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Eng Fmc Durban2019 B ENG UCLG Congress Durban 2019 · 11-15 November Financial Management Committee Tuesday 12 November 16:00-17:00 #UCLGCongress FINANCIAL MANAGEMENT COMMITTEE DURBAN, 12 NOVEMBER 2019 16:00 – 17:00 Item 1 For adoption DRAFT AGENDA 1. ADOPTION OF THE AGENDA 2. FINANCIAL MANAGEMENT COMMITTEE REPORT MONTEVIDEO, APRIL 2019 3. FINAL CLOSURE OF 2018 ACCOUNTS AND AUDIT REPORT 4. EXECUTION OF THE 2019 BUDGET AS OF 30 SEPTEMBER 5. INFORMATION ON MEMBERSHIP FEES 6. GRANT AGREEMENT WITH SIDA 7. DRAFT BUDGET FOR 2020 8. REQUESTS FROM MEMBERS AND SECTIONS 9. OTHER ISSUES FINANCIAL MANAGEMENT COMMITTEE DURBAN, 12 NOVEMBER 2019 16:00 – 17:00 Item 2 For approval FINANCIAL MANAGEMENT COMMITTEE REPORT, MONTEVIDEO, APRIL 2019 Summary and Recommendations The members of the United Cities and Local Governments Financial Management Committee met on 5th April 2019 in Montevideo on the occasion of the Executive Bureau. The meeting was chaired by Berry Vrbanovic, elected Treasurer of UCLG. This document sets out the main decisions taken under each agenda item. The Chair welcomed the participation of all members of the Financial Management Committee. The members of the Financial Management Committee were informed of the following issues: I. Adoption of the agenda The agenda was adopted as presented. II. Financial Management Committee report, Madrid – November 2018 The minutes of the Financial Management Committee (FMC) were approved by members. III. Provisional closure of the 2018 accounts 1 Members noted that the 2018 accounts presented to the FMC were provisional and might be subject to slight modifications once the final audit by professional auditors had been carried out. It was informed that the final accounts would be presented at the next FMC meeting. 2 The Chair highlighted that the diversity of fund sources guarantees good financial health and stability for the Organization but pointed out that the membership fee amounts collected should represent a higher portion of the budget. 3 The Committee celebrated the satisfactory implementation of the Operating Grant from the European Commission for the fourth year, amounting to €1,610,000. Though the attention of the Committee was brought to the facts that some benefitting sections are producing profits and/or did not spend the total budget allocated to the activities agreed, which could set that funding into jeopardy in the future. 1 4 The representatives of CEMR, UCLG-AFRICA and FEMP recalled that the Operating Grant is not to be taken for granted and that, in views of the possible future funding possibilities offered by the EC, the whole organization should keep on working to demonstrate that it can both absorb the funds received and report according to EU strict rules. 5 The Secretary General underlined that the implementation of the Operating Grant has been very positive as the funding has benefitted the different parts of the network (World Secretariat, Working Groups, Committees and Sections). This also implied for the World Secretariat an extra effort to gather all the technical and financial reports and be able to close accounts on time. She further indicated that the feedback received from the evaluators from the European Commission was very positive, mainly regarding our capacity to implement. She also indicated that effort should be put on the capacity of our Sections in upcoming grants in order to reach the goal of direct funding from the EC. IV. Execution of the budget at 29th February 2019 6 Members noted that the Operating Grant for 2019 had been formalized, amounting to €1,500,000, which will also benefit Sections and members, as in previous years even though it has to be noted that the requests received in the World Secretariat are steadily increasing. 7 Regarding the 6th UCLG Congress, the Committee congratulated host organisations for having already settled all their financial commitments in accordance with the terms of the agreement. 8 Members were provided with the updated amount of membership fees collected during the first 3 months of the year: €344,030 (28% of the forecasted amount for the whole year). 9 The Chair celebrated the fact that some programmes (such as Migration and Climate) had already entered into their second phases, as well as the increase of Pilot cities and Leader Cities committed in the Culture Committee, and the progression of the 5th edition of the GOLD report expected to be published this year. 10 The Secretary General also thanked the host organizations of the Congress for having honoured their financial commitments which is extremely helpful in terms of security and liquidity. She also highlighted that the amount of fees collected so far in 2019 was very positive compared with previous years. That good start of the year will be highly necessary in views of the great number of activities that this year will bring. V. Information on membership fees 11 Members were provided with an analysis on the evolution of membership fees collection over the period 2016-2017-2018 in terms of contributions by Regions, by Sections, by Membership Types. 12 The Secretary General thanked the Sections for the important effort made in collecting fees and acknowledged direct members in particular, as they are very important in terms of the World Secretariat’s liquidity during the first half of the year. 13 The Secretaries General of CEMR and ASPAC indicated their concerns as for the evolution in Sections due to the change of mindset of local leaders towards international organizations and their higher expectations. 14 The Secretary General highlighted that the decrease in contribution from Sections has been compensated by an increase in contribution from Direct members. She pointed out that a solution should be found, through a joint membership campaign, so that the whole network benefits from the potential members wishing to join the network. 15 Members were also provided with the lists, per Regional areas, of fees received by each single member over the years 2016 to 2019. 16 The Secretary General indicated that this effort of transparency responds to the request received by some Sections of getting a detailed overview of fees collected from all membership. She further stressed that, with the electoral and nomination process approaching, double-checking that all parties have the most updated information on fees paid is of utmost necessity. 17 The Secretary General of CEMR indicated that the sharing of this information is very much valued. The representative of FEMP further strengthened that transparency, autonomy and accountability of the organization is an important factor in order to attract local governments. VI. 6th UCLG Word Congress - Durban 18 The Chair informed members on the latest updates about the 6th UCLG Word Congress. 19 The Secretary General thanked the host organizations for having fulfilled all their financial commitment, and expressed her satisfaction in regards with the overall preparation of the Congress, and particularly in terms of content. She also reassured members on the fact that, as in previous Congresses, a sponsorship program will be implemented in order to assure the participation of the members from all parts of the world. VII. UCLG procedures and other administrative issues 20 The Chair presented the updates in terms of internal controls to ensure the utmost transparency in the economic/financial operations within UCLG, particularly emphasizing on two subjects: an updated version of the Handbook of Administrative and Financial procedures and the recommendations made by SIDA Auditors in relation to the grant under discussion. 21 The Secretary General highlighted the question of the legal relationship with Sections. As currently there is only an institutional and constitutional relation but no concrete agreement in which parties officially compromise themselves in respecting the same basic rules. 22 Due to the level of maturity of the organization reached, she also indicated that part of the UCLG Code of Conduct deals with integrity, transparency and anti-corruption, which is a very important issue to govern the whole network. 23 The Chair reiterates his satisfaction on the fact that these procedures have been brought forward since, as a global organization, the implementation of these policies are imperative in order to ensure that, in all parts of the world, UCLG can be seen as an organization with the highest standards and highest integrity. 3 VIII. Requests from members and sections 24 The Chair informed that UCLG has received specific requests from sections: 25 For the CEMR Request coming from 6 National Associations (namely Hungary, Romania, Ukraine, Slovenia, Albania, and Poland) to remove fees from certain yearly calls (between the period 2014-2018) as it is now known that these fees will never be cashed. From MERCOCIUDADES: The following members advised that they will stop contributing starting from 2019: Medellin (Colombia), Osasco (Brazil), Zarate (Argentina). From METROPOLIS: The following members advised that they will stop contributing starting 2019: Caracas, Estado de Zulia (Venezuela), Ile de France (France). The Section is also requesting to approve the transitory period for some members (at the moment 6) for the year 2019 following the introduction of the Section’s new scheme structure. The Committee took note and approved the requests presented. IX. Other questions 26 The Chair and Secretary General thanked the Honorary Auditor, Mr. Heikki Telakivi, for his invaluable support to all the Treasurers and Secretaries Generals over the years, as this FMC would be his last meeting in this position before retiring later on this year. 27 The Secretary General indicated that for the taking-over of the role, this position should involve more than one person. Taking into account the gender and geographic diversity, it was announced that Maria Julia Reyna (from the Province of Santa Fe –Argentina-) would be presented as one of them. 28 The Chair concluded the session by thanking all members for their presence.
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