United Nations Educational,
Scientific and Cultural Organization
Executive Board ex
Hundred and seventieth
Session
170 EX/20
Original: English
Item 7.2 of the
provisional agenda
SUMMARY
The Director-General reports herewith on the status of
contributions of Member States, and the cash flow of the Organization (Part I)
and on payment plans agreed with Member States in arrears in the payment of
their contributions, further to
Decision required: paragraph
8.
1. This report is
divided into two Parts. Part I covers the collection of contributions during
2004 up to 30 June, the status of contributions and, the cash flow at that
date. Part II provides a report on the actual position concerning all payment
plans agreed with Member States in arrears as required under
Part I - COLLECTION OF MEMBER STATES’ CONTRIBUTIONS
A.
Status of contributions
2.1 Total contributions for 2004 received by 30 June 2004 amounted to USD 199.3 million as against USD 305 million assessed, which represented 65.34% of the total assessed for 2004. The balance outstanding amounted to USD 105.7 million. Contributions due and unpaid for 2004 and previous years amounted to USD 152.9 million at 30 June 2004. In addition an amount of USD 30.4 million, which exceeds the level of the Working Capital Fund, has been deferred under instalment plans for payment in future years.
2.2 Of the 190 Member States requested to contribute for 2004, 77 have paid their contribution in full for 2004. In addition, 31 Member States have paid part of their contribution for 2004. Of the six associate Members requested to contribute for 2004, three have paid in full for 2004 and three have made no payment.
2.3 At the end of 2003 there were 77 Member States that owed USD 92.2 million in respect of 2003 and prior years, including amounts due on payment plans. By the end of June 2004 USD 14.7 million had been received from them. Consequently, there was still USD 77.6 million due from Member States for previous biennia at the end of June 2004. At the end of June 2002 there was USD 64.8 million due from Member States for previous biennia.
2.4 The following chart shows comparative figures for arrears of contributions at the end of June, as a percentage of the amount assessed for each current year in 2004, 2002, and 2000.
{Figure here}
The total of contributions unpaid for 2004 and previous years, including amounts deferred under payment plans, represented 60.09 % of the amount assessed for 2004. At 30 June 2002 the total of contributions unpaid represented 50.58 %. This increase is largely due to the amount of contributions deferred to future years (9.96 %). Nonetheless the amount of the remaining arrears (USD 47.2 million or 15.47 %) gives cause for concern. Annex I to this document shows the summary status of contributions as at 30 June 2004 as well as comparative figures for two previous years. Annex II shows the detailed situation regarding each contribution assessed and advances to the Working Capital Fund at 30 June 2004. Information concerning further receipts from Member States will be communicated when this item is discussed at the Executive Board.
B. Assessment action for 2004
3.1 Financial Regulation 5.5 states that “contributions and advances to the Working Capital Fund shall be considered as due and payable in full within thirty days of the receipt of the communications of the Director-General referred to in Regulations 5.3 and 5.4 above or as of the first day of the year to which they relate, whichever is the later. As of 1 January of the following year the unpaid balance of such contributions and advances shall be considered to be one year in arrears”.
3.2 Letters of assessment for 2004 were dispatched on 22 December 2003. In these letters the Director-General reminded the Member States that he would appreciate full and timely payment of contributions due.
3.3 Paragraph 5 of the Annex to Resolution 82 adopted at the 30th session of the General Conference states that “After the Conference session, the Director-General should send a letter to the governments concerned to remind them that their payment plans have been approved by the General Conference and, at the same time, to inform them of all the possible consequences of non-observance of those commitments”. Accordingly, reminder letters were sent on 2 February 2004 to the 35 Member States concerned.
3.4 The letters of assessment for 2004 contained reminders of arrears to those Member States with contributions then outstanding. Further reminder letters were dispatched to all Member States in arrears on 1 June 2004, including those with instalments outstanding on payment plans. In addition, personal representations including letters and telephone calls were made to many contributors, particularly those of significant size.
C. Payment of contributions in national currency
4.1 The Director-General welcomes requests from Member States facing serious payment difficulties for information on the existing options for the payment of assessed contributions and for the settlement of arrears and to help them to devise solutions that are appropriate for their specific situation. Such options include payments in local currencies and “Swap” arrangements.
4.3 To assist in these options, the UNESCO Secretariat benefits from the active support of UNDP regarding the use of national currencies where it cannot itself identify users for such currencies within a one-year period. It must be noted, however, that with the globalization of markets, there are more and more Member States for which national currencies are convertible or where foreign currency is readily accessible to them. Thus there is a declining interest for payment of contributions in national currency.
D. Cash flow
5.1 During the 2004-2005 biennium to end June 2004, contributions received for 2004 and previous years totalled USD 213.3 million as detailed in Annex II to this document. Annex III attached shows the end-of-month cash position of the Organization over the period August 2003 to June 2004. The cash situation has notably improved compared with the last biennium. No borrowing has been required since early 2000.
E.
Incentive scheme to encourage prompt
payment of contributions
6.1 At its 31st session
the General Conference decided by Resolution 53 that the then existing positive
incentive scheme to encourage prompt payment of contributions should be
extended for a further six-year period, expiring 31 December 2007. However, in
accordance with
a. A maximum amount of USD 12.9 million depending on the availability of funds will be credited to 63 Member States for the year 2003, from voluntary contributions received for this purpose and from funding currently earmarked for the existing experimental scheme to encourage prompt payment of contributions made available from the 2002-2003 biennium,
b. Afghanistan and Argentina shall be given, as an exceptional measure, a credit equivalent in effect to an ad hoc reduction in their rates of assessment,
c. Any remaining balance shall be distributed to Member States in accordance with the experimental scheme to encourage prompt payment on contributions.
6.2 The resources that became available for distribution under the enhanced incentive scheme for the 2002-2003 biennium amount to USD 5,012 million. The Director General has sent letters to governments on 19 June and 22 December 2003 requesting voluntary contributions for this purpose but as at 31 May 2004 no voluntary contributions have been received and only one Member State has waived its right to a credit. The total amount available will be credited to the Member States concerned against their 2005 contributions.
Part II – PAYMENT PLANS
7.1 There were 26
Member States with approved plans for settlement of arrears in annual
instalments prior to the 32nd session of the General Conference. At its 32nd
session, the Conference approved a net additional eighteen payment plans,
taking into account the rescheduling of eight pre-existing plans. As a result
of the 18 new payment plans approved during last General Conference, the level
of arrears due under payment plans deferred to future years has more than
doubled from USD 13.1 million at the end of June 2002 to USD 30.4 million at
the end of June 2004. In addition, an amount of USD 7.6 million is due for 2004
and prior years in declining aggregate amounts up to the year 2009. Full
details are provided in Annex IV attached.
7.2 Member States
in arrears on their payment plans were reminded of amounts due in the letters
of assessment dispatched to them at the end of 2003 and again on 2 February
2004 as well as on 1 June 2004. On 31 December 2003 USD 8.5 million was overdue
on payment plans. An additional amount of USD 1.1 million became due for
payment in the year 2004 bringing the total due for 2004 and prior years to USD
9.6 million, of which up to end June 2004, only USD 1.9 million has been
collected on plans from 10 Member States. Thus a balance of USD 7.6 million
relating to payment plans payable by 29 Member States due for payment in 2004,
by 30 June 2004, remains unpaid at 30 June 2004. Whilst appreciating the
difficulties many of these Member States have, the Director-General urges them
to make every effort to respect the commitments they have made so as to
preclude the need to request voting rights at the next General Conference.
8. The Executive
Board may wish to adopt a decision along the following lines:
The Executive Board,
1. Recalling
2. Having examined the report of the
Director General on the collection of contributions of Member States
(170/EX/20) and having taken note of the up-to-date information provided
during the debate of the Financial and Administrative Commission,
3. Expresses its gratitude to Member
States that have paid their contributions for the year 2004 and to those who
have made efforts to reduce their arrears of contributions in response to
appeals;
4. Strongly supports the approaches the
Director General is continuing to make to Member States with a view to
obtaining timely payment of contributions;
5. Recalls that the prompt payment of
contributions is an obligation incumbent on Member States under the
Constitution and the Financial Regulations of the Organization;
6. Urgently appeals to those Member
States that are behind with the payment of their contributions to pay their
arrears without delay;
7. Urges Member States, on receipt of
the Director General’s request for payment of assessed contributions, to inform
him, as promptly as possible of the probable date, amount and method of payment
of the forthcoming contribution in order to facilitate his management of the
Organization’s treasury function;
8. Noting in particular the failure of
29[1]
Member States to pay up to the end of September 2004 the amounts due by them
against payment plans approved by the General Conference for settlement of
their accumulated arrears in instalments, in addition to current year
contributions, as well as the request of the General Conference to the
Director-General to report to the General Conference at its 33rd session
thereon;
9. Appeals to those Member States in
arrears on payment plans to settle their outstanding instalments at the
earliest possible time as well as their regular assessed contributions, bearing
in mind the risk of loss of voting rights that may otherwise ensue at the 33rd
session of the General Conference.