FAO Conference resolutions

Resolution

27/77

Establishment of a special reserve

account

The Conference

Recalling

its Resolutions 6/73 and 35/75,

Conscious

of the need to ensure that adequate cash resources are available to the Organization to finance the Programmes of Work approved by the

Conference

for 1978-79 and subsequent biennia,

Recognizing

that unbudgeted extra costs due to adverse currency fluctuations and unbudgeted inflationary trends may have a serious impact on the Organization's Programme of Work and Budget,

Having considered

the recommendations of the

Council

at its Seventy-First Session on measures to ensure the financing of such unbudgeted extra costs as may have to be met,

Decides

to establish a Special Reserve Account as of

31 December 1977

to assist in protecting the Organization's Programmes of Work against the effects of unbudgeted extra costs that may arise in the 1978-79 biennium or in any subsequent biennia,

Authorizes

the

Director-General

to use the funds in the Special Reserve Account:

(a)

whenever the Working Capital Fund is insufficient to finance budgetary expenditure pending receipt of contributions from Member Nations to the budget; such advances to be reimbursed from subsequent receipts of contributions as soon as possible;

(b)

to finance unbudgeted extra costs due to movements of currency exchange rates;

(c)

subject to prior review by the

Finance Committee

and approval by the

Council

, to finance unbudgeted extra costs of approved programmes due to unforeseen inflationary trends, to the extent that such costs cannot be met through budgetary savings, up to an amount equivalent to 2 percent of the total effective working budget of the relevant biennium;

Directs

the

Director-General

, notwithstanding the provisions of Financial Regulation 6.1(b), to transfer, as of 31 December 1977, a sum of $5 million from the Suspense Account established under Resolution 35/75 to the Special Reserve Account;

Further

directs

the Director-General to credit in 1978-79 and in subsequent biennia any savings on staff costs arising from favourable differences between the lira exchange rate used in calculating the budget and the effective UN rate to the Special Reserve Account, using an appropriate statistical formula for the purpose;

Decides

that any balance of funds remaining in the Special Reserve Account at the end of the 1978-79 biennium and of each biennium thereafter shall be carried forward into the Special Reserve Account for the respective subsequent biennium, up to an amount equivalent to 2.5 percent of the total effective working budget for the respective subsequent biennium;

Requests

the

Director-General

, in the event of the balance at the end of 1978-79 or any subsequent biennium not attaining the aforesaid level of 2.5 percent of the total effective working budget for 1980-81 or for any subsequent biennium, to submit proposals to the

Conference

, through the

Finance Committee

and

Council

, concerning the ways and means of bringing the Special Reserve Account up to the level of 2.5 percent of the total effective working budget for the subsequent biennium;

Further

decides

that any balance at the end of 1978-79 or any subsequent biennium in excess of the amounts referred to in paragraph 5 above shall not be used for any purpose other than provided for in this resolution and shall be returned to the General Fund and allocated in accordance with Financial Regulation 6.1(b).

Adopted

30 November 1977

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