Major programme 170. Financial Services

Summary of 1998-99 proposals and comparison with previous biennium (including funds from other sources)

170.1. The principal function of this major programme is the provision of continuing financial and related services in accordance with the requirements of the Financial Regulations of the Organization and Financial Rules of the Office. More specifically, this includes the formulation of financial and budgetary policy, as well as financial management of both headquarters and field operations.

170.2. A key responsibility of this major programme is the preparation of documents on financial matters for the Governing Body and the Conference and their committees (in particular, the Programme, Financial and Administrative Committee, including meetings of Government members on allocations matters and the Finance Committee of Government Representatives of the Conference) and the servicing of these committees. Other major tasks include dealing with the financial aspects of the preparation of the Programme and Budget, preparing the financial report and financial statements for submission through the External Auditor to the Governing Body and the Conference, establishing the financial policies and procedures of the ILO and monitoring financial responsibilities decentralized to the field and headquarters departments.

170.3. The major objectives in the biennium 1998-99 will be to perform the continuing financial services as efficiently as possible whilst maintaining acceptable standards of quality and security; contribute to increased efficiency throughout the Office and to seek the best possible protection for the Organization’s current financing and assets, including the amounts entrusted to it by UNDP, multi-bilateral and other donors of technical cooperation funds and research grants. A further objective will be the consolidation and strengthening of the decentralization of budgetary and financial responsibilities to the external offices and departments at headquarters, including the related training and updating of relevant instruction manuals.

170.4. The central budgetary/accounting system and the general ledger system currently in use will be 21 and 12 years old respectively by the end of the 1998-99 biennium and will inevitably have to be replaced. These systems are cumbersome and expensive to maintain and even after numerous modifications it has proved difficult to improve their efficiency (e.g. eliminate duplication of data entry) and make them more user-friendly and compatible with a vastly changed and more sophisticated information technology environment. To support and ensure the full benefits of streamlining and simplification of financial and administrative procedures, it will be necessary to develop integrated financial, administrative and personnel systems. The need to introduce new systems that fully meet the requirements of the Office is becoming increasingly urgent. Even though this will require a significant investment of several millions of dollars which may be difficult to set aside in one biennium in view of the constraints of zero growth, it will be important to take the preliminary steps within the 1998-99 biennium. A first step prior to a major investment in systems design is a thorough review of the underlying budgetary, financial and administrative procedures to determine the optimum approach. Such a review would in particular focus on the procedures followed in the implementation of technical cooperation activities. Inter alia, the study would seek to identify those processes which are the most cumbersome and costly in order to seek simplifications while at the same time maintaining essential controls. This would also enable the Office to offer more effective services in a highly competitive environment. A second step will be to determine the user requirements. This will permit the Office to better evaluate the relative advantages of adapting to ILO requirements the financial module of the United Nations Integrated Management Information System (IMIS), which should then be fully operational, or using a commercial package.

170.5. The resources proposed for this major programme for the biennium 1998-99 show a decrease of some $462,000 in real terms compared with the 1996-97 biennium. The Programme Support Income to be made available to this major programme also shows a decrease of some $394,000 compared with 1996-97. The continuing  reduction  in  resources  is  due  to  the further transfer of financial functions to the field and efficiency improvements stemming from the limited modernization of existing financial computer systems (financed in part from the 1992-93 cash surplus) and through more widespread implementation of decentralized arrangements regarding the establishment of obligations.

170.1. Treasurer and Financial
Comptroller

170.6. Provision is made under this programme for the Treasurer and Financial Comptroller, secretarial support and mission travel.

170.2. Budget and finance

170.7. The purpose of this programme is to direct and perform budgetary and payment operations related to the regular budget and to other funds managed by the ILO, including those for externally financed technical cooperation projects. Its main functions are:

(a)

formulating financial and budgetary policy, including reviewing financial regulations, rules and directives and preparing relevant documents for consideration by ILO bodies;

(b)

preparing expenditure and related estimates for the regular programme and preparing and reviewing budgets and expenditure forecasts for programmes financed from extra-budgetary resources;

(c)

negotiating the financial aspects of agreements with donors of extra-budgetary resources;

(d)

recording   regular   budget   allocations,   extra-budgetary allocations established at headquarters and expenditure; monitoring allocations, obligations and expenditure for headquarters, external offices and field projects;

(e)

examining and approving requests for payments; performing financial operations relating to fellowships and seminars, and preparing and managing payrolls;

(f)

providing management and policy-making bodies with financial analyses and reports relating to the financial and budgetary aspects of regular budget and extra-budgetary programmes, including the budgetary implications of cost and exchange rate changes;

(g)

maintaining the accounting records related to the functions listed above;

(h)

developing and reviewing accounting policies, standards and systems related to the above work both at headquarters and in the field;

(i)

preparing and updating manuals, circulars and other instructions on financial matters.

(j)

participating in UN inter-agency coordination bodies and the regular ILO submissions to UN intergovernmental bodies, including ACABQ and ACC; and

(k)

servicing the Governing Body’s Programme, Financial and Administrative Committee (including meetings of Government members on allocations matters) and the Finance Committee of Government Representatives of the Conference.

170.8. Following the decentralization of a range of financial and budgetary functions to headquarters and external offices, this programme will have the responsibility, inter alia, of training officials and monitoring the implementation and application of the decentralized responsibilities.

170.3. Treasury and accounts

170.9. The overall objectives of this programme in 1998-99 will continue to be to protect and strengthen the bases of financing the Organization’s activities and to provide efficient and comprehensive financial accounting and reporting for these activities. These overall objectives will be met through the:

(a)

timely collection of member States’ assessed contributions and the Organization’s other income;

(b)

development and introduction of effective treasury and investment management and disbursement policies and procedures, both at headquarters and in the field;

(c)

maintenance of income, expenditure and other general ledger accounts for all funds in the custody of the Director-General;

(d)

preparation of interim and final financial statements and reports, as well as the preparation of analyses, forecasts and studies for the relevant policy-making and management bodies;

(e)

processing of field accounts for the New York Liaison Office and Washington Branch Office and monitoring field accounting work carried out under decentralized arrangements for major programmes 250 (Africa), 265 (Arab States), 260 (Americas), 270 (Asia and the Pacific), and 280 (Europe); and

(f)

developing and reviewing accounting policies, standards and systems related to the above work, both at headquarters and in the field.

170.10. In the biennium 1998-99, this programme will seek to further computerize and rationalize its banking operations. In the light of the changed relationships resulting from the decentralization of functions to the field, a major study on existing procedures will also be carried out. The aim of this study will be to examine all procedures with a view to simplifying these while at the same time maintaining controls. It will focus inter alia on the cost benefit of controls, the need for clear procedures, the preparation and maintenance of comprehensive manuals, and need for integrated systems.

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