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12 October 1955 Limited Distribution RESTRICTED GENERAL AGREEMENT ON L/42 TARIFFS AND TRADE 12 October 1955 Limited Distribution FINANCING OF THE 1955 BUDGET Report by the Executive Secretary I . INTRODUCTION 1. In accordance with the resolution approved by the CONTRACTING PARTIES on 29 October 1954, the Executive Secretary has the honour to report "on the statue of budgetary expenditure including all commitments entered into to meet unforeseen and extraordinary expenses". This report contains information on budgetary expenditure up to 30 September 1955, on budgetary income received during the first nine months of 1955, on the status of accounts receivable (including contributions), as well as on administrative and financial arrangements made in 1955. II. AUDITED ACCOUNTS FOR 1954 2. The audited accounts for 1954: as well as the report of the Director of the United Nations Inspection Service on the Audit of the Accounits shall be circulated as soon as they are received from New York in document L/422/Add.1. In agreement with the auditor, the presentation of the accounts has been slightly modified this year. The accounts for 1954 include: (a) The accounts of the GATT i, Income and Expenditure Account for 1954 ii. Statement of Budgetary Expenditure for 1954 iii. Balance Sheet as at 31 December 1954 (b) Supporting Statemuents iv. Income and Expenditure Budget Account for 1954(showing a comparison between the budget estimates and the actual receipts and expenditure during the budget year) v. Statement of contributions as at 31 December 1954 (showing for each budget year since 1948 the contributions assessed, the collections and the arrears in contributions) vi, Receipts and Payments Account for the year 1954 showingg the actual receipts on account of the various financial years and the actual payments made on account of the 1954 budget year and on other items) (c) Acoouts of the I.S.B.F. vii. Income and Expenditure Account for 1954 viii. Balance Sheet as at 31 December 1954. L/422 Page 2 3. More dotailed statements showing tho appropriations and expenditure for each budgetary item, as well as other subsidiary accounts of the secretariat may be inspected by delegates at the Administrative Office of the secretariat. 4. The income received in 1954 on account of that financial year amounted to 102,63 per cent of the income budget. The arrears on current contributions at the end of the year accounted for a smaller percentage of the assessment than in 1953 (3.32 per cent as compared with 8.23 per cent in 1953). In the course of 1955, these arrears, which amounted to $11,350.90 have boon roduced to $3,000.--. The miscellaneous receipts were abnormally high, sinco they included the Japaneso contribution to the expenses of the CONTRACTING PARTIES, an income which had not been budgeted for when the estimates were approved. 5. Budgetary expenditure in 1954 increased by more than $63,000.-- as comparod with 1953.1 actual expenditure in 1954 represented 87.75 per cent of the budget estimates as compared with 67.63 per cent in 1953, The increase in expenditure required tho full use of tho appropriation for unforeseen expendi- ture. The increase in expenditure is due to a large part to the length of tho Ninth Session which involvod an expenditure of $45,711.09 as compared with $21,518.71 for the Eighth Session in 1953. Tho balance of the increase is accounted for by increased workload during the intorsessional period and expenditure resulting from the increase in tho permanent establishment. About $16,000 more were spont on Section IV "Salaries,' Wages and Official Travel"; and the rest, i.e. approximately $23,000 is accounted .or by Section V "Common Staff Costs". A large part of this increase is due to the new arrangements adopted by the CONTRACTING PARTIES for the building up of a Repatriation Grant Fund. The other major increase in this section results from increased liabilities on account of travel on home leave. 6. As a result of increased expenditure, the cash surplus has been sub- stantially lower than in preceding years. It amounted to $51,229.14 and was transferred to the Reserve in accordance with the decision of the CONTRACTING PARTIESS. 7. The audeitod Accounts for 1954 are submiettd to the CONAR&CTINPARTIESS for approval. III. EPDEDNITUEq FORTHE . EJRIOD 1 ANUARY Y ,3O EPKTMBER 1955 TABLE I -UDGETARRY EXPENDITU ; (.S., Dollnru ) Up to 30 September 1955 (a) Disbursements 266,728.72 (b) Unliquidatod obligations 25,021.54 (c) Total actual expenditure 291,750.26 A comparative Statement of expenditure in 1951> 1952, 1953 and 1954 is contained in document L/307. L/422 Page 3 8. During tho fïrst mine months of 1955, actual expenditure has been considerably higher than during the corresponding period in 1954 ($291,750.26 as compared with $179,103.73). It is estimated that total expenditure for 1955 will be more than 30 per cent above actual expenditure in 1954 and will amount to about $400,000, 9. When estimates of expendituro for 1955 were approved by the CONTRACTING PARTIES, it was contemplated that a major part of the increase budgeted for would be of a non-rocurrent nature. Even though the total actual expenditure this year will probably keep within tho total estimates approved at the last session: the actual exponditure on certain budget item will exceed the corresponding appropriations and, in a number of cases, tho increases result from causes which could hardly be regarded as of a non-recurrent nature. The main Items affected are the following: COMPARISION BETWEENAPPROPRIATIONS AND ESTIMATED ACTUAL EXPENDITUREFOR CERTAIN ITEMS (U.S. dollars) Appropriation Estimated actual Difference expenditure Part I: Section 1. Ninth Session of the CONTRACTING PARTIES (continuation) 30,000.- 49,629.-- + 19,629.- Section 2. Tenth Session 27,100.- 28,344.- + 1,244.- Part II: Soction 1. (ii) Temporary assistance (during intersessional periods) 7 000--- 22,754.- + 15,754.- Section 3. (V) .Partalservices3,000.- 4,066.- + 1066- (IX) Remeval to Le Bocage 500.- 1,187.- 687.- Section 4. Printing 10,000.- 11567.- + 1,567.- Some of this additional expenditure will be met by transfers from other items in the same section which the Executive Secretary is authorized to mako, but it will still be necessary to draw about $27,000 from the Provision for unforseen expendi- ture (Part III). 10. Increasod expenditure in connection with theNinth Session is, of course, of a non-recurrent nature, since it is due to tho prolongation of the Sossion and the decision taken by the CONTRACTING PARTIES to grant an exceptional bonus to the con- forence staff. As regards the Tenth Session, it has been necessary to revise the budget estimates in the light of tho experience gained at tho Ninth Session, and in particular in view of the fact that a number of international meetings will take place in Geneva at tho same time and that it will be necessary to recruit more L/422 Page 4 non-local staff than usual. As regarded the other major source of additional expenditure, i.e. temporary assistance during the intersessional period, this was due to the need for replacing, in all cases, the members of the staff who took ordinary or home leave, but also to a durable increase in the general workload of the secretariat during the intersessional period. The increased expenditure in postage and in printing is also due mainly to non-reccurent causes. The following figures may throw soma light on this point. Documents Reproduction and Distribution during the intersessional Period April/Sept. April/Sept. 1954 1955 Impressions (number of pages of documents rolled) 743,000 1,213,725 Distribution (number of copies of documents distributed) 54,622 104,800 Printing 1954 1955 Number of pages of text printed or offset 740 2,407 Total of pages printed or offset 983,600 2,723,600 Sheets of paper used 32,925 91,913 11. The trend of expenditure in 1955 shows that it is becoming increasingly difficult to forecast with any accuracy what expenditure the decision of the CONTRACTING PARTIESmay actually involve and to meet increased requirements on the basis of a strictly limited budget and with an insufficient number of permanent officials. While it may still have been possible this year to make up partly for the increases in expenditure on certain items by cancelling or postponing certain projects and in cutting down expenditure on other items, this would be far more difficult in the future. The experience gained this year shows that the secretariat could only be able to meet adequately the requirements of governments if the CONTRACTING PARTIESare prepared, either to organize their administration and finances on a more permanent basis, or to enable the Executive Secretary to keep a substantial cash reserve whioh would be at his disposal to meet, not only unforeseen expenditure, but also expenditure exceeding the original estimates. 12. As indicated in paragraph 9 above, it will be necessary to use up the original appropriation for unforeseen expenditure and to use part of the additlonal appropriation voted by the CONTRACTING PARTIES in March 1955, As savings were made on soms budget items, it i expected that total expenditure will remain within the original estimates, but, on the basis of present expectations, the financial year will end with practically no cash surplus. L/422 Page 5 IV. INCOME RECEIVED DURING THEPERIOD 1 JANUARY/30 SEPTEMBER1955 TABLE Il - BUDGETARY INCOME (U.S. Dollars) Income Budget Receipte up for 1955 to 30.9.55 % Contributions 1955 354,000--.1 324,000.- 91,53 Miscellaneous Income 4,600.-- 14,254.03 309.87 Transfer from the Cash Reserve 63,950.-- 63,950.- 100 422,550.-- 402,204.03 95.18 u=Z=31SmIu:SUUu- 13.
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