The Agency's Financial Statements for 2019
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The Agency’s Financial Statements for 2019 GC(64)/4 Atoms for Peace and Development THE AGENCY’S FINANCIAL STATEMENTS FOR 2019 _________________________________________ Printed by the International Atomic Energy Agency July 2020 GC(64)/4 Page i Report by the Board of Governors 1. In accordance with Financial Regulation 11.03(b)[1], the Board of Governors hereby transmits to the Members of the Agency the report of the External Auditor on the Agency’s Financial Statements for 2019. 2. The Board has examined the report of the External Auditor and the report by the Director General on the financial statements, and also the financial statements themselves as well as the notes and annexes thereto (Parts I to V of GOV/2020/12) and submits the following draft resolution for the consideration of the General Conference. 3. The Board takes note of the report of the External Auditor on the External Auditor’s planned scope, timing and other information related to the audit of the Agency’s Financial Statements for 2020 (Part VI of GOV/2020/12). The General Conference, Having regard to Financial Regulation 11.03(b), Takes note of the report of the External Auditor on the Agency’s financial statements for the year 2019 and of the report of the Board of Governors thereon [*]. [*] GC(64)/4 [1] INFCIRC/8/Rev.4 GC(64)/4 Page iii Sixty fourth regular session The Agency’s Financial Statements For 2019 Contents Page Table of contents iii Report of the Director General on the Agency’s Financial Statements for the year ended 31 December 2019 1 Statement of the Director General’s responsibilities and confirmation of the financial statements with the financial regulations of the International Atomic Energy Agency as at 31 December 2019 17 Part I - Audit opinion 19 Part II - Financial Statements 25 I Statement of Financial Position as at 31 December 2019 28 II Statement of Financial Performance for the year ended 31 December 2019 29 III Statement of Changes in Equity for the year ended 31 December 2019 30 IV Statement of Cash Flow for the year ended 31 December 2019 31 Va Statement of Comparison of Budget and Actual Amounts (Regular Budget Fund Operational Portion) for the year ended 31 December 2019 32 Vb Statement of Comparison of Budget and Actual Amounts (Regular Budget Fund Capital Portion) for the year ended 31 December 2019 33 VI Statement of Segment Reporting by Major Programme for the year ended 31 December 2019 34 VIIa Statement of Segment Reporting by Fund – Financial position as at 31 December 2019 36 VIIb Statement of Segment Reporting by Fund – Financial performance for the year ended 31 December 2019 38 Part III - Notes to the Financial Statements 41 Part IV - Annexes to the Financial Statements 113 A1 List of Acronyms 115 A2 Revenue from Contributions for the year ended 31 December 2019 116 A3 Status of Outstanding Contributions as at 31 December 2019 122 A4 Status of Deferred Revenue as at 31 December 2019 127 A5 Status of Cash Surplus as at 31 December 2019 130 A6 Statement of Investments as at 31 December 2019 131 GC(64)/4 Page iv Part V - Report of the External Auditor on the Audit of the Financial Statements of the International Atomic Energy Agency for the year ended 31 December 2019 133 GC(64)/4 Page 1 REPORT OF THE DIRECTOR GENERAL ON THE AGENCY’S FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2019 Introduction 1. I have the honour to present the financial statements of the International Atomic Energy Agency (hereafter IAEA or the Agency) for the year ended 31 December 2019. In accordance with the Financial Regulation 11.03 of the Agency, the financial statements are submitted with the report of the External Auditor that contains an unqualified opinion on the financial statements. 2. The IAEA is a not-for-profit autonomous intergovernmental organization established in 1957 in accordance with its Statute. It is part of the United Nations Common System and the relationship with the United Nations is regulated by the “Agreement Governing the Relationship between the United Nations and the International Atomic Energy Agency” which came into force on 14 November 1957. 3. The Agency’s statutory objective is to seek to accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the world and to ensure, so far as it is able, that assistance provided by it or at its request or under its supervision or control is not used in such a way as to further any military purpose. To fulfil this statutory objective, the Agency manages its work under the following six Major Programmes: Nuclear Power, Fuel Cycle and Nuclear Science; Nuclear Techniques for Development and Environmental Protection; Nuclear Safety and Security; Nuclear Verification; Policy, Management and Administration Services; and Management of Technical Cooperation for Development. 4. The Agency carries out its mandate within a results-based framework ensuring effectiveness, accountability and transparency. This framework is supported by high quality financial reporting and management information. The comprehensive financial statements prepared under the International Public Sector Accounting Standards (IPSAS) are a key enabler to allow the Agency to deliver its mandate in an efficient manner. Analysis of Financial Statements 5. The financial statements of the Agency have been prepared on the accrual basis in accordance with IPSAS. The budget, as well as the budgetary information contained in the financial statements, continues to be prepared on a modified cash basis. The Agency’s functional currency is the euro. 6. During 2019, the Agency continued to focus on the effective implementation of programmatic activities and the efficiency of the process supporting such implementation. Within this context, the following are some of the highlights of the 2019 financial year in perspective: (i) The Regular Budget Fund (RBF) experienced a utilization rate of 100% during 2019. The increase in revenue from assessed contributions of €6.4 million (1.8%) is in line with the increase in the approved budget. GC(64)/4 Page 2 (ii) The decrease in revenue from voluntary contributions is mainly due to a decrease of €11.6 million in revenue of the Extrabudgetary Programme Fund and the Technical Cooperation Extrabudgetary Fund. This decrease was partly offset by an increase in revenue for the Technical Cooperation Fund and extrabudgetary contributions for the Low Enriched Uranium (LEU) Bank totalling €5.7 million. (iii) The decrease in transfers to development counterparts of €9.6 million is primarily the result of the timing of the programmatic delivery of the Technical Cooperation Programme. (iv) Net gains of €6.7 million, primarily pertaining to the revaluation of cash, cash equivalents and investments, were driven by the appreciation of the US dollar throughout 2019. The majority of these gains were unrealized as the Agency’s risk management strategy aims to hold its funds in the currencies of the expected disbursements. (v) The value of cash, cash equivalents and investments decreased by €36.8 million. The decrease was mainly experienced in the LEU Bank (€50.9 million) and the Regular Budget Fund Group (€22.2 million). These decreases more than offset the increase of €36.5 million experienced in the other funds. (vi) The total outstanding contributions receivable for assessed and voluntary contributions increased by €10.3 million; this was mainly driven by an increase in outstanding assessed contributions receivable relating to the current year. (vii) Continued investments in tangible assets contributed to an increase in the net book value of Property, Plant and Equipment by €9.4 million (3.3%). This increase is primarily related to the Renovation of the Nuclear Applications Laboratories (ReNuAL) project. On the other hand, there was a net decrease of €5.4 million (8.2%) in the value of intangible assets, as the amortization expense more than offsets the additions during the year. (viii) An overall increase in the Agency’s liabilities in 2019 was primarily the result of the increase in obligations related to long-term employee benefits liabilities, in particular After Service Health Insurance (ASHI). The ASHI liability increased by €84.4 million (38.0%) during 2019, which is mainly the result of the changes in actuarial financial assumptions, particularly the decrease in the long-term discount rate. (ix) The total net assets position experienced a decrease of €62.9 million (10.8%) driven by the increase in total liabilities of €102.2 million which more than offsets the increase in total assets. It should be noted that the net assets of the Regular Budget Fund remain with a negative balance which amount to €87.6 million as of end of 2019. GC(64)/4 Page 3 Financial Performance 7. A summary of the Financial Performance by Fund for 2019 is shown in Table 1 below. Table 1: Summary of Financial Performance by Fund for the year ended 31 December 2019 (expressed in millions of euro) Technical Regular Budget Cooperation Extrabudgetary Other Trust Funds RBF and & TC- LEU Special Inter-fund Total WCF MCIF TCF EB EBF Bank Funds Elimination IAEA Total Revenue from all sources a/ 379.25 6.25 82.8 11.9 103.1 5.15 - (7.7) 580.7 Total Expenses (408.15) (1.65) (78.4) (10.4) (78.50) (1.15) (0.1) 7.7 (570.6) Net gains/(losses) b/ 0.4 (0.1) 0.6 0.6 1.9 3.3 - - 6.7 Net surplus/(deficit) for the year (28.5) 4.5 5.0 2.1 26.5 7.3 (0.1) - 16.8 a/ Total Revenue includes assessed, voluntary and other contributions; revenue from exchange transactions and interest revenue b/ Includes realized and unrealized foreign exchange gains/(losses) and gains/(losses) on sale or disposal of property, plant and equipment Revenue analysis 8.