8/28/081 CAAP BASICS and CRITICAL ISSUES GENERAL SECRETARIAT OF THE OAS.

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CAAP BASICS and CRITICAL ISSUES

GENERAL SECRETARIAT OF THE OAS

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CAAP Basics Who’s Who What does CAAP do? Basic Documents Budget Structure

2009 – 2010 Challenges: 2009 Program-Budget Proposal 2010 and Beyond

Critical Issues: CAAP Agenda for 2008

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Who’s Who

Permanent Council Article 91 of the Charter of the OAS grants it responsibility for administrative oversight of the GS/OAS.

Acts as the Preparatory Committee of the General Assembly.

CAAP

Established pursuant to Article 19 of the Rules of the Permanent Council.

Reviews administrative and budgetary matters referred to it by the PC and/or the General Secretariat.

Reports to the PC on its findings.

Serves as a Subcommittee of the Preparatory Committee.

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Who’s Who (cont.)

General Secretariat

Secretariat for Administration and Finance (SAF): Technical Secretariat to the CAAP.

Secretariat to the GA, Meeting of Consultation, the Permanent Council and Subsidiary Organs: Committee Secretary.

Department of Legal Affairs and Services: Legal advisor to CAAP.

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What does CAAP do?

Examines, discusses, evaluates and makes recommendations to the Permanent Council on administrative and budgetary matters referred to it by the PC and/or General Secretariat (GS/OAS).

Reviews periodic financial and administrative management reports submitted by the GS/OAS.

Follows-up on the implementation of mandates and administrative measures required by the PC or the GA.

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Basic Documents

Legal Framework, Mandates:

Charter of the OAS.

“General Standards” to Govern the Operations of the GS/OAS.

Budget resolutions AG/RES. 2353 (2008 budget) and AG/RES. 2437

(2009 budget guidelines), other resolutions from previous years.

Additional Key Documents:

Proposed Program-Budget of the Organization for 2009 (March 2008).

Quarterly Resource Management Reports, Financial Statements, and other CAAP documents issued in 2007/08.

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Annual OAS Management Cycle:Annual Audit, RF Program-Budget and Quarterly Reports aligned to CAAP’s Agenda

Jun 30

Mar 31 1st Quarterly Report

2nd Quarterly Report

Sep 303rd Quarterly Report

Dec 31 | Jan 1

ORGANIZATION OF AMERICAN STATES GENERAL SECRETARIAT

REPORT TO THE PERMANENT COUNCIL

ANNUAL AUDIT OF ACCOUNTS AND FINANCIAL STATEMENTS

For the years ended December 31, 2006 and 2005

2006

By the Board of External Auditors ADM

Publication of Annual Audit of Accounts

Phase 2SAF inputs budgetInformation

Phase 1Program-Budget formulation and planning

Phase 6Publication and distribution of the Budget by no later than 60 days after approval

Phase 5(Jun 1 – Jun 6)Approval of Program-Budget by the GA

Phase 4Discussion and review by CAAP and recommendation to the Preparatory Committee 15 days prior to GA

Phase 3Budget analysis, preparation and presentation 90 days prior to GA

Publication ofRF Program-

Budget

Year-round financial

planning and performance assessment

Preliminary Audit of Accounts(SEP to OCT)

Audit of Accounts(JAN to APR)

Report from the Board of External

Auditors(end of APR)

Legend

Annual Audit

RF Program-Budget

Quarterly Reports

ORGANIZATION OF AMERICAN STATES GENERAL SECRETARIAT (GS/OAS) 1889 F Street, N.W., Washington, D.C. 20006, USA (202) 458-3000 / www.oas.org

EOSAF/101-07 Original: English

October 30, 2007

OAS QUARTERLY RESOURCE

MANAGEMENT REPORT SEPTEMBER 30, 2007

An overview of the financial position of the General Secretariat for the 3rd quarter (July—September) of 2007,

and a status report on other management activities

October 2007

Secretariat for Administration and Finance (SAF)



October 30, 2007





October 2007




October 30, 2007





October 2007


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Chapter / Program Corresponds to a major organizational unit or program

within the overall framework of the General Secretariat.

Subprogram Corresponds to a specialization within the scope of

activities defined for a program. Project

Constitutes the basic unit for budget planning and is the level of greatest detail in the program budget.

PROGRAM-BUDGET STRUCTURE

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Chapters / Programs1. – Secretary General

2. – Assistant Secretary General

3. – Autonomous and/or Decentralized Entities

4. – Secretariat for Legal Affairs

5. – Secretariat for Multidimensional Security

6. – Secretariat for Political Affairs

7. – Executive Secretariat for Integral Development

8. – Secretariat for External Relations

9. – Secretariat for Administration and Finance

10. - Basic Infrastructure and Common Services

PROGRAM-BUDGETSTRUCTURE (cont.)

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Objects of Expense

1. – Approved posts, temporary and overtime

2. – Non recurring personnel expenses

3. – Fellowships

4. – Travel

5. – Documents

6. – Equipment and Supplies

7. – Buildings and Maintenance

8. – Performance Contracts

9. – Other Costs

PROGRAM-BUDGETSTRUCTURE (cont.)

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Types of Funds Regular Fund

Operating Subfund Reserve Subfund

Voluntary Fund (FEMCIDI) Specific Funds, e.g.

OAS DEMOC Spain Canada Mexico

Trust Funds, e.g. Retirement and Pension Medical Benefits Leo Rowe

Revolving Funds (Internal accounts) e.g. Administrative and Service Funds Treasury Fund

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Regular Fund

Funded by the obligatory quota payments of the Member States to finance the operations of the General Secretariat.

Operating Subfund

Records all income, obligations and expenditures of the approved Regular Fund budget.

Reserve SubfundRecords year-end balance of operating activity. Designed to meet the expenditures of the General Secretariat pending receipt of quota and other income.

Types of Funds (cont.)

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Voluntary Fund (FEMCIDI) Funded by voluntary contributions (pledges) of the Member States

to finance the activities of the Inter-American Council for Integral Development.

Specific FundsFunded by donor contributions designated for specific activities or projects according to an agreement between the donor of funds and the General Secretariat.

Trust FundsFunds established by a donor to fund purposes and activities specified by the donor in the trust instrument and must be used for the benefit of those activities or persons specified in the trust agreement.


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Revolving Funds

Established to account for internal operations originating from the execution of approved activities.

Administrative Service FundsCreated to record transactions for services such as parking, long distance telephone, rental maintenance, ICR, tax reimbursement.

Treasury FundAll the cash available for use in carrying out the activities of the various funds of the OAS, except those funds that the Permanent Council specified should be deposited in a separated bank account. Available cash is consolidated in the Treasury Fund for more efficient and effective cash management of those financial resources


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Critical Issues: CAAP Agenda for Aug-Dec 2008

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2009 Proposed Program-Budget2009 Indicative Figures

$ % $ %

Personnel 55,833.5 63.81% 58,022.5 64.38%

Non Personnel 31,666.5 36.19% 32,102.5 35.62%

Total 87,500.0 100.00% 90,125.0 100.00%

Notes:

a) 2008 Program-Budget approved by AG/RES. 2353 (XXXVI I O/07)

b) Assumes a global increase of 3.0% over the 2008 approved Program-Budget

Approved 2008 a) Proposed 2009 b)

2009 Program-Budget - Regular FundBudget Ceiling - I ndicative Figures

(in thousands of US$)

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2009 Budget: Ceiling and Financing2008 approved and proposed 2009

(Figures in thounsands) 2008 2009

Approved Proposed

Sources of Financing

Quota Assessments 76,107.0$ 78,593.0$ c)

Indirect Cost Recovery (ICR) 2,500.0 2,500.0

Administrative and Technical Support (FEMCIDI) 780.4 780.4

Other Income (rent, interest and miscellaneous) 1,419.6 1,500.0 a) b)

80,807.0$ 83,373.4$

To be financed through overquotas, prompt payment

credit waiver and/or Reserve Subfund 6,693.0 a) b) 6,751.6

87,500.0$ 90,125.0$

a) Overquota = $1,340.9M.

c) Quota assessment per quota scale in AG/ RES. 1 (XXXIV-E/ 07) plus a 3.0% increase in quota base of $76,107.0M.

a) Reserve Subfund = $5,352.1M.

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2009 Proposed Program-BudgetAssumptions

■ Adherence to the SG’s commitment, stated on June 5, 2006 in Santo Domingo, to present throughout his administration a proposal that protects the purchasing power of the budget but maintains a zero real growth rate.

■ The 2009 Budget ceiling is being proposed at $90.1 million, only 3% over the

2008 Approved Budget ceiling.

■ Object 1 (personnel) has been set to $58.0 million, equivalent to 64.38%, pursuant to AG/RES. 2353 (XXXVII – O/07).

■ Compared to the 2008 Approved Budget, this represents an increase of $2.2 million resulting principally from statutory increases (post adjustment, health insurance).

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2009 Proposed Program-BudgetAssumptions (cont.)

■ Objects 2-9 (non-personnel) have been adjusted to $32.1 million.

■ Compared to the 2008 Approved Budget, the non-personnel budget proposal represents an increase of $436.0 thousand to accommodate inflationary increases (e.g., electricity, fuel, travel).

■ Statutory increases to personnel costs are based on the following:

● A 4% increase for professional staff and 3% for General Services staff in 2009. These estimates are based on the trend of the increases granted by the UN in recent years.

■ Increases to objects 2-9 costs have been capped in the 2009 proposed program-budget at 1.3%.

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Summary of Decisions To-date and Next Steps

ACTIONS TAKEN MARCH – JUNE 2008:■ CAAP reviewed the 2009 Program-Budget Proposal and drafted the 2009 Budget

Resolution. No changes were made to the proposed itemized budget figures.

■ Medellín GA approved the “Guidelines for the 2009 Program-Budget” AG/RES. 2437 (XXXVIII-O/08).

AUGUST- SEPTEMBER 2008

■ CAAP recommends budget expenditure ceiling and financing sources.

■ CAAP presents report to the Permanent Council/PrepCom by mid September.

■ PrepCom convenes the XXXVI Special Session of the General Assembly by no later than 9/30/08.

■ By September 30, Special GA approves 2009 budget and its financing.

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2010 and beyond

Pursuant to resolution AG/RES. 2437 (XXXVIII-O/08), the Permanent Council is required to convene a special session by Dec. 15, “to consider the recommendations of the Board of External Auditors … in regards to the need for a periodic adjustment of quota income to the Organization’s expenditure level”, as well as to “convoke prior to 31 January 2009, a Special Session of the General Assembly to adopt, as appropriate, those decisions that may be required.”

In this context:

The SG is committed to maintaining budget growth target of 3% annually. Inflationary pressures and a weak US $ are likely to test the limits of targeted growth

rate:● US inflation at 5.6% for the 12-month period ending July 2008.● US dollar posting losses against major currencies.● Statutory increases to salaries and inflation have been eroding the purchasing power of the

budget.

Improved quota collections have reduced the arrears of prior periods which have contributed to finance the budgets up to 2009. Starting in 2010, the gap of $8.0 million needs to be closed by a one-time quota increase, a one time program reduction or a combination of both.CP20924E

8/28/081 CAAP BASICS and CRITICAL ISSUES GENERAL SECRETARIAT OF THE OAS.

Documents

program budget

programbudget structure

programbudget formulation

proposed programbudget

programbudget proposal

budget planning

budget analysis

budget guidelines