Identifier
Created
Classification
Origin
02ROME2387
2002-05-15 15:30:00
UNCLASSIFIED
Embassy Rome
Cable title:  

FAO FINANCE COMMITTEE NOTES DETERIORATING

Tags:  AORC EAGR EAID EFIN KUNR WFPO 
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UNCLAS SECTION 01 OF 04 ROME 002387 

SIPDIS

FROM U.S. MISSION TO UN AGENCIES IN ROME

STATE FOR IO/EDA AND IO/S

PARIS FOR UNESCO

E.O. 12958: N/A
TAGS: AORC EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR WFPOAORC WFPOAORC WFPOAORC WFPO
SUBJECT: FAO FINANCE COMMITTEE NOTES DETERIORATING
UNCLASSIFIED

PAGE 02 ROME 02387 01 OF 04 151543Z
FINANCES OF FAO; PROGRAMME COMMITTEE EVALUATES SPECIAL
PROGRAM FOR FOOD SECURITY

UNCLAS SECTION 01 OF 04 ROME 002387

SIPDIS

FROM U.S. MISSION TO UN AGENCIES IN ROME

STATE FOR IO/EDA AND IO/S

PARIS FOR UNESCO

E.O. 12958: N/A
TAGS: AORC EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR WFPOAORC WFPOAORC WFPOAORC WFPO
SUBJECT: FAO FINANCE COMMITTEE NOTES DETERIORATING
UNCLASSIFIED

PAGE 02 ROME 02387 01 OF 04 151543Z
FINANCES OF FAO; PROGRAMME COMMITTEE EVALUATES SPECIAL
PROGRAM FOR FOOD SECURITY


1. SUMMARY: THE FAO FINANCE AND PROGRAM COMMITTEES MET
AT FAO HEADQUARTERS IN ROME MAY 6-10. THE DIRECTOR
GENERAL EMPHASIZED THE LACK OF RESOURCES APPARENT IN THE
DOCUMENTS BEFORE THE COMMITTEES, FORESHADOWING A CALL FOR
MORE INVESTMENT IN AGRICULTURE AT THE UPCOMING WORLD FOOD
SUMMIT; FIVE YEARS LATER. THE JOINT COMMITTEE CONSIDERED
INEQUITIES IN THE EXPANDING FAO COUNTRY REPRESENTATIVE
PROGRAM. WE WILL REPORT SEPTEL ON THE PROGRAMME
COMMITTEE MEETING.


2. THE FINANCE COMMITTEE, OF WHICH THE UNITED STATES IS
A MEMBER, NOTED THE DETERIORATING FINANCIAL HEALTH OF THE
ORGANIZATION DUE TO GROWING ARREARS, DECLINING INVESTMENT
INCOME AND ACCOUNTING LOSSES DUE TO FOREIGN EXCHANGE RATE
DEVELOPMENTS. THE FAO SECRETARIAT ALSO REPORTED ON
PROGRESS ON HUMAN RESOURCE MANAGEMENT, IMPLEMENTATION OF
EXTERNAL AUDIT RECOMMENDATIONS AND THE NOW INFAMOUS
ORACLE (INFORMATION TECHNOLOGY) PROJECT. THE COMMITTEE
AGREED TO REVIEW AUDITS OF THE NEW FAO PARTNERSHIP WITH
THE GLOBAL ENVIRONMENT FUND (GEF),AND DISCUSSED WORLD
FOOD PROGRAM REPORTS, INCLUDING ON INDIRECT SUPPORT COST
(ISC) RATES.


3. THE SPECIALIZED COMMITTEES ARE TENTATIVELY SCHEDULED
TO MEET SEPTEMBER 9-13, 2002. END SUMMARY.


4. NEW COMMITTEE COMPOSITION WAS REGIONALLY BALANCED.


UNCLASSIFIED

PAGE 03 ROME 02387 01 OF 04 151543Z
THE FINANCE AND PROGRAM COMMITTEES ARE COMPOSED OF
REPRESENTATIVES OF EACH REGIONAL GROUP. THE FINANCE
COMMITTEE WAS CHAIRED BY CHILE AND INCLUDED, IN ADDITION
TO THE UNITED STATES, REPRESENTATIVES OF JAPAN, KUWAIT,
PAKISTAN, SENEGAL, SWITZERLAND, TANZANIA, AND THE UNITED
KINGDOM. THE PROGRAM COMMITTEE WAS CHAIRED BY THE DUTCH
PERMREP AND INCLUDED REPRESENTATIVES OF AUSTRALIA,
CAMEROON, CANADA, CHINA, COLOMBIA, LEBANON, MALAYSIA,
MALI, PARAGUAY AND SUDAN. MEMBERS ARE ELECTED BY THE
CONFERENCE FOR TWO-YEAR TERMS AND THIS WAS THE FIRST
MEETING FOR MOST PARTICIPANTS.


5. DIRECTOR GENERAL CALLS FOR MORE RESOURCES FOR
AGRICULTURE

IN HIS REMARKS TO THE JOINT COMMITTEE, THE DIRECTOR
GENERAL EMPHASIZED THE LACK OF RESOURCES APPARENT IN ALL
EVALUATIONS OF PROGRAMS: STANDARDS SETTING TO INSURE FOOD
SAFETY, PREVENTION OF THE SPREAD OF DISEASE, ETC. HE
EXPRESSED THE HOPE THAT THE FAO WOULD BE ABLE TO GROW
WITH MORE INVESTMENT IN AGRICULTURE, POSSIBLY
FORESHADOWING A CALL TO COME AT THE WORLD FOOD SUMMIT;
FIVE YEARS LATER WHICH TAKES PLACE JUNE 10-13, 2002.


6. FAO FINANCES DETERIORATED 2000-01.

MEMBERS OF THE FINANCE COMMITTEE WERE CONCERNED BY THE
DETERIORATING FINANCIAL HEALTH OF THE FAO. THE
CUMULATIVE DEFICIT HAS WIDENED TO $75.4 MILLION AND THE
BALANCES IN THE WORKING CAPITAL FUND AND SPECIAL RESERVE
ACCOUNT HAVE REACHED PERILOUSLY LOW LEVELS, $15.5 MILLION
UNCLASSIFIED

PAGE 04 ROME 02387 01 OF 04 151543Z
AND $0.5 MILLION RESPECTIVELY. THE FAO MANAGED ITS CASH
EXPENDITURES BY USING UNDISBURSED ALLOCATIONS FOR THE
TECHNICAL COOPERATION PROGRAM (TCP). HOWEVER, ACCORDING
TO CASHFLOW PROJECTIONS PREPARED BY THE SECRETARIAT, IF
THE FAO DRAMATICALLY ACCELERATES TCP EXPENDITURES (AS
MANY MEMBERS WOULD LIKE) THE ORGANIZATION COULD BE FORCED
TO BORROW EXTERNALLY. AT THE CURRENT RATE OF EXPENDITURE
THE CASH FLOW BECOMES TIGHT IN SEPTEMBER, BUT WOULD NOT
REQUIRE BORROWING TO PAY THE FAO'S BILLS.


7. REASONS FOR DECLINE: ARREARS, INVESTMENT LOSSES,
FOREIGN EXCHANGE RATE CHANGES

ARREARS WERE CITED AS THE MAIN REASON FOR THE FAO'S
FAILING FINANCES. AS OF MAY 3, 2002 ONLY ONE THIRD OF
ALL CONTRIBUTIONS HAD BEEN PAID, THE WORST RECORD IN FIVE
YEARS. ARREARS TOTALED $157 MILLION, NEARLY TWO THIRDS
OF WHICH WERE OWED BY THE UNITED STATES. OTHER MAJOR
DEBTORS INCLUDE ARGENTINA ($13.9 MILLION),BRAZIL ($23.4
MILLION) AND IRAQ ($5 MILLION). FIFTY SIX MEMBERS HAVE
ARREARS IN EXCESS OF TWO YEARS WORTH OF CONTRIBUTIONS
WHICH, ACCORDING TO THE BASIC TEXTS, JEOPARDIZES THEIR
VOTING RIGHTS.

UNCLASSIFIED

UNCLASSIFIED PTQ9608

PAGE 01 ROME 02387 02 OF 04 151544Z
ACTION IO-00

INFO LOG-00 NP-00 AID-00 CEA-01 CIAE-00 COME-00 CTME-00
INL-00 DODE-00 ITCE-00 SRPP-00 EB-00 EXME-00 EUR-00
E-00 UTED-00 VC-00 FRB-00 H-01 TEDE-00 INR-00
ITC-01 L-00 AC-01 NSAE-00 NSCE-00 OES-01 OIC-02
OMB-01 OPIC-01 ACE-00 SP-00 SSO-00 STR-00 TEST-00
TRSE-00 USIE-00 FMP-00 EPAE-00 DRL-02 G-00 SAS-00
/011W
-------------- AEE39D 151544Z /38
R 151530Z MAY 02
FM AMEMBASSY ROME
TO SECSTATE WASHDC 3752
INFO USMISSION GENEVA
USMISSION USUN NEW YORK
USMISSION UNVIE VIENNA
AMEMBASSY PARIS
USDA FAS WASHDC 2131

UNCLAS SECTION 02 OF 04 ROME 002387

SIPDIS

FROM U.S. MISSION TO UN AGENCIES IN ROME

STATE FOR IO/EDA AND IO/S

PARIS FOR UNESCO

E.O. 12958: N/A
TAGS: AORC EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR WFPOAORC WFPOAORC WFPOAORC WFPO
SUBJECT: FAO FINANCE COMMITTEE NOTES DETERIORATING
UNCLASSIFIED

PAGE 02 ROME 02387 02 OF 04 151544Z
FINANCES OF FAO; PROGRAMME COMMITTEE EVALUATES SPECIAL
PROGRAM FOR FOOD SECURITY


8. THE U.S. PERMANENT REPRESENTATIVE (PERMREP) STATED
THAT IT REMAINED OUR GOAL TO PAY OUR ARREARS THIS YEAR
AND THAT WE WERE WORKING ACTIVELY TO ACHIEVE THAT END.
EFFORTS HAD BEEN DELAYED SOMEWHAT BY THE SEPTEMBER 11
TERRORIST ATTACKS IN THE UNITED STATES. OTHER MEMBERS,
NOTABLY SENEGAL, WERE ENCOURAGED BY THE U.S. REMARKS.
THERE WERE NO COMMENTS AS IN PREVIOUS YEARS CHIDING THE
UNITED STATES FOR PLACING ADDITIONAL CONDITIONALITY ON
PAYMENT OF ITS ASSESSMENTS.


9. THE COMMITTEE DISCUSSED THREE METHODS OF ACCELERATING
COLLECTIONS: INCENTIVE PAYMENTS, SANCTIONS AND
EXHORTATION. THE FINANCE COMMITTEE HAD RECOMMENDED THAT
THE FINANCIAL INCENTIVE SCHEME, WHICH COSTS ABOUT
$500,000 ANNUALLY, BE ABANDONED, BUT THE CONFERENCE
REJECTED THE RECOMMENDATION LAST NOVEMBER AND ACTED TO
RETAIN THE SCHEME.


10. SANCTIONS FOR NON-PAYMENT ALREADY EXIST IN THE FORM
OF LOSS OF VOTING RIGHTS, BUT, AS NOTED BY THE U.S.
PERMREP, ARE NOT ENFORCED. THE GENERAL COMMITTEE OF THE
CONFERENCE ROUTINELY APPROVES WAIVERS FOR THOSE MEMBERS
WHO CLAIM INABILITY TO PAY ON GROUNDS OF CIRCUMSTANCES
BEYOND THEIR CONTROL.

11. THE FINANCE COMMITTEE RECOMMENDED THAT COUNTRIES
PARTICIPATING IN THE UPCOMING WORLD FOOD SUMMIT AGAIN BE
EXHORTED TO PAY. (LETTER DISTRIBUTED MAY 8 WILL BE
FORWARDED TO IO/S VIA FACSIMILE.)
UNCLASSIFIED

PAGE 03 ROME 02387 02 OF 04 151544Z


12. INVESTMENT LOSSES - THE FAO LOST $16.45 MILLION ON
ITS LONG-TERM INVESTMENT PORTFOLIO IN 2001. THIS ABYSMAL
RESULT, WHILE CONSISTENT WITH NEGATIVE DEVELOPMENTS IN
FINANCIAL MARKETS OVERALL, WAS LESS THAN ITS BENCHMARK (A
LOSS OF 16.8 PERCENT VERSUS EXPECTED LOSSES OF 10.5
PERCENT) AND WORSE THAN LOSSES SUFFERED BY COMPARABLE
INTERNATIONAL ORGANIZATIONS.


13. REPRESENTATIVES OF FIDUCIARY TRUST COMPANY, FAO'S
INVESTMENT FUND MANAGER, BRIEFED THE COMMITTEE ON REASONS
FOR THIS POOR PERFORMANCE, NOTING THAT IT NEEDED TO BE
SEEN IN LIGHT OF PREVIOUS POSITIVE PERFORMANCE FROM 1990
TO 2001. UNDERPERFORMANCE IN EQUITIES WAS ATTRIBUTED TO
OVERWEIGHTING IN THE TECHNOLOGY SECTOR, POOR STOCK
SELECTIONS AND THE CURRENCY IMPACT OF NON-USD INVESTMENTS
THAT WERE SOLD. COMMENT: IT WAS EMBARRASSING, HOWEVER,
WHEN THE EXTERNAL AUDITOR POINTED OUT THAT THE DATE OF
SALE OF ENRON STOCK HAD NOT BEEN CORRECTLY REPORTED TO
THE COMMITTEE. FIDUCIARY IMMEDIATELY ACCEPTED
RESPONSIBILITY AND COMPENSATED FAO FOR THE $194,684
ERROR. END COMMENT. THE SECRETARIAT LATER EXPLAINED TO
COMMITTEE MEMBERS THAT FIDUCIARY TRUST HAD LOST 87
MEMBERS OF ITS STAFF IN THE SEPTEMBER 11 ATTACKS.


14. THE SECRETARIAT RECOUNTED THE HISTORY OF ITS
INVESTMENT MANAGEMENT STRATEGY WHICH HAS BEEN HINDERED BY
LACK OF SENIOR STAFF IN THE TREASURY OFFICE. THE FAO
ADVISORY COMMITTEE ON INVESTMENTS (AIC) HAD STRONGLY
ADVISED THE FAO AS RECENTLY AS 2001 TO SECURE ADEQUATE
PERSONNEL TO MONITOR INVESTMENT STRATEGY. NOW THAT A
UNCLASSIFIED

PAGE 04 ROME 02387 02 OF 04 151544Z
SENIOR TREASURY OFFICER HAS BEEN IDENTIFIED FAO CAN
PROCEED TO IMPLEMENT THIS STRATEGY. THE EXTERNAL AUDITOR
EMPHASIZED THE NEED TO REVIEW THE CONTRACT WITH FIDUCIARY
TRUST, WHICH HAD BEEN AUTOMATICALLY RENEWED LAST JANUARY,
AND TO REVIEW THE BENCHMARK 65/35 SPLIT BETWEEN EQUITIES
AND BONDS IN THE INVESTMENT PORTFOLIO. SHE ALSO
SUGGESTED RESCHEDULING MEETINGS OF THE AIC IN ORDER TO
PRECEDE MAY SESSIONS OF THE FINANCE COMMITTEE.


15. ACCOUNTING LOSSES ON FOREIGN EXCHANGE - WHILE THE
PURCHASE OF A CONTRACT FOR FORWARD EXCHANGE HAD PROTECTED
THE FAO BUDGET AGAINST FOREIGN EXCHANGE RATE MOVEMENTS,
THE FALL IN THE VALUE OF THE EURO VIS--VIS THE U.S.
DOLLAR CREATED AN ACCOUNTING LOSS ON FOREIGN EXCHANGE OF
$23 MILLION. THIS LOSS WAS CHARGED TO THE SPECIAL
RESERVE ACCOUNT. THE U.S. PERMREP POINTED OUT THAT THAT
STRENGTH OF THE U.S. DOLLAR, THE CURRENCY IN WHICH
CONTRIBUTIONS ARE DENOMINATED, HAD ALSO BENEFITED THE
FAO. THE POSSIBILITY OF MAKING CONTRIBUTIONS IN EITHER
EUROS OR DOLLARS WILL BE EXAMINED AT THE SEPTEMBER
SESSION.


16. FAO TAKES MORE PROACTIVE APPROACH TO HUMAN RESOURCE
MANAGEMENT ISSUES

UNCLASSIFIED

UNCLASSIFIED PTQ9610

PAGE 01 ROME 02387 03 OF 04 151544Z
ACTION IO-00

INFO LOG-00 NP-00 AID-00 CEA-01 CIAE-00 COME-00 CTME-00
INL-00 DODE-00 ITCE-00 SRPP-00 EB-00 EXME-00 EUR-00
E-00 UTED-00 VC-00 FRB-00 H-01 TEDE-00 INR-00
ITC-01 L-00 AC-01 NSAE-00 NSCE-00 OES-01 OIC-02
OMB-01 OPIC-01 ACE-00 SP-00 SSO-00 STR-00 TEST-00
TRSE-00 USIE-00 FMP-00 EPAE-00 DRL-02 G-00 SAS-00
/011W
-------------- AEE3B2 151544Z /38
R 151530Z MAY 02
FM AMEMBASSY ROME
TO SECSTATE WASHDC 3753
INFO USMISSION GENEVA
USMISSION USUN NEW YORK
USMISSION UNVIE VIENNA
AMEMBASSY PARIS
USDA FAS WASHDC 2132

UNCLAS SECTION 03 OF 04 ROME 002387

SIPDIS

FROM U.S. MISSION TO UN AGENCIES IN ROME

STATE FOR IO/EDA AND IO/S

PARIS FOR UNESCO

E.O. 12958: N/A
TAGS: AORC EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR WFPOAORC WFPOAORC WFPOAORC WFPO
SUBJECT: FAO FINANCE COMMITTEE NOTES DETERIORATING
UNCLASSIFIED

PAGE 02 ROME 02387 03 OF 04 151544Z
FINANCES OF FAO; PROGRAMME COMMITTEE EVALUATES SPECIAL
PROGRAM FOR FOOD SECURITY

THIS SESSION WAS ATTENDED BY THE DEPUTY DIRECTOR OF THE
FAO, A SIGN THAT HRM ISSUES NOW RECEIVE MORE ATTENTION
FROM HIGH LEVEL MANAGEMENT. THE U.S. PERMREP SPOKE OUT
ON THE NEED FOR IMPROVED GENDER BALANCE AND EQUITABLE
GEOGRAPHIC REPRESENTATION. SHE SAID THESE ORGANIZATIONAL
GOALS HAD TO BE INCORPORATED INTO INDIVIDUAL PERFORMANCE
MANAGEMENT. MANY COMMENTED ON THE NEED TO RESPOND TO
INQUIRIES REGARDING EMPLOYMENT AND TO REDUCE THE TIME
NEEDED FOR RECRUITMENT. IT WAS SUGGESTED THAT
INFORMATION TECHNOLOGY COULD BE BETTER USED TO ACCOMPLISH
THESE GOALS AND TO REACH OUT TO YOUNGER PEOPLE INTERESTED
IN EMPLOYMENT AT THE FAO.


17. THE MOST CONTROVERSIAL ISSUE, HOWEVER, WAS SPOUSAL
EMPLOYMENT. SOME DELEGATES WERE CONCERNED THAT CHANGES
IN THE REGULATIONS GOVERNING EMPLOYMENT OF SPOUSES COULD
LEAD TO NEPOTISM. THE ISSUE WILL BE REEXAMINED AT THE
SEPTEMBER SESSION.


18. PROGRESS REPORT ON THE ORACLE PROJECT

THE SECRETARIAT WAS PLEASED TO REPORT THAT THE ORACLE
PROJECT, WHICH HAD REQUIRED SUPPLEMENTAL FUNDS TO BE
TAKEN FROM PROGRAM ALLOCATIONS, WAS ON TRACK. THE
EQUIPMENT WILL HAVE TO BE UPGRADED SINCE ORACLE HAS
ANNOUNCED IT WILL WITHDRAW SUPPORT OF THE CURRENT
VERSION. HOWEVER, MANY ORACLE CLIENTS, NOT ONLY THE FAO,
UNCLASSIFIED

PAGE 03 ROME 02387 03 OF 04 151544Z
HAVE FOUND THIS PROSPECT EXPENSIVE AND TIME-CONSUMING SO
THE DEADLINE FOR WITHDRAWAL OF SUPPORT HAD BEEN
REPEATEDLY EXTENDED.


19. THE FUTURE PROBLEM AS FORESEEN BY THE SECRETARIAT,
IS THAT FUNDING FOR PHASE II OF THE ORACLE PROJECT, WHICH
COVERS HUMAN RESOURCES AND PAYROLL, IS DEPENDENT ON THE
PAYMENT OF ARREARS FROM THE "MAJOR CONTRIBUTOR," I.E. THE
UNITED STATES. PHASE II IS ESTIMATED TO COST $25 MILLION
WHICH COULD BE MORE IF IMPLEMENTATION IS DELAYED BEYOND
DECEMBER 2002.


20. MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN FAO AND
THE GLOBAL ENVIRONMENT FACILITY (GEF)

THE FINANCE COMMITTEE EXAMINED AN EXCITING NEW PROJECT
FOR FAO, PARTNERSHIP WITH THE GLOBAL ENVIRONMENT
FACILITY. THE GEF IS THE FINANCING MECHANISM FOR THE
CONVENTIONS OF BIODIVERSITY, CLIMATE CHANGE AND THE
STOCKHOLM CONVENTION ON PERSISTENT ORGANIC POLLUTANTS. AT
A TIME OF SHRINKING RESOURCES THE GEF OFFERS A
SIGNIFICANT POTENTIAL SOURCE OF ADDITIONAL INCOME
(POSSIBLY $40-60 MILLION ANNUALLY) FOR FAO PROJECTS. THE
GEF COUNCIL ASKED THAT THE FAO EXTERNAL AUDITOR EXAMINE
ITS ACCOUNTS BIANNUALLY, AND AUDIT COSTS WOULD BE PAID
FROM PROJECT FUNDS. THE AUDIT REPORT WOULD BE REVIEWED
BY THE FINANCE COMMITTEE. DESPITE THE ADDITIONAL WORK
GENERATED, THE COMMITTEE ENDORSED THIS NEW DIRECTION FOR
THE FAO.


21. WFP REPORTS ON "CONTRIBUTIONS AND WAIVERS OF COSTS"
UNCLASSIFIED

PAGE 04 ROME 02387 03 OF 04 151544Z
AND THE INDIRECT SUPPORT COST RATE.

AT PRESENT WFP USES A SINGLE RATE OF 7.8 PERCENT FOR ALL
CONTRIBUTIONS TO COVER ADMINISTRATIVE COSTS. LAST YEAR
THE ACABQ RECOMMENDED THAT THE EXTERNAL AUDITOR REVIEW
ACTUAL COSTS TO DETERMINE WHETHER THE 7.8 PERCENT RATE IS
REALISTIC. THE EXECUTIVE BOARD ENDORSED THAT
RECOMMENDATION. ACCORDING TO A PRELIMINARY REVIEW, 7.8
PERCENT IS CLOSE TO ACTUAL EXPENDITURES, BUT THE
EXECUTIVE BOARD WILL BE ASKED TO APPROVE USING THE
CURRENT RATE UNTIL THE REVIEW IS COMPLETE, POSSIBLY FOR
THE REST OF THE BIENNIAL BUDGET PERIOD.


22. THE UNITED STATES EXPRESSED THE OPINION THAT ISC
"INCOME" SHOULD BE RECOGNIZED WHEN CONTRIBUTIONS ARE
ACTUALLY RECEIVED, BUT THE EXTERNAL AUDITOR DISAGREED.
SHE RECOMMENDED THAT THE SAME METHOD, CASH OR ACCRUAL, BE
USED TO TRACK BOTH INCOME AND EXPENSES. USUALLY IN THE
UN SYSTEM THE ACCRUAL BASIS FOR ACCOUNTING IS PREFERRED.
IN THE CASE OF WFP, WHICH DEPENDS ON VOLUNTARY
CONTRIBUTIONS RATHER THAN ASSESSMENTS, FOR "REASONS OF
PRUDENCE" ISC INCOME IS RECOGNIZED WHEN RECEIVED. IF THE
ACCRUAL BASIS WERE EMPLOYED, INCOME WOULD BE ACCOUNTED
FOR WHEN EARNED. (DETAILS WILL BE PROVIDED TO USAID

UNCLASSIFIED

UNCLASSIFIED PTQ9612

PAGE 01 ROME 02387 04 OF 04 151544Z
ACTION IO-00

INFO LOG-00 NP-00 AID-00 CEA-01 CIAE-00 COME-00 CTME-00
INL-00 DODE-00 ITCE-00 SRPP-00 EB-00 EXME-00 EUR-00
E-00 UTED-00 VC-00 FRB-00 H-01 TEDE-00 INR-00
ITC-01 L-00 AC-01 NSAE-00 NSCE-00 OES-01 OIC-02
OMB-01 OPIC-01 ACE-00 SP-00 SSO-00 STR-00 TEST-00
TRSE-00 USIE-00 FMP-00 EPAE-00 DRL-02 G-00 SAS-00
/011W
-------------- AEE3B6 151544Z /38
R 151530Z MAY 02
FM AMEMBASSY ROME
TO SECSTATE WASHDC 3754
INFO USMISSION GENEVA
USMISSION USUN NEW YORK
USMISSION UNVIE VIENNA
AMEMBASSY PARIS
USDA FAS WASHDC 2133

UNCLAS SECTION 04 OF 04 ROME 002387

SIPDIS

FROM U.S. MISSION TO UN AGENCIES IN ROME

STATE FOR IO/EDA AND IO/S

PARIS FOR UNESCO

E.O. 12958: N/A
TAGS: AORC EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR EAGR EAID EFIN KUNR WFPOAORC WFPOAORC WFPOAORC WFPO
SUBJECT: FAO FINANCE COMMITTEE NOTES DETERIORATING
UNCLASSIFIED

PAGE 02 ROME 02387 04 OF 04 151544Z
FINANCES OF FAO; PROGRAMME COMMITTEE EVALUATES SPECIAL
PROGRAM FOR FOOD SECURITY

SEPARATELY.)


23. JOINT COMMITTEE DISCUSSION REVEALS INEQUITIES IN FAO
COUNTRY REPRESENTATIVE PROGRAM

THE SECRETARIAT CALLED ATTENTION TO THE GROWING INEQUITY
IN THE FAOR PROGRAM. SINCE THE LIMITATION (78) ON THE
NUMBER OF COUNTRY OFFICES WAS REACHED FAO HAS STARTED
SENDING SENIOR TECHNICAL OFFICERS TO THE FIELD TO MEET
GROWING DEMAND. PARTICIPATING MEMBER COUNTRIES MUST
COVER ALL COSTS FOR SUCH REPRESENTATIVES ALTHOUGH IN THE
REGULAR PROGRAM REPRESENTATIVES ARE FULLY FUNDED. THE
U.S. PERMREP COMMENTED THAT THE CRITERIA FOR
PARTICIPATION WAS BUDGET DRIVEN AND THEREFORE DID NOT
BENEFIT MEMBERS MOST IN NEED. THE COMMITTEE ASKED FOR
MORE INFORMATION OF THE COSTS AND CONTRIBUTIONS TO THIS
PROGRAM.

24 PROGRAMME COMMITTEE MEETS

THE MOST SIGNIFICANT AGENDA ITEM FOR THE PROGRAM
COMMITTEE WAS THE SPECIAL PROGRAM FOR FOOD SECURITY
(SPFS) CLOSELY FOLLOWED BY THE TERMS OF REFERENCE FOR AN
EVALUATION OF CODEX ALIMENTARIUS. U.S. POSITIONS WERE
PRESENTED BY CANADA AS REPRESENTATIVE OF THE NORTH
AMERICA REGIONAL GROUP. REPORT WILL BE SENT SEPTEL.


25. NEXT MEETING AND MAJOR AGENDA ITEMS
UNCLASSIFIED

PAGE 03 ROME 02387 04 OF 04 151544Z

THE FINANCE AND PROGRAM COMMITTEES ARE TENTATIVELY
SCHEDULED TO MEET AGAIN SEPTEMBER 9-13, 2002. IN
ADDITION TO SEVERAL PROGRESS REPORTS ON ISSUES DISCUSSED
IN MAY, THE FINANCE COMMITTEE WILL TAKE UP THE PROGRAMME
IMPLEMENTATION REPORT AND THE MEDIUM TERM PLAN.

HEILEMAN

UNCLASSIFIED

>
2002ROME02387 - Classification: UNCLASSIFIED