INSTITUTE FOR TRAINING AND RESEARCH

FINANCIAL llEPORT AND AICCOUNTS for the year ended 31 December 1974 and I REPORT OF TH1~ BOARD OF AUDITORS

GENERAIL ASSEMBLY

OFFICIAL RECORDS: THIRTIETH SESSION __ SUPPLEMENT No. 70 (A/10007/Add.4) ------_._---_._------~------~--=

UNITED NATIONS

( 22 p. ) UNITED NATIONS INSTITUTE FOR TRAINING AND RESEARCH

FINANCIAL REPORT AND ACCOUNTS for the year ended 31 December 1974 ~'-' and

REPORT OF THE BOARD OF AUDITORS :;.-

GENERAL ASSEMBLY

Or-FiCIAL RECORDS: THIRTIETH SESSION

SUPPLEMENT No. 7D (A/10007/Add.4)

UNITED NATIONS

New York, 1975 NOTE Symbols of United Nations docun. ,'ts are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document. {Original: English/

CONTENTS

Chapter

Letters of transmittal iv

I. Financial report for the year ended 31 December 1974 . 1

11. Audit opinion 3

Ill. Accounts for the year ended 31 December 1974 5

Statement I Combined statement of assets, liabilities and Fund balance as at 31 December 1974 6 Statement 11 Statement of income and expenditure - General Fund for the year ended 31 December 1974 •••.•.•.• 7 Statement III Statement of income and expenditure - Special-purpose Grants Fund for the year ended 31 December 1974 ••• 8 Schedule 1 Status of contributions unpaid as at 31 December 1974 •••••••• 9 Schedule 2 Obligations incurred for the year ended 31 December 1974 •.••.•••••• 10 Schedule 3 Special-purpose grants - Status as at 31 December 1974 11

IV. Report of the Board of Auditors 12

-iii-

• iT- WII- C T- T 7-· :lish7 LETl'ERS OF TRANSMITTAL -

26 March 1975

Sir, iv Pursuant to financial regulation 11.4, I have the honour to submit the 1 annual accounts of the United Nations Institute for Training and Research as at 31 December 1974, which I hereby approve. 3 Copies of these financial statements are also being transmitted to the 5 Advisory Committee on Administrative and Budgetary Questions.

Accept, Sir, the assurances ef my highest consideration. 6

7 (Signed) Davidson NICOL Executive Director Under-Secretary-General 8

9 The Chairman of the Board of Auditors New York 10

11

12

-iv- 25 June 1975

Sir, 75 I have the hono~~ to transmit to you the financial statements of the United Nations Institute for Training and Research for the year ended 31 December 1974 which were submitted by the Executive Director of the Institute. These statements have been examined and certified by the Board of the Auditors. h

In add.ition to the above 3 I have the honour to present the report of the Board with respect to the accounts of the United Nations Institute for the Training and Research for the year ended 31 December 1974.

Accept, Sir, the assurances of my highest consideration.

(Signed) Abdul HAMID Auditor-General of Pakistan and Chairman of the United Nations Board of Auditors

The President of the General Assembly of the United Nations New York

-v- 1. FINANCIAL REPORT FOR THE YEAR ENDED 31 DECEJ.l1BER 1974

1. The Executive Director has the honour to submit herewith the financial report of the United Nations Institute for Tr~ining and Research for the year ended 31 December 1974, together with the audited accounts for the year ended 31 Dcember 1974 comprising three statements supported by three schedules. The report is presented in accordance with suoparagraph 3 (i) of article IV of the statute of the Institute, enacted in November 1965 11 and amended in March 1967 5.! and June 1973. 11 -

2. Statement I shows that the combined assets for the General Fund and the Special-purpose Grants Fund amounted to $2,647,031 at 31 December 1974 and included, inter alia, $469,242 in contributions receivable from Governments and $465,000 in capital assets donated to the Institute. No pledges for future years were made. It will be seen that the Institute's assets exceeded its liabilities in the General Fund and the Special-purpose Grants Fund at year-end by $1,289,613 and $596,008 respectively. These unencumbered balances are carried forward to the 1975 financial year and exclude $465,000, the donated capital assets.

3. The total income available to the Gem,ral Fund during 1974 amounted to $2,754,438 of which $920,315, represents Fund balance 1 January 1974 of $975,946 less collaceral on leasehold $55,631 and $1,834,123 relates to 1974 (see statement 11). As show~ in statement 11 and in schedule 2, obligations were incurred in 1974 in the amount of $1,520,456; these compare with $1,312,085 in the preceding year.

4. Scheaule 1 provides a breakdown of governmental contributions pledged and paid. It shows that, during 1974, 35 Governments paid a total of $1,370,956 against their current and prior years' pledges, leaving $469,242 unpaid. Included in this amount of pledged contributions receivable from Governments are various unpaid pledges totalling $53,432, which are considered doubtful. The recommendation of the Board of Auditors regarding doubtful pledges receivable from some Governments was studied and submitted to the Board of Trustees, which directed that, if further efforts made by the Executive Direetor to collect these pledges proved fruitless, they should be presented for 1vrite-off action in 1975 in accordance with financial rule 110.14. During 1974 the Executive Director made further efforts to collect contributions pledged from previous years. The correspondence with -Governments is continuing and it is expected that during 1975 a clearer position will emerge and such action for wTite-off as may be necessary will be taken.

11 Official Records of the Economic and Social .:ouncil, FortY-first Session, Annexes, agenda item 28, document E/4200, annex 1. ' 2/ Officials Records of the General Assembly, ~wenty-second Session, Annexes, agenda item 45, document A/6875, annex Ill. 1/ Ibid., Twenty-eighth Session, Supplement No. 14 (A/9014), chap. 1, para. 6·

-1- ,

5. The presentation for 1974 differs from that of 1973 in that the classification of expenditure in statement III (Special-purpose Grants) has been revised for the purpose of maintaining similarlity with the objects of expenditure in statement II (General Fund). In the case of schedule 2 the obligations incurred for the year ended 31 December 1974 have been presented under four main sections: A. Management; B. Programme activities; C. General expenses; and D. Geneva Office. The llstudiesll component previously shown under "Programme activities" is now, in the interest of clearer disclosure, reflected as three components; studies, training, and project support. "Project support" includes both direct and indirect items of expenditure relating to research, training and other activities carried out by the Institute. The expenses under "Geneva Office" include salary and allowances of staff who devote most of their time to research and training activities. It may also be pointed out that "Management" and IiGeneral expensesli relate both to programme activities financed from the General Fund and to those financed from special-r;·':iT0se Grants.

6. As shown in schedule 3, an amount of $847,499 became available in 1974 in respect of the programmes financed under Special-purpose Gra~ts, against which obligations were incurred in the amount of $251,491, thus leaving an unencumbered balance of $596,008 at year-end of which $515,709, a significant segment, being a non-convertible currency contribution from the VSSR.

~ction taken on observations and recommendations made by the Board of Auditors in its report to the General Assembly on the UNITAR Qccounts for the y'=.cr er,ded 31 December 1973

7. In its resolution 3227 E (XXIX) accepting the financial report and accounts of UNITAR for the year ended 31 December 1973 and the audit opinion of the Board of Auditors, the General Assembly requested the Executive Director to take such remedial action as might be required by the commen~s of the Board of Auditors.

8. The audit comments on the accounts for the year 1973 had included suggestions and recommendations for improving bUdgetary controls and the financial administration of the Institute. These suggestions and recommendations have been carefully studied and implemented by the Executive Director in 1974 ar~ this process will be continued during 1975 to the extent that is practicable within the limits of the Institute's funds and staff resources.

9. The Board of Auditors noted that no audit was conducted by the Internal Audit Service during 1973, and we are pleased to report that the Internal Audit Service undertook an audit of the records of the Institute and issued an audit report in November 1974 covering the period 1 January 1974 to 31 August 1974. Several recommendations were made and are being actively considered by the Management for possible implementation in the near future.

10. In complying with the requirement that the annual accounts be submitted not later than 31 March a sibned copy was sent to the Board, of Auditors on 21 March 1975.

11. The Office of Legal Affairs is pursuring the question of obtaining exemption from payment of the real property tax on the UNITAR land and building. We are informed that as the land is owned by private individuals and the tax is considered as part of the rent paid, the matter is one which presents considerable difficulty. Therefore, pending a final decision from tte City, the tax is being paid under protest. -2- J ..

11 . AUDIT OPINION

We have examined the following appended statement of status of funds, properly identified, and relevant schedules of the United Nations Institute for Training and Research for the year ended 31 December 1974. Our examination included a general review of the accounting procedures and such tests of the accounting records and other supporting evidence as we considered necessary in the circumstances. As a result of our examination, we are of the opinion that the financial statements properly reflect the recorded financial transactions for the year, which transactions were in accordance with the Financial Regulations and legislative authority, and present fairly the financial position as at 31 December 1974.

(Signed) Acdul HM-lID Auditor-General of Pakistan

(Si~ned) J. J. MACDONELL

Auditor-General of Canada ',I , :1 (Signed) J. E. ESCALLON O. Controller-General of Colombia

25 June 1975

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I :~·i ;i ." -j'·;'.·:.·······;.··· " ll,,:c. .• c.:..;.I Ill. ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 1974

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STATEMENTI Combined statement of assets, l:labilities and Fund balance as at 31 December 1974 (in United states dollars)

ASSETS LIABILITIES ANDFUNDBALANCE I. General Fund Current assets G~rrentliabilities Cash in banks and on hand 263 541 Accounts payable 169 333 Interest-bearing bank accounts 761711 Due to held-in-trust for Special­ purpose Grants Fund Special trust deposit - savings,account 8 615 32 253 Pledged contributions receivable from Governments (see schedule 1) 469 242 Unliquidated obligations 85270 Miscellaneous accounts receivable 6043 Accrued interest receivable 17 943 Total current assets 1 527095 Total current liabilities 286 856 Capi't:.u assets Investments in capital assets financed from donated funds 465 000 Leasehold and building 465 000 mI Due to United Nations General Fund 6 257 I other assets Fund Balance Collateral on leasehold 55 631 Balance 1 January 1974 975 946 Add: Excess of income over - expendi ture (statement II) 313 667 Balance 31 December 1974 1 289 613

Total assets 2 047726 Total liabilities and fund balance 2 047 726 II. Held-in-trust for Special-purpose Grants Fund Current assets Current liabilities Cash in banks and on hand 566 784 Unliquidated oblig&tions 3 297 Due from UNITARGeneral Fund 32 253 Fund Balance Accounts receivable 268 Balance 1 January 1974 606 833 Excess of expenditure over income 10 825 Balance 31 December 1974 (schedule 3) 596 008 Total current assets 599 305 Total liabilities and fund balance 599305 Ill. Grand total all funds 2 647031 Grand total all funds 2 647 031

CERTIFIED COBRECT(Signed) H. DEBATIN --- Assistant Secretary-General (Controller) Office of Financial Services

New York, 21 March 1975 STATE..f\1ENT 11

Statement of income and expenditure - General Fund for the year ended 31 December 1974 (in United States dollars)

Income

Government contributions for the current year 1 671 843 Interef3t income ?9 234 Rental income 14 250 Sale of publications 11 646 Refund of prior years' expenditures 10 048 Savings in liquidation of prior years' obligations 23 771 Miscellaneous income 3 331

Total income 1 834 123

a Less: EXPenditures /

Salaries 857 983 Ancillary allowances 213 573 Education grant 6 728 Income tax reimbursement 63 550 CIl QI () Home leave, appointment and separation travel 25 875 ~ QI Other travel 102 513 tr.l'" r-l Communications 22 249 .,.;as () ~ Premises 141 980 ~ External audit 14 001 .... 0 QI Printing and ancillary expenditures 33 832 () .r! ~ Miscellaneous 38 172 Total expenditures 1 520 456 r-IJ'\ ~ Excess of income over expenditures 313 667 -5 ! r-l t\I

,)4" a/ See schedule 2 for details of expenditures. !:l >t CERTIFIED CORRECT ~ (Signed) H. DEBATIN, Assistant Secretary-General (Controller) Office of Financial Services New York, 21 March 1975

-7- • i: J ~ ~ IT ;'! f STATEMENT III

!.,~ f Statement of income and expenditure - Special-purpose Grants Fund for the year ended 31 December ]974 I.~ (in United States dollars) 3 ,~j ~ Income ) Grants ,. ) Other income and adjustments 3 L Total income 240 666 L Less: ,,'}: 3 ~; :~xpenditures

~: Salaries 131 291

"t? .N Ancillary allowances 8 696

r: Travel 56 086

" , Total expenditures 251 491 .' , ~'! :p :~: ,\:\ ',10: Excess of expenditure over income 10 825 ;,,~ ~:; 0.-',,: .;, t ~:

"i ;:j r .'~ ~~ CERTIFIED CORRECT = :~1,;1 H. DEBATIN, Assistant Secretary-General (Controller) :~! (Signed) -:::1 Office of Financial Services 'i "i, .i ;1 New York, 21 March 1975 "1 .,"r t'l 'j

-8- TIlT SCHEDULE 1

Status of ~vntributions unpaid as at 31 Decem~er 1974 (in United States dollars) - P1edRed for current :vear and 'Prior vears Unpaid balance P1edll:ed in Received Balance due 1 January 1974 1974 Prior years Total in 1974 31 Dec. 1974

Algeria 5 000 - - 5 000 - 5 000 Argentina - 17 250 - 17 250 17 250 - Australia - 14 872 - 14 8'(2 14 872 - - 10 000 - 10 000 10 000 - Barbados - 250 - 250 250 - Belgium 60 452 64 450 - 124 902 124 902 - Canada - 61 856 - 61 856 61 856 - Chile - 6 000 - 6 000 6 000 - Derunark - - 25 000 25 000 25 000 - Dominican Republic 2 000 - - 2 000 - 2 000 Ecuador 19 422 - - 19 422 607 18 815 Egypt 3 901 - - 3 901 - 3 901 Finland - 42 614 - 42 614 - 42 614 Germany. Federal Republic of - 239 473 - 239 473 239 473 - Ghana - 116 348 - 46 348 46 348 - Greece - 2 500 - 2 500 2 500 - Guinea 15 000 - - 15 000 - 15 000 Guyana - 446 - 4116 446 - Hungary - 4 016 - 4 016 4 016 - Indonesia 2 000 2 500 500 5 000 5 000 - Iran - 10 000 - 10 000 10 000 - Iraq - 15 200 - 15 200 15 200 - Ireland - 9 320 - 9 320 9 320 - Italy - 199 971 - 199 971 152 603 117 368 Ivory Coast - 20 833 - 20 833 20 833 - Japan - 50 000 - 50 000 50 000 - Kenya - 2 000 - 2 000 2 000 - Liberia - 1 500 - 1 500 1 500 - Mali 8 000 - - 8 000 - 8 000 Malta 600 - 600 1 200 - 1 200 Mauritania 5 000 - - 5 000 - 5 000 Mauritius 187 (9) - 178 - 178 Nepal 1 000 - - 1 000 - 1 000 New Zealand - 1 299 5 956 7 255 7 255 - Norway - 55 840 - 55 840 55 840 - Pakistan - 4 000 - 4 000 4 000 - Sri Lanka - 991 - 991 - 991 Senegal 11 862 21 345 - 33 207 33 207 - Sudan 4 999 - - 4 999 - 4 999 Sweden - 68 729 - 68 729 68 729 - Switzerland - 15 271 39 473 54 744 - 54 744 Uganda 16 432 - - 16 432 - 16 432 Union of Soviet Sodalist RepUblics - 40 000 - 40 000 40 000 - United Arab Emirates - 15 000 - 15 000 15 000 - of Great Britain and Northern Ireland - 2 858 98 591 101 449 101 449 - United States of America - 400 000 - 400 000 200 000 200 000 Upper Vo1ta 12 000 - - 12 000 - 12 000 Uruguay 500 - - 500 500 - Venezuela - 20 000 - 20 000 20 000 - Yugoslavia - 5 000 - 5 000 5 000 - Zaire - 30 000 - 30 000 - 30 000 168 355 1 501 723 170 120 1 840 198 1 370 956 469 242

-9- •

SCHEDULE 2

Obligations incurred for the year ended 31 December 1974 (in United States dollars) e due • 1974 Obligations incurred

000 Approved Unliquidated budget Disbursements obligations Total

A. Management

Bo~rd of Trustees 40 000 32 973 1 563 34 536 000 Office of the 815 Executive Director 110 700 96 322 2 266 98 588 901 614 Total ~ Part A 150 700 129 295 3 829 133 124

000 B. Programme activities

Studies 520 000 446 540 35 775 482 315 Training 243 000 176 319 8 461 184 780 Project support 488 000 402 701 20 989 423 690 368 Total, Part B 1 251 000 1 025 560 65 225 1 090 785

000 C. General expenses 200 000 178 Maintenance~ operation 000 and improvement to premises 170 000 141 920 60 141 980 Furniture~ fixtures and 991 equipment 20 000 7 578 1 480 9 058 Communications 25 000 14 684 191 14 875 999 Miscellaneous supplies 744 and services 5 000 4 782 4 782 432 Hospitality 3 000 928 928 Fund-raising 5 000 1 236 1 319 2 555 External audit 14 000 6 118 7 883 14 001 ---- Total ~ Part C 242 000 177 246 la 933 188 179 000 000 D. Geneva Office 136 000 103 085 5 283 108 368

000 Grand total, Parts A to D 1 779 700 1 435 186 85 270 1 520 456 242

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SCHEDULE3 Special-purpose grants Status as at 31 December 1974 (in United States dollars)

Total funds available Obligations incurred Unencumbered Grants Other income Total Unencumbered balance received and available Unliquidated Total balance 31 December 1973 in 1974 adjustments for 1974 Expenditure obligations Expenditures 31 Dec. 1974

Volkswagen Foundation - Grant for research 26 061 - - 26 061 25 741 - 25 741 320 Institute for International Order e67 e67 I -- - - - e67 Beulah Edge and Roundtree Trust - research for peaceful settlements 254 -- 254 - - - 254 Beulah Edge and Roundtree Trust 33 963 50 000 937 84 900 65 617 991 66 608 I 18 292 Ford Foundation - Planning future research 1 - - 1 - - - 1 France - "Brain 280 280 I drain" project - - - - - 280 ~ I Fund for Peace Grant - Pell,ceful settlement 97 - 2 000 2 097 -- - 2 097 Argentina - Financial and legal ~Jpectsof international waterways 9 216 - - 9 216 - - - 9 216 Union of Soviet Socialist Republics - fund for training and research 477 469 128 535 - 606 004 89620 675 90 295 515 709 Kettering Grant - World Youth project 712 - - 712 - - - 712 Hungary - Fund for training and research 8 417 - 830 9 247 4 248 1 273 5 521 3 726 Sweden - Staff college project 3 967 - 22e6 6 253 -- - 6 253 Sweden - Regional seminars in procurement training 468 - 48 451 48 919 38 !175 350 38 825 10 094 Federal Republic of Germany - miscellaneous 20 127 - 1 210 21 337 I -- - 21 337 Rockefeller Foundation 24 934 5 667 750 31 351 I 24 493 8 24 501 6 850 - . ---- 606 833 184 202 56 464 847 499 2118 194 3 297 251 491 596 008 - 0 Cl) lr\ 0 Cl) 0 \D 'B- l!\ IV. REPORT OF THE BOARD OF AUDITORS

r-! 0 al 1. The Board of Auditors~ established under General Assembly resolution 74 (I)~ l!\ .::t required~ 6~ .::t r-! is in terms of paragraph article VIII of the Statute of the United C\I l!\ C\J Nations Institute for Training and Research, to audit the accounts of the funds a&ninistered by and for the Institute in accordance with article XII of the Financial ReRulations and Rules of the United Nations and the annex thereto entitled liAdditional terms of reference governing the audit of United Nations". <:0 I~ .'" Financial Statements submitted for .::t the year ended 31 December 1974 0'\ 0'\ .::t'" r-! .:.t I."\J I~ 2. The Executive Director of UNITAR submitted for audit the following three financial statements ~ together 1·lith three schedules: -- I

r-! 0'\ Statement I Combined statement of assets and liabilities and l!\ 0'\ Fund balances. '"r-! '" li Statement 11 Statement of income and expenditure - General Fund. Statement IH Statement of incoIle and expenditure - Special-purpose

0 .::t Grants Fund. l!\ t'- ~ \D l!\ Scope of audit

t- C\I \D I 0 3. The scope of audit of the Board of Auditors is enunciated in the'Financial \D C\J l!\ ci!i Regulations, which state the,t; r-! ilThe audit shall be conducted in conformity with generally accepted ccrJ:on auditing standards and~ subject to any special directions of the .::t General Assembly, in accordance with the additional terms of reference set ~ Cl)'" .::t out in the annex to the Regulations • C\I '8 \D "The Board of Auditors may make observations with respect to the efficiency of the financial procedures~ the accounting system~ the internal financial controls and, in general~ the udministration and management of the OrganizatiC'YJ..

liThe Board of Auditors shall be completely independent and solely il I': responsible for the conduct of the aUdit. 0 ori ~ 'l:l 4. Para.graph 1 of the annex to the Financial Regulations referred to above § 0 requires tha.t: fx< H Q) r-! r-! liThe Board of Auditors shall perform jointly and severally such audit of Q) 'H Q) the accounts of the United Nations, including all trust funds and special .>:: t> accounts~ as it deems necessary in order to satisfy itself: p:;0

-12- (a) That the financial sts.tements are in accord \.;rith the beoks and records of the Organization;

(b) That the financial transactions reflected in the statements have been in accordance with the Rules and Regulations, the budgetary provisions and other applicable dire·>tives;

In 74 (I), e United (c) That the securities and monies on deposit and on hand have been verified by certificate received direct fro~ the Organization's depositaries he funds or by actual count; the reto (d) That the internal controls, including the internal audit, are ations" • adequate in the light of the extent of reliance placed thereupon;

(e) That procedures satisfactory to the Board of Auditors have been applied to the recording of all assets, liabilities, surpluses and deficits. \,

5. The Board's examination was carried out in accordance with the above provisions and included a general review of the accounting procedures, systems of three internal financia~. controls and such tests of the accounting records and other supporting evidence as it considered necessary in the circumstances.

6. The Board's examina~ion of the accounts and financial statements was carried out at Ne,,! York.

Jose Audit comnents and recolliBendations

Revision of the accounts codes

7. vfuile a project budget has been formulated in lli~ITAR since 1973 as a Lnancial supplement to the main budget, the accounting system of lli~ITAR does not fully reflect the emphasis on projects. The accounting output does ~ot readily give the following information: ~epted f the (a) Expe'1diture incurred on a project during a month; =nce set (b) Progressive expenditure incurred on a project;

~he (c) Consolidated figures of expenditure incurred against each Special-purpose internal Grant. =nt of the 8. Items of expenditure such as salary a~d allowances, staff travel, income-tax reimbursement, education grant etc. are booked under various departments instead Lely of being charged to particular projects.

9. As and when the above information is needed, the data is picked up from various :tbove records and the information compiled and consolidated afresh by hand.

10. With a view to providing timely management information, a revised ccdification ~h audit of has been suggested for adoption in UNITAR. 3pecial 11. The Aruministration has \.;relcomed the suggestions and intends to introduce a new

-13- coding system in 1975 on an experimental basis so that a more practicable and viable system can be put into full operation from 1976. status of Special-purpose Grant entitled IISwe den - Regional Seminars in procurement training"

12. In schedule 3 the status of the Special-purpose Grant entitled I'Sweden ­ Regional Seminars in procurement training" is not reflected correctly. .An amount of Swiss Francs 80~000 ivas received on this account in Geneva on 20 March 1974 against which an expenditure of $11,660 was incurred in 1974. Both these amounts of receipt and expenditure have not yet been transferred to UNITAR accounts. Consequently~ the figures of income~ expenditure and balance in the financial statements have been understated to that extent.

13. Necessary adjustments are proposed to be made in the accounts of 1975.

Benefits to special fellows and research associates

14. Special fellows and research associates are employed in UNITAR under special arrangements ar,reed between the Secretary-General and the Executive Director. The terms and conditions applicable to them are to be set out precisely in the letters of their appointment. They are not entitled to any other allowances or benefits undel' Staff' Regulations.

15. Th~ee cases came to the notice of the Board in 1973 in which payments no~ covered by the terms of their appointment were made to special fellows and research associates. It was suggested in the Board's internal memorandum that such payments should not be made in future. Another instance came to notice during 1974 in which removal expenses of $1~000 not contemplated in the terms of appointment were paid to a fellow.

16. The Board reiterates that such payments should not be made in future, and whatever benefits are intended to be given to fellows/associates be specifically mentioned in the letters of their appointment.

Expenditur9 by functional activities

17, For several years attention has been focused on the relative proportions of the expenditures incurred by UlTITAR on administrative and project support and on its programme activities of research and training. The Administration has had a closer look at the basis O~ which expenditure was classified in these categories. It has been stated that in order to arrive at a more realistic appraisal the expenditures out of the Special-purpose Grants Fund shoulo. also be taken into account. In addition~ a portion of the expenditures booked in accounts under Administration should be apportioned to programme activity on the basis of a rough estimate of the time devoted by Administration personnel to programme activity and project support. The Board generally agrees with this in principle and recognizes that in an organization like UEITAR full-fledged costing techniques for identifying overheads is neither feasible nor necessary. It suggests~ however, that a consistent method te used to enable meaningful comparisons.

18. On the basis of clarifications provided by Administration the analysis by

-14- .e functional activities of the total expenditure incurred by UNITAR both from the General Fund and the Special-purpose Grants Flli1d would be as follows:

% Programme activities (including project support): 1,247,921 70.4 Other expenditure: 524,026 29.6 1.771.947 100

~9. The Board's objective in presenting analysis by functional activiti~s had been to ~mphasize the need for effecting economies in administrative expenditures so UNITAR's resources be utilized to the maximum for its main objectives. In response, the Administration has stated that administrative expenses had been reduced to the minimum consistent with effic~ency. If this be so, it needs to be explored whether the programme activity can be increased to be commensurate with the present administrative support capacity.

20. It is noted that during 1974, there was a saving of $259,244 (14.5 per cent of the revised budget estimates) under the General Fund and a saving of $80,009 (24.1 per cent) in the Special-purpose Grants Fund. A substantial share of these savings relates to programme activity. Had the resources provided for programme activity in the budget been fully utilized, the proportion of expenditure on programme activity would have improved further.

21. The Boa::d suggests that the position be kept under constant review and :h necessary measures taken to ensure maximum utilization of UNITAR's resources on programme activity.

Follow-up on recommendations made in earlier reports

22. Action has generally been tal;:en on the recommend.ations made in earlier reports. The following cases, however, deserve further attention:

Budgetary controls (para. 6 of oche audit report on the accounts of 1973)

23. It was recommended that allotment advices be issued sectionwise and formal orders of transfer of funds from one chapter/section to another be made before the incurring of expenditure in excess of budget provision.

24. It was observed that allotment advices continued to be issued chapterwise. Expenditure was also incurred under certain sections in excess of budget provision without issuing formal orders of transfer of funds.

25. The Administration has assured that the recommendations would be acted upon from 1975.

Ple~ed contributions receivable from Governments (paras. 13 to 15 of the audit report on the accounts of 1973)

26. The Board had on several occasions recommended that the degree to which the outstanding pledges receivable from some Governments were collectible should be clearly established and reflected in the books accordingly. -15- •

27. Out of $S2~983 reported as due for more than three years at the end of 1973~ an amount of [)12,969 'vas collected during the year. The Admipistration hopes that 'ITith continued efforts it would be possible to collec"t most of the pledges.

28. As of 31 December 197~, the amount due for more than three years 'Ivas $87,147. The Board sugrests that efforts to collect the outstanding contributions be accelerated and the position kept under review.

Real nroperty taxes on UNITAR building (paras. 19-20 of the audit report on the accounts of 1973)

29. The Board had recommended that the real property taxes be paid under protest and renewed efforts be made to obtain exemption from payment of these taxes.

30. The Administration has informed that the Office of Legal Affairs are not hopeful of ~etting an exemption from the payment of this tax as the land is olfDed by a private party and the tax is considered as part of the rent paid.

Acknmvledgement

31. The Board of Auditors records its appreciation for the co-operation and assistance extended by the Executive Director and his staff and the Secretariat of the United Nations.

(Signed) Abdul HA!\IID Auditor-General of Pakistan

(SigJ:2ed) J. J. liIACDOHELL Auditor-General of Canada

(Signed) J. E. ESCALLON 0, Controller-General of Colombia 25 Jtme 1975

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Litho in United Nations, New York Price: $U.S. 1.50 15881 - September 1975 - 2,750 (or equivalent in other currencies)