D. Capital Expenditure
315. Conference Resolution 10/2003 established a Capital Expenditure Facility to integrate capital expenditure planning into FAO’s budgeting and financial framework and designated Chapter 8 of the PWB for the purposes of defining and authorising capital expenditures34. The revised PWB 2006-07 included resources totalling USD 13.6 million across several programme entities under Chapter 8 including:
- Corporate Administrative Applications
- Server Software and Client Access Licenses for HQ and ROs
- IT Support to Meetings
- Human Resources Management System Project (HRMS)
- Field Accounting System Replacement Project
- Electronic Document Management System35.
316. A further USD 1.7 million was subsequently transferred from other budgetary chapters in 2006-07 to cover excess expenditure under HRMS.
317. During 2006-07, the Organization successfully implemented many of the projects that had been foreseen under the Capital Expenditure Facility. Expenditures under Chapter 8 amounted to some USD 12.5 million, with USD 2.8 million transferred to the Capital Expenditure Account for use in a subsequent financial period36. Key projects are highlighted below.
318. In line with guidance from the Finance Committee, the HRMS project was the top priority under Chapter 8, accounting for more than two-thirds of the Capital Expenditure budget for the biennium. Implementation of the HRMS was a prerequisite for a large number of streamlining and efficiency savings initiatives, and activities in the biennium included: one-off post-implementation support, resolution of initial problems and some parallel processing with legacy systems, integration of HRMS with existing systems and introduction of the HR Management Model (HRMM) capitalising on the foundation laid by the HRMS to reform HR management. More detail is provided in the box.
319. In order to reduce the Organization’s exposure in terms of functionality, security and IT service continuity, investment was made in Server Software and Client Access Licenses for both headquarters and the regional offices. IT support to meetings allowed the Organization to find efficiency through increased video-conferencing, Web-casting and the digitisation of audio from meeting rooms, as well as the upgrade of simultaneous interpretation systems in the meeting rooms themselves. Recognising that the technology and business needs of the FAO representation offices have significantly evolved in recent times, the Field Accounting System upgrade sought to ensure that financial information was timely and accurate to facilitate decision-making. This complemented work undertaken within the Corporate Administrative Applications which targeted information and communications technology in the subregional offices in Africa and Central Asia in order that FAO’s technical, administrative and operational applications be accessible to these offices, as well as the planned replacement of obsolete servers that support administrative systems.
Capital Expenditures Highlight
In March 2007 the Organization implemented the Oracle-based Human Resources Management System (HRMS), a major capital project. The go-live of HRMS represented an important milestone in one of the largest information systems projects undertaken in the Organization – a project that had begun in May 2002 and was implemented nearly on schedule in 2007. During the entire period 2006-07, considerable effort was expended by the Organization on HRMS, both in the run-up to its implementation, and in further expanding its functionality.The HRMS functions implemented during 2006-07 cover all aspects of HR servicing and include all payroll related activities. HR servicing covered by the HRMS begins at engagement and extends through all changes in employment history to separation. FAO now has in operation one of the most up-to-date and extensive Enterprise Resource Planning (ERP) systems in the UN system, covering the full range of financial, procurement and human resources processes (cf. FC 118/18, paras. 4-5).
Deployment of the HRMS was scheduled based on a phased approach linked to location functional-specific requirements and transaction volumes. Deployment to departments in headquarters began in July 2007, and deployment to the regional offices began in October 2007. The number of end-users is in excess of 2,200 at headquarters and 1,060 in decentralized offices (cf. FC 118/18, para. 7).
As a result of the HRMS implementation, administrative processes have been streamlined as follows:
- HR service delivery has been rationalised so as to realise efficiency gains;
- a single point of contact for clients has been introduced; and
- resources have been shifted from low value-added transaction-processing functions to higher value-added advisory and policy functions.
The benefits of the implementation of HRMS were realised partly in 2007, but more fully in 2008 and the following years in line with the HRMS deployment plan.
The costs associated with the HRMS during the period 2002 through the go-live in March 2007 amounted to some USD 19.7 million, which was financed through a combination of FAO Regular Programme funds (USD 3.5 million), arrears funding (USD 8.9 million), and the Organization’s Capital Budget (USD 7.3 million) (cf. FC 118/18, paras. 12-15).