US embassy cable - 05GENEVA1815

UNCLAS SECTION 01 OF 03 GENEVA 001815 
 
SIPDIS 
 
STATE FOR IO/T FOR G.ROBERTS 
STATE FOR IO/S FOR DAVID LEIS 
COMMERCE PASS NOAA FOR DUS J.KELLY, R.MASTERS, W.BOLHOFER 
USUN FOR S.KOTIS 
 
E.O. 12958: N/A 
TAGS: EFIN, AORC, KUNR, WMO 
SUBJECT: WMO EXECUTIVE COUNCIL 57TH SESSION: FINANCIAL AND 
ADMINISTRATIVE MATTERS 
 
 
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SUMMARY 
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1. (U) This cable provides an overview of the key financial 
and administrative matters considered by the World 
Meteorological Organization's (WMO) Executive Council (EC) 
at its 57th session from June 21 to July 1 and by the WMO 
Financial Advisory Committee (FINAC) at its June 20 session. 
Reporting on the WMO Audit Committee and coverage of the 
fraud investigation and follow-up will be provided SEPTEL. 
 
2. (U) Overall, the EC's decisions on financial and 
administrative matters were in line with USG positions. 
Most noteworthy were decisions that the WMO Secretary- 
General: 1) prepare a zero-nominal-growth budget, 2) 
strengthen the internal audit function on an urgent basis 
and explore the option of outsourcing all or part of it, 3) 
arrange for annual external audits, 4) prepare a budget for 
the 15th financial period (2008-2011) based on an improved 
results-based budgeting approach, 5) present a tailor-made 
code of ethics for WMO at the EC's 58th session, and 6) 
harmonize WMO paternity leave policy with relevant 
International Civil Service Commission guidelines.  As an 
added bonus, the S-G presented for the first time charts of 
information about WMO's consultancy contracts and 
procurement actions. 
 
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PROGRAM AND BUDGET 2006-2007 
---------------------------- 
 
3. (U) The EC accepted the S-G's proposed budget of CHF 
126.6 million (about $99 million) for the second biennium 
(2006-2007) of the 14th financial period (2004-2007).  The 
amount is the remainder of the funding that Congress 
approved for the 14th financial period after subtracting 
expenses for the first biennium (2004-2005).  There was 
little debate regarding the allocation of funds to 
particular programs. 
 
4. (U) The EC accepted the S-G's proposals for spending the 
surplus of about CHF 5.5 million (about $4.3 million) still 
remaining from the previous 13th financial period (2000- 
2003).  The 14th Congress waived on an exceptional basis 
Financial Rule 9.1, which requires that a surplus be 
returned to the Members.  Accordingly, the S-G is permitted 
to spend the surplus from the 13th financial period during 
the 14th financial period to support a specified group of 
high-priority programs.  There was little debate about the S- 
G's proposed allocation of the surplus to high-priority 
activities. 
 
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PROGRAM AND BUDGET 2008-2011 
---------------------------- 
 
5.  (U) Looking ahead to the 15th financial period, the EC 
began consideration of the next four-year program and 
budget.  The S-G indicated his plan to submit a program and 
budget proposal based on zero real growth.  That budget 
would amount to CHF 262 million (about $205 million), which 
starts with the base of CHF 249.8 million (about $195 
million) and accounts for 1.9% annual inflation.  Numerous 
PermReps rejected the idea of simply topping up the budget 
by accounting for inflation and pressed the S-G to build a 
budget based on what WMO plans to achieve during the 
financial period.  In this regard, the EC decided the 
following: 
 
-- It requested that the S-G submit budget proposals for the 
15th financial period based on zero-real-growth and zero- 
nominal-growth and using the figure of CHF 249.8 million as 
the base.  Moreover, the EC requested that the budget 
proposals be developed using a results-based budgeting 
approach and taking into account the 7th Long-Term Plan, now 
under development. 
 
-- It requested that the budget presentation show all 
sources of income, not just Members' contributions, so that 
Members will not be overassessed. 
 
-- It emphasized that Financial Rule 9.1 would not be waived 
for the 15th financial period and that the WMO would have to 
return any surplus from the 14th financial period to 
Members. 
 
-- It requested the formation of an ad hoc group on 
presentation of program and budget for 2008-2011 that would 
provide the S-G guidance on an improved results-based 
budgeting approach. 
6.  (U) The ad hoc group on the presentation of program and 
budget for 2008-2011 will meet just after the next session 
of the Audit Committee, which will be held October 24-25, 
2005.  The U.S. PermRep to the WMO was designated as one of 
seven core members of this ad hoc group, in which any 
interested PermRep to WMO may participate. 
 
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EFFORTS TO COLLECT ARREARS 
-------------------------- 
 
7.  (U) The S-G reported that a number of Members have 
sizeable arrears dating back a number of years.  As a result 
50 Members (27% of the total membership) have lost the right 
to vote.  The S-G noted that Members tend to pay off their 
arrears just before Congress (every four years) so they will 
be able to vote, which results in an uneven flow of cash. 
The S-G proposed several options aimed to facilitate payment 
of arrears.  These included: 
 
-- Allowing repayment plans for countries whose yearly 
installment exceeds 200% of their assessed contribution to 
be extended up to 15 years. 
 
-- Allowing those who default on repayment agreements to A) 
re-enter into those agreements, if they pay what's due, or 
B) to enter into new agreements, if the EC approves. 
 
-- Creating a voluntary trust fund that would be used to pay 
off poor countries arrears. 
 
8. (U) The EC was not ready to decide on any of these 
options and requested the S-G to continue studying the 
matter and report back at the EC's 57th session.  PermReps 
were most skeptical about the proposal to create a trust 
fund to pay off arrears, noting that the concept raised 
concerns about conflict of interest and influence peddling. 
A number of PermReps and WMO staff have said they believe 
that some Members buy votes from Members in arrears by 
giving them money to pay their arrears just before sessions 
of Congress. 
 
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STRENGTHENING INTERNAL AND EXTERNAL AUDIT 
----------------------------------------- 
 
9. (U) Having heard the reports and recommendations of the 
Audit Committee, FINAC, and the external auditor and 
understanding the S-G's desire to improve internal controls, 
the EC agreed on the need to strengthen WMO's internal audit 
function and conduct external audits more frequently.  The S- 
G presented three options for strengthening internal audit: 
1) staff increases, 2) a mix of staff increases and 
outsourcing, and 3) complete outsourcing.  Having considered 
these options, the EC took two decisions: 
 
-- It requested that the S-G strengthen WMO's internal audit 
function on an urgent basis within the budget envelope for 
2006-2007.  The approved program and budget for 2006-2007 
provides CHF 1.2 million (about to $940,000) for internal 
audit, up from CHF 741,000 (about $579,000) in 2004-2005. 
 
-- It requested that the S-G explore the option for 
outsourcing some or all of the internal audit function and 
report his findings at the EC's 58th session. 
 
-- It decided that external audits would be conducted on an 
annual basis starting in 2005. 
 
10.  (U) While no one disputed the utility and necessity of 
outsourcing some elements of internal audit, some PermReps 
opposed outsourcing the entire internal audit function, 
either to the UN Office of Inspection and Oversight Services 
(OIOS) or another provider.  The French and Japanese 
PermReps were the most vocal opponents. 
 
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CODE OF ETHICS 
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11.  (U) The S-G informed the EC that WMO would immediately 
adopt the ICSC Standards of Conduct on an interim basis.  S- 
G noted that WMO has had no code of staff conduct in place 
and that such a code is an important element of his efforts 
to build an anti-fraud organizational culture.  Recognizing 
that the ICSC Standards of Conduct have weaknesses, the S-G 
committed himself to developing a code of ethics for WMO 
that would be stronger than the ICSC Standards of Conduct. 
The EC welcomed these moves and requested that he present a 
proposed WMO code of ethics at its 58th session. 
 
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STAFF MATTERS 
------------- 
 
12.  (U) Advisor to the U.S. PermRep raised concerns about 
differences between WMO's policies related to paternity 
leave, DSA for senior officials, and educational benefits 
for staff residing and serving outside their home country 
and those of UN Headquarters in New York.  The Secretariat 
opposed immediate action on the DSA issue, noting that it 
would produce limited savings and had not yet been reviewed 
by the ICSC.  The French PermRep's Alternate opposed 
immediate action on the educational benefits issue, citing a 
disproportionate impact on French nationals.  No other 
PermReps spoke on these matters, but the Swiss Mission has 
subsequently taken interest in the educational benefits 
issue.  In the end, the EC took two decisions: 
 
-- It EC requested that the S-G harmonize WMO's paternity 
leave policy with that of the International Civil Service 
Commission (ICSC). 
 
-- It requested that the S-G study the option of harmonizing 
WMO's policies regarding DSA for senior officials and 
educational benefits for staff residing and serving outside 
their home country with those of the UN Headquarters in New 
York and report his findings to the EC's 58th session. 
 
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GENDER ISSUES 
------------- 
 
13.  (U) Advisor to the U.S. PermRep intervened to ask that 
the WMO present side-by-side comparisons of the number and 
percentage of men and women in professional positions.  The 
Secretariat took the point, and we expect future information 
 
SIPDIS 
of this type to be in the format requested. 
 
14.  (U) With regard to the third women's conference, which 
had not been specified in the list of events in the S-G's 
proposed program and budget for 2006-2007, the EC reminded 
the S-G that the 14th Congress had requested that he make 
appropriate arrangements for that conference to take place 
before the end of 2007. 
 
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NEW DATA ON CONSULTANTS CONTRACTS AND PROCUREMENT 
--------------------------------------------- ---- 
 
15. (U) At his own initiative, the S-G presented information 
about WMO's consultancy contracts and procurement actions 
during 2004.  PermReps welcomed this as a positive step 
forward that would provide greater transparency. 
 
16. (U) Data on consultancy contracts included: the name and 
nationality of the contractor, number of days employed, 
cost, source of funding (regular or extrabudgetary), task, 
location where the work was performed, and total amounts per 
country in CHF.  At CHF 342,700 (about $268,000), the U.S. 
was the second largest provider of consultancy services in 
2004 behind Mexico at CHF 990,800 (about $774,000).  Mexico 
towered above all others due to a large water project that 
WMO is carrying out there with UNDP. 
 
17. (U) Data on procurements included: the name and 
nationality of the supplier, good/services provided, cost, 
source of funding (regular or extrabudgetary), and location 
where the product was delivered.  At CHF 565,371 (about 
$442,000), the U.S. was the WMO's fourth largest supplier 
behind Germany, Switzerland, France, and Norway. 
 
18. (U) The U.S. Permanent Representative to WMO -- 
Brigadier General John J. Kelly, Jr., USAF Retired -- and 
his U.S.-based advisors did not have a chance to clear this 
cable before their departure from Geneva. 
 
MOLEY