VII. ADMINISTRATIVE AND FINANCIAL MATTERS

Programme and Budgetary Adjustments Including Transfers in the 1972–73 Biennium ¹

210. The Council noted that the Programme and Finance Committees in their joint report, and in their individual reports, had agreed to the Programme and Budgetary Adjustments, including Transfers in the 1972–73 biennium, proposed by the Director-General. The Council approved the proposals of the Director-General.

211. These adjustments included the transfer of Fellowships activities from Personnel Division to Area Service Division, Development Department, and the consolidation of the Programme Formulation Unit and the Budget Branch into the Office of Programme and Budget (Office of the Director-General), while the remaining portions of the Office of Controller were to become the new Financial Services Division.

212. The Council concurred with the action taken by the Finance Committee in approving the establishment of a Senior Reviser post for the Chinese language in the Translation Service, Publications Division.

¹ CL 60/3, paras 18–19 and 141–148.

Financial Matters

- Status of Contributions and Contributions in Arrears

213. The status of contributions as of 13 June 1973 was as follows:

214. Contributions in arrears at 13 June 1973 were as follows:

* Total Assessment

^a Member Nations in arrears with payments due under Conference Resolutions 33/65 (Bolivia), 25/71 (Haiti) and 26/71 (Paraguay) respectively.

^b Member Nations whose arrears exceed contributions due for two preceding calendar years and thus in danger of losing their voting rights at the Seventeenth Session of the Conference in accordance with Article III.4 of the Constitution.

215. The Council noted with concern that amounts payable by Bolivia, Haiti and Paraguay in accordance with Conference Resolutions 33/65, 25/71 and 26/71 respectively, were overdue. These resolutions provided that contributions then outstanding would be settled by annual instalments while current contributions would be paid in the year of assessment. The amounts presently overdue from Bolivia, Haiti and Paraguay were $34,426, $20,893 and $23,182 respectively.

216. The Council further noted with concern that the arrears due from Chad, Dominican Republic and Yemen Arab Republic equalled or exceeded the contributions due for the two preceding calendar years and thus these countries were in danger of losing their voting rights at the forthcoming Session of the Conference in accordance with Article III.4 of the Constitution. The amounts overdue from Bolivia also exceeded its assessments for the two preceding years.

217. The Council urged the Member Nations referred to above to regularize their positions at the earliest possible moment and certainly before the coming Conference Session.

218. The Council noted that subsequent to the last Session of the Finance Committee, sufficient amounts were received from El Salvador and Uruguay to ensure their Conference voting rights.

219. While the percentage of current assessments collected at 31 May 1973 compared favourably with that at 31 May 1972 and 31 May 1971, the Council noted the considerable slow down in the rate at which contributions were received in 1973 as against 1971, the comparable year of the preceding biennium. Moreover during the first six months of the current biennium there was not sufficient income to meet expenditures as well as current funding needs (i.e. minimum balance held in Bank accounts etc.). In January and March of 1972, expenditures had actually exceeded income on a cumulative basis. In this respect, the Council noted that the next report on the financial position of the Organization would include information on the utilization of the Working Capital Fund, and, in particular, information on the Organization's monthly income and expenditure pattern.

220. In view of the foregoing and because of the financial uncertainties facing the Organization, the Council appealed to all Member Nations to arrange for the prompt payment of amounts presently outstanding as well as early settlement of assessments in the coming biennium.

Status of 1972–73 Expenditure

221. The Council noted that as at 30 April 1973 the cash expenditure and unliquidated obligations recorded in the books of the Organization in respect of the 1972–73 biennium totalled $70,567,000 against the 1972–73 budget of $81,660,000 (as reduced by $4,338,000 in accordance with paragraph 2 of Conference Resolution 5/71 - Removal of Administrative and Operational Servicing Costs of UN Development Programme - Small Scale Projects).

Unbudgeted Extra Costs - Current Situation ¹

222. The Council noted that the Director-General's estimates of unbudgeted additional costs for 1972–73 calculated at the rate of 582 Lire to the US Dollar were still considered to be of the magnitude of approximately $6.5 million.

223. The Council was informed by the Director-General that he was confident that the economy measures initiated in 1972 and continued in 1973 would provide sufficient funds to meet these extra costs, without having recourse to the Working Capital Fund, unless the Lira-Dollar rate were to be well below the current level for the balance of the 1972–73 biennium.

224. The Council was also informed that the Finance Committee would review the position again at its Thirtieth Session.

¹ CL 60/3, paras 2 and 153–155.

Provision of Funds to Finance Budgetary Expenditure ¹

225. The Council recalled that at its Fifty-Ninth Session it had been unable to arrive at unanimous recommendations as to the manner in which the problem of financing unbudgeted costs should be dealt with, and that it had requested the Finance Committee to re-examine the problem relating to unbudgeted costs and to make recommendations to the Sixtieth Council Session, such recommendations to include one on the level of the Working Capital Fund which might need to be increased.

226. The Council noted that subsequently the Director-General had made the following proposals on the matter to the Finance Committee:

1. the creation of a Special Reserve Fund to finance extra costs due to currency instability with a target level of $4 million;

2. an increase in the level of the Working Capital Fund from $4.5 million to $6.5 million;

3. authority to borrow funds up to $2 million in case of need to meet cash requirements.

227. The Finance Committee had been unable to agree with these proposals for the following reasons:

1. the creation of a Special Reserve Fund conveyed a notion of permanency whereas the Organization was trying to cope with a problem which might be temporary in nature;

2. the Committee considered that the proposal to increase the level of the Working Capital Fund be reviewed at a later session on the basis of a further detailed study;

3. the Committee felt that the cash position could be improved substantially if Member Nations paid their contributions earlier, and it had reiterated its appeal to this effect. It also considered that substantial interest costs would ensue if funds had to be borrowed from commercial sources.

228. After full discussion of the problems involved, the Council supported the recommendation made by the Finance Committee with which the Director-General had concurred, viz. that a special Suspense Account be created for the period 1974–75 to be drawn upon as necessary to meet cash needs and unbudgeted extra costs arising from currency movements and from inflationary trends in the biennium, in order that serious inroads on the integrity of the 1974–75 programme could be avoided in the event such extra costs materialized. The special Suspense Account would be closed at the end of 1975.

229. The Suspense Account would be funded, up to a maximum of $4 million, from
(a) the 1970–71 cash surplus ($1 404 710);
(b) any cash surplus that might arise in 1972–73;
(c) 1974–75 Miscellaneous Income.

¹ CL 60/3 paras 12 and 156–165, CL 60/INF/9 paras 3–5 and CL 60/PV/16.

230. Funds in the Suspense Account would be available in 1974–75 to permit the Director-General:

1. to advance monies to the General Fund whenever the Working Capital Fund would be insufficient to finance budgetary expenditure pending receipt of contributions to the budget; such borrowings to be reimbursed from subsequent receipts of contributions from Member Nations as soon as feasible;

2. subject to prior Finance Committee review and Council approval, to finance unbudgeted extra costs due to movements of currency exchange rates; funds so used not being reimbursed to the Suspense Account;

3. subject to prior Finance Committee review and Council approval, to finance, up to a total of $2 million, such unbudgeted extra costs due to inflationary trends, as could not be met through budgetary savings; funds so used not being reimbursed to the Suspense Account.

231. The Council stressed that these arrangements would apply only for 1974–75 and should not bias the outcome of any future examination should a more permanent solution to the problems appear necessary at the end of 1974–75.

232. With respect to unbudgeted extra costs in future biennia, the Council considered that the problems involved were not unique to FAO and that consequently a common approach of the United Nations and its Specialized Agencies was desirable to solve the problems from a longer term point of view. In this connexion it understood that the Advisory Committee on Administrative and Budgetary Questions (ACABQ) of the United Nations would report on the matter to the Fifth Committee of the UN General Assembly, based upon a study that it was making on the subject. It considered that this study, together with any other study that might be undertaken on an interagency basis, should be borne in mind should recommendations aimed at a more permanent solution to the problems prove necessary. Further in this connexion, a number of proposals were put forward by various members for further consideration by the Finance Committee and the Council. These included:

1. the alternative of supplementary estimates, which it was recognized would require an adequate Working Capital Fund;

2. procedures whereby the obligations of Member Nations with regard to contributions to the budget of FAO would be assumed in terms of their national currencies as from the first day of the biennium; ¹

3. the concept of “semi-full” budgeting plus supplementary estimates.

233. The Council noted that the level of the Working Capital Fund would be reviewed in the Finance Committee at a later session, and assumed that the review would be based on criteria of demonstrated and/or anticipated liquidity problems.

234. The Council then recommended the following draft resolution for adoption by the Conference:

DRAFT RESOLUTION FOR ADOPTION BY THE CONFERENCE

Authority to Transfer Certain Amounts to a Suspense Account

THE CONFERENCE

Aware of the serious impact on the Organization's Programme of Work and Budget for 1972–73 of unbudgeted extra costs due mainly to movements of currency exchange rates and to inflationary trends;

Having considered the recommendations of the Council at its Sixtieth Session as regards measures to ensure the financing of such unbudgeted extra costs as may have to be met during the 1974–75 biennium as a result of continuing pressures in these areas;

Conscious of the need to ensure that adequate cash resources are available to the Organization to finance the Programme of Work approved by the Conference for 1974–75;

¹ See also paras 241–243 below.

1. Authorizes the Director-General to transfer funds not to exceed $4 million to a suspense account for the purpose of meeting in 1974–75 such unbudgeted extra costs and cash needs, as follows:

1. Notwithstanding the provisions of Financial Regulation 6.1(b), the cash surplus of the 1970–71 biennium withheld in accordance with Conference Resolution 24/71, and any cash surplus which may materialize in the 1972–73 biennium, shall be transferred, as necessary, to such suspense account; and

2. Notwithstanding the provisions of Financial Regulation 5.2(a), Miscellaneous Income of the 1974–75 biennium shall be transferred, as necessary, to such suspense account; amounts not so tranferred shall remain in the Miscellanous Income Account.

2. Further authorizes the Director-General to use the funds in the suspense account

1. Whenever the Working Capital Fund is insufficient to finance budgetary expenditure, to advance monies to the General Fund to finance such expenditure pending receipt of contributions from Member Nations to the budget; such advances to be reimbursed from subsequent receipts of contributions as soon as feasible; and

2. Subject to prior Finance Committee review and Council approval:

   1. to finance unbudgeted extra costs due to movements of currency exchange rates, and

   2. to finance unbudgeted extra costs due to unforeseen inflationary trends to the extent that such costs cannot be met through budgetary savings, up to a total amount of $2 million;

funds so used under (a) and (b) shall not be reimbursed to the suspense account;

3. Decides that at the end of 1975 the suspense account shall be closed and the unused portion of this account transferred to cash surplus.

Scale of Contributions, 1974–75 ¹

235. The Council noted the contents of the document which had been submitted to the Twenty-Ninth Session of the Finance Committee (April 1973), and which summarized the provisions of the Basic Texts and Conference decisions regarding the establishment of the FAO Scale of Contributions in past biennia.

236. The document also contained the texts of three resolutions adopted by the UN General Assembly relating to the UN Scale of Assessments for 1974 and onwards, and which are set out in Appendix J to this Report.

237. The Council was informed that the World Health Organization had decided to follow the principles laid down in these UN General Assembly Resolutions regarding the maximum and minimum rates of assessment.

238. The Council further noted the Report of the Twenty-Ninth Session of the Finance Committee ² in which the Committee concluded that, since there were too many unknowns at that time, it should defer making any recommendations on the Scale of Contributions to be adopted by the Conference for 1974–75 until its Thirtieth Session. By that time further information might be available, including the Report of the UN Committee on Contributions which was meeting in May/June to consider the UN Scale of Assessments for 1974–76.

¹ CL 60/8 and CL 60/PV/16.
² CL 60/3, para. 186.

239. Some members suggested that the FAO Scale of Contributions for the 1974–75 biennium should be based on the 1973 UN Scale, in order to comply with the provisions of Conference Resolution 42/55. One of these members indicated that if the FAO Scale for 1974–75 were not based on the 1973 UN Scale, his Government might experience difficulty in obtaining budgetary approval of the funds necessary to fulfill its financial obligations to the Organization. This member further requested that an FAO Scale of Contributions, based on the 1973 UN Scale of Assessments, be presented for information purposes to the Sixty-First Session of the Council. He also suggested that consideration be given to introducing rules which would avoid sudden drastic changes in the rate of assessment of individual members.

240. In this connection, it was noted that whilst FAO had in general adhered to Resolution 42/55 adopted by the Eighth Session of the Conference, exceptions had occurred in 1955, 1957 and 1961, when the Conference decided that the FAO Scale for the ensuing biennia (1956–57, 1958–59 and 1962–63) would be based on the UN Scale of Assessments for the calendar years subsequent to that of the Conference Session. The Council was informed that these exceptions took place due to substantial changes in the membership of the United Nations.

241. It was observed that the series of monetary crises which had taken place in recent years had caused a heavy burden in the financial positions of the developing countries, and it was suggested that this factor be taken into account in the Scale of Contributions. The Council was informed, however, that exchange rates and prices were already taken into consideration by the UN Committee on Contributions when establishing the UN Scale.

242. It was proposed that the Finance Committee at its next Session review the desirability of the establishment within FAO itself of a Committee on Contributions, in order to analyse the UN Scale of Assessments and to effect adjustments thereto, bearing in mind the situation of the developing countries and the special role FAO had to play with regard to them.

243. There was a consensus, however, that the FAO Scale should, as in the past, be based on the UN Scale of Assessments, as was the case with the other Organizations in the United Nations system.

244. The Council requested the Finance Committee to review in depth the basis for the FAO Scale of Contributions for 1974–75 in the light of the forthcoming Report of the UN Committee on Contributions and the above comments of the Council, and to report thereon to the next Council Session.

Special Report on Travel ¹

245. The Council at its Fifty-Ninth Session had urged the Director-General to raise the question of first-class travel for senior staff members with the appropriate organs of the UN System.

246. The Finance Committee, at its Twenty-Ninth Session, had considered the question of travel standards and had come to the conclusion that savings could be made by the Organization should travel of all officers below the level of Deputy Director-General be in economy class. It considered that these arrangements would not be too burdensome on the staff, whilst permitting the transfer of funds so saved to higher-priority programme activities.

247. The Council was informed that the Consultative Committee on Administrative Questions (CCAQ) had the question of travel standards of senior staff (ADGs and D-2s) under consideration, and the Director-General strongly believed that the Organization should not compromise in its adherence to the UN Common System but should contribute actively to maintaining uniformity in its practices in line with the system. He therefore believed that any action should await the results of a study of governmental travel standards by ICAO, which had just been completed and presented to the Common System Agencies for study and recommendations to the UN General Assembly.

¹ CL/60/3, paras 234–240 and CL 60/INF/9 paras 22–25.

248. The Council considered the views expressed and generally agreed that the UN Common System should be supported in principle. It agreed that the question should be further considered by the Finance Committee and the Director General when the UN General Assembly had made a decision. However, in view of the financial difficulties of the Organization and the economies which could be made, as evidenced by the decision of the Council to restrict travel of its members and members of the Programme and Finance Committees to economy class, the Council urged the Director-General to make an appeal to senior staff voluntarily to limit their travel to economy class standards when efficiency would not be impaired. It noted that travel in Europe and the Mediterranean area was already so limited.

249. The Council noted that the UN General Assembly had decided that the costs of home leave travel by sea should be limited, as of 1 January 1974, to the air economy class fare, and that the Finance Committee at its Twenty-Ninth Session, had recommended that the Director-General should adopt this restriction not later than 1 September 1973. The Council decided that, in the interest of adhering to the UN Common System, the restrictions limiting the cost of home leave travel by sea to air economy fare should be applied as from 1 January 1974.

Applications for Membership by Albania, Bangladesh and the United Arab Emirates ¹

250. The Council was informed that Albania, Bangladesh and the United Arab Emirates had applied for membership in the Organization, and noted that as the assessment rate for Albania and the United Arab Emirates in the United Nations was 0.04 percent the same minimum rate would apply in FAO for 1973.

251. The Council further noted that contributions for the last quarter of 1973 for Albania and the United Arab Emirates would thus be $4 000 each, in accordance with established principles and practice. The advance due by each of them to the Working Capital Fund would amount to $1 800.

252. The Council was informed that a theoretical assessment rate for Bangladesh had not yet been established by the UN Committee on Contributions.

Resumption of Membership by China ²

253. With regard to the resumption of membership by China as from 1 April 1973, the Council recalled that the Sixteenth Session of the Conference had, by Resolution 33/71 (paragraph 2), authorized the Director-General

“To take all necessary measures concerning financial questions, taking into account any action that may be taken by the United Nations in this respect and after consultation with the competent Organs of FAO”.

254. The Council noted that a figure of $1 487 250 had been agreed upon as the contribution due from the People's Republic of China for the three calendar quarters commencing 1 April 1973. This contribution would on receipt accrue to Miscellaneous Income. The advance to be paid by the People's Republic of China to the Working Capital Fund was $225 000.

255. The Council also noted that at the effective date of its withdrawal from the Organization, 21 July 1952, China had outstanding financial obligations relating to the years 1948 to 1952 totalling $1 220 430. In accordance with Regulation 6.6(b) of the Financial Regulations, its credit in the Working Capital Fund at 1 January 1953, $143 232.42, was used towards liquidation of the amounts due, thus reducing the balance outstanding to $1 077 197.58. This balance remained unpaid.

¹ CL 60/3, paras 187–189.
² CL 60/3, paras 190–194 and CL 60/PV/16.

256. The Council further noted that the UN General Assembly had in December 1972 dealt with the the question of unpaid assessed contributions for China to that Organization.

257. The Council concurred with the Director-General's proposal, which the Finance Committee had also endorsed, that in the circumstances it would be appropriate for FAO to take similar action. Accordingly, the Council recommended the following draft resoluciton for adoption by the Conference, but stressed that the proposed decision should not be considered as establishing a precedent:

DRAFT RESOLUTION FOR THE CONFERENCE

China

THE CONFERENCE

Noting with satisfaction that in accordance with Conference Resolution 33/71 of 25 November 1971, China had resumed its place in the Organization with effect from 1 April 1973;

Recalling that the accounts of the Organization record unpaid assessed contributions for China in respect of the years 1948 to 1952 in the amount of US$1 077 197.58;

Recalling further that Resolution 33/71 did not deal expressly with the question of these unpaid contributions but authorized the Director-General

“to take all necessary measures concerning financial questions, taking into account any action that may be taken by the United Nations in this respect and after consultation with the competent organs of FAO”;

Noting that, by Resolution 3049c (XXVII) of 19 December 1972, the General Assembly of the United Nations has decided not to retain as unpaid assessed contributions for China any amounts due for the period preceding the restoration to the People's Republic of China of its rights in the United Nations;

Considering that the unpaid assessed contributions for China for the years 1948 to 1952 recorded in the accounts of FAO relate to a period prior to the resumption by China of its place in the Organization;

1. Decides that the unpaid assessed contributions for China relating to the years 1948 to 1952 in the amount of US$1 077 197.58 shall henceforth no longer be retained as arrears of contributions due by China to the Organization,

2. Decides that this amount shall be offset against the corresponding sum in the Reserved Surplus Account.

Appointment of External Auditor ¹

258. The Council agreed to re-appoint the Comptroller and Auditor-General of Great Britain for a further period of two years commencing with the accounts for the year 1974, and accordingly adopted the following resolution;

Resolution 3/60

Appointment of the External Auditor

THE COUNCIL

Noting that the Finance Committee recommends the re-appointment of the Comptroller and Auditor-General of Great Britain as External Auditor of the Organization;

¹ CL 60/3, paras. 262–263.

Recognizing the effective services of the External Auditor;

Decides to re-appoint the Comptroller and Auditor-General of Great Britain as External Auditor of the Organization for a further period of two years commencing with the audit of accounts for the year 1974.

Annual Report of Budgetary Performance¹

259. The Council noted the Finance Committee's comments on the report by the Director-General on the annual budgetary performance for 1972.

Personnel Matters²

260. The Council noted that most of the matters presented under this heading were related to conditions of employment of staff and felt that FAO, which applied a Common System along with the United Nations and the other U.N. Specialized Agencies, should encourage adherence to these provisions. While agreeing that adherence to the Common System should be encouraged, the Council underlined the need to give adequate consideration to the possible implications for the various Specialized Agencies when decisions affecting the Common System were contemplated. The Council also noted that where the Finance Committee had recommended actions different from those adopted by other Agencies which follow the Common System, it had done so in response to the Council's request to seek savings where they could reasonably be made without substantial effects on the programme.

Report of the Special Committee for the Review of the UN Salary System (Committee of Eleven) ³

261. The Council, at its Fifty-Ninth Session, had noted the recommendation of the Special Committee for the Review of the UN Salary System (Committee of Eleven) for the establishment of an independent International Civil Service Commission. Whilst recognizing in principle the need for such a body, the Council had, at that stage, deferred discussions until action has been taken by the UN General Assembly.

262. The Council heard an oral report by the Rapporteur of the Committee of Eleven. It further noted that the Twenty-Seventh Session of the UN General Assembly (December 1972) had decided in principle to establish as of 1 January 1974, an International Civil Service Commission.

263. The General Assembly Resolution called upon the Secretary-General together with ACC to submit, through ACABQ, to its Twenty-Eighth Session detailed proposals for the International Civil Service Commission “together with the draft Statute covering its terms of reference, procedures including conditions and periods of service for the Commission, methods of consultation with representatives of the Administration and staff and other necessary administrative, budgetary and financial provisions.”

264. The Council was advised that in the interim, ACC had prepared an initial draft Statute but that this draft required further consideration by ACC at its July 1973 Session following the review of the subject by ICSAB during its May 1973 session.

265. The Council agreed that the matter should be further reviewed at the Thirtieth Session of the Finance Committee.

General Service Salary Scales⁴

266. The Council reviewed the report and recommendations of the Finance Committee on General Service salaries, prepared in response to the concern expressed by the Fifty-Ninth Council Session over the rising costs of General Service (GS) salaries, and noted the marked increase in overlapping of GS Salary scales with those of Professional staff.

¹ CL 60/3, paras 149–152 and Appendix III.
² CL 60/PV/16.
³ CL 60/3 para. 230.
⁴ CL 60/3 paras 200–218, CL 60/INF/9 paras 13–16 and CL 60/PV/16.

267. The Council recalled that in 1964, it had decided that a new salary schedule should be put into effect from 1 January 1965 based upon a wage survey. This new schedule represented a 27 percent increase in GS salaries. At the same time, it had decided that between surveys, which were in theory to be conducted at four-year intervals, salaries would be adjusted by 5 percent whenever the weighted average of Italian salary increases for commerce or industry had moved by 5 percent.

268. The Council noted that the application of this index since 1 January 1965 had resulted, by December 1972, in eleven 5 percent adjustments representing a net increase of 84 percent to the GS scale. It further was informed that in the first five months of 1973, there had been two additional 5 percent increases.

269. The Council was advised that as a result of a number of inherent flaws in the system of adjusting GS salary scales between surveys, the situation had developed wherein the present FAO GS scale appeared to be inflated and out of line with the “best prevailing conditions of employment” for comparable work in the local market. It was also advised that the increases to the GS salary scale ¹ were considerably greater than those that had applied for the same period to Professional scales, as a result of which the considerable overlapping between the scales had arisen.

270. Although the Council recommended that as soon as possible the International Civil Service Commission should review the whole question of the Guiding Principles and their application and should be made responsible for determining GS salary scales, it recognized that the International Civil Service Commission might not be in a position to deal with these matters for some considerable time.

271. In the light of these considerations and of the need for immediate action, and in view of the fact that the 1964 survey represented the only existing basis for determination of GS salary schedules, the Council concluded that it was essential that a new survey be conducted as soon as possible.

272. For this purpose, it was agreed that the Director-General, in consultation with the Chairman of the Council and the Chairman of the Finance Committee, should appoint an Ad Hoc Panel of three persons with experience in personnel and wage examination questions, who would:

1. conduct the interpretation and application in Rome of the Guiding Principles for the determination of GS Salaries as laid down by the Administrative Committee on Coordination (ACC) and promulgated in the FAO manual;

2. control and direct the conduct of a survey into Rome salary conditions;

3. select an institute or firm with experience in the collection and processing of salary data which would work under the direction of the Panel in the conduct of the survey.

273. The Council agreed that the Panel would operate within the framework of the Guiding Principles, and that the Panel would submit its report to the Director-General who thereafter would submit the report and his recommendations, including a revised salary schedule for GS staff and recommendations on the manner in which GS salaries would be adjusted between surveys, to the Finance Committee and the Council.

274. The Council stressed the urgency of completion of the survey with the least possible delay. The Council was informed that results might not be available for some 3–6 months after the appointment of the panel. The Director-General was asked to take special measures to ensure that the panel was appointed and commenced its work as soon as possible. The Council decided that some action must be taken in the interim period to prevent further possible inflation of the GS scale. It considered the respective merits of the proposal of the Finance Committee and the solution suggested by the Director-General, and the majority of representatives expressed themselves in favour of the formula prepared by the Finance Committee. Accordingly, the present system of 5 percent increases whenever the Italian salary index moved by 5 percent would, with effect from 1 July 1973, be at the rate of 3 percent at all grade levels until such time as the results of the survey were known.

¹ See para 268 above.

275. The Council further decided that measures should be taken to allow the repayment to the staff of all or part of the difference between the 5 percent and 3 percent should the survey indicate that, on the basis of prevailing local salary rates, such repayment was justified.

276. The Council agreed that administrative and accounting details for withholding of the difference and for possible repayment would be developed by the Director-General and submitted to the next Finance Committee session for approval.

277. Some members requested that, in future consideration of the problem concerning the overlap between Professional and GS salary scales, the Director-General should ensure that the negative effects on lower paid GS staff be minimised.

Appointment of Replacement of Member Government Representative to the Staff Pension Committee ¹

278. Under authority delegated to it by the Conference at the Eighth Session, the Council appointed Kamla Prasad, Counsellor (Agriculture), Embassy of the Republic of India, Rome, as member of the Staff Pension Committee representing the Conference, to replace M.I.K. Khalil for the unexpired term, i.e. to 31 December 1973.

279. The Council expressed its appreciation of the services M.I.K. Khalil had rendered (as alternate and member of the Committee) from 1967 until his recent transfer away from Rome.

Redeployment of Personnel²

280. The Director-General, as requested by the Fifty-Ninth Council Session, had provided full details on the effects of measures taken as a result of the Organization's financial difficulties in the field of redeployment of personnel in particular with respect to the readjustment of priorities and grade structure.

281. The Council noted a decline in the number of staff in the lower grade levels, especially in the P-1 category, and a simultaneous increase in the number of senior posts particularly in the D-1 and D-2 levels. The Council further noted that the Director-General felt that the need for the increase in numbers of staff at the higher grades, commensurate with their qualifications and responsibilities, had become more evident at the present time when there had to be a certain amount of restructuring to accommodate shifts in priorities together with a reduction in over-all establishment. The Council shared the concern of the Finance Committee for the increase in the numbers of senior posts, but welcomed the Director-General's assurance that he would continue to keep in mind the need for a balanced grade structure.

282. With regard to the use of consultants, the Council endorsed the recommendation of the Programme Committee.³

283. Arising from this discussion, the Council considered that the Finance Committee should, at a future session, review criteria presented by the Director-General for determining posts considered suitable for fixed-term appointments and permanent appointments.

284. While the Council agreed that the present time might not be appropriate for such a review because of the organizational changes under consideration, and the uncertainty relating to sources of extra-budgetary funds, the view was also expressed that these very reasons made it important for the Director-General to establish the criteria as had been requested by the Council at its Fifty-Sixth and Fifty-Ninth Sessions. The Council requested the Finance Committee and the Director-General to establish a time schedule for preparation of a study of criteria which might apply to the determination of posts which might be suitable for permanent and fixed-term appointments.

¹ CL 60/24.
² CL 60/3 paras 219–222, CL 60/INF/9 paras 17–18 and CL 60/PV/16.
³ CL 60/3 para. 39.

Home Leave Entitlements¹

285. The Council considered the report of the Twenty-Ninth Session of the Finance Committee suggesting that savings might be effected by not granting a home leave entitlement in the case of non-renewable three-year fixed-term appointments.

286. The Council agreed that the proper organ for consideration of a proposal of this nature would be the International Civil Service Commission, and requested the Director-General to bring to the attention of that body, once established, the need for a thorough study of home leave entitlements.

287. The Council also noted that arising out of the Finance Committee's report on home leave entitlements there was a request for the Director-General to furnish a comparison of all aspects of the conditions of employment of fixed-term and permanent appointments. It requested the Director-General to proceed with this study ² which would be also useful in considering the criteria for fixed-term and permanent appointments to be examined at a future Council Session.

Changes in Salary Scales and Allowances (Education Grant)³

288. The Council noted that the Twenty-Seventh Session of the UN General Assembly had approved an increase in the education grant maximum from $1 000 to $1 500 per school year (but in any case not more than 75 percent of admissible costs) and an increase in the flat sum payable for boarding costs, where not billed by the school, from $500 to $650 within the new maximum. It also noted that the UN and all the major UN Specialized Agencies were applying the new maxima from the beginning of the 1972–73 school year.

289. The Council approved the application of the new maxima by FAO with the same effective date as the United Nations. The Council was informed that the total estimated expenditure in FAO for education grant claims, including the additional costs resulting from the application of the new maxima to the 1972–73 scholastic year, would be, $1 515 000 under the Regular Programme and $545 000 under extra-budgetary funds for the 1972–73 biennium, and $1 750 000 under the Regular Programme and $ 635 000 under extra-budgetary funds for the 1974–75 biennium.⁴

Management/Staff Relations: Staff Council Elections ⁵

290. On the basis of a document submitted by the Director-General (which included statements by representatives of the three staff constituencies), the Council examined the problems of representation on the Staff Council, which had led to the postponement of the Staff Council elections in January 1973. The Council was informed that, while Staff Regulation 301.0811 approved by the Council ⁶ provided for “equitable representation” of all staff, no arrangements had been made in the past for the participation of the field staff in elections and for any form of their representation on the Staff Council. The Council further noted from the Director-General's report that, due to differences of opinion between the various groups of staff representatives, all efforts to remedy this situation and to provide for field staff representation, in accordance with the wishes expressed by the Fifty-Sixth Council Session (June 1971) ⁷, had been fruitless.

¹ CL 60/3 paras 227–229 and CL 60/INF/9 para. 21.
² See paras 283–284 above.
³ CL 60/3 paras 195–199 and CL 60/INF/9 paras 6–12.
⁴ See para. 129(d) above.
⁵ CL 60/LIM/4, CL 60/LIM/4-Corr.1; CL 60/3, para 223, CL 60/INF/9, para. 19 and CL 60/PV/16.
⁶ Report of the Sixteenth Session of the Council, pages 77 and 78 and Document CL 16/38.
⁷ CL 56/REP, para. 167.

291. The Council expressed concern about the fact that the prolonged disagreement regarding the composition of the Staff Council had seriously affected management/staff relations and it considered that it was essential to find a solution to this problem without further delay.

292. The Council welcomed the initiative taken by the Director-General in submitting a formula with respect to the composition of the Staff Council and the conduct of the 1973 elections. The Council fully endorsed the Director-General's view that all qualified staff should be enabled to participate in future Staff Council elections and that in particular the field staff should no longer be deprived of this right and should be given representation on the Staff Council.

293. The Council noted that, under the formula presented by the Director-General, three of the twenty-one Staff Council seats would be allotted to representatives of the field and Regional Office staff, elected from among Headquarters staff of any category having served for at least three years away from Headquarters. It was noted that the remaining eighteen seats would be distributed among the existing categories in accordance with their numerical strength at Headquarters, and that in the future all eligible staff would vote for candidates in all categories, so that all representatives would receive their mandate from the staff as a whole.

294. The Council noted that the proposed distribution of seats did not entirely correspond with the numbers of staff in the three categories. It therefore decided that the three seats allotted to representatives of non-Headquarters staff be filled by candidates from the professional category to which the overwhelming majority of the field staff belonged.

295. The Council agreed that the formula presented by the Director-General, subject to the above proviso, was equitable in the sense of the Staff Regulations and, in the present circumstances, the most practicable solution. It therefore endorsed the formula as amended and the proposal to hold elections at the earliest possible date in order to restore harmonious cooperation between all groups of staff, and to provide the basis for a strong and effective Staff Council, which was essential for fruitful management/staff relations.

Associate Expert Scheme ¹

296. The Council noted that the Twenty-Ninth Session of the Finance Committee had recommended that the $15 000 requested for consultant funds for the Associate Expert Scheme in 1974–75 should not be met within the 1974–75 Regular Budget but rather from any surplus of income over expenditure. It also noted that in 1972 the surplus was $20 582. The Council was informed that FAO expected to have about 400 associate experts in 1974.

297. The Council was informed that the Finance Committee intended to re-examine the position of Associate Experts at Headquarters at its Spring 1974 Session.

¹ CL 60/3 paras 224–226, CL 60/INF/9 para 20 and CL 60/PV/16.