131ST SESSION OF THE FAO FINANCE COMMITTEE - WFP MATTERS

UNCLAS SECTION 01 OF 02 UN ROME 000015

SIPDIS

USAID FOR DCHA, FFP
USDA FOR DOUVELIS
STATE FOR IO/HS FOR TUMINARO, RUSSELL AND IO/MPR
TREASURY FOR LIZA MORRIS, PRIYA GANDHI

E.O. 12958: N/A
TAGS: WFP FAO PREL UN EAID EAGR
SUBJECT: 131ST SESSION OF THE FAO FINANCE COMMITTEE - WFP MATTERS


1. On February 1, the 131st session of the FAO Finance
Committee, of which the U.S. is a member, discussed a number of
budgetary and financial matters of the World Food Program which
will be presented to the First Session of the WFP Executive
Board February 8 through 11. The Committee discussed six
documents: Selection and Appointment of the WFP External
Auditor, Revised Fee for the External Auditor for the Biennium
2008-2009, Report of the External Auditor on the Strategic
Planning and Reporting at a WFP Country Office - Uganda and
Management Reponses, Report on the External Auditor on the IPSAS
Dividend: Strengthening Financial Management and Reponses of
the Secretariat, Update on the WFP Biennial Management Plan
(2010-2011) and Final Update on the WINGS II Project. The
Committee postponed review of the Update on the Financial
Framework Review: Program Categories due to the paper's late
submission by WFP. [Note: Underlying the discussion, however,
was the concern expressed by the U.S. and Australia that this
specific document did not fall under the purview of the Finance
Committee because the subject matter related to definition of
emergency and recovery rather than financial issues.]




2. On Appointment of the External Auditor, the WFP Secretariat
explained that the delay in the appointment process for WFP's
new external auditor (to commence term July 2010) was due to
more extensive participation in the process by the WFP Audit
Committee under their new terms of reference. A recommendation
for a new external auditor would be ready for the Committee at
their April 2010 meeting. The U.S. questioned whether there
would be sufficient time between the selection of the next
External Auditor at the Annual Session of the Executive Board in
June 2010 and the appointment of the External Auditor on July 1
to ensure appropriate handover. The President of the Executive
Board responded that the current External Auditor had been
ensured that the new timeline would be sufficient for an
appropriate handover. The Committee also discussed the revised
fee for the current WFP external auditor which resulted from
additional work required with implementation of International
Public Sector Accounting Standards (IPSAS) in 2008 and the
rollout of WFP's new enterprise resource planning (ERM) system
WFP Information Network and Global System (WINGS II) and 2009.
The WFP Secretariat informed that future contracts with audit
bodies would include price ceilings which could not be exceeded
without explicit approval in advance from the Executive Board.




3. On the external auditor's report on strategic planning and
reporting at a WPF country office - Uganda and Management
Response, the Committee recommended that WFP thoroughly discuss
with the Executive Board the audit recommendation that the WFP
Executive Board review and approve country strategies in lieu of
country programs. [Note: It is our understanding that the move
to Board review of country strategies only emanated from
discussions of the UN Secretariat. USUN Rome will monitor the
discussion via USUN New York to determine implications for Rome
governing bodies.] On the report on the external auditor on the
IPSAS dividend, strengthening financial management and response
of the secretariat, the Committee noted the absence of the
external auditor during the Committee's discussion and
recommended that the external auditor participate in any future
meetings in which the auditor's work is being considered. The
Committee also welcomed WFP's acceptance of all audit
recommendations, including more frequent review and analysis by
WFP senior management of financial information and metrics.




4. During discussion on the Update on the WFP Biennial
Management Plan (2010-2011) which outlines increases in WFP's
Program of Work for 2010 of USD 595 million, the Committee
learned that WFP now has plans to update the Haiti requirements
to USD 800 million. The Committee looked forward to reviewing
the forthcoming report on a lessons-learned exercise on WFP's
hedging strategy planned for June 2010. On the final WINGS II
report, the Committee learned that following the ERM system
rollout in 2009, an assessment of the project's value and
benefits will be carried out by the Performance and
Accountability Management Division and will be aligned to the
annual performance reporting cycle for 2010. In the future,
reporting on WINGS II will be incorporated into other WFP
reports to keep the Board informed.

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5. The Committee is tentatively scheduled hold its 132nd
session from April 12 to 16 in Rome. To view the complete
report on the 131st session, see
http://one.wfp.org/eb/docs/2010/wfp212924~1.p df.
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