any futurecases. In our view this would then better mainstream the decision-making process andfacilitate earlier conclusions.

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Part Three
Other matters for the Governing Bodies
3.32
Under the Terms of reference for the External Audit, the Director General isrequired to report to us on any ex-gratia payments made or cases of proven fraud madeor identified during 2019. There were no cases of ex-gratia payments reported to us.
We identified no instances of fraud during the course of our audit testing, and no casesof fraud or writes-off related to fraudulent activity were reported to us by the Director
General.

Prior Year Recommendations
3.33
In this section we summarise the Organization's progress in implementing
past recommendations. Appendix One provides a more detailed review of progress foreach prior years’ recommendation based on data held in WIPO’s TeamCentral as at
31 May 2020.
3.34
As at May 2020, of the 23 recommendations outstanding for 2018 andprevious years, we considered that ten recommendations had been implemented andtherefore closed, with 13 recommendations remaining in progress. Appendix One
contains a more detailed commentary on the status of previous recommendations. It is
important to note though that many of our previous recommendations have quite
extended implementation dates, with little or no substantive activity in 2019. As aconsequence, at this point in time many of our previous recommendations have notyet been actioned. We would encourage the Organization to review the potential forearlier action to secure the benefits of the improvement.
3.35
We are mindful of the recent challenging circumstances which will impact
upon management's ability to implement recommendations. We believe there should
be a more concerted effort to implement or reassess the applicability of previous
recommendations which remain outstanding. The IAOC is a good forum through whichto discuss any potential changes to these implementation plans.

WO/PBC/31/3
page 34

Acknowledgments
3.36
We would like to thank the Director General and his staff for their co-operationin facilitating our audit engagement. The audit of 2019 was particularly challenging
with the need for remote working, and the efforts of staff to support the audit haveenabled us to ensure we can meet the timelines to support WIPO’s Governing Bodies.
Original – as signed

Gareth Davies
Comptroller and Auditor General, United Kingdom - External Auditor
29 June 2020

WO/PBC/31/3
page 35

Appendix One
Follow-up of prior year recommendations(Source: WIPO TEAMCENTRAL REPORT as at 31 May 2020)

Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

Status2014

Disclose details of heritage
assets including works of art
in the Notes to the Financial
Statements and may takesteps for strengthening thesecurity systems to prevent
further loss of such assets

WIPO has developed a more detailed
heritage assets disclosure which isincluded in the 2019 financial statements.
This includes information on the number
or assets held, a breakdown of assets bytype, and an overview of the policies for
managing and tracking heritage assets.

Note 7 to the financial
statements provides
additional information
regarding heritage
assets managed by
WIPO.

Closed2017(WO/PBC/28/4)
R#5

In addition to translating theClassification Guidelines inother languages, analyse
the reasons for the errors in
the applications and takemitigation measures.

Classification Guidelines (2018 Edition)
has been translated into six UN official
languages. The 2019 Edition isunderway. It's a policy now. Analysis of
the irregularity has been initiated by the
Head of Operations Support Service.

We note theSecretariat’scomments andconsider thisrecommendation
closed.

Closed2017(WO/PBC/28/4)
R#6i) Establish a well-defined
Customer Service Strategy,Standards and bestpractices supported by aneffective e-based quality
feedback system, to cater to

A feedback questionnaire was introduced
to measure customer's satisfaction on theContact Madrid Service and collectsuggestions for improvement. Several
enhancements were made to thequestionnaire which now allows for

We note theSecretariat’scomments andconsider thisClosed.

WO/PBC/31/3
page 36
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

the needs of customers
efficiently.

automated reports. A policy andstandards for response times have beendeveloped and model replies have beencreated in English, French and Spanish:in 2018; 80% of emails to the MIU were
processed within two business days; atleast 80% of phone calls were replied thesame day. In 2019 at least 90% of
emails are distributed within 24hours; atleast 80% of emails to MIU are answered
within 48 hours and at least 90% ofphone calls are replied the same day.
Due to the departure of the Director of the
Madrid Information and Promotion
Division, work was delayed on further
developments regarding therecommendation.

recommendation
closed.

ii) Undertake regular
Customer Surveys, asmentioned in CSC, for
feedback to improve theirservices.

This will be taken up when the new
director is appointed. Madrid IPD is
responsible for the Madrid component of
the 2019 WIPO Customer Satisfaction
coordinated by the Marketing andCustomer Service Division. key areas tobe measured in the survey were identified
and the Madrid sampling was delivered.
The next step is to review the draft
questionnaire to be provided by thesurvey company. For this 2019 exercise,the survey will assess the customer

StatusWO/PBC/31/3
page 37
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

StatusThe project in 2018 has been
discontinued due to conflict of priorities.
Instead, an IT process for sampling
purposes that uses MIRIS production
data to create excel files has been put
into place. The process was put into
production in Q3 of 2018. Accepted
Quality Level are reviewed and revised
on a yearly basis.

We note theSecretariat’scomments andconsider thisrecommendation
closed.

Closed.

satisfaction across various touch points
with the Madrid Registry (and not only forfiling applications as previously done).
The WIPO Customer Satisfaction Survey
should be launched before the end of
2019.
2017
(WO/PBC/28/4)
R#7i) Use IT Tool to carry out
QC/QA processes effectively
and conduct the QC process
at the stipulated periodicity.
ii) Adopt a policy for periodic
review of Accepted Quality
Levels.

2017(WO/PBC/28/4)
R#8

Formulate a long-term
strategy for human resource
for the Madrid System in
consultation with a view toworking out an appropriatebalance between permanentand flexible personnel
resources.

In September 2019, HR Strategy of the
Madrid Registry has been approved by
the DG. The recommendation could beclosed now..

We note theSecretariat’scomments andconsider thisrecommendation
closed.

Closed.

2017(WO/PBC/28/4)
R#9

Review the existing fees
structure with a view tomaking the Madrid Union
self–sustaining, after
carefully weighing its impact

Taking into account experienced gained
and progress made since the formulationof the recommendation, it is believed therecommendation needs to be broken

We notemanagement’s
response and will

In progress.

WO/PBC/31/3
page 38
Previous
reference

2017(WO/PBC/28/4)
R#16

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

on the accession of new
members and on the usageof Madrid System.

down in various components with aclosure event for each of them.

revisit this area
during the 2020 audit.

Formulate an appropriate
plan for implementation of
the remaining
recommendations of the2012 expert report for
improved physical access to
WIPO campus.

The action plan includes:

An action plan has
been developed andis being put into
practice. On thisbasis we have closed
this recommendation.

ClosedManagement havereviewed the financial
statements and have

ClosedBy end of Q2 2019, award of a specificmandate to the specialized architect who
has been contracted by WIPO at end
2018 following a tender process in 2018.
This is now done

StatusBy end of Q3 2019, proposed
implementation mechanism by thisarchitect in respect of the 2012 expert
report remaining recommendations. Draft
floorplans of all buildings and all levels
reviewed with architect in October 2019;his consolidated report being finalized for
end November 2019.
By the then of Q4 2019, review by WIPOof the proposed implementation
mechanism and, estimated cost andtimeframe. Still on time for PID to makeassessment by end Q4 2019.
2018(WO/PBC/30/4)
R#1

Review the current
composition of the financial
commentary and consider
the scope to make moreconcise disclosures within

A session was held with the external
auditor on 2 October 2019, during which
the 2018 financial statements wereanalyzed to identify areas wheredisclosures could be more concise andWO/PBC/31/3
page 39
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

the financial statements,
while maintaining
compliance with the financial
reporting standards.

the document streamlined. An amended
version of the 2018 financial statements
was subsequently prepared during
November 2019, which included
proposed presentation changes, and waspresented to the external auditor during
the interim audit. The 2019 financial
statements are based on this amended
version.

produced a morestreamlined report.

2018(WO/PBC/30/4)
R#2

Develop a more systematic
approach to reviewingbalance sheet control
accounts to ensure thatreceivables and payables
are regularly analysed, andcorrective action taken
where necessary for aged
and/or irrecoverable items.

For the September 2019 closure, a list ofbalance sheet accounts was prepared toensure the required analysis was in placeand fully documented. This included
preparing itemized breakdowns and aged
analysis of balances where applicable.
This exercise was repeated for the 2019
year-end closing and is incorporated into
the Finance Division's financial closureschedule.

Management havedeveloped andimplemented thereview of its control
accounts.

Closed2018(WO/PBC/30/4)
R#3

Develop a strategy toleverage the power ofanalytic tools to enhance
and automate the monitoringof core business processes,
integrating these into thecontrol environment asevidence to support theManagement has accepted thisrecommendation.

We note WIPO’s
response and have
had some further
discussions on
analytics during the2019 audit.

In progress. WIPO’s
estimated implementation
date: 30/09/2020

WIPO plans to develop a strategy by
September 2020 focused on the objective
to leverage the power of analytic tools toenhance and automate the monitoring ofcore business processes, integratingthese into the control environment asevidence to support the Statement on

StatusWO/PBC/31/3
page 40
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

StatusStatement on Internal
Control.

Internal Control. WIPO has worked withan external consultant to draft the inputs
to the strategy and will consult internallyto complete the strategy by September
2020 and also commence the work
identified the strategy for 2020.

2018(WO/PBC/30/4)
R#4

Consider aligning the IOD
Planning and Reporting
cycle to the financial period,
allowing the outputs to feed
into the SIC assurances.

IOD accepts this recommendation.
However, it should be noted that in thetransitional period for this alignment, thePBC and General Assembly will receive a
6-month report (July 2019 to December2019) for the sessions in 2020.

We have noted the
response of IOD toalign the reporting
periods and consider
this recommendation
closed.

Closed.

2018(WO/PBC/30/4)
R#5

Review the scope to alignthe RBM and internalreporting framework, toensure that internal reporting
incorporates those indicators
used for the RBM process.
Align internal monitoring withthe performance priorities
and indicators identified in
the Program and Budget
and systematically record
progress in implementing
the work plans.

Management has accepted thisrecommendation. The results frameworkfor Program 23 in the approved Programand Budget 2020/21 was revised toincorporate internal measurements.

We note the changes
to the performanceindicators reported in
the 2020/21
programme budget.
We also note thoughthat baselines aretargets have not yet
been established.

In progress. WIPO’s
estimated implementation
date: 30/06/2020

2018(WO/PBC/30/4)
R#6

Ensure that the key
performance indicators foreach program contain an

Ensure that the key performanceindicators for each program contain an
appropriate balance of measures to alignWe notemanagement’s
response to

In progress. WIPO’s
estimated implementation
date: 31/12/2021

WO/PBC/31/3
page 41
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

appropriate balance ofmeasures to align activities
to the strategic goals.

activities to the strategic goals. This will
be addressed in the context of theProgram & Budget 2022/23

incorporate this in to
the 2022/23
biennium.

2018(WO/PBC/30/4)
R#7

Consider the practicalities ofthe data systems which will
be used to evidence
performance at the design
stage of indicators, toensure that they will becapable of robustly collating
and measuring key
performance indicators at
the outset of the 2020-21
Program and Budget.

Management has accepted thisrecommendation. This will be addressedwith Programs as part of thebaseline/target update exercise for thebiennium 2020/21.

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 30/06/2020

2018(WO/PBC/30/4)
R#8

Reserve the category of“fully achieved” for futurereporting of performance toMember States where
achievement is, at least, 100
per cent of target values.

Assessing the achievement of indicators
within a range is common results-based
management practice. Management will
therefore further explore thisrecommendation. This will be further
explored in the context of the WIPO
Performance Report 2018/19

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 31/12/2020

2018(WO/PBC/30/4)
R#9

Assess the extent to which
existing performanceindicators adequately
measure progress inaddressing the four priorities
set out in the 2017-21 HR
Strategy, with a view to

The development of replacement
indicators can only be addressed in thecontext of the preparation of the biennial
Program and Budget. The 2020-21
Program and Budget has already been
approved by Member States during the2019 Assemblies of WIPO Member

We notemanagement’s
response toincorporate this in to
the 2022/23
biennium.

In progress. WIPO’s
estimated implementation
date: 31/12/2021

StatusWO/PBC/31/3
page 42Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

Statusdeveloping new or
replacement indicators
where significant gaps or adisproportionate emphasis
exist.

States. As such, new indicators may only
be proposed during the preparation of theProgram and Budget for the next
biennium (2022-23), i.e. around early2021.

2018(WO/PBC/30/4)
R#10

Ensure that (a) the portfolioof performance indicators in
the Program and Budget arecapable of ‘stand-alone’interpretation by Member
States; and (b) thatbaselines and targets
provide real indications ofprogress between biennia.

This recommendation was duly taken into
account during the preparation of theProgram and Budget 2020/21 andperformance indicators were revised
accordingly. Baselines and targets
providing clear indications of planned
progress in the biennium were defined for
95% and 98% of the baselines/targets
respectively. The minimal remaining
baselines and targets will be defined
during the baseline/target update
exercise as per usual practice.

We note the changes
to the performanceindicators reported in
the 2020/21
programme budget.
We also note thatbaseline targets have
not yet been
established for all
program 23
indicators.

Closed, but we note thatthe program 23
baselines/targets wereless fully defined than the
program budget overall.

2018(WO/PBC/30/4)
R#11

Monitor implementation ofactions from its 2018
Gender Parity Action Planand reports on theirprogress (and early
indications of impact) in
future HR Reports.

Management has accepted thisrecommendation. HRMD will ensure that
the Gender Action Plan is sustainablyaligned with and integrated into WIPO's
revised Policy on Gender Equality, as
recommended by EVAL 2019-02. Within
this framework, HRMD will review the
implementation of the Action Plan andreport on progress in the 2021 Annual
Report on Human Resources.

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 01/03/2021

WO/PBC/31/3
page 43
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

Status

2018(WO/PBC/30/4)
R#12

Work with Member States toresolve the lack of clarity
around geographicalrepresentation of theworkforce.

Management has accepted thisrecommendation. As stated at the PBC
session of July 2019 and as reflected in
the Report of the Coordination Committee
during the Assemblies of WIPO Member
States in October 2019, an extensive
exercise was undertaken amongst theMember States on this question in theyears 2015 and 2016, in which the 1975
Accord on geographical representationagreed to by Member States, wasrevisited and had resulted in a report.
However, in the discussions held in 2015
and 2016, Member States did not agree
to change it. Responsibility to clarify or
modify the 1975 Accord lays withMember States and not with theSecretariat, which can only assist theMember States in its discussions. The
Secretariat will implement any decisionon the issue of geographical distribution
once taken by Member States.
Meanwhile, the Secretariat continues totake action to improve geographicalrepresentation in its workforce through its
Focal Point Initiative and targeted
outreach visits to unrepresented Member
States.

We note theconstraints here and
WIPO’s future
implementation dateof thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
implementation date:
31/12/2020

WO/PBC/31/3
page 44
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

Status

2018(WO/PBC/30/4)
R#13

Consider reviewing theeffectiveness of its training
offer, to ensure it meets
current business needs andthe talent management
strategic priorities

Management has accepted thisrecommendation. A new learning anddevelopment policy is foreseen in 2020
and this will include a revised approach totraining offered.

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 31/12/2020

2018(WO/PBC/30/4)
R#14

Ensure it utilises the fullrange of performanceassessment markings, as ameans of targeting training
and identifying
underperformance;

Management has accepted thisrecommendation. A new learning anddevelopment policy, foreseen in 2020 andwhich will be widely consulted will include
performance assessment,
underperformance and targeted training

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 31/12/2020

2018(WO/PBC/30/4)
R#15

Consider ways in which thelevel of average staff
absence can be reduced,
and to introduce goodpractice techniques which
require greater
accountability for taking
sickness absence, including
consideration of return towork interviews.

Management has accepted thisrecommendation. Measures are being put
in place which would lead to a reduction
in absenteeism. Following the
introduction of the absence management
module in AIMS in January 2019, newreporting tools on sick leave have been
and are in the process of being
developed to enhance accountability.
Internal guidelines on return to work havebeen drafted and are in use since thethird quarter of 2019 on a pilot basis

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 31/12/2020

WO/PBC/31/3
page 45
Previous
reference

Summary ofrecommendation

Administration’s comments on status:
May 2020

External Auditor’sview

Status

2018(WO/PBC/30/4)
R#16

Undertake an annual staff
survey to ascertain thebaseline for measuring staff
perceptions around the wide
range of HR issues which
underpin the strategic aims
and to measure theeffectiveness of HR policy
and implementation. The
survey could assess themes
such as motivation,
development, well-being,
workplace harassment,
management andtransparency and tomeasure the staff
perceptions of the support
provided by enabling
functions like HR

Management has accepted thisrecommendation. A staff survey covering
a number of themes mentioned in therecommendation may be implemented in
2021. The Procurement and Travel
Division is reviewing existing tenders ofother UN Agencies and a review of UN
Staff Surveys is currently underway toassist WIPO in the design of its own
regular staff surveys.

We note WIPO’s
future implementation
date of thisrecommendation andwe will review thestatus during next
year’s audit.

In progress. WIPO’s
estimated implementation
date: 30/06/2021

WO/PBC/31/3
page 46
MANAGEMENT’S RESPONSES TO THE RECOMMENDATIONS MADE BY THE EXTERNAL
AUDITOR
Financial Management
Recommendation no.1
WIPO should annually review the content of the Financial Report and Financial Statements anddiscuss proposed changes at the relevant meeting of the IAOC in advance of preparing theannual financial statements.
Response
Management reviews the content and presentation of the WIPO Financial Report and Financial
Statements at least annually as part of its year-end closing process. This includes considerationof the impact of changes in the Organization’s operations, and of developments in International
Public Sector Accounting Standards. The WIPO Financial Report and Financial Statements arepresented each year to the IAOC in accordance with its mandate and responsibilities in the areaof financial reporting.
External Offices
Recommendation no. 2
WIPO should consider the development of a clearer strategy for offices outside of Geneva
taking full account of the business and operational priorities identified in its next strategic planand establishing clearer criteria to support the decision-making process.
Response
In view of the ‘Guiding Principles Regarding WIPO External Offices’, the Secretariat
understands that this recommendation is directed to the Member States.
Recommendation no. 3
Following a more clearly articulated strategy, WIPO should consider changes to the balance of
responsibilities between Member States and the Secretariat in relation to external officedecision-making.
Response
In view of the ‘Guiding Principles Regarding WIPO External Offices’, the Secretariat
understands that this recommendation is directed to the Member States.
Recommendation no. 4
WIPO should consider measures to enhance the activity reports and plans produced by external
offices by:a.

ensuring these follow closely the activities agreed in Program and Budget work plans,
enabling a clearer assessment of external office progress.

b.

adopting a ‘plan on page’ discipline to these reports recording key metrics, activities
and engagements and key next steps in line with the agreed work plan.

WO/PBC/31/3
page 47c.

reviewing the frequency of the formal reporting of external office activities, if
supplemented by other more regular communications.

Response
The Secretariat accepts the recommendation and will implement changes to its activity reporting
starting in January 2021.
Recommendation no. 5
WIPO’s Independent Oversight Division should consider the value in undertaking an audit ofexternal office operations and the flow of information between offices and the headquarters.
Response
IOD accepts the recommendation and will integrate an audit of external offices in the 2022/2023
oversight work-plan; taking into account the PBC evaluation of external office planned for 2021.
Recommendation no. 6
Alongside existing indicators and measures, WIPO should consider establishing specific result
areas and performance indicators relevant to each external office, reflecting the unique
circumstances of their implementation priorities and the local context.
Response
The Secretariat will take this duly into account in the context of the preparation of the Programand Budget 2022/2023.
Recommendation no. 7
WIPO should consider regular independent surveys of host country stakeholders to measure
their views on the contributions from the external offices, to identify trends and movements andto ensure they remain relevant and focused on WIPO core objectives.
Response
The Secretariat accepts the recommendation within the context of the WIPO Performance
Assessment biennial exercise.