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Table of contents Director-General’s report ................................................................................................................... 2 Certification of the financial statements for the year ended 31 December 2013 ..................................18 Letter of transmittal...........................................................................................................................19 Opinion of the External Auditor ........................................................................................................20 Financial statements ..........................................................................................................................22 Statement I. Statement of Financial Position ............................................................................22 Statement II. Statement of Financial Performance ...................................................................23 Statement III. Statement of Changes in Net Assets/Equity .......................................................24 Statement IV. Statement of Cash Flow ....................................................................................25 Statement V. Statement of Comparison of Budget and Actual Amounts...................................26 Notes to the financial statements .......................................................................................................27 1. Basis of preparation and presentation ....................................................................................27 2. Significant accounting policies .............................................................................................28 3. Note on the transitional provision and restatement of balances ..............................................37 4. Supporting information to the Statement of Financial Position ..............................................39 5. Supporting information to the Statement of Financial Performance .......................................59 6. Supporting information to the Statement of Net Assets/Equity ..............................................63 7. Supporting information to the Statement of Comparison of Budget and Actual Amounts ......66 8. Segment reporting ................................................................................................................68 9. Amounts written-off and ex-gratia payments ........................................................................70 10. Related party and other senior management disclosures ........................................................70 11. Events after the reporting date ..............................................................................................70 12. Contingent liabilities, commitments and contingent assets ....................................................71 Schedule I. Statement of Financial Performance by major funds ........................................................72 Schedule II. General Fund expenses ..................................................................................................73 Schedule III. Programme budget utilization 2012‒2013 .....................................................................74 Schedule IV. Expenses by major office ‒ General Fund only .............................................................75
Information on voluntary contributions by fund and by contributor for the year ended 31 December 2013 is contained in the Annex to the Financial Report, which is available on the WHO internet at http://www.who.int/about/resources_planning/en/.
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DIRECTOR-GENERAL’S REPORT
INTRODUCTION 1. In accordance with Article 34 of the Constitution and Financial Regulation XIII of the World Health Organization, I have the honour to present the Financial Report for the year ended 31 December 2013. The financial statements, accounting policies and notes to the financial statements have been prepared in compliance with International Public Sector Accounting Standards (IPSAS) and WHO’s Financial Regulations and Financial Rules. The statutory components of the Financial Report have been audited by the Organization’s External Auditor, the Republic of the Philippines Commission on Audit, whose opinion is included in the Financial Report. 2. This is the second year in which the Organization’s financial statements have been prepared under the IPSAS basis of accounting. This approach continues to bring greater transparency, accountability and a higher standard of financial reporting. Although IPSAS requires reporting on an annual basis, WHO continues to have a biennial budget and therefore, in my report, I include both the annual and the biennial results. Furthermore, this is the first time that the WHO financial statements have included a separate account of the second year of the biennium. 3. Financial reporting is a critical element of governance and of sound management, the improvement of which are both important parts of the WHO reform process. Enhanced financial information supports governance, the management of assets and liabilities, and facilitates decisionmaking. The Financial Report now permits a better understanding of the Organization’s financial performance and health. 4. Highlights of revenue, expenses, net assets/equity, assets and liabilities of the Organization are provided, together with information on cash flow, liquidity and investment management in order to provide a complete picture of WHO’s financial position as at 31 December 2013. Finally, I have highlighted certain financial risks facing the Organization and the measures in place to manage them, including improvements to the internal control framework.
FINANCIAL HIGHLIGHTS 5. In 2013, the total revenue was US$ 2614 million and the total expenses were US$ 2261 million. The resulting net amount of US$ 353 million reflects funds received in advance of implementation that were carried forward to 2014. Even with this solid overall result, certain budget centres continue to be underfunded as a result of mismatches between planned spending and actual resources received. This situation is one of the central issues being addressed through the WHO financing reforms. Table 1 below provides the overall financial highlights.
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Table 1. Financial highlights – all funds, 2013 and 2012 and biennium 2012–2013 (US$ million) Total biennium 2012–2013
Total 2013
Total 2012
Member States’ assessed contributions Voluntary contributions – programme budget Total contributions – programme budget Voluntary contributions – non-programme budget Reimbursable procurement Other operating revenue Decrease/(increase) in allowance for doubtful accounts receivable Voluntary contributions in-kind and in-service Finance revenue Total revenue (all sources) Total expenses – programme budget Total expenses – in-kind and in-service Total expenses – non-programme budget Total expenses (all sources) Net
475 1 930 2 405 87 34 26 1 44 17 2 614 2 052 39 170 2 261 353
475 1 539 2 014 98 62 14 (3) 66 43 2 294 1 841 44 195 2 080 214
950 3 469 4 419 185 96 40 (2) 110 60 4 908 3 893 83 365 4 341 567
6. Total contributions for the programme budget in 2013 were US$ 2405 million (in 2012, US$ 2014 million). This includes US$ 475 million from Member States’ assessed contributions, and US$ 1930 million from voluntary contributions. An additional amount of US$ 209 million was recorded in 2013 for non-programme budget revenue. This included voluntary contributions for partnerships outside the programme budget such as the Stop TB Global Drug Facility Fund and the Roll Back Malaria Partnership Fund, in-kind and in-service contributions, reimbursable procurement revenue, other operating revenue (being mainly administrative support costs from WHO entities, rental revenue, sale of publications), and finance revenue.
BIENNIAL RESULTS 7. The financial statements cover the total effective budget for 2012–2013 of US$ 3959 million. 1 Although the Organization has adopted an annual financial reporting period as stipulated in the revised Financial Regulation XIII,2 the budgetary period remains a biennium (Financial Regulation II). Therefore, for the purposes of making comparisons between the actual expenses and the planned budget, the biennium’s budget is set against two years of annual expenses. Statement V – Statement of Comparison of Budget and Actual Amounts provides this comparison by strategic objective. Further analysis of the use of funds is available in document A67/42 “Programme budget 2012–2013: performance assessment”, which describes the implementation of the Programme budget 2012 –2013 and the results achieved.
1 2
See resolution WHA64.3. See resolution WHA62.6.
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8. A summary showing the sources of funding for the Programme budget 2012 –2013 and the use of funds for 2012–2013 and 2010–2011 is provided in Table 2. Table 2. Comparison of Programme budget 2012–2013 with use of funds for biennium 2012–2013 and biennium 2010–2011 (US$ million) Programme budget 2012–2013 Source of funding: Member States’ assessed contributions Highly flexible funding – voluntary contributions – core Medium flexible funding – voluntary contributions – core Specified funding – voluntary contributions – specified Total voluntary contributions Total contributions – programme budget Use of funding: Expenses – programme budget Net – programme budget 3 959 – 3 893 526 3 808 36 944 400 400 2 215 3 015 3 959 950 231 33 3 205 3 469 4 419 945 235 14 2 650 2 899 3 844
Total 2012–2013
Total 2010–2011
9. It should be noted that although the total revenue for 2012 –2013 exceeded the budgeted contributions, the level of flexible funding was lower than originally planned. Further details regarding the increase in specified funding are given in the section on revenue below. The total programme budget expenses for 2012–2013 were US$ 3893 million resulting in a net balance for the General Fund of US$ 526 million, which was carried forward as part of the financing for the biennium 2014 –2015, and included within net assets/equity.
NET ASSETS/EQUITY 10. In addition to the General Fund (the Programme budget), two other fund groups are included in WHO’s financial statements: “Member States – other” and the Fiduciary Fund. The “Member States – other” fund group includes the Common Fund (which reflects changes in assets and liabilities), the Enterprise Fund (mainly procurement activities on behalf of Member States and the Revolving Sales Fund), and the Special Purpose Fund (such as the Terminal Payments Fund, the Staff Health Insurance Fund, the Real Estate Fund and the Security Fund). The Fiduciary Fund is used when the Organization is managing revenue and expenses on behalf of other entities that are consolidated within WHO’s financial statements. Details of the revenue and expenses for each of these three main fund groups can be found in Schedule I of this report. 11. In addition, the Organization provides services to six other entities: The Trust Fund for the Joint United Nations Programme on HIV/AIDS (UNAIDS), the International Drug Purchase Facility (UNITAID), the International Agency for Research on Cancer (IARC), the International Computing Centre (ICC), the African Programme for Onchocerciasis Control (APOC) and staff health insurance (SHI). Separate financial statements are prepared for each entity, and these are subject to separate external audits. The funds managed by WHO on behalf of these entities are included within the Statement of Financial Position (and summarized in Table 6 below).
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12. Statement III, the Statement of Changes in Net Assets/Equity provides information on the fund balances for all funds as at 31 December 2013, the movement of these balances during 2013 and the opening balance from 1 January 2013. The total net assets/equity (carry forward) as at 31 December 2013 was US$ 1535 million (1 January 2013, US$ 1181 million). A breakdown of net assets/equity is shown in Table 3. Table 3. Summary of net assets/equity in 2013 (US$ million) Surplus/(deficit) 2013 (including 1 January 2013 opening adjustments)
31 December 2013
General Fund: Total Member States ’ – regular budget Total voluntary funds Total – General Fund Other funds: Total Member States – other Total Fiduciary Fund Total net assets/equity (722) 134 1 535 (29) (15) 353 (693) 149 1 182 89 2 034 2 123 5 392 397 84 1 642 1 726
13. Net assets/equity under the General Fund increased from US$ 1726 million at the beginning of 2013 to US$ 2123 million by the end of 2013. These funds represent contribution agreements recorded and not yet spent. Of the US$ 2123 million, an amount of approximately US$ 185 million has been committed and will be used for the settlement of contracts made in 2013 for which expenses will be paid and recorded in 2014. The remainder of the funds will be used to support work in 2014 and beyond. The increase from 2012 to 2013 is mainly due to the agreements recorded as revenue in 2013. This also confirms the positive effect of the financing dialogue. 14. Of the net assets/equity balance within the voluntary funds, 79% of the funds are specified. The largest increase was within the Special Programmes and Collaborative Arrangements Fund, which is primarily due to the funding for the Global Polio Eradication Initiative (which increased by US$ 205 million in 2013). 15. The negative balance in the net assets/equity attributable to “Member States – other” of US$ 722 million (as at 1 January 2013, US$ 693 million) arises primarily from the future unfunded liabilities for staff health insurance (see paragraphs 46 to 49 below).
REVENUE 16. Total revenue for 2013 was US$ 2614 million (in 2012, US$ 2294 million) (refer to Table 1 above). Revenue is recorded when amounts become due, based on signed agreements. When amounts are due in future periods, according to the payment terms included in donor agreements, the associated revenue is deferred. Revenue from voluntary contributions is summarized in Table 4 below.
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Table 4. Voluntary contributions revenue – 2013 and 2012, biennium 2012–2013 and biennium 2010–2011, excluding in-kind and in-service contributions (US$ million) Total 2013 Total 2012 Biennium 2012–2013 Biennium 2010–2011
Voluntary contributions – core Voluntary contributions – specified Voluntary contributions – programme budget Voluntary contributions – Fiduciary Fund Total voluntary contributions
132 1 798 1 930 87 2 017
130 1 409 1 539 98 1 637
262 3 207 3 469 185 3 654
249 2 650 2 899 170 3 069
17. Out of the total voluntary contributions for 2013 of US$ 2017 million, US$ 1930 million was for the programme budget. The remaining amount was received for the Fiduciary Fund. Fiduciary Fund contributions have remained fairly stable and for 2012–2013 only represented 5% of the total voluntary contributions. Voluntary contributions – core, increased slightly for 2012–2013 but were lower than budgeted. Many of the voluntary contributions were highly earmarked and related to individual projects with differing reporting requirements within the framework of the planned results of the programme budget. Voluntary contributions – specified increased by 21% from 2010–2011 to 2012–2013. Increases in contributions for the Global Polio Eradication Initiative accounted for most of the growth. Full details of all the voluntary contributions recorded in 2013 are contained in the Annex to the Financial Report.1 18. Figure 1 below illustrates the relative proportions of the various sources of voluntary contributions for the biennium 2012–2013. Figure 1. Revenue from voluntary contributions for 2012–2013, by source
1
The Annex to the Financial Report is available at: http://www.who.int/about/resources_planning/en/.
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19. Member States continue to be the largest source of voluntary contributions, contributing 53% of the total non-assessed (voluntary) contributions. Revenue from the United Nations and intergovernmental organizations 22%, from foundations was 19%, and revenue from nongovernmental organizations and other institutions was 5%. Donations from the private sector represented 1% of the voluntary contributions to the Organization. The relative percentages are similar to the previous biennium with a slight decrease in Member States’ and nongovernmental organization contributions and slight increases from foundations, and from United Nations and intergovernmental organizations. 20. The total of contributions by Member States (voluntary contributions and assessed contributions) for 2012–2013 was US$ 2866 million. This represents 62% of total voluntary and assessed contributions. The 10 largest contributors among the Member States are shown below and accounted for a combined total of US$ 2182 million or 76% of the total contributions from Member States, or 48% of the total voluntary and assessed contributions. Figure 2. Top 10 Member State contributors for 2012 –2013, combining assessed and voluntary contributions (US$ million)
21. The top voluntary contributors for 2012–2013 are summarized below in Figure 3 with a comparison against 2010–2011. This includes both Member States and other contributors.
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Figure 3. Top 10 voluntary contributors to the programme budgets for 2012–2013 and for 2010–2011 (US$ million)
EXPENSES 22. The total expenses for 2013 were US$ 2261 million (in 2012, US$ 2080 million). Expenses are recognized when the goods and services are received and not when the commitments or the payments have been made. The total expenses incurred for the implementation of the programme budget were US$ 2091 million (in 2012, US$ 1885 million). Excluding in-kind and in-service expenses for 2013 of US$ 39 million (in 2012, US$ 44 million), the total expenses for 2013 were US$ 2052 million (in 2012, US$ 1841 million). Programme budget expenses for 2013, excluding in-kind and in-service expenses, were 11% higher than for 2012. Details of expenses by cost category, major office, and by strategic objective for 2013 are provided in Schedules I to IV of this report. 23. Higher expenses in the second year of the biennium are usual, given the additional planning steps in the first year. A more meaningful expense comparison is achieved by viewing one biennium against another. The total expenses for 2012–2013 for the programme budget (excluding in-kind and in-service expenses) were US$ 3893 million (in 2010–2011, US$ 3808 million). The increase in expenses from 2010–2011 to 2012–2013 of US$ 85 million is mainly due to the expanded activities of the Global Polio Eradication Initiative (an increase of 20% from 2010 –2011 to 2012–2013). 24. The proportions of expenses incurred by each major office are shown below in Figure 4. In comparison with 2010–2011 there has been a decrease in headquarters’ share, from 37% to 32%, and a proportionate increase in the regions’ share, which has grown from 63% to 68%. The largest increases were in the Eastern Mediterranean Region and the African Region. These increases were mainly due to expanded activities for the eradication of poliomyelitis. In addition, the Eastern Mediterranean Region had a higher level of emergency activities in 2012–2013 (a rise from US$ 103 million in 2010–2011 to US$ 206 million in 2012–2013 due to new activities, mainly in the Syrian Arab Republic and the Sudan). The decrease in headquarters’ share is a result of the cost-saving measures. All cost categories decreased at headquarters between 2010 –2011 and 2012–2013, with the largest reduction being attributable to lower staff costs.
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Figure 4. Programme budget expenses by major office (excluding in-kind and in-service expenses) in 2012–2013 and 2010–2011 (US$ million)
25. Summary information by cost category is shown below. Figure 5 provides a comparison of programme budget expenses in 2012–2013 with those for 2010–2011. Figure 5. Programme budget expenses by type (excluding in-kind and in-service expenses) in 2012–2013 and 2010–2011 (US$ million)
26. Staff and other personnel costs were the largest category of expenses and represented 45% of the total expenses incurred in the programme budget for 2012 –2013. This represented the total cost of employing staff, including charges for base salary, post adjustment and any other types of entitlements paid by the Organization (e.g. pensions and insurances).
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27. Compared with 2010–2011, total staff and other personnel costs have decreased by 9% or US$ 165 million as a result of the difference in the number of staff employed. Between December 2010 and July 2012 there was a reduction of 937 staff.1 The largest decrease in staff and other personnel costs has been at headquarters (US$ 91 million). The South-East Asia Region recorded a reduction of US$ 34 million, although this was mainly due to a re-coding of special service agreement contract expenses from staff to contractual services. 28. Contractual services were the second largest category of expenses (accounting for 18% of all expenses for 2012–2013) and represent the cost of contracts given to experts and service providers who supported the Organization in achieving its planned objectives. The main components were for agreements for performance of work, consulting contracts and special service agreement contracts that were issued to individuals to perform activities on behalf of the Organization. Medical research activities were also included in contractual services. In addition, direct implementation activities, mainly for immunization campaigns led by WHO were included under contractual services. The increase from 2010–2011 to 2012–2013 is therefore mainly due to the inclusion of special service agreements and direct implementation costs that were previously reported under different categories of expenses and were mainly for the Global Polio Eradication Initiative. The table below provides a breakdown of the types of expenses included under contractual services. Table 5. Programme budget – contractual services, by type (excluding in-kind and in-service expenses) in 2012–2013 and 2010–2011 (US$ million) Total 2012–2013 Total 2010–2011 Contractual services – general of which individual service contractors represent: Fellowships, training and security Special service agreements Direct implementation – polio immunization campaigns Total 510 75 43 93 73 719 542 62 49 – – 591
29. The total of expenses incurred for special service agreements in 2012 –2013 was US$ 93 million. The largest amounts were incurred for the African, Eastern Mediterranean and South-East Asia regions. This represents approximately 3500 additional personnel in these regions, mostly deployed in the Global Polio Eradication Initiative. Excluding special service agreements and direct implementation, which are now separately reported, there has been an overall decrease of 6% in contractual service costs with decreases across all major offices. 30. Transfers and grants to counterparts represented 13% of the overall expenses, and were highest in the African Region and the Eastern Mediterranean Region. These expenses were for contracts signed with national counterparts (mainly health ministries as well as nongovernmental organizations) to perform activities in line with the programme budget. The expenses were recognized at the time of transfer of the funds to the contractual partner. Close to 50% of all amounts recorded as being for transfers and grants to counterparts are related to Global Polio Eradication Initiative activities. The majority of expenses recorded for transfers and grants to counterparts relate to direct financial cooperation arrangements. The policies surrounding the use of direct financial cooperation arrangements are currently under review by WHO management, with the aim of strengthening accountability for the use of such funds.
1
See document EB132/38.
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31. General operating expenses reflect maintenance and operational running costs, including utilities and other office costs. These are incurred mainly at the local level and represent 9% of total expenses under the programme budget. 32. In order to improve the consistency of recording and the transparency of reporting and expense management, there have been certain changes to the categorization of coding of expenses for transfers to counterparts and direct implementation between 2010 and 2013. Figure 6 below summarizes the total for the three categories of expenses, namely contractual services, general operating expenses and transfers and grants to counterparts, by major office. Figure 6. Programme budget expenses for contractual services, general operating expenses and transfers and grants to counterparts, by major office in 2012–2013 and 2010–2011 (US$ million)
33. The increases shown in Figure 6 for the African, Eastern Mediterranean and South-East Asia regions in 2012–2013 are directly related to increases in activities for the Global Polio Eradication Initiative and emergency activities. Headquarters shows a decrease due to cost-containment measures. The decrease for the Region of the Americas is due to a reclassification of expense types. 34. At US$ 310 million, travel constituted 8% of the Organization’s total expenses under the General Fund in 2012–2013 (in 2010–2011, US$ 295 million). Travel expenses include airfare, per diem and other travel-related costs for staff and non-staff. The amount spent on staff travel has reduced as a result of cost-saving measures. Staff travel for 2012–2013 constituted 45% of the total cost of travel, reduced from 48% in 2010–2011, with the remaining balance being costs that related to travel by participants in meetings and advisors (delegates of Member States and other non-Secretariat personnel). Travel costs by major office are summarized below in Figure 7.
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Figure 7. Programme budget travel expenses, by major office in 2012 –2013 and 2010–2011 (US$ million)
* Data to distinguish between staff/non-staff were not available
35. Only the African Region and the Region of the Americas have shown an increase in travel expenses from 2010–2011 to 2012–2013. This is mainly due to changes in the classification of expenses. In order to improve transparency, there has been a shift from showing travel expenses under “meetings and training” to recording them under “travel”. In addition, for the African Region, the relative percentage of staff travel has decreased from 64% of the total in 2010 –2011 to 59% of the total in 2012–2013. The total travel expenses for headquarters has decreased. Most notably, staff travel expenses have decreased for headquarters, falling from 43% of the total in 2010 –2011 to 38% in 2012–2013, representing a reduction of US$ 8.4 million. 36. The expenses for medical supplies and materials related primarily to medical supplies purchased and distributed by the Organization for programme implementation as well medical literature. They accounted for 4% of total expenses for 2012–2013. The increase in medical supplies is due to emergency medical supplies for Libya and the Syrian Arab Republic as well as for Global Polio Eradication Initiative activities in the African Region. Equipment, vehicles and furniture represents 3% of WHO’s total expenses. These costs continue to be recorded as expenses in line with the IPSAS transitional provision. However, eventually all property, plant, and equipment will be capitalized and depreciated over its expected useful life and will be presented in the Statement of Financial Position.
ASSETS Liquidity and investment management 37. The totals of cash, cash equivalents and investments at the end of 2013 and at the end of 2012 are summarized below in Table 6.
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Table 6. Cash, cash equivalents and investments for 2012 –2013 (US$ million) Total 2013 Total 2012
Cash and cash equivalents Short-term investments Long-term investments Total cash, cash equivalents, and investments Less: cash, cash equivalents and investments held on behalf of other entities WHO cash, cash equivalents, and investments
715 2 419 82 3 216
734 1 820 266 2 820
982
990
2 234
1 830
38. Investments are primarily made on a short-term basis in order to ensure that cash is available for programmatic needs. Some funds for longer-term liabilities have been invested in securities, in accordance with the recommendations of the Advisory Investment Committee. In the Organization ’s accounts, US$ 982 million of cash and investments are held on behalf of the following entities: the African Programme for Onchocerciasis Control, The Trust Fund for the Joint United Nations Programme on HIV/AIDS, the International Drug Purchase Facility, the International Computing Centre and staff health insurance. Table 6 excludes long-term investment portfolios managed for the Staff Health Insurance Fund, which are reported separately. The finance revenue for 2012–2013 was US$ 60 million.
Accounts receivable 39. The balance of accounts receivable includes amounts due from Member States for assessed contributions, from Member States and other contributors for voluntary contributions and other receivables. For assessed contributions, the total amount due at 31 December 2013 amounted to US$ 114 million and included US$ 38 million of rescheduled arrears (US$ 104 million at 31 December 2012, including US$ 39 million of rescheduled arrears). Further information on the collection of assessed contributions for 2013 is provided in document A67/44 “Status of collection of assessed contributions, including Member States in arrears in the payment of their contributions to an extent that would justify invoking Article 7 of the Constitution ”. 40. For voluntary contributions, the total amount of accounts receivable was US$ 1017 million (US$ 852 million at the end of 2012). The overall increase is due to the higher level of the non-current accounts receivable, which rose from US$ 210 million at the end of 2012 to US$ 347 million at the end of 2013. This is mainly due to a large contribution from the United Kingdom of Great Britain and Northern Ireland for Global Polio Eradication Initiative activities covering the period until the end of 2019. The non-current accounts receivable amount represents funds due more than one year in the future (i.e. in 2015 and beyond). This amount is supported by signed agreements from 58 contributors, with payment terms that specify when the amounts will be paid to WHO. The recording of these future amounts has made prospective revenue more visible, which has assisted in the Organization’s revenue planning and further clarified WHO ’s overall financial situation. As these future deferred revenue amounts become due for payment, the amounts are transferred to current period revenue and made available for expenses. Full details of all voluntary contributions including accounts receivable, by contributor are provided in the Annex to the Financial Report.1
1
The Annex to the Financial Report is available at: http://www.who.int/about/resources_planning/en/.
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41. The allowance for doubtful accounts receivable is based on a detailed review of all accounts receivable that are more than one year overdue and on a review of amounts that are less than one year overdue where there is a risk that the amount is unlikely to be received. The allowance for voluntary contributions at 31 December 2013 was US$ 12 million (or 1% of the total value of accounts receivable) and for assessed contributions the allowance was US$ 42 million. The allowance for doubtful accounts receivable at the end of 2013 decreased by US$ 1 million from the balance of the allowance at 31 December 2012.
Inventory 42. The WHO inventory consists of medicines, vaccines, humanitarian supplies and publications. These are recorded as current assets until sold, distributed or until the expiration of their useful life. Tracking and recording of inventory globally enables the Organization to review and improve its stewardship. 43. As at 31 December 2013, the Organization held inventory valued at US$ 51 million (US$ 68 million at 31 December 2012), confirmed by a physical verification in the 26 countries where inventory was held and managed. The value of inventory decreased in 2013 due to improved stock management and increased distributions.
Property, plant and equipment 44. Property, plant, and equipment includes land, buildings, furniture, fixtures and fittings, information technology equipment, and vehicles owned by the Organization. WHO is utilizing the transitional provision available under IPSAS to ensure the accurate valuation and recording of all assets globally, before recognition in the Statement of Financial Position and subsequent amortization over the assets’ useful lives. 45. As part of the transition process, WHO recognized the cost and accumulated depreciation of land and buildings at headquarters in 2012. In 2013, all regional and country offices owned by WHO were recognized as assets in the Statement of Financial Position. In total, excluding the Region of the Americas/PAHO, the Organization currently operates from almost 300 premises around the world. Of those premises, 16 are owned and the remainder are either rented or have been donated to WHO by a Member State.
LIABILITIES Staff liabilities 46. Based on the latest actuarial projections, the total amount required to settle current liabilities for staff entitlements was US$ 70 million. A further US$ 939 million has been estimated for future non-current staff liabilities (giving a total of US$ 1009 million). These liabilities cover the expected costs for accrued annual leave, accrued repatriation grant, travel, removal and the current and future health care scheme costs. The total of the accrued staff liability, funding and net deficit is summarized below in Table 7.
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Table 7. Accrued staff liabilities for 2013 (US$ million) Staff health insurance liability Staff health insurance funding
WHO liability
WHO funding
Net deficit
Terminal payments Special Fund for Compensation Staff health insurance Total accrued staff benefits
– – (1 410)
– – 557
(142) (14) (853) (1 009)
68 8 – 76
(74) (6) (853) (933)
47. The health care scheme provides medical reimbursements for serving and retired staff members, and their dependents, subject to strict rules and limits. The actuarial valuation of the future liability for WHO staff health costs at 31 December 2013 was estimated at US$ 1410 million, of which US$ 557 million is funded and US$ 853 million is unfunded (US$ 823 million at the end of 2012). This valuation was based on estimates of future health care costs and the projections of retired staff, as well as a number of socioeconomic assumptions. The staff health insurance scheme covers other entities, namely PAHO, UNAIDS, UNITAID, APOC, IARC and ICC. Their share of the future staff liability is reflected in their respective financial statements. The assets of the Staff Health Insurance Fund are reflected in its own financial statements, which, in accordance with IPSAS, are now subject to a full and separate external audit. In order to establish a long-term mechanism to ensure full financing of this liability, changes to the staff health insurance contribution rates were approved in 2011, affecting both the Organization and the scheme participants, and covering all entities. The latest actuarial assessment now projects that the plan will reach full funding in 2037, six years ahead of actuarial assessment made in 2010. 48. The improvement in projected funded status is primarily due to an increase in the expected investment return (i.e. 5.6% in 2013, compared to 4.0% in the prior valuation), and a higher than expected active staff headcount at 31 December 2013. 49. Since the prior valuation, the United Nations Joint Staff Pension Fund (UNJSPF) adopted an increase in the normal retirement age from age 62 to 65 for staff hired after 2013. This change reduces the projected pension liability significantly. There is a smaller, favourable impact from an assumption that staff will retire slightly later on average, resulting in more years of in-service contributions and fewer years of after-service benefits.
FINANCIAL RISKS 50. The Organization must manage a number of financial risks. These are regularly reviewed by the Independent Expert Oversight Advisory Committee. Many financial risks originate from WHO’s decentralized operating environment; for the mitigation of these risks, stronger internal controls are required. A new Internal Control Framework is being introduced across the Organization, addressing responsibilities for controls over financial, procurement, human resources and programmatic processes. New tools are accompanying this framework, and revised delegations of authority are being issued, starting with the cluster and regional office heads, and their budget centre managers. A standardized internal control checklist has been developed and will be introduced during 2014. 51. Further information is provided below on some of WHO’s significant financial risks.
Investment and foreign currency risks 52. The Organization is exposed to financial risks including credit risk, interest rate risk, foreign exchange risk and investment price risk. WHO uses derivative financial instruments to hedge some of
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its risk exposures. In accordance with the Financial Regulations, funds not required for immediate use may be invested. All investments are carried out within the framework of investment policies approved by the Director-General. Some portfolios are managed by external managers appointed by the Organization to manage funds in accordance with a defined mandate. The Advisory Investment Committee regularly reviews the investment policies and the investment performance and risk for each investment portfolio. This Committee comprises external investment specialists and makes recommendations to the Director-General. 53. Investments are placed with a wide range of financial counterparties, whose credit risk is minimized by applying minimum credit quality requirements and maximum investment exposure limits, both by the counterparty and by groups of related counterparties. These terms are set out in agreed investment mandates. 54. The Organization receives contributions and makes payments in currencies other than the United States dollar and it is exposed to foreign exchange currency risk arising from fluctuations in currency exchange rates. Translation into United States dollars of transactions expressed in other currencies is done at the prevailing United Nations Operational Rates of Exchange at the date of transaction. Assets and liabilities that are denominated in foreign currencies are translated at the United Nations Operational Rates of Exchange that prevail at the end of each month. Forward foreign exchange contracts are transacted in order to hedge non-United States dollar currency exposures and to manage short-term cash flows. Realized and unrealized gains and losses resulting from the settlement and revaluation of foreign currency transactions are recognized in the Statement of Financial Performance. 55. With effect from 2014, 50% of assessed contributions are now assessed in Swiss francs to reduce the currency risk of headquarters’ expenses in that currency.1
Staff financing risks 56. Although this report shows an improvement in the overall financial situation of the Organization, some budget centres continue to have difficulty in ensuring sufficient stability in the financing of salary costs. In 2013, 64% of staff salaries were financed from voluntary funds, most of which were specified funds (in 2012, the similar percentage was 59%). There are limited possibilities for shifting funds between budget centres in order to ensure consistency in salary financing across the Organization. This risk is subject to close monitoring through review of staff work plans and the matching of these plans to sources of funds. 57. The Organization has long-term financial commitments in respect of future staff liabilities, given that the majority of staff have long-term appointments, with associated future entitlements. The most significant of these is the future cost of the staff health benefits that are provided for staff and dependants, including into retirement for those staff that remain eligible. Given that two thirds of staff are paid from voluntary funds it is important to ensure that sufficient provision is now made to cover these future costs. To mitigate this risk the Organization now commissions an annual actuarial assessment for all future staff liabilities. As a result of these reports, adjustments have been made recently to funding rates. In addition to future staff healthcare costs, the Organization must ensure adequate financing for future staff separation costs, in the event of a significant sudden loss of a major funding source. The Organization is looking carefully at the best ways to build up appropriate reserves to meet possible future liabilities of this sort and the latest estimated amounts, together with funding plans, will be regularly provided to the Independent Expert Oversight Advisory Committee.
1
See resolution WHA66.16.
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Administration, management and infrastructure financing 58. Administration and management costs (broadly speaking strategic objectives 12 and 13 in the 2012–2013 financial period) are financed from a combination of three sources: assessed contributions, programme support costs (a percentage charged to voluntary contributions) and a post-occupancy charge (a percentage on salary costs charged to all programmes). The current approach presents risks for both sustainability of financing, and transparency of reporting, and as a result, also hinders effective management of costs. Proposed revised budgeting and financing proposals are under consideration and will be incorporated into the 2016–2017 budget planning process. These changes will be introduced gradually in order to avoid the risk of underfunding the basic infrastructure of the Organization. 59. The Organization has a two-year operating budget but does not have an approved capital budget. In consequence, many of the Organization’s 16 owned premises are in need of repair and refurbishment. This is most critical for the headquarters building, built in 1966, which now requires major renovation. A comprehensive headquarters refurbishment strategy is being developed and will be proposed for approval at the Sixty-eighth World Health Assembly as part of the overall Capital Master Plan. An additional one-time financing for the Capital Master Plan will form part of the Secretariat proposal to the Health Assembly in respect of supplemental funding for real estate and long-term staff liabilities.1
CONCLUSION 60. Measures taken in 2011 to reduce expenses have produced considerable cost savings in 2012–2013 giving the Organization a strong financial base for operations in 2014 –2015. The financing dialogue has contributed to highlighting the risks in receiving specified funding and the remaining shortfalls in certain areas. Much of the increased revenue, expenses and year-end fund balances are for specified activities, especially in the Global Polio Eradication programme which has a limited time frame. The ongoing work on WHO reform will help to address the structural financing risks which remain, notably the lack of predictability and the level of specification of funding. WHO ’s managerial reforms in the areas of accountability, internal controls and human resource management will contribute to stronger financial management. The effective use by WHO managers of financial and human resources is now more closely and consistently monitored and measured through a new dashboard, and longer-term financial risks including those for long-term staff liabilities are monitored through a new risk register. Improved transparency in WHO’s funding sources, and use of funds, has been achieved through the new “ web-portal”, and WHO is consistently looking for ways to further improve the quality and timeliness of financial and results reporting. These measures, taken together, provide a solid foundation for WHO’s future.
Dr Margaret Chan Director-General Geneva, 3 April 2014
1
See document A67/43 Add 1.
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Certification of the financial statements for the year ended 31 December 2013 According to Financial Regulation XIII ‒ Accounts and Financial Statements, accounts for the World Health Organization have been established and maintained in accordance with International Public Sector Accounting Standards. The financial statements for the year ended 31 December 2013, together with the notes to the statements and supporting schedules, have been reviewed and are approved.
Nicholas R. Jeffreys Comptroller
Dr Margaret Chan Director-General
3 April 2014
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Letter of transmittal
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Opinion of the External Auditor
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Financial statements World Health Organization Statement I. Statement of Financial Position As at 31 December 2013 (In US dollars) Notes ASSETS Current assets Cash and cash equivalents Short-term investments Accounts receivable – net current Staff receivables Inventories Prepayments and deposits Other current assets Total current assets Non-current assets Accounts receivable – net non-current Long-term investments Property, plant and equipment – net Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Contributions received in advance Accounts payable Staff payable Accrued staff benefits – current Deferred revenue Financial liabilities Other current liabilities Inter-entity liabilities Total current liabilities Non-current liabilities Long-term borrowings Accrued staff benefits – non-current Deferred revenue – non-current Total non-current liabilities TOTAL LIABILITIES NET ASSETS/EQUITY Member States – regular budget Voluntary funds Member States – other Fiduciary Fund TOTAL NET ASSETS/EQUITY TOTAL LIABILITIES AND NET ASSETS/EQUITY 88 695 960 2 034 530 340 (722 319 628) 133 811 884 1 534 718 556 4 425 661 545 84 121 732 1 642 008 469 (715 899 865) 148 477 124 1 158 707 460 3 860 404 217 4.17 4.13 4.14 19 814 277 939 117 427 346 512 477 1 305 444 181 2 890 942 989 22 782 082 911 532 131 210 277 136 1 144 591 349 2 701 696 757 4.10 4.11 4.12 4.13 4.14 4.2 4.15 4.16 80 089 221 29 718 935 2 323 781 70 148 086 342 413 767 19 637 190 59 467 509 981 700 319 1 585 498 808 86 329 879 24 983 899 4 366 015 71 735 099 317 034 710 21 403 427 41 442 241 989 810 138 1 557 105 408 4.3 4.2 4.8 346 512 477 81 819 896 61 694 051 490 026 424 4 425 661 545 210 277 136 266 323 581 41 180 878 517 781 595 3 860 404 217 4.1 4.2 4.3 4.4 4.5 4.6 4.7 714 841 758 2 419 344 288 735 520 722 11 349 360 51 124 089 3 454 904 – 3 935 635 121 734 358 416 1 819 531 140 695 054 637 12 263 937 67 614 034 1 608 986 12 191 472 3 342 622 622 31 December 2013 31 December 2012 (restated)
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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World Health Organization Statement II. Statement of Financial Performance For the year ended 31 December 2013 (In US dollars) Notes REVENUE Member States’ assessed contributions Decrease/(increase) in allowance for doubtful accounts receivable Voluntary contributions Voluntary contributions in-kind and in-service Reimbursable procurement Other operating revenue Finance revenue Total revenue EXPENSES Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Depreciation and amortization Finance costs Total expenses TOTAL SURPLUS FOR THE YEAR 5.2 890 557 352 200 260 099 456 161 202 282 319 117 174 519 485 206 903 970 39 171 566 2 079 036 9 026 502 2 260 998 329 353 418 887 912 439 371 199 412 230 324 574 414 215 889 802 152 770 486 235 726 093 32 025 524 1 116 199 6 723 426 2 080 677 545 213 189 249 5.1 474 640 515 1 005 011 2 017 136 747 43 827 944 34 413 016 26 527 386 16 866 597 2 614 417 216 474 609 150 (3 321 404) 1 636 552 815 66 468 439 62 459 972 13 981 777 43 116 045 2 293 866 794 31 December 2013 31 December 2012 (restated)
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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World Health Organization Statement III. Statement of Changes in Net Assets/Equity For the year ended 31 December 2013 (In US dollars) Notes General Fund Member States – regular budget Member States’ Assessed Contributions Fund Member States’ Non-Assessed Income Fund Tax Equalization Fund Working Capital Fund Total Member States – regular budget Voluntary funds Voluntary Contributions Core Fund Voluntary Contributions Specified Fund TDR Trust Fund1 HRP Trust Fund2 Stop TB Fund Special Programmes and Collaborative Arrangements Fund Special Account for Servicing Costs Fund Outbreak and Crisis Response Fund Total voluntary funds Total General Fund Member States – other Common Fund Enterprise Fund Revolving Sales Fund Concessions Fund Insurance Policies Fund Office/Garage Rental Fund Global Conference and Training Centre – Tunis Fund Total Enterprise Fund Special Purpose Fund Real Estate Fund Security Fund Information Technology Fund Revolving Fund for Teaching and Laboratory Equipment Special Fund for Compensation Terminal Payments Fund Non-Payroll Staff Entitlements Fund Post Occupancy Charge Fund Internal Service Cost Recovery Fund Staff Health Insurance Fund Total Special Purpose Fund Total Member States – other Fiduciary Fund WHO Framework Convention on Tobacco Control Stop TB Partnership Global Drug Facility Fund Roll Back Malaria Partnership Fund Health Metrics Network Fund Partnership for Maternal, Newborn and Child Health Fund United Nations System Standing Committee on Nutrition Fund Alliance for Health Policy and System Research Fund Global Health Workforce Alliance Fund Total Fiduciary Fund TOTAL NET ASSETS/EQUITY 6.1 56 688 496 14 659 986 (13 652 522) 31 000 000 88 695 960 225 720 042 1 086 757 032 21 880 294 33 914 618 52 244 021 346 775 914 193 822 757 73 415 662 2 034 530 340 2 123 226 300 104 572 841 3 446 737 2 134 498 1 860 610 927 665 621 754 8 991 264 6.3 33 773 522 4 353 703 263 302 – (5 566 170) (73 895 112) 25 731 746 30 134 981 2 364 564 (853 044 269) (835 883 733) (722 319 628) 4 225 623 88 938 299 9 547 172 – 11 121 990 580 924 16 744 761 2 653 115 133 811 884 1 534 718 556 1 470 231 4 338 475 (1 234 478) – 4 574 228 (20 048 580) 99 033 366 8 637 077 6 833 666 (6 910 417) 205 171 590 43 695 926 56 109 243 392 521 871 397 096 099 (24 984 939) (529 200) (191 311) 947 781 (444 250) (369 715) (586 695) 14 677 922 (82 567) 387 755 (16 520) 145 365 14 108 396 (3 105 176) (634 552) 1 140 123 (30 061 084) (3 440 338) (29 011 972) (1 096 115) (1 795 710) 2 213 258 (5 203 897) 598 581 114 207 (9 795 950) 300 386 (14 665 240) 353 418 887 55 218 265 10 321 511 (12 418 044) 31 000 000 84 121 732 245 768 622 987 723 666 13 243 217 27 080 952 59 154 438 141 604 324 150 126 831 17 306 419 1 642 008 469 1 726 130 201 129 557 780 3 975 937 2 325 809 912 829 1 371 915 991 469 9 577 959 19 095 600 4 436 270 (124 453) 16 520 (5 711 535) (88 003 508) 28 836 922 30 769 533 1 224 441 (822 983 185) (832 443 395) (693 307 656) 5 321 738 90 734 009 7 333 914 5 203 897 10 523 409 466 717 26 540 711 2 352 729 148 477 124 1 181 299 669 31 December 2013 Surplus/(deficit) 2013 1 January 2013 (restated – refer to Note 3)
6.2
The statement of significant accounting policies and the accompanying notes form part of the financial statements. ______________________________ 1 2
Trust Fund for the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases.
Trust Fund for the UNDP/UNFPA/UNICEF/WHO/World Bank Special Programme of Research, Development and Research Training in Human Reproduction.
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World Health Organization Statement IV. Statement of Cash Flow For the year ended 31 December 2013 (In US dollars) 31 December 2013 CASH FLOWS FROM OPERATING ACTIVITIES TOTAL SURPLUS FOR THE YEAR Depreciation and amortization (Increase)/decrease in accounts receivable – net current (Increase)/decrease in staff receivables (Increase)/decrease in inventories (Increase)/decrease in prepayments (Increase)/decrease in other current assets (Increase)/decrease in accounts receivable – net non-current Increase/(decrease) in contributions received in advance Increase/(decrease) in accounts payable Increase/(decrease) in staff payable Increase/(decrease) in accrued staff benefits – current Increase/(decrease) in deferred revenue Increase/(decrease) in other current liabilities Increase/(decrease) in inter-entity liabilities Increase/(decrease) in accrued staff benefits – non-current Increase/(decrease) in deferred revenue – non-current Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES (Increase)/decrease in short-term investments (Increase)/decrease in long-term investments Increase/(decrease) in financial liabilities Reversal of opening adjustment for unrealized foreign exchange loss Net cash flows from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase/(decrease) in long-term borrowings Net cash flows from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year (2 967 805) (2 967 805) (19 516 658) 734 358 416 714 841 758 56 878 56 878 90 841 888 643 516 528 734 358 416 (599 813 148) 184 503 685 (1 766 237) – (417 075 700) 433 772 667 (231 490 143) (309 673 496) 22 850 906 (84 540 066) 353 418 887 2 079 036 (40 466 085) 914 577 16 489 945 (1 845 918) 12 191 472 (136 235 341) (6 240 658) 4 735 036 (2 042 234) (1 587 013) 25 379 057 18 025 268 (8 109 819) 27 585 296 136 235 341 400 526 847 213 189 249 1 116 199 34 174 580 4 446 953 (3 464 804) 321 227 10 673 073 14 618 958 (14 398 672) (7 303 244) (2 777 425) (2 452 463) (140 606 075) (4 638 541) 56 413 275 30 631 743 (14 618 957) 175 325 076 31 December 2012 (restated)
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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World Health Organization Statement V. Statement of Comparison of Budget and Actual Amounts For the year ended 31 December 2013 (In US dollars) Programme budget 2012–2013 Strategic objectives 1 Communicable diseases 2 HIV/AIDS, tuberculosis and malaria 3 Chronic noncommunicable conditions 4 Child, adolescent, maternal, sexual and reproductive health, and ageing 5 Emergencies and disasters 6 Risk factors for health 7 Social and economic determinants of health 8 Healthier environment 9 Nutrition, food safety and food security 10 Health systems and services 11 Medical products and technologies 12 WHO leadership, governance, and partnerships 13 Enabling and support functions Total 1 278 130 000 540 298 000 113 763 000 218 306 000 382 028 000 122 255 000 42 789 000 86 825 000 54 898 000 348 093 000 137 283 000 257 570 000 376 741 000 3 958 979 000 762 322 493 206 452 907 60 592 478 123 729 088 184 685 626 48 660 814 20 423 214 43 581 261 32 767 090 168 408 576 74 693 751 128 496 424 180 190 310 2 035 004 032 614 022 050 181 714 613 47 412 836 97 672 590 144 162 271 44 776 525 16 849 129 38 854 554 27 154 471 134 846 988 61 909 715 124 325 224 159 979 398 1 693 680 363 1 376 344 543 388 167 520 108 005 314 221 401 678 328 847 897 93 437 339 37 272 343 82 435 815 59 921 561 303 255 564 136 603 466 252 821 648 340 169 708 3 728 684 425 (98 214 543) 152 130 480 5 757 686 (3 095 678) 53 180 103 28 817 661 5 516 657 4 389 185 (5 023 561) 44 837 436 679 534 4 748 352 36 571 292 230 294 605 Difference – Programme budget and expenses
Expenses 2013
Expenses 2012 (restated)
Total expenses 2012–2013
Basis differences In-kind/in-service expenses Transfer from assessed contributions to Real Estate Fund Tax Equalization Fund expenses Other non-programme budget utilization Common Fund activities Total basis differences Timing differences Programme budget expenses in prior periods Total timing differences Entity differences Expenses under Common Fund, Enterprise Fund, Special Purpose Fund, and Fiduciary Fund Total entity differences Total expenses as per the Statement of Financial Performance (Statement II) 145 908 175 145 908 175 2 260 998 329 194 947 377 194 947 377 2 080 677 545 (4 805 730) (4 805 730) 125 153 581 125 153 581 38 562 107 10 000 000 11 423 628 749 426 24 156 690 84 891 851 44 681 506 – 14 533 591 6 601 885 1 079 242 66 896 224
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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Notes to the financial statements 1. Basis of preparation and presentation
The financial statements of the World Health Organization have been prepared in accordance with International Public Sector Accounting Standards (IPSAS). They have been prepared using the historical cost convention with the exception of investments and loans, which are recorded at fair value or at amortized cost. Where a specific matter is not covered by IPSAS, the appropriate International Financial Reporting Standards (IFRS) have been applied. These financial statements have been prepared under the assumption that WHO is a going concern, will continue in operation, and will meet its mandate for the foreseeable future (IPSAS 1). Functional currency and translation of foreign currencies The functional and reporting currency of the Organization is the United States dollar. Foreign currency transactions are translated into United States dollars at the prevailing United Nations Operational Rates of Exchange, which approximates to the exchange rates at the date of the transactions. The Operational Rates of Exchange are set once a month, and revised mid-month if there are significant exchange rate fluctuations relating to individual currencies. Assets and liabilities in currencies other than United States dollars are translated into United States dollars at the prevailing Operational Rates of Exchange of the first day of the subsequent month. The resulting gains or losses are accounted for in the Statement of Financial Performance. The non-United States dollar denominated assets and liabilities in the investment portfolios are translated into United States dollars at the month-end closing rate used by the custodian. Materiality1 and the use of judgments and estimates Materiality is central to WHO’s financial statements. The Organization’s process for reviewing accounting materiality provides a systematic approach to the identification, analysis, evaluation, endorsement and periodic review of decisions taken involving the materiality of information, spanning a number of accounting areas. The financial statements include amounts based on judgments, estimates and assumptions by management. Changes in estimates are reflected in the period in which they become known. Financial statements In accordance with IPSAS 1, a complete set of financial statements have been prepared as follows: • Statement of Financial Position; • Statement of Financial Performance; • Statement of Changes in Net Assets/Equity; • Statement of Cash Flow; • Statement of Comparison of Budget and Actual Amounts; and • Notes to the financial statements, comprising a summary of significant accounting policies and other relevant information. Omissions or misstatements of items are material if they could, individually or collectively, influence the decisions or assessments of users made on the basis of the financial statements. 1
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2. 2.1
Significant accounting policies Cash and cash equivalents
Cash and cash equivalents are held at nominal value and comprise cash on hand, cash at banks, collateral deposits, commercial paper, money market funds and short-term bills and notes. All investments that have a maturity of three months or less from the date of acquisition are included as cash and cash equivalents. This includes cash and cash equivalents held in the portfolios managed by external investment managers.
2.2
Investments and financial instruments
Financial instruments are recognized when WHO becomes party to the contractual provisions of the instrument until such time as the rights to receive cash flows from those assets have expired or have been transferred and the Organization has transferred substantially all the risks and rewards of ownership. Investments can be classified as being: (i) financial assets or financial liabilities at fair value through surplus or deficit; (ii) held-to-maturity; (iii) available-for-sale; or (iv) bank deposits and other receivables. All purchases and sales of investments are recognized on the basis of their trade date. Financial assets or financial liabilities at fair value through surplus or deficit are financial instruments
that meet either of the following conditions: (i) they are held-for-trading; or (ii) they are designated by the entity upon initial recognition as at fair value through surplus or deficit. Financial instruments in this category are measured at fair value and any gains or losses arising from changes in the fair value are accounted for through surplus or deficit and included within the Statement of Financial Performance in the period in which they arise. All derivative instruments, such as swaps, currency forward contracts or options are classified as held-for-trading except for designated and effective hedging instruments as defined under IPSAS 29. Financial assets in the externally managed portfolios designated upon initial recognition as at fair value through surplus or deficit are classified as current assets or non-current assets according to the time horizon of the investment objectives of each portfolio. If the time horizon is less than or equal to one year, they are classified as current assets, and if it is more than one year, they are classified as non-current assets. Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that WHO has both the intention and the ability to hold to maturity. Held-to-maturity investments are stated at amortized cost using the effective interest rate method, with interest revenue being recognized on an effective yield basis in the Statement of Financial Performance. Available-for-sale investments are classified as being available-for-sale where WHO has not
designated them either as held-for-trading or as held-to-maturity. Available-for-sale items are stated at fair value (including transaction costs that are directly attributable to the acquisition of the financial asset) with value changes recognized in net assets/equity. Impairment charges and interest calculated using the effective interest rate method are recognized in the Statement of Financial Performance. As at 31 December 2013, no available-for-sale financial assets were held by the Organization. Bank deposits and other receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Accrued revenue related to interest, dividends and pending cash to be received from investments are included herein. Bank deposits and other receivables are stated at amortized cost calculated using the effective interest rate method, less any impairments. Interest revenue is recognized on the effective interest rate basis, with the exception of short-term receivables for which the recognition of interest would be immaterial.
A67/43 Page 29 Other financial liabilities include payables and accruals relating to investments and are recognized
initially at fair value and subsequently measured at amortized cost using the effective interest rate method, with the exception of short-term liabilities for which the recognition of interest would be immaterial.
2.3
Accounts receivable
Accounts receivable are non-derivative financial assets with fixed or determinable payments that are not traded in an active market. Current receivables are for amounts due within 12 months of the reporting date, while non-current receivables are those that are due more than 12 months from the reporting date of the financial statements. Voluntary accounts receivable are recognized based on the payment terms specified in a binding agreement between WHO and the contributor. Where no payment terms are specified, the full amount receivable is recognized as currently due. Assessed accounts receivable are recognized annually, at the beginning of the year as per the assessments approved by the Health Assembly. Accounts receivable are recorded at their estimated net realizable value and not discounted as the effect of discounting is considered immaterial. An allowance for doubtful accounts receivable is recognized when there is a risk that the receivable may be impaired. Changes in the allowance for doubtful accounts receivable are recognized in the Statement of Financial Performance.
2.4
Inventories
WHO recognizes medicines, vaccines, humanitarian supplies, and publications as part of its inventory. Inventories are valued taking the lower amount of (i) cost or (ii) net realizable value, using a weighted average basis. Where inventories have been acquired through a non-exchange transaction (i.e. inventories were donated as an in-kind contribution), the value of inventory is determined by reference to the donated goods’ fair value at the date of acquisition. When inventories are sold, exchanged or distributed, their carrying amount is recognized as an expense. 2.5
Prepayments and deposits
Prepayments relate to amounts paid to suppliers for goods or services not yet received. Deposits relate to amounts paid as security for the leasing of office space. Deposits and prepayments are recorded at cost.
2.6
Property, plant and equipment
Property, plant and equipment with a value greater than US$ 5000 are recognized as non-current assets in the Statement of Financial Position. Property, plant and equipment are stated at historical cost, less accumulated depreciation and any impairment losses. Property, plant and equipment acquired through a non-exchange transaction are recognized at fair value at the date of acquisition. WHO considers all assets of this type to be non-cash generating. Depreciation is calculated on a straight-line basis over the asset’s useful life except for land, which is not subject to depreciation. Property, plant and equipment are reviewed annually for impairment to ensure that the carrying amount is still considered to be recoverable. The estimated useful lives of the asset classes that make up property, plant and equipment are provided in the table below.
A67/43 Page 30 Asset class Land Buildings – permanent Buildings – mobile Furniture, fixtures and fittings Vehicles and transport Office equipment Communications equipment Audiovisual equipment Computer equipment Network equipment Security equipment Other equipment Estimated useful life (in years) N/A 60 5 5 5 3 3 3 3 3 3 3
Improvements are capitalized over the remaining life of the asset when the improvement results in an increase in the useful life of the asset. The residual value of the asset and the cost of the improvement will be amortized over the adjusted useful life (remaining life). Normal repair and maintenance costs are charged to the Statement of Financial Performance during the year in which the cost is incurred. A transitional provision has been applied for the initial recognition of property, plant and equipment that were purchased or donated before 1 January 2012. Land and building assets will be recognized by location commencing on 1 January 2012 up to the end of the transitional period. As allowed under the transitional provision, other assets in the form of property, plant and equipment acquired during 2013 were expensed at the date of purchase and have not been recognized as assets in 2013. The effect of the initial recognition of property, plant and equipment is shown as an adjustment to the opening balance of net assets/equity.
2.7
Intangible assets
Intangible assets that are above the pre-established threshold of US$ 100 000 are stated at historical cost less accumulated amortization and any impairment losses. Amortization is determined over the estimated useful life of the assets using the straight-line method of amortization. The estimated useful lives of intangible asset classes are as follows. Asset class Software acquired externally Software internally developed Licences and rights Copyrights Estimated useful life (in years) 1–3 1–3 2–6 3–10
WHO’s intangible assets are assumed to have a residual value of zero as intangible assets are not sold or transferred at the end of their useful life. Intangible assets are reviewed annually for impairment.
2.8
Leases
A lease is an agreement whereby the lessor conveys to the lessee (the Organization), in return for a payment or series of payments, the right to use an asset for an agreed period of time. Every lease is reviewed to determine whether it constitutes a financial or operating lease. Necessary accounting entries and disclosures are made accordingly. Where the WHO is the lessor, lease revenue from operating leases is recognized as revenue on a straight-line basis over the lease term. All costs associated with the asset incurred in earning the lease revenue, including depreciation, are recognized as an expense.
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2.9
Contributions received in advance
Contributions received in advance arise from legally binding agreements between WHO and its contributors ‒ including governments, international organizations and private and public institutions ‒ whereby contributions are received in advance of the amounts concerned falling due to the Organization.
2.10 Accounts payable and accrued liabilities Accounts payable are financial liabilities for goods or services that have been received by WHO but not yet paid for. Accrued liabilities are financial liabilities for goods or services that have been received by WHO and which have neither been paid for nor invoiced to WHO. Accounts payable and accrued liabilities are recognized at cost as the effect of discounting is considered immaterial.
2.11 Employee benefits WHO recognizes the following categories of employee benefits: • short-term employee benefits that fall due wholly within 12 months following the end of the accounting period in which employees render the related service • post-employment benefits • other long-term employee benefits • termination benefits WHO is a member organization participating in the United Nations Joint Staff Pension Fund, which was established by the United Nations General Assembly to provide retirement, death, disability and related benefits to employees. The Pension Fund is a funded, multi-employer defined benefit plan. As specified by Article 3(b) of the Regulations of the Fund, membership in the Fund shall be open to the specialized agencies and to any other international, intergovernmental organization which participates in the common system of salaries, allowances and other conditions of service of the United Nations and the specialized agencies. The plan exposes participating organizations to actuarial risks associated with the current and former employees of other organizations participating in the Pension Fund, with the result that there is no consistent and reliable basis for allocating the obligation, plan assets, and costs to individual organizations participating in the plan. WHO and the UNJSPF are not in a position to identify WHO ’s proportionate share of the defined benefit obligation, the plan assets and the costs associated with the plan with sufficient reliability for accounting purposes; this is also true for the other organizations participating in the Pension Fund. Hence WHO has treated this plan as if it were a defined contribution plan in line with the requirements of IPSAS 25. WHO’s contributions to the plan during the financial period are recognized as expenses in the Statement of Financial Performance.
2.12 Provisions and contingent liabilities Provisions are recognized for future liabilities and charges where WHO has a present legal or constructive obligation as a result of past events and it is probable that the Organization will be required to settle the obligation.
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Other commitments, which do not meet the recognition criteria for liabilities, are disclosed in the notes to the financial statements as contingent liabilities when their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events that are not wholly within the control of WHO.
2.13 Contingent assets Contingent assets will be disclosed when an event gives rise to a probable inflow of economic benefits or service potential and there is sufficient information to assess the probability of the inflow of economic benefits or service potential.
2.14 Deferred revenue Deferred revenue derives from legally binding agreements between WHO and its contributors, including governments, international organizations and private and public institutions. Deferred revenue is recognized when: • a contractual agreement is confirmed in writing by both the Organization and the contributor; and • the funds are earmarked and due in a future period. Deferred revenue also includes advances from exchange transactions. Deferred revenue is presented as non-current if the revenue is due one year or more after the reporting date.
2.15 Revenue Revenue comprises gross inflows of economic benefits or service potential received and receivable by WHO during the year, and represents an increase in net assets/equity. The Organization recognizes revenue following the established criteria of IPSAS 9 (Revenue from Exchange Transactions) and IPSAS 23 (Revenue from Non-Exchange Transactions). The main sources of revenue for WHO include but are not limited to: Non-exchange revenue • Member States’ assessed contributions. Revenue from contributions from Member States and Associate Members is recorded annually at the beginning of the year as per the assessments approved by the Health Assembly. • Voluntary contributions. Revenue from voluntary contributions is recorded when a binding agreement is signed between WHO and the contributor. Where there are no payment terms specified by the contributor or payment terms are in the current accounting year, revenue is recognized immediately. • Contributions in-kind and in-service. Contributions in-kind and in-service received by WHO are recorded upon receipt from the contributor at an amount equal to their fair market value as determined at the time of acquisition. Other in-kind or in-service contributions are recognized as revenue with a corresponding entry to expense. Exchange revenue • Reimbursable procurement, concessions, and revolving sales. Revenue from reimbursable procurement on behalf of Member States or from the sale of goods or services is recorded on an accrual basis at the fair value of the consideration received or receivable when it is probable that
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the future economic benefits and/or service potential will flow to WHO and those benefits can be measured reliably.
2.16 Expenses Expenses are decreases in economic benefits or service potential during the reporting period in the form of outflows, consumption of assets, or incurrences of liabilities that result in decreases in net assets/equity. WHO recognizes expenses at the point where goods have been received or services rendered (delivery principle) and not when cash or its equivalent is paid.
2.17 Fund accounting Fund accounting is a method of segregating resources into categories (i.e. funds) to identify both the source and the use of the funds. Establishing such funds helps to ensure better reporting of revenue and expenses. The General Fund, the Special Purpose Fund, the Enterprise Fund and the Fiduciary Fund serve to ensure the proper segregation of revenue and expenses. Any transfers between funds that would result in duplication of revenue and/or expenses are eliminated during consolidation. Intra-fund transfers such as programme support costs within the General Fund are also eliminated. General Fund The accounts contained under this fund support the implementation of the programme budget. The General Fund contains the following accounts: • Member States’ Assessed Contributions Fund. This fund consolidates revenues and expenses arising from assessed contributions from Member States. • Member States’ Non-Assessed Income Fund. This fund (formerly referred to as the Miscellaneous Income Fund) consolidates all sources of revenue attributable to Member States other than current period assessed contributions. The Fund earns revenue from interest and other miscellaneous revenue. • Tax Equalization Fund. In accordance with resolution WHA21.10, in which the Health Assembly decided to establish the Tax Equalization Fund, the assessed contributions of all Member States are reduced by the revenue generated by the staff assessment plan. In determining the reduction of assessed contributions to be applied to the Member States concerned, the Tax Equalization Fund is credited with the revenue from the staff assessment plan, the credits being recorded in the name of individual Member States, in proportion to their assessments for the biennium. For those Member States that levy income tax on emoluments received from the Organization by their nationals or others liable to such taxes, the credit from the staff assessment plan is charged with the estimated amount to be levied by those Member States. Those amounts which have been charged are, in turn, used by the Organization to reimburse income tax paid by the staff concerned as per resolution WHA21.10. • Working Capital Fund. The Fund was established to implement the programme budget pending receipt of assessed contributions in arrears. In accordance with Financial Regulation VII, implementation of that part of the budget financed from assessed contributions may be financed from the Working Capital Fund and thereafter by internal borrowing against available cash reserves of WHO, excluding trust funds. Amounts borrowed are repaid from the collection of arrears of assessed contributions and are credited first against any internal borrowing outstanding and then against any borrowing outstanding from the Working Capital Fund. • Voluntary funds (core, specified and partnerships). This fund consolidates revenue and expenses arising from voluntary contributions and includes the special account for servicing costs.
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Member States – other Member States ‒ other contains the following accounts: • Common Fund. This fund reflects the movement in the asset and liability accounts of the Organization resulting from changes in items such as inventory, depreciation and unrealized exchange gains and losses. • Enterprise Fund. This fund contains accounts that generate self-sustaining revenue. The revenue and expenses under this fund are not included in the reporting of the programme budget. The Enterprise Fund contains the following accounts: – Revolving Sales Fund1 – Concessions Fund – Insurance Policies Fund – Office/Garage Rental Fund – Reimbursable Procurement Fund2 – Global Conference and Training – Tunis Fund • Special Purpose Fund. The accounts contained under this fund represent transfers from the General Fund or appropriations by the Health Assembly. The revenue and expenses under this fund are not included in the reporting of the programme budget. The Special Purpose Fund contains the following accounts: – Real Estate Fund – Security Fund – Information Technology Fund – Revolving Fund for Teaching and Laboratory Equipment 3 – Special Fund for Compensation – Terminal Payments Fund – Non-Payroll Staff Entitlements Fund – Post Occupancy Charge Fund – Internal Service Cost Recovery Fund – Staff Health Insurance Fund Fiduciary Fund This fund accounts for assets that are held by WHO in a trustee or agent capacity for others and that cannot be used to support the Organization’s own programmes. The Fund includes the assets of the partnerships that are administered by the Organization and whose budgets are not approved by the Health Assembly. Similarly, financial activities related to the financing of WHO ’s long-term liabilities
In accordance with Health Assembly resolutions WHA22.8 and WHA55.9, the Fund is credited with proceeds from the sale of publications, international certificates of vaccination, films, videos, DVDs and other information material. The related costs of production and printing are charged to the Fund. Transactions under this fund are from exchange transactions. Total revenue equals total expenses, hence there is no fund balance at year-end. The Revolving Fund for Teaching and Laboratory Equipment was established in 1966 under resolution WHA19.7. Activity in the Fund has been very limited and the small amounts remaining have been transferred to the Reimbursable Procurement Fund. Any new requests for teaching and laboratory equipment will be accounted for under the latter Fund. 3 2
1
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are managed through this fund. The Fund is not available for operations and does not contribute to the Programme budget 2012–2013. The Fiduciary Fund contains the following accounts: • WHO Framework Convention on Tobacco Control • Stop TB Partnership Global Drug Facility Fund • Roll Back Malaria Partnership Fund • Health Metrics Network Fund1 • Partnership for Maternal, Newborn and Child Health Fund • United Nations System Standing Committee on Nutrition Fund • Alliance for Health Policy and System Research Fund • Global Health Workforce Alliance Fund
2.18 Segment reporting As required under IPSAS, WHO reports on segments based on its regional structure. Revenue, expenses, assets and liabilities are reported for each major office (region). The use of major offices is in line with the way that Member States and management make decisions over the allocation of resources to the Organization. WHO’s programme budget is presented by major office, which supports using major offices as the segments. Furthermore, the accountability for results and management of assets and liabilities lies with the heads of each regional office.
2.19 Statement of Cash Flow The Statement of Cash Flow (Statement IV) is prepared using the indirect method.
2.20 Budget comparison WHO’s budget and accounting bases differ. Budgets within the Organization are approved on a modified cash basis rather than the full accrual basis of IPSAS. In addition, budgets are prepared on a biennial basis. Whereas WHO’s financial statement covers all the activities of the Organization, budgets are approved only for the General Fund. There are no approved budgets for other funds. All funds are administered in accordance with the Financial Regulations and Financial Rules. As required under IPSAS 24, the actual amounts presented on a comparable basis to the budget shall, where the financial statements and the budget are not prepared on a comparable basis, be reconciled to the actual amounts presented in the financial statements, identifying separately any basis, timing, presentation and entity differences. There may also be differences in formats and classification schemes adopted for the presentation of financial statements and the budget. The Health Assembly approved the Programme budget 2012‒2013 through resolution WHA64.3. WHO’s Statement V: Statement of Comparison of Budget and Actual Amounts compares the final budget to actual amounts calculated on the same basis as the corresponding budgetary amounts. As the bases used to prepare the budget and financial statements differ, Note 7 provides a reconciliation between the actual amounts presented in Statement V to the actual amounts presented in Statement IV.
1
The Health Metrics Network Fund closed in May 2013.
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2.21 Consolidated and non-consolidated entities Non-consolidated entities WHO provides administrative services to a number of entities. Each of these entities produces a full set of financial statements that are subject to a separate audit. The following six entities have their own governing bodies and are not controlled by the Health Assembly: • Trust Fund for the Joint United Nations programme on HIV/AIDS (UNAIDS) • International Drug Purchase Facility (UNITAID) • International Agency for Research on Cancer (IARC) • International Computing Centre (ICC) • African Programme for Onchocerciasis Control (APOC)1 • Staff health insurance (SHI)
Consolidated entities WHO administers or participates in a large number of global health partnerships, and maintains some special programmes and collaborative arrangements. All of these contribute to the achievement of the Organization’s objectives and as such were reflected in the Programme budget 2012 –2013, under the Special programmes and collaborative arrangements segment of the budget. The activities implemented by the Organization have been consolidated under the General Fund. The activities covered under the Special programmes and collaborative arrangements segment of the budget, following a revision made at the beginning of 2012, are as follows: • Codex Alimentarius Commission • European Observatory on Health Systems and Policies • Collaboration with partners in the GAVI Alliance • Global Polio Eradication Initiative • Health and Nutrition Tracking Service • Intergovernmental Forum on Chemical Safety • UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases (TDR) • UNDP/UNFPA/UNICEF/WHO/World Bank Special Programme of Research, Development and Research Training in Human Reproduction (HRP) • HIV Vaccine Initiative (including the African AIDS Vaccine Programme) • Vaccine research partnerships • Partnership for the control of neglected tropical diseases • WHO/UN Programme on Prequalification of Medicines • WHO-FAO-OIE agreement on the management of avian influenza and other emerging diseases • WHO Centre for Health Development (Kobe) • World Alliance for Patient Safety • Stop TB Partnership, including Green Light Committee and Global Laboratory Initiative In addition, other partnerships are included as part of the Fiduciary Fund.
1
Includes residual values for the former Onchocerciasis Control Programme.
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3. 3.1
Note on the transitional provision and restatement of balances Application of the transitional provision
Adjustment to land and building. As permitted under IPSAS 17, WHO elected to recognize all property, plant and equipment within five years of the Organization’s adoption of IPSAS. During 2013, WHO recognized all land and buildings owned at the regional offices and the country offices. Following the recognition of these assets, opening net assets/equity were adjusted and increased by US$ 22.6 million as summarized below. 1 January 2013 Land – regional offices Buildings – regional and country offices Total land and buildings – regional Less: accumulated depreciation Adjustment to net assets/equity 13 618 37 721 311 37 734 929 15 142 720 22 592 209
3.2
Restatement of balances
The table below summarizes the restatement of the net assets/equity balances from the balances reported at 31 December 2012 to the opening restated balance at 1 January 2013 as reported in the Statement of Changes in Net Assets/Equity (Statement III). 1 January 2013 (restated) General Fund Member States – regular budget Voluntary funds Total General Fund Member States – other Common Fund Enterprise Fund Special Purpose Fund Total Member States – other Fiduciary Fund Fiduciary Fund Total Fiduciary Fund TOTAL NET ASSETS/EQUITY 148 477 124 148 477 124 1 181 299 669 – – 22 592 209 148 477 124 148 477 124 1 158 707 460 – – (714 140) 148 477 124 148 477 124 1 159 421 600 129 557 780 9 577 959 (832 443 395) (693 307 656) 22 592 209 – – 22 592 209 106 965 571 9 577 959 (832 443 395) (715 899 865) (714 140) – – (714 140) 107 679 711 9 577 959 (832 443 395) (715 185 725) 84 121 732 1 642 008 469 1 726 130 201 – – – 84 121 732 1 642 008 469 1 726 130 201 – – – 84 121 732 1 642 008 469 1 726 130 201 Transitional provision 31 December 2012 (restated) Other adjustments 31 December 2012
Adjustment to inventory. The inventory valuation method has been adjusted to include packaging, freight and insurance costs. For comparative purposes, the prior year ’s balance was restated. As a result of this adjustment, the closing value as at 31 December 2012 of medicines, vaccines and humanitarian supplies increased by US$ 5.8 million. Inventory was also restated to recognize only WHO publications. Following this adjustment, the closing balance of inventory as at 31 December 2012 was reduced by US$ 5.6 million. These adjustments resulted in an increase to net assets/equity of US$ 155 711.
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Adjustment to long-term borrowings. Long-term borrowings has been adjusted to reflect the appropriate discount rate. Due to this adjustment, the closing balance of long-term borrowings as at 31 December 2012 increased by US$ 869 851. Consequently, the balance of net assets/equity was reduced by the same amount. Mapping changes • Deposits are reported together with prepayments. For comparative purposes, 2012 balances were restated. • In the 2012 comparative figures US$ 450 million have been re-classified from cash and cash equivalents to short-term investments. • The presentation of figures in the 2013 notes has made it necessary, for comparative purposes, to restate certain figures for 2012.
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4. 4.1
Supporting information to the Statement of Financial Position Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at banks, investments in money market funds, collateral deposits, bank deposits, and short-term highly liquid investments with original maturity dates of three months or less from the date of acquisition. Cash and cash equivalents are held for the purpose of meeting the short-term cash requirements of the Organization, rather than for longer-term investment purposes. They are held on behalf of the Organization, including the General Fund, the Special Purpose Fund, the Enterprise Fund, the Fiduciary Fund and non-WHO entities administered by the Organization. The figures include cash and cash equivalents held in the portfolios managed by investment managers. 31 December 2013 Major office Headquarters (Note a) Regional Office for Africa Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific Cash at banks, investment accounts, in transit and on hand Headquarters Cash and cash equivalents held by investment portfolios Total cash and cash equivalents 299 869 779 21 127 629 7 662 109 1 173 557 4 455 997 3 948 813 338 237 884 376 603 874 376 603 874 714 841 758 171 023 455 29 126 359 23 389 879 1 531 029 7 799 091 5 596 234 238 466 047 495 892 369 495 892 369 734 358 416 31 December 2012 (restated)
Note a. The cash and cash equivalents figure for headquarters of US$ 299.9 million included a large remittance for UNITAID of US$ 151.4 million received on 31 December 2013 which was after the cut-off for investment in the investment portfolios.
4.2
Investments and financial instruments
Details of the accounting policies for investments and financial instruments are described in Note 2.2. WHO’s principal investment objectives in descending order of priority are: • the preservation of capital; • the maintenance of sufficient liquidity to meet the payment of liabilities on time; and • the optimization of investment returns. The Organization’s investment policy reflects the nature of its funds, which may either be held short-term pending implementation of programmes, or held longer term to meet its long-term liabilities. WHO’s investments include funds managed for other entities. An analysis of the investments of the Organization is provided in the following table.
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Investments and financial instruments (US dollars) Internally managed funds Cash and time deposits Investments under current assets Cash and cash equivalents held by investment portfolios Short-term investments Financial assets at fair value through surplus or deficit – held-for-trading Financial assets at fair value through surplus or deficit – upon initial recognition Financial assets at amortized cost Bank deposits and other receivables Total short-term investments Total investments under current assets Investments under non-current assets Long-term investments Financial assets at fair value through surplus or deficit – upon initial recognition Financial assets at amortized cost Total long-term investments Total investments under non-current assets Financial liabilities under current liabilities Financial liabilities Financial liabilities at fair value through surplus or deficit – held-for-trading Payables and accruals Total financial liabilities Total financial liabilities under current liabilities Total investments – net – – – – 1 151 756 507 – – – – 236 576 435 – – – – 27 106 530 – – – – 1 415 439 472 (640 400) (15 847 246) (16 487 646) (16 487 646) 333 452 911 – (11) (11) (11) 250 695 487 – (534) (534) (534) 433 397 960 (318 212) (1) (318 213) (318 213) 416 678 591 (958 612) (15 847 792) (16 806 404) (16 806 404) 1 434 224 949 (2 830 786) – (2 830 786) (2 830 786) 8 466 447 (3 789 398) (15 847 792) (19 637 190) (19 637 190) 2 858 130 868 – – – – – 55 068 481 55 068 481 55 068 481 26 751 415 – 26 751 415 26 751 415 26 751 415 55 068 481 81 819 896 81 819 896 – – – – – – – – – – – – – – – – – – – – – – – – 26 751 415 55 068 481 81 819 896 81 819 896 – – – 1 126 541 995 1 126 541 995 1 151 756 507 – – 181 146 504 194 435 181 340 939 181 507 954 353 075 353 075 355 115 – – – – 181 146 504 1 127 089 505 1 308 236 009 1 333 619 576 11 219 637 101 518 903 349 940 557 882 663 245 307 402 250 695 498 1 097 811 348 962 206 433 398 494 928 282 404 022 535 416 996 804 14 128 393 1 099 811 046 1 451 031 353 348 783 89 950 483 175 093 244 249 646 4 248 347 860 147 12 582 403 081 671 540 706 1 085 141 947 11 297 233 – – – 11 297 233 11 297 233 11 837 939 1 085 141 947 181 146 504 1 141 217 898 2 419 344 288 2 795 948 162 25 214 512 167 015 2 040 25 383 567 248 421 654 5 388 096 84 436 288 12 974 269 351 220 307 – 376 603 874 Held-tomaturity portfolio Long-term portfolio Short-term portfolio A Externally managed funds Short-term portfolio B Short-term portfolio C Short-term portfolio D Foreign exchange hedging contracts Total managed funds and contracts
Total
Total
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Short-term investments Short-term investments relating to funds held pending the implementation of programmes are invested in cash and high-quality short-term government, agency, corporate bonds and time deposits as defined in the approved investment policy. Investments included within “financial assets at fair value through surplus or deficit” include fixed-income securities and derivative instruments held to cover projected liabilities and any unexpected cash requirements. Financial assets in the externally managed portfolios designated upon initial recognition as at fair value through surplus or deficit are classified as short-term investments where the investment time horizon objective of these portfolios is less than or equal to one year. For short-term tactical investment reasons, the external managers of these portfolios may from time to time decide to lengthen temporarily the average duration of these portfolios to slightly longer than one year. This will not change the short-term classification of these financial assets unless the investment time horizon objective of the portfolio and the duration of its benchmark have been changed to more than one year. The investments in the “held-to-maturity” portfolio with a duration of less than one year are classified as current assets in the category “financial assets at amortized cost”. Other receivables include accrued revenue on investments and receivables from investments that were sold but settled after 31 December 2013. Financial assets at fair value through surplus or deficit – held-for-trading Financial assets at fair value through surplus or deficit – upon initial recognition Financial assets at amortized cost Bank deposits and other receivables Total short-term investments 31 December 2013 11 837 939 1 085 141 947 181 146 504 1 141 217 898 2 419 344 288 31 December 2012 23 817 731 870 420 661 48 575 780 876 716 968 1 819 531 140
Long-term investments Long-term investments are placed for the Terminal Payments Fund in line with the approved investment policy and are invested in high-quality, medium-dated and long-dated, government, agency and corporate bonds. The financial assets at fair value through surplus or deficit upon initial recognition in the Terminal Payments Fund investment portfolio are classified as long-term investments in accordance with the investment time horizon objective of the portfolio and the duration of its benchmark which are both greater than one year. Investments in the held-to-maturity portfolio whose maturity date is in more than one year are classified as “financial assets at amortized cost”. 31 December 2013 Financial assets at fair value through surplus or deficit – upon initial recognition Financial assets at amortized cost Total long-term investments 26 751 415 55 068 481 81 819 896 31 December 2012 35 844 887 230 478 694 266 323 581
Financial liabilities Financial liabilities disclosed under “financial liabilities at fair value through surplus or deficit ‒ held-for-trading” include derivative transactions such as foreign exchange forward contracts and interest rate swaps. Financial liabilities disclosed under “payables and accruals” relate to other financial liabilities from investments, including assets purchased before 31 December 2013 and settled after that date. 31 December 2013 Financial liabilities at fair value through surplus or deficit – held-for-trading Payables and accruals Total financial liabilities 3 789 398 15 847 792 19 637 190 31 December 2012 13 289 400 8 114 027 21 403 427
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The fair value hierarchy The fair value hierarchy represents the categorization of market pricing to indicate the relative ease with which the value of investments held by WHO can be realized. The majority of the financial instruments held by WHO have quoted prices in active markets and are classified as Level 1. Derivative instruments that are “over-the-counter” are classified as Level 2 because their fair value is observable ‒ either directly as a price, or indirectly after being derived from prices. The instruments shown under the Level 2 fair value measurement category consist of the foreign currency hedging forward contracts and the derivative contracts in the externally managed portfolios. Level 3 valuations include financial instruments for which the fair value is not based on observable market data. As at 31 December 2013, WHO held no financial instruments that would be classified as Level 3. Level 1 Cash and cash equivalents Short-term investments Financial assets at fair value through surplus or deficit – held-for-trading Financial assets at fair value through surplus or deficit – upon initial recognition Long-term investments Financial assets at fair value through surplus or deficit – upon initial recognition Financial liabilities Financial liabilities at fair value through surplus or deficit – held-for-trading Total (46 200) 1 259 785 931 (3 707 336) 7 928 162 (3 753 536) 1 267 714 093 26 751 415 – 26 751 415 23 100 1 085 141 947 11 635 498 – 11 658 598 1 085 141 947 147 915 669 Level 2 – Total 147 915 669
Risk management WHO is exposed to financial risks including credit risk, interest rate risk, foreign exchange risk and investment price risk. The Organization uses derivative financial instruments to hedge some of its risk exposures. In accordance with WHO’s Financial Regulations, funds not required for immediate use may be invested. All investments are carried out within the framework of the investment policy approved by the Director-General. Some portfolios are managed by external managers appointed by the Organization to manage funds in accordance with a defined mandate. The Advisory Investment Committee reviews regularly the investment policies, the investment performance and the investment risk for each investment portfolio. The Committee is composed of external investment specialists who can make investment recommendations to the Director-General. Nature of financial instruments Investments are categorized as follows: • Investments with short-term maturities. These investments are invested in cash and high-quality short-dated government, agency, and corporate bonds as defined in the approved investment policy. • Investments with long-term maturities. These investments comprise funds managed for the Terminal Payments Fund as defined in the approved investment policy. They are invested in high-quality medium-dated and long-dated, government, agency, and corporate bonds. Credit risk WHO’s investments are widely diversified in order to limit its credit risk exposure to any individual investment counterparty. Investments are placed with a wide range of counterparties using minimum
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credit quality limits and maximum exposure limits by counterparty established in investment mandates. These limits are applied both to the portfolios managed internally by the Organization’s Treasury Unit, and to the portfolios managed by external investment managers. The Treasury Unit monitors the total exposure to counterparties across all internally and externally managed portfolios. The credit risk and liquidity risk for cash and cash equivalents are minimized by investing only in major financial institutions that have received strong investment grade credit ratings from primary credit rating agencies. The Treasury Unit regularly reviews the credit ratings of the approved financial counterparties and takes prompt action whenever a credit rating is downgraded. The investments with long-term credit ratings are summarized as follows. Minimum rating category AAA AA+ AA AAA+ A ABBB+ Total asset value US dollars 191 645 568 579 425 968 44 148 168 348 003 179 55 248 290 62 099 603 46 918 561 2 039 898 1 329 529 235
Interest rate risk WHO is exposed to interest rate risk through its short-term and long-term fixed-income investments. The investment duration is a measure of sensitivity to changes in market interest rates, and the effective average duration of the Organization’s investments as at 31 December 2013 was 0.4 years for the short-term investments and 2.1 years for the long-term investments. Fixed-income derivative instruments may be used by external investment managers to manage interest rate risk under strict investment guidelines. Interest rate instruments of this type are used for portfolio duration management and for strategic interest rate positioning. Foreign exchange currency risk WHO receives contributions and makes payments in currencies other than the United States dollar and the Organization is thus exposed to foreign exchange currency risk arising from fluctuations in currency exchange rates. Exchange rate gains and losses on the purchase and sale of currencies, revaluation of cash book balances, and all other exchange differences are adjusted against the funds and accounts eligible to receive interest under the interest apportionment programme. The translation of transactions expressed in other currencies into the United States dollar is performed at the United Nations Operational Rates of Exchange prevailing at the date of transaction. Assets and liabilities that are denominated in foreign currencies are translated at the Operational Rates of Exchange prevailing at the end of each month. Forward foreign exchange contracts are transacted to hedge foreign currency exposures and to manage short-term cash flows. Realized and unrealized gains and losses resulting from the settlement and revaluation of foreign currency transactions are recognized in the Statement of Financial Performance. With effect from 2014, 50% of assessed contributions are now calculated in Swiss francs to reduce the currency risk of headquarters expenses in that currency. 1
1
See resolution WHA66.16.
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Hedging foreign exchange exposures on future payroll costs. The United States dollar value of non-dollar expenses in 2014 has been protected from the impact of movements in foreign exchange rates through the transaction of forward currency contracts during 2013. As at 31 December 2013 these forward foreign currency exchange hedging contracts by currency are summarized as follows. Currency forward bought Swiss francs Egyptian pounds Euros Indian rupees Malaysian ringgits Philippine pesos Total Net amount sold (US dollars) 113 347 734 7 182 500 106 934 740 16 480 363 10 062 722 17 025 838 271 033 897 Net unrealized gain/(loss) (US dollars) 5 411 022 950 187 3 813 087 (360 627) (279 730) (645 001) 8 888 938
105 600 000 59 500 000 80 400 000 1 038 000 000 32 400 000 724 800 000
There was a net unrealized gain on these contracts of US$ 8.9 million as at 31 December 2013 (unrealized gain of US$ 10.1 million as at 31 December 2012). Realized gains or losses on these contracts will be recorded on maturity of the contracts and applied during 2014. Hedging foreign exchange exposures on receivables and payables. Currency exchange risk arises as a result of differences in the exchange rates at which foreign currency receivables or payables are recorded, and the exchange rates at which the cash receipt or payment is subsequently recorded. A monthly programme of currency hedging is in place to protect against this foreign currency risk. On an ongoing monthly basis the exposures in respect of awards, accounts receivable and accounts payable are netted by currency and each significant net foreign currency exposure is bought or sold forward using a forward foreign exchange contract equal and opposite to the net currency exposure. These exposures are re-balanced at each month-end to coincide with the setting of the monthly United Nations Operational Rates of Exchange. Through this process the exchange gains or losses realized on the forward foreign currency contracts match the corresponding unrealized exchange losses and gains on the movements in net accounts receivable and accounts payable. As at 31 December 2013 the total forward foreign currency exchange hedging contracts by currency were as follows. Currency forward sold Australian dollars Canadian dollars Swiss francs Euros Pounds sterling Norwegian kroner Swedish kronor Total 19 200 000 58 900 000 20 000 000 127 600 000 137 900 000 3 000 000 25 000 000 Currency forward bought (US dollars) 17 075 520 55 193 740 22 574 459 176 236 365 227 699 656 489 207 3 851 853 503 120 800 Net unrealized gain/(loss) (US dollars) (23 090) (219 064) 106 904 524 423 (626 366) (4 512) (30 252) (271 957)
There was a net unrealized loss on these contracts of US$ 0.3 million as at 31 December 2013 (unrealized net gain of US$ 0.2 million as at 31 December 2012). Realized gains or losses on these contracts will be recorded on the maturity of the contracts and applied during 2014. Forward foreign exchange contracts to manage operational cash flows. Forward foreign exchange contracts are also used to manage short-term cash flows of foreign currency balances to minimize foreign currency transaction risk. At 31 December 2013 the total amount bought was CHF 23.7 million against the United States dollar. The maturity dates of these forward foreign exchange contracts fall in January and February 2014. Net unrealized losses on these contracts amounted to US$ 150 533 as at 31 December 2013 (unrealized net losses of US$ 26 277 as at 31 December 2012).
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Sensitivity of forward foreign exchange contracts to movements in the relative value of the United States dollar. A 1% appreciation in the relative value of the United States dollar against the forward foreign exchange hedging contracts mentioned above would result in an increase in the net unrealized gain of US$ 2.2 million. A 1% depreciation in the relative value of the United States dollar would result in a decrease in the net unrealized gain of US$ 2.3 million. Forward foreign exchange contracts and other derivative financial instruments held within the externally managed investment portfolios. In accordance with the investment guidelines set up for each externally managed portfolio, the external investment managers use forward foreign exchange contracts, futures contracts and interest rate swap contracts to manage the currency and interest rate risk of groups of securities within each portfolio. The net values of these instruments as at 31 December 2013, as evaluated by the Organization’s investment custodian, are recorded by portfolio under “financial assets/liabilities at fair value – held-for-trading”. The outstanding forward foreign exchange contracts are summarized below. Net sold amount Australian dollars Canadian dollars Euros Pounds sterling Japanese yen Total 287 000 3 449 000 10 803 000 13 150 000 351 394 994 (US dollar equivalent) 256 699 3 242 690 14 885 815 21 778 580 3 343 359 43 507 143
A 1% appreciation in the relative value of the United States dollar against the above-mentioned forward foreign exchange hedging contracts would result in an increase in the unrealized gain of US$ 0.4 million. A 1% depreciation in the relative value of the United States dollar would result in an increase in the unrealized loss of US$ 0.5 million. The outstanding interest rate futures and options contracts are summarized below. Long positions Products Call option Euribor 9975 DEC 2014 Eurodollar JUN 2016 Eurodollar SEP 2016 Exchange (Note a) IMM IMM IMM No. of contracts 462 551 133
Short positions Products Eurodollar MAR 2014 Eurodollar JUN 2014 Eurodollar SEP 2014 Eurodollar DEC 2014 Put option Euribor 9900 DEC 2014 Eurodollar MAR 2015 Eurodollar JUN 2015 Eurodollar SEP 2015 Eurodollar DEC 2015 Eurodollar MAR 2016 Eurodollar JUN 2016 Eurodollar SEP 2016 Eurodollar DEC 2016 Eurodollar MAR 2017 Eurodollar JUN 2017 Eurodollar SEP 2017 Eurodollar DEC 2017 Eurodollar MAR 2018 Exchange (Note a) IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM IMM No. of contracts (8) (8) (8) (8) (462) (8) (8) (8) (8) (8) (8) (8) (8) (7) (5) (5) (5) (1)
Note a. IMM refers to the International Monetary Market on the Chicago Mercantile Exchange.
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The outstanding interest rate swap contracts are summarized below. Currency/notional amount Australian dollars Euros 30 500 000 1 600 000 (US dollar equivalent) 27 286 824 2 204 720 Pay/receive Pay fixed/receive floating Pay fixed/receive floating Maturity June 2016 September 2022
4.3
Accounts receivable ‒ net
As at 31 December 2013, total accounts receivable ‒ net amounted to US$ 1082 million (US$ 905 million as at 31 December 2012). The receivable balance includes outstanding amounts for both assessed and voluntary contributions. Accounts receivable are split between current and non-current based on the payment terms of when the amounts become due. 31 December 2013 Accounts receivable – net current Member States’ assessed contributions receivable – current biennium Member States’ assessed contributions receivable – previous biennium Voluntary contributions receivable Reimbursable procurement receivable Revolving sales receivable Other receivables Allowance for doubtful accounts receivable Total accounts receivable – net current Accounts receivable – net non-current Outstanding rescheduled assessments receivable Voluntary contributions receivable Allowance for doubtful accounts receivable Total accounts receivable – net non-current Total accounts receivable – net 31 165 856 346 512 477 (31 165 856) 346 512 477 1 082 033 199 34 757 280 210 277 136 (34 757 280) 210 277 136 905 331 773 82 030 622 1 153 882 670 280 507 411 743 247 602 4 335 271 (22 938 905) 735 520 722 65 246 279 4 136 501 641 850 953 1 092 985 388 748 2 691 663 (20 352 492) 695 054 637 31 December 2012
As at 31 December 2013, the total allowance for doubtful accounts receivable was US$ 54.1 million (US$ 55.1 million at 31 December 2012). This figure comprises an allowance of US$ 42.4 million for assessed contributions and an allowance of US$ 11.7 million for voluntary contributions. The allowance for assessed contributions receivable includes any Member State with amounts receivable from prior years, all rescheduled amounts receivable and any current amounts receivable from Member States in arrears. The allowance for voluntary contributions receivable is based on a detailed review of all amounts receivable more than one year overdue and on a review of amounts less than one year overdue where there is evidence that the amount is unlikely to be received.
A67/43 Page 47 31 December 2013 Opening balance – assessed contributions Write-off of unpaid arrears from the former Yugoslavia Increase/(decrease) in allowance for doubtful accounts receivable Ending balance – assessed contributions Opening balance – voluntary contributions Increase in allowance for doubtful accounts receivable Ending balance – voluntary contributions Total allowance for doubtful accounts receivable Allowance for doubtful accounts receivable Allowance – current Allowance – non-current Total allowance for doubtful accounts receivable 22 938 905 31 165 856 54 104 761 20 352 492 34 757 280 55 109 772 44 072 658 – (1 666 156) 42 406 502 11 037 114 661 145 11 698 259 54 104 761 31 December 2012 47 175 926 (5 532 592) 2 429 324 44 072 658 10 145 034 892 080 11 037 114 55 109 772
With certain contributors, WHO signs agreements that may span many years of implementation. These agreements do not state the payment terms for the transfer of instalments; instead, they are reimbursed based on quarterly expenses incurred. WHO records the full amount of revenue in the financial year in which the agreement is signed and recognizes the full receivable as currently due. As at 31 December 2013, the total receivable shown as currently due under this arrangement was US$ 267 million, of which US$ 83 million were due on agreements ending in 2015 and beyond.
4.4
Staff receivables
In accordance with WHO’s Staff Regulations and Staff Rules, staff members are entitled to certain advances including those for salary, education, rent and travel. The total balance of staff receivables amounted to US$ 11.3 million as at 31 December 2013 (US$ 12.3 million as at December 2012). The education grant balance represents advances made to staff for the 2014 portion of the school year 2013‒2014. 31 December 2013 Salary advances Education grant advances Rental advances Travel receivables Other staff receivables Total staff receivables 1 154 218 7 450 670 1 658 710 1 123 975 (38 213) 11 349 360 31 December 2012 2 465 979 6 706 172 1 906 945 1 013 709 171 132 12 263 937
4.5
Inventories
The total value of inventory as at 31 December 2013 was US$ 51.1 million (US$ 67.6 million as at 31 December 2012 – restated).
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The following table shows the movement of inventory items during the year. 31 December 2012 (restated) Medicines, vaccines and humanitarian supplies Publications Total inventory 58 236 284 9 377 750 67 614 034 Net additions 40 983 718 7 395 476 48 379 194 Net shipments 41 895 831 5 227 576 47 123 407 Net disposals and expired items 16 303 746 1 441 986 17 745 732 31 December 2013 41 020 425 10 103 664 51 124 089
WHO recognizes medicines, vaccines, humanitarian supplies, and publications as part of its inventory. Inventories are valued taking the lower amount of (i) cost or (ii) net realizable value. Inventories were validated by a physical stock count in December 2013. Inventory cost for medicines, vaccines and humanitarian supplies includes an apportionment of packaging, freight and insurance charges. Total expenses relating to inventories during the period (net shipments, net disposals and expired items) amounted to US$ 64.9 million (US$ 58.7 million as at 31 December 2012).
4.6
Prepayments and deposits (restated)
The total value of prepayments was US$ 3.5 million (US$ 1.6 million as at 31 December 2012). These represent payments to suppliers in advance of the receipt of goods or services. It is common practice for technical service contractors to request payments in advance to support project work. When goods or services are delivered, prepayments are applied to the appropriate expense account. Prepayments include US$ 0.2 million of deposits (US$ 0.3 million as at 31 December 2012). Deposits represent amounts given to landlords as a security to rent office space.
4.7
Other current assets
Other current assets were nil as at 31 December 2013. The amount of US$ 12.2 million as at 31 December 2012 related to a receivable from PAHO which was collected in 2013.
4.8
Property, plant and equipment – net
WHO has invoked the transitional provision under IPSAS 17, which allows a period of up to five years before requiring full recognition of property, plant and equipment. In 2013, the Organization recognized all land and buildings owned at the regional offices and country offices. All other assets were expensed upon acquisition. As at 31 December 2013, the total value of land and buildings recognized (net of accumulated depreciation) was US$ 61.7 million (US$ 41.2 million as at 31 December 2012).
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Major office Headquarters Land Buildings Total property – headquarters New additions (transitional provision) Regional Office for Africa Land Buildings Total property – Regional Office for Africa Regional Office for the Eastern Mediterranean Buildings Total property – Regional Office for the Eastern Mediterranean Regional Office for South-East Asia Buildings Total property – Regional Office for South-East Asia Regional Office for the Western Pacific Buildings Total property – Regional Office for the Western Pacific Total WHO Land Buildings Total property – WHO
31 December 2012
Disposals
Impairments
Depreciation
31 December 2013
1 000 095 40 180 783 41 180 878
– – –
– – –
– – –
– (1 116 194) (1 116 194)
1 000 095 39 064 589 40 064 684
– – –
13 618 2 393 860 2 407 478
– – –
– – –
– (158 423) (158 423)
13 618 2 235 437 2 249 055
– –
17 314 599 17 314 599
– –
– –
(340 444) (340 444)
16 974 155 16 974 155
– – – – –
258 856 258 856
– –
– –
(28 761) (28 761)
230 095 230 095 –
2 611 276 2 611 276
– –
– –
(435 214) (435 214)
2 176 062 2 176 062
1 000 095 40 180 783 41 180 878
13 618 22 578 591 22 592 209
– – –
– – –
– (2 079 036) (2 079 036)
1 013 713 60 680 338 61 694 051
In order to ensure appropriate control and stewardship over property, plant and equipment, existing assets have been recorded in the asset register, except for the African Region which continues to maintain its asset register offline. In 2013, new property, plant, and equipment in the amount of US$ 2.7 million was recognized in the assets register. This figure concerned only individual items with a value above US$ 5000. However, as WHO is using the transitional provision, these purchases were expensed upon acquisition. The details of the property, plant, and equipment concerned are as follows. Total Network equipment Vehicles and transport Computer equipment Other equipment Office equipment Audio visual equipment Communications equipment Security equipment Furniture, fixtures and fittings Total property, plant and equipment – excluding land and buildings 1 555 144 759 338 126 703 109 145 85 659 65 938 9 216 8 644 5 391 2 725 178
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4.9
Intangible assets
WHO has no intangible assets to report.
4.10 Contributions received in advance The amount for contributions received in advance mainly concerns payments received from Member States in 2013 for their 2014 assessed contributions. The balance for advance payments for voluntary contributions reflects funds received for agreements starting in 2014. Unapplied and unidentified receipts are amounts received in 2013 but not yet matched to awards as at 31 December 2013. 31 December 2013 Assessed contribution advances Advances for voluntary contributions Unapplied and unidentified receipts Other advances Total contributions received in advance 57 159 786 8 596 129 13 693 346 639 960 80 089 221 31 December 2012 60 363 091 19 327 188 6 622 339 17 261 86 329 879
4.11 Accounts payable Accounts payable represents the total amount due to suppliers by major office as at 31 December 2013. 31 December 2013 Headquarters Regional Office for Africa Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific Total accounts payable 10 397 884 6 024 997 6 275 565 1 261 224 3 127 172 2 632 093 29 718 935 31 December 2012 8 267 051 5 491 858 6 713 885 1 103 480 1 605 293 1 802 332 24 983 899
4.12 Staff payable The balance of staff payable represents the total amount outstanding to staff as at 31 December 2013. Salaries payable consist of balances due to staff pending the finalization of clearance certificates. Bank returns are balances due to staff for which the payment is pending the receipt of updated bank account information. 31 December 2013 Salaries payable Bank returns Travel claims payable Total staff payable 1 663 038 217 001 443 742 2 323 781 31 December 2012 1 807 549 1 494 157 1 064 309 4 366 015
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4.13 Accrued staff benefits Accrued staff benefits include terminal payments, staff health insurance and liabilities due to serviceincurred death or disability (Special Fund for Compensation). 31 December 2013 Accrued staff benefits – current Terminal payments Special Fund for Compensation Total accrued staff benefits – current Accrued staff benefits – non-current Terminal payments Special Fund for Compensation Staff health insurance Total accrued staff benefits – non-current Accrued staff benefits Terminal payments Special Fund for Compensation Staff health insurance Total accrued staff benefits 142 513 171 13 708 073 853 044 269 1 009 265 513 147 153 305 13 130 740 822 983 185 983 267 230 72 776 045 13 297 113 853 044 269 939 117 427 75 798 885 12 750 061 822 983 185 911 532 131 69 737 126 410 960 70 148 086 71 354 420 380 679 71 735 099 31 December 2012
Terminal payments The Terminal Payments Fund was established to finance the terminal emoluments of staff members, including repatriation grants, accrued annual leave, repatriation travel and removal on repatriation. The Terminal Payments Fund is funded by a charge made to salary. Liabilities arising from repatriation benefits and annual leave are determined by independent consulting actuaries. However, the accrued leave is calculated on a walk-away basis ‒ that is, as if all staff separated immediately ‒ and, therefore, is not discounted. The latest actuarial study (as at 31 December 2013) estimated the full terminal payment liability to be US$ 142.5 million (short-term liability, US$ 69.7 million; long-term liability, US$ 72.8 million). This calculation did not include costs for the end-of-service grant and for separation by mutual agreement on abolishment of posts. The defined benefit obligation amounted to US$ 85.4 million for terminal entitlements, and US$ 57.1 million for annual leave which is included in the terminal payments current balance. As per the actuarial study, a net reduction of US$ 4.7 million is recognized, by nature of expenses, in the Statement of Financial Performance (total liability was US$ 142.5 million in 2013 and US$ 147.2 million in 2012).
Staff health insurance WHO participates in a health insurance scheme. The scheme is managed as a separate entity, staff health insurance, which has its own governance. It provides for the reimbursement of expenses for medically recognized health care incurred by staff members, recognized dependants and retired staff. It is financed from the contributions made by the participants and the Organization. The Organization accounts for after-service staff health insurance as a post-employment benefit. All gains and losses were recognized upon the adoption of IPSAS 25. Thereafter, gains and losses
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(unexpected changes in surplus or deficit) will be recognized over time via the corridor method. Under this method, amounts up to 10% of the defined benefit obligation are not recognized, so as to allow gains and losses the reasonable possibility of offsetting one another over time. Gains and losses over 10% of the defined benefit obligation are amortized over the average remaining service period of active staff expected to receive each benefit. The defined benefit obligation as at 31 December 2013 was determined by professional actuaries, based on personnel data and past payment experience provided by WHO. As at 31 December 2013 the unfunded defined benefit obligation amounted to US$ 853 million for staff health insurance. Further details on the staff health insurance liability can be found in the annual report of the staff health insurance scheme. As per the actuarial study, an additional accrual of US$ 30 million is charged to staff costs (total liability was US$ 853 million in 2013 and US$ 823 million in 2012).
Special Fund for Compensation In the event of a death or disablement attributable to the performance of official duties of an eligible staff member, the Special Fund for Compensation covers all reasonable medical, hospital, and other directly related costs, as well as funeral expenses. In addition, the Fund will provide compensation to the disabled staff member (for the duration of the disability) or to the surviving family members. WHO accounts for the Special Fund for Compensation as a post-employment benefit. All gains and losses were immediately recognized upon adoption of IPSAS 25. Thereafter, gains and losses (unexpected changes in surplus or deficit) are recognized over time via the corridor method. Under this method, amounts up to 10% of the defined benefit obligation are not recognized, so as to allow gains and losses the reasonable possibility of offsetting one another over time. Gains and losses over 10% of the defined benefit obligation are amortized over the average remaining service of active staff expected to receive each benefit. For accounting purposes, the plan is considered unfunded (the liability is not reduced by plan assets). As per the actuarial study, an additional accrual of US$ 0.6 million (total liability was US$ 13.7 million in 2013 and US$ 13.1 million in 2012) has been recognized, by nature of expenses, in the Statement of Financial Performance.
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Actuarial summary of terminal payments, staff health insurance, and the Special Fund for Compensation (US dollars) Terminal payments (other than accrued leave) Reconciliation of defined benefit obligation Defined benefit obligation as at 31 December 2012 Service cost Interest cost Actual gross benefit payments for 2013 Actual administrative expenses Actual contributions by participants Actuarial (gain)/loss Defined benefit obligation as at 31 December 2013 Reconciliation of plan assets Assets as at 31 December 2012 Actual gross benefit payments for 2013 Actual administrative expenses WHO contributions during 2013 Participant contributions during 2013 Increase/decrease in WHO SHI Rule 470.1 liability Expected return on assets Asset gain/(loss) Assets as at 31 December 2013 Reconciliation of unfunded obligation status Defined benefit obligation Active Inactive Total defined benefit obligation Plan Assets Gross plan assets Offset for WHO SHI Rule 470.1 liability Total plan assets Deficit/(surplus) Unrecognized gain/(loss) Net liability/(asset) recognized in the Statement of Financial Position Current liability Non-current liability Net liability/(asset) recognized in the Statement of Financial Position Expenses for 2013 Service cost Interest cost Expected return on assets Recognition of (gain)/loss Total expenses recognized in the Statement of Financial Performance Expected contributions for 2014 WHO contributions Participant contributions Total expected contributions for 2014 12 873 860 – 12 873 860 46 247 543 13 641 792 59 889 335 418 494 – 418 494 9 726 167 2 415 533 – (6 451 463) 5 690 237 61 432 714 46 246 871 (23 358 401) – 84 321 184 763 622 343 936 – (56 036) 1 051 522 – – – 85 418 151 – 85 418 151 12 642 106 72 776 045 85 418 151 (577 689 085) 20 680 882 (557 008 203) 774 509 670 78 534 599 853 044 269 – 853 044 269 853 044 269 – – – 11 159 701 2 548 372 13 708 073 410 960 13 297 113 13 708 073 85 418 151 – 85 418 151 656 168 085 675 349 788 1 331 517 873 3 554 495 7 605 206 11 159 701 – (5 578 893) – 5 578 893 – – – – – 506 297 200 (54 912 151) (3 922 066) 57 899 034 29 346 942 (1 783 087) 23 358 401 723 930 557 008 203 – (474 189) – 474 189 – – – – – 85 306 807 9 726 167 2 415 533 (5 578 893) – – (6 451 463) 85 418 151 1 364 783 189 61 432 714 46 246 871 (33 771 503) (2 467 335) 8 607 410 (113 313 473) 1 331 517 873 11 656 298 763 622 343 936 (474 189) – – (1 129 966) 11 159 701 Staff health insurance Special Fund for Compensation
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Staff health insurance medical sensitivity analysis 2013 service cost plus interest cost Current medical inflation assumption minus 1% Current medical inflation assumption Current medical inflation assumption plus 1% 31 December 2013 defined benefit obligation Current medical inflation assumption minus 1% Current medical inflation assumption Current medical inflation assumption plus 1% 1 111 252 249 1 331 517 873 1 617 457 257 81 409 000 107 679 585 143 176 000
Actuarial methods and assumptions Each year the Organization identifies and selects assumptions and methods that will be used by the actuaries in the year-end valuation to determine the expense and contribution requirements for the Organization’s employee benefits. Actuarial assumptions are required to be disclosed in the financial statements in accordance with IPSAS 25. In addition, each actuarial assumption is required to be disclosed in absolute terms. Measurement date All plans: Discount rate Terminal payments (other than accrued leave): The discount rate used is 3.7% (increase from 3.0% in the prior valuation). Based on the combined projected benefit payments for both plans and with weights of 75% on the Aon Hewitt AA Bond Universe yield curve and 25% on the SIX Swiss Exchange yield curve as at 31 December 2013. The resulting discount rate is rounded to the nearest 0.1%. Europe, 2.9% (increase from 2.6% in prior valuation); the Americas, 4.9% (increase from 4.1% in prior valuation); Other Countries, 5.3% (increase from 4.5% in prior valuation. For Europe, beginning with the 31 December 2010 valuation, WHO adopted a yield curve approach to reflect the pattern of expected cash flows from the European major office. The rate is a weighted average of the 2.49% rate from the SIX Swiss Exchange curve and the 3.87% rate from the iBoxx Euro Zone curve, with a two-thirds weight on the former. The resulting rate is rounded to the nearest 0.1%. For the Americas and Other Countries, the rates use the same methodology as for PAHO’s valuation of the staff health insurance. Beginning with the 31 December 2012 valuation, PAHO adopted a yield curve approach using the Aon Hewitt AA Bond Universe Curve. The resulting rates for The Americas and Other Countries can differ due to different patterns of expected cash flows from those regions. Special Fund for Compensation: The discount rate is 3.7% (increase from 3.0% in the prior valuation). Based on the combined projected benefit payments for both plans and with weights of 75% on the Aon Hewitt AA Bond Universe yield curve and 25% on the SIX Swiss Exchange yield curve as at 31 December 2013. The resulting discount rate is rounded to the nearest 0.1%. 31 December 2013
Staff health insurance:
Annual general inflation Terminal payments (other than accrued leave): The inflation rate used is 2.2%. Based on inflation rates of 2.5% for the United States of America and 1.3% for Switzerland with weights of 75% and 25%, respectively. The resulting inflation rate is rounded to the nearest 0.1%. Europe 1.6%, the Americas 2.5%, Other Countries 2.5%. Based on Aon Hewitt’s Q4 2013 10-year forecast of global capital market assumptions. Rate for Europe is the average of rates for Switzerland (1.3%) and the rest of Europe (1.8%), rounded to the nearest 0.1%. Rate for The Americas and Other Countries is based on the 31 December 2011 valuation of the United Nations Joint Staff Pension Fund (UNJSPF). The inflation rate used is 2.2%. Based on inflation rates of 2.5% for the United States of America and 1.3% for Switzerland with weights of 75% and 25%, respectively. The resulting inflation rate is rounded to the nearest 0.1%.
Staff health insurance:
Special Fund for Compensation:
A67/43 Page 55 Annual salary scale All plans: General inflation, plus 0.5% per year productivity increases, plus merit increases. Productivity and merit increases are set equal to those from the 31 December 2011 valuation of the United Nations Joint Staff Pension Fund.
Regional groupings for all purposes except claims costs Terminal payments (other than accrued leave): Staff health insurance: Not applicable Based on: the Regional Office for Europe, headquarters, International Computing Centre, IARC, UNAIDS, and the International Drug Purchasing Facility (UNITAID) which are grouped as Europe; the Regional Office for the Americas constitutes the Americas; and the African Region, the Eastern Mediterranean Region, the African Programme for Onchocerciasis (APOC), the South-East Asia Region, and the Western Pacific Region, which are grouped as Other Countries. Not applicable
Special Fund for Compensation: Repatriation travel and removal on repatriation Terminal payments (other than accrued leave): Staff health insurance: Special Fund for Compensation:
Calculated using the projected unit credit method with service prorated, and an attribution period from the “entry on duty date” to separation. Not applicable Not applicable
Repatriation grant, termination indemnity, and grant in case of death Terminal payments (other than accrued leave): Staff health insurance: Special Fund for Compensation: Accrued leave Terminal payments (other than accrued leave): Staff health insurance: Special Fund for Compensation: The liability is set equal to the walk-away liability ‒ that is, as if all staff separated immediately. Not applicable Not applicable Using the projected unit credit method with accrual rate proration. Not applicable Not applicable
Abolition of post, end-of-service grant, and separation by mutual agreement Terminal payments (other than accrued leave): Staff health insurance: Special Fund for Compensation: These benefits are considered termination benefits under IPSAS 25 and, therefore, are excluded from the valuation. Not applicable Not applicable
United Nations Joint Staff Pension Fund The Pension Fund’s Regulations state that the Pension Board shall have an actuarial valuation made of the Fund at least once every three years by the Consulting Actuary. The practice of the Pension Board has been to carry out an actuarial valuation every two years using the Open Group Aggregate Method. The primary purpose of the actuarial valuation is to determine whether the current and estimated future assets of the Pension Fund will be sufficient to meet its liabilities. WHO’s financial obligation to the United Nations Joint Staff Pension Fund consists of its mandated contribution, at the rate established by the United Nations General Assembly (currently at 7.9% for participants and 15.8% for member organizations) together with any share of any actuarial deficiency payments under Article 26 of the Regulations of the Pension Fund. Such deficiency payments are only payable if and when the United Nations General Assembly has invoked the provision of Article 26, following determination that there is a requirement for deficiency payments based on an assessment of the actuarial sufficiency of the Pension Fund as of the valuation date. Each member organization shall contribute to this deficiency an amount proportionate to the total contributions that each paid during the three years preceding the valuation date.
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The actuarial valuation performed as at 31 December 2011 revealed an actuarial deficit of 1.87% (0.38% in the 2009 valuation) of pensionable remuneration, implying that the theoretical contribution rate required to achieve balance as at 31 December 2011 was 25.57% of pensionable remuneration, compared with the actual contribution rate of 23.7%. The actuarial deficit was primarily attributable to the lower than expected investment experience in recent years. The next actuarial valuation will be conducted as at 31 December 2013. As at 31 December 2011, the funded ratio of actuarial assets to actuarial liabilities, assuming no future pension adjustments, was 130% (140% in the 2009 valuation). When the current system of pension adjustments was taken into account, the funded ratio was 86% (91% in the 2009 valuation). After assessing the actuarial sufficiency of the Pension Fund, the Consulting Actuary concluded that there was no requirement, as at 31 December 2011, for deficiency payments under Article 26 of the Regulations of the Fund as the actuarial value of assets exceeded the actuarial value of all accrued liabilities under the Fund. In addition, the market value of assets also exceeded the actuarial value of all accrued liabilities as at the valuation date. At the time of this report, the General Assembly has not invoked the provision of Article 26. In July 2012, in the report of the United Nations Joint Staff Pension Board on its fifty-ninth session (3‒11 July 2012), submitted for consideration by the United Nations General Assembly, 1 the Pension Board noted that an increase in the normal age of retirement for new participants in the Fund to 65 was expected to significantly reduce the deficit and would potentially cover half of the current deficit of 1.87%. In December 2012 and April 2013, in resolution 67/240 and resolution 67/257 respectively, the General Assembly authorized the Pension Board to increase to age 65 both the normal retirement age and the mandatory age of separation for new participants of the Fund, with effect not later than from 1 January 2014. The related change to the Pension Fund’s Regulations was approved by the General Assembly in December 2013.2 The increase in the normal retirement age will be reflected in the actuarial valuation of the Fund as at 31 December 2013. During 2013, contributions paid to the United Nations Joint Staff Pension Fund amounted to US$ 205 million (US$ 206 million in 2012). Expected contributions due in 2014 are US$ 205 million. The United Nations Board of Auditors carries out an annual audit of the Pension Fund and reports to the Pension Fund Pension Board on the audit every year. The Pension Fund publishes quarterly reports on its investments and these are made public online. 3
4.14 Deferred revenue Deferred revenue on voluntary contributions represents multi-year agreements signed in 2013 or prior years but for which the revenue recognition has been deferred to future financial periods. The balance on voluntary contributions is split into current and non-current deferred revenue, depending upon when the funds are available to the Organization to spend.
1 2 3
Official records of the General Assembly, sixty-seventh session, supplement no.9 (document A/67/9). See United Nations General Assembly resolution 68/247. Available at http://www.unjspf.org/UNJSPF_Web/ (accessed 26 March 2014).
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Deferred revenue on reimbursable procurement relates to revenue recognized where supplies or services have not been delivered to requesting parties at year end. As reimbursable procurement is an exchange transaction, revenue is recorded on an accrual basis. The entire amount of deferred revenue for reimbursable procurement is current. 31 December 2013 Voluntary contributions Reimbursable procurement Total deferred revenue – current Voluntary contributions Total deferred revenue – non-current Total deferred revenue 279 833 190 62 580 577 342 413 767 346 512 477 346 512 477 688 926 244 31 December 2012 239 161 415 77 873 295 317 034 710 210 277 136 210 277 136 527 311 846
4.15 Other current liabilities The total balance for other current liabilities as at 31 December 2013 was US$ 59.5 million (US$ 41.4 million as at 31 December 2012). The largest component is composed of the various yearend accruals totalling US$ 44.9 million. In addition to these accruals, an accrual for refunds payable was recorded relating to the balance of funds reported due to contributors after programme implementation. Other amounts relate to various short-term liabilities as detailed below. 31 December 2013 Accrual for uninvoiced goods and services Accrual for restructuring cost Accrued staff liability Accrual for refunds payable Pension payable Insurance payable Foundations Other liabilities Total other current liabilities 38 659 225 3 487 317 2 686 943 2 441 903 280 232 1 693 809 3 531 558 6 686 522 59 467 509 31 December 2012 15 983 455 3 901 890 1 742 806 5 111 282 2 487 305 3 761 018 3 567 774 4 886 711 41 442 241
The balance for foundations concerns funds that WHO holds in trust and for whose financial and administrative management the Organization is responsible. As at 31 December 2013, the foundations with funds in trust were as follows: • Down Syndrome Research Prize in the Eastern Mediterranean Region • Dr A.T. Shousha Foundation • Dr Comlan A.A. Quenum Prize • Ihsan Doğramacı Family Health Foundation • Jacques Parisot Foundation • Léon Bernard Foundation • Professor Francesco Pocchiari Fellowship Prize • State of Kuwait Prize for the Control of Cancer, Cardiovascular Diseases and Diabetes in the Eastern Mediterranean Region • State of Kuwait Prize for Research in Health Promotion • United Arab Emirates Health Foundation
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4.16 Inter-entity liabilities WHO hosts a number of entities through administrative service agreements. As cash for all entities is managed by the Organization, liabilities exist with these entities for funds held on their behalf. The total amounts due per entity are as follows. 31 December 2013 Staff health insurance (SHI) International Computing Centre (ICC) International Drug Purchase Facility (UNITAID) African Programme for Onchocerciasis Control (APOC) Trust Fund for the Joint United Nations Programme on HIV/AIDS (UNAIDS) Total inter-entity liabilities 37 159 592 21 173 528 707 069 967 5 230 828 211 066 404 981 700 319 31 December 2012 207 903 045 16 561 280 553 805 387 7 018 925 204 521 501 989 810 138
4.17 Long-term borrowings (restated) The Health Assembly, in resolutions WHA55.8 and WHA56.13, authorized the Director-General to proceed with the construction of a new building at headquarters for the Organization and UNAIDS at a cost estimated at CHF 66 million, of which WHO’s share was estimated at CHF 33 million. The Swiss Confederation agreed to provide an interest-free loan to the Organization and UNAIDS of CHF 59.8 million, of which WHO’s share is CHF 29.9 million. In the resolutions mentioned above, the Health Assembly also approved the use of the Real Estate Fund for the repayment over a 50-year period of the Organization’s share of the interest-free loan provided by the Swiss Confederation with effect from the first year of the completion of the building. The outstanding balance of the loan of US$ 19.8 million (US$ 22.8 million in 2012) is reflected at amortized cost using the effective interest rate of 1.97% (Swiss franc Libor rate for 30 years).
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5. 5.1
Supporting information to the Statement of Financial Performance Revenue
Member States’ assessed contributions In May 2011, the Sixty-fourth World Health Assembly adopted the appropriation resolution for the financial period 2012‒2013,1 in which it welcomed a total effective budget of US$ 3959 million. In the same resolution, the Health Assembly further resolved that the total assessment on Member States in respect of the financial period 2012–2013 would be US$ 949 million. US$ 475 million has been recognized as revenue for the year 2013 and assessed to Member States. 2 US$ 10.2 million were transferred to the Tax Equalization Fund in 2013. In line with resolution WHA64.3, US$ 10.0 million were transferred to the Real Estate Fund in 2013. Decrease in allowance for doubtful accounts receivable The allowance for doubtful accounts receivable represents accounts receivable where the collection is considered uncertain, both for voluntary and for assessed contributions. The decrease in the allowance for doubtful accounts receivable in 2013 was US$ 1.0 million (increase US$ 3.3 million as at 31 December 2012) (refer to Note 4.3). Voluntary contributions The total voluntary contributions were US$ 2017 million (US$ 1637 million for 2012). These contributions represent revenue recognized from governments, intergovernmental organizations, institutions, other United Nations organizations as well as the private sector. 3 Much of the revenue reported in 2013 relates to agreements that continue in future years. The figure for total voluntary contributions reported of US$ 2017 million is after the deduction of (i) refunds to contributors ‒ these amounted to US$ 14.2 million; (ii) reductions in revenue recognized in prior years due to evidence arising in the current year that amounts will no longer be collected ‒ these amounted to US$ 10.8 million; and (iii) the adjustment of payment terms with the effect of increasing deferred revenue and decreasing current revenue for revenue recognized in previous years – these amounted to US$ 5.1 million. Voluntary contributions in-kind and in-service WHO receives non-cash contributions from Member States and other contributors. In 2013, the Organization received in-kind and in-service contributions amounting to US$ 43.8 million (US$ 66.5 million as at 31 December 2012).4 31 December 2013 Voluntary contributions in-kind Voluntary contributions in-service Total voluntary contributions in-kind and-in service 28 582 826 15 245 118 43 827 944 31 December 2012 51 133 480 15 334 959 66 468 439
1 2
Resolution WHA64.3. See document A67/44 for details of the status of collection of assessed contributions.
Refer to the Annex to the Financial Report for details by fund and by contributor. The Annex to the Financial Report is available at: http://www.who.int/about/resources_planning/en/. 4
3
Refer to Schedule 5 of the Annex to the Financial Report for details of in-kind and in-service contributions.
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Reimbursable procurement WHO procures medicines and vaccines on behalf of Member States and other United Nations agencies. The total revenue and expenses recognized for 2013 for reimbursable procurement was US$ 34.4 million (US$ 62.5 million as at 31 December 2012) after the deduction of refunds to contributors of US$ 0.6 million. The funds received in advance for reimbursable procurement are recorded as deferred revenue. The revenue and expenses related to reimbursable procurement form part of the Enterprise Fund and are not reported against the programme budget. Other operating revenue In 2013, other operating revenue totalled US$ 26.5 million (US$ 14.0 million as at 31 December 2012). This mainly represents fees earned for hosting other entities such as UNAIDS, the International Drug Purchase Facility (UNITAID), the International Computing Centre (ICC) and the African Programme for Onchocerciasis Control (APOC). Other sources of earnings also included the sale of publications and royalties earned. Finance revenue Finance revenue includes the following: 31 December 2013 Investment revenue Net realized foreign exchange gains on balance sheet hedging Net realized foreign exchange gains on hedging, transactions and bank balances Net unrealized foreign exchange gains on hedging Net unrealized foreign exchange gains on balance sheet revaluation Actuarial revaluation gains on Terminal Payments Fund Total finance revenue (WHO and other entities) Investment revenue and foreign exchange gains and losses apportioned to other entities Net finance revenue for WHO 10 119 407 3 295 211 5 529 735 – 2 969 128 6 507 499 28 420 980 (11 554 383) 16 866 597 31 December 2012 19 013 674 – 1 809 681 10 364 967 15 524 796 7 350 743 54 063 861 (10 947 816) 43 116 045
5.2
Expenses
Staff and other personnel costs Staff and other personnel costs reflect the total cost of employing staff at all locations and include charges for base salary, post adjustment and any other types of entitlements (e.g. pensions and insurances) paid by the Organization. Staff costs also include the movement in the staff health insurance actuarial liability that is recognized in the Statement of Financial Performance. Medical supplies and materials The majority of the balance for medical supplies and materials relates to medical supplies purchased and distributed by WHO for programme activities. Medical supplies and materials include in-kind expenses of US$ 25 million (US$ 31 million as at 31 December 2012) and reimbursable procurement related expenses of US$ 34 million (US$ 58 million as at 31 December 2012).
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Contractual services The amount for contractual services represents expenses for service providers. The main components are agreements for performance of work, consulting contracts or special service agreements given to individuals to perform activities on behalf of the Organization. Medical research activities, costs for fellowships, and security expenses are also considered to be contractual services. In 2013, a new account for the charging of costs of direct implementation activities (e.g. immunization campaigns led by WHO) was added under contractual services. For 2013, the cost of direct implementation amounted to US$ 73 million. In prior years, these costs were charged to transfers and grants to counterparts and general operating expenses. Transfers and grants to counterparts Transfers and grants to counterparts relates to non-exchange contracts signed with national counterparts (mainly health ministries), United Nations agencies and nongovernmental organizations to perform activities that are in line with the Organization’s programme budget. These expenses are also referred to as “direct financial cooperation”. Funds are expensed at the time of transfer to the contractual partner. National counterparts are required to report back on the use of funds to ensure that they are used according to the agreement and on-site monitoring and spot checks of activities may be undertaken. WHO may withhold further funding to recipients of transfers and grants on the basis of a risk assessment or where the requirements of the agreement have not been met. Travel The cost of travel for WHO staff, non-staff participants in meetings, consultants and representatives of Member States paid by the Organization is included in the balance for total travel expenses. Travel expenses include airfare, per diem and other travel-related costs. This amount does not include the statutory travel for home leave and education grant that is accounted for within staff and other personnel costs. General operating expenses General operating expenses reflect the cost of general operations to support country offices, regional offices and headquarters including utilities, telecommunications (fixed telephone, mobile phone, Internet and global network expenses) and rents. Equipment, vehicles and furniture As WHO opted to use the transitional provision under IPSAS 17, the Organization currently expenses the full cost of equipment, vehicles and furniture at the point of delivery, excluding owned land and buildings. Depreciation and amortization Depreciation is the expense resulting from the systematic allocation of the depreciable amounts of property, plant and equipment over their useful lives. As of 2013, it relates to the Organization’s buildings. Amortization is the expense resulting from the systematic allocation of the amortizable amount of intangible assets over their useful lives.
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Finance costs Finance costs include the following: 31 December 2013 Bank charges and investment management fees Net realized foreign exchange losses Net unrealized foreign exchange losses on balance sheet revaluation and expenditure hedging Actuarial interest cost related to the valuation of the Terminal Payments Fund Total finance costs 2 708 420 – 3 558 613 2 759 469 9 026 502 31 December 2012 (restated) 2 242 258 979 127 869 851 2 632 190 6 723 426
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6. 6.1
Supporting information to the Statement of Net Assets/Equity Member States – regular budget
This note provides details of financing and revenue of assessed contributions, along with the transfer made to the Tax Equalization Fund for the year 2013 (as per resolution WHA 64.3). The status of the funds available highlights the net surplus/deficit of the Member States ’ regular budget. Member States’ Assessed Contributions Fund Balance as at 1 January 2013 Programmatic revenue and expenses Member States’ assessed contributions Appropriations to Real Estate Fund Tax equalization reimbursements Effective programme budget Programmatic expenses Tax reimbursements to staff members Decrease in the allowance for doubtful accounts receivable Interest Miscellaneous revenue Total surplus/(deficit) Balance as at 31 December 2013 474 640 515 (10 000 000) (10 189 150) 454 451 365 (454 647 290) – 1 666 156 – – 1 470 231 56 688 496 – – – – – – – 462 874 3 875 601 4 338 475 14 659 986 – – 10 189 150 10 189 150 – (11 423 628) – – – (1 234 478) (13 652 522) – – – – – – – – – – 31 000 000 474 640 515 (10 000 000) – 464 640 515 (454 647 290) (11 423 628) 1 666 156 462 874 3 875 601 4 574 228 88 695 960 55 218 265 Member States’ Non-Assessed Income Fund 10 321 511
Tax Equalization Fund (12 418 044)
Working Capital Fund 31 000 000
Total 84 121 732
In resolution WHA64.3, the Health Assembly decided that the Working Capital Fund should be maintained at its existing level of US$ 31 million.
6.2
Special Account for Servicing Costs Fund
This fund was established in order to support the costs of servicing activities financed from sources other than the assessed contribution budget (i.e. from voluntary contributions). The Fund is credited with revenue from the following sources: • under resolution WHA34.17, funds are received for programme support costs from voluntary sources and are calculated by applying a fixed percentage rate to total expenses • administrative service agreements with other entities • interest earned on voluntary funds as described in document EB122/3 A reconciliation of the Fund balance is as follows.
A67/43 Page 64 31 December 2013 Balance as at 1 January Revenue Programme support costs Interest Administrative service agreements with other entities Repayment of advances (Note a) Total revenue Expenses Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Total expenses Less: Increase in allowance for doubtful accounts receivables – voluntary contributions (Note b) Other expenses Balance as at 31 December 661 145 – 193 822 757 892 080 2 755 772 150 126 831 74 849 114 777 555 12 152 882 506 273 3 458 983 15 438 688 3 748 790 110 932 285 59 245 144 322 102 10 007 307 21 253 2 571 468 8 287 714 2 144 064 82 599 052 135 174 154 10 093 260 8 677 508 1 344 434 155 289 356 111 347 786 6 872 997 4 814 538 2 154 433 125 189 754 150 126 831 31 December 2012 111 183 981
Expenses under the Fund by major office are as follows. Expenses by major office Global and interregional activities Regional Office for Africa Regional Office for the Americas Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific Total expenses by major office 31 December 2013 47 527 102 16 368 703 4 279 434 11 817 196 9 821 987 10 102 940 11 014 923 110 932 285 31 December 2012 36 220 150 18 524 026 3 460 154 7 398 613 8 398 337 4 986 292 3 611 480 82 599 052
Note a. In 2011, an advance of US $3.2 million was given from the Fund to the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases. Half the advance was repaid in 2012 (US$ 1.6 million) with the balance being repaid in 2013 (US$ 1.6 million). In 2013, an advance of US$ 0.3 million was given to the Framework Convention on Tobacco Control from the Fund. The net repayment is US$ 1.3 million. Note b. The increase in the allowance for doubtful accounts receivable for voluntary contributions is US$ 0.7 million (from US$ 11.0 million as at 31 December 2012 to US$ 11.7 million as at 31 December 2013). Refer to Note 4.3 for details of the balance of accounts receivable and the allowance.
6.3
Real Estate Fund
This fund was established by the Health Assembly in resolution WHA23.14. The Fund is used to meet the costs of: the construction of buildings or extensions to existing buildings; the acquisition of land that may be required; and major repairs and alterations to WHO ’s existing office buildings and to residences leased to staff by the Organization. Specific Health Assembly authorization is required for the acquisition of land and the construction of buildings or extensions to existing buildings.
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A reconciliation of the Fund balance is as follows. 31 December 2013 Balance as at 1 January 2013 Revenue Appropriation received in accordance with resolution WHA63.7 Rents collected Transfer for special projects for the Regional Office of Africa Other revenue In-kind revenue Total revenue Expenses In-kind expenses Staff and other personnel costs Medical supplies and materials Contractual services Travel General operating expenses Equipment, vehicles and furniture Total expenses Balance as at 31 December 2013 2 598 854 340 431 850 000 2 064 354 4 718 7 488 891 445 335 13 792 583 33 773 522 7 752 917 346 116 12 836 1 729 920 1 681 8 474 935 419 267 18 737 672 19 095 600 10 000 000 3 225 160 4 900 000 7 746 491 2 598 854 28 470 505 – 3 906 856 – 8 052 919 7 752 917 19 712 692 19 095 600 31 December 2012 18 120 580
Expenses under the Fund by major office are as follows. 31 December 2013 Expenses by major office In-kind expenses Headquarters Regional Office for Africa Regional Office for the Americas Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific Total expenses 2 598 854 3 731 294 3 476 108 850 000 1 861 611 687 838 265 788 321 090 13 792 583 7 752 917 8 229 995 1 306 540 – 1 486 211 (37 991) – – 18 737 672 31 December 2012
In-kind revenue and expenses represents contributions from Member States for donated office space.
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7.
Supporting information to the Statement of Comparison of Budget and Actual Amounts
In May 2011, the Health Assembly adopted resolution WHA64.3, the appropriation resolution for the financial period 2012–2013, in which it noted the total effective budget of US$ 3959 million. WHO’s budget is adopted on a biennial basis by the Health Assembly. No revisions have been made to the Programme budget 2012–2013. As the Organization’s methodology is based on a results-based framework, the approved programme budget is measured on expenses incurred during the programme budget period. WHO’s budget and financial statements are prepared using different accounting bases. The Statement of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/Equity, and Statement of Cash Flow are prepared on a full accrual basis, whereas the budget is established on a modified cash basis (i.e. actual expenses are used to measure the budget utilization). As per the requirements of IPSAS 24, the actual amounts presented on a comparable basis to the budget shall, where the financial statements and the budget are not prepared on a comparable basis, be reconciled to the actual amounts presented in the financial statements, identifying separately any differences in terms of basis, timing, entity and presentation. The General Fund, as per Note 2.17, represents the programme budget results, except for the Tax Equalization Fund expenses, other non-programme budget utilization and all in-kind/in-service expenses which are not included in the programme budget results. Explanations of material differences between the final budget and the actual amounts are available in document A67/42, which describes the implementation of the Programme budget 2012 –2013 and the results achieved. As required by IPSAS 24, a reconciliation is provided on a comparable basis between the actual amounts as presented in Statement V and the actual amounts in the financial accounts identifying separately any basis, timing, entity and presentation differences. Basis differences occur when the components of the approved programme budget are used for activities other than the implementation of technical programmes. Examples of this include Tax Equalization Fund expenses, in-kind/in-service expenses, other non-programme budget utilization and other Common Fund activities. Timing differences represent the inclusion in WHO’s financial accounts of programme budget expenses in other financial periods. Entity differences represent the inclusion in WHO’s financial accounts of the amounts against two funds, Member States – other and the Fiduciary Fund. These funds do not form part of the Organization’s programme budget. Presentation differences concern differences in the format and classification schemes in the Statement of Cash Flow and the Statement of Comparison of Budget and Actual Amounts.
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A reconciliation between the actual amounts on a comparable basis in the Statement of Comparison of Budget and Actual Amounts (Statement V) and the actual amounts in the Statement of Cash Flow (Statement IV) for December 2013 is presented below. 2013 Operating Actual amount on a comparable basis (Statement V) Basis differences Timing differences Entity differences Presentation differences Actual amount in the Statement of Cash Flow (Statement IV) (2 035 004 032) 84 891 851 (4 805 730) 145 908 175 2 209 536 583 400 526 847 Investing – (426 252 917) – 9 177 217 – (417 075 700) Financing – (2 967 805) – – – (2 967 805) Total (2 035 004 032) (344 328 871) (4 805 730) 155 085 392 2 209 536 583 (19 516 658)
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8. 8.1
Segment reporting Statement of Financial Position by segments As at 31 December 2013 (In US dollars) Headquarters Regional Office for Africa Regional Office for the Americas Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific Total
ASSETS Current assets Cash and cash equivalents Short-term investments Accounts receivable – net current Staff receivables Inventories Prepayments and deposits Other current assets Total current assets Non-current assets Accounts receivable – net non-current Long-term investments Property, plant and equipment – net Total non-current assets TOTAL ASSETS LIABILITIES Current liabilities Contributions received in advance Accounts payable Staff payable Accrued staff benefits – current Deferred revenue Financial liabilities Other current liabilities Inter-entity liabilities Total current liabilities Non-current liabilities Long-term borrowings Accrued staff benefits – non-current Deferred revenue – non-current Total non-current liabilities TOTAL LIABILITIES NET ASSETS/EQUITY Member States – regular budget Voluntary funds Member States – other Fiduciary Fund TOTAL NET ASSETS/EQUITY TOTAL LIABILITIES AND NET ASSETS/EQUITY
676 473 653 2 419 344 288 733 381 179 6 935 834 38 726 174 2 747 193 297 459 533 4 175 067 854 346 512 477 81 819 896 40 064 684 468 397 057 4 643 464 911
21 127 629 – 624 424 1 644 826 1 053 258 113 995 – 24 564 132 – – 2 249 055 2 249 055 26 813 187
– – 355 911 – – – (297 459 533) (297 103 622) – – – – (297 103 622)
7 662 109 – 104 404 511 344 8 443 838 23 785 – 16 745 480 – – 16 974 155 16 974 155 33 719 635
1 173 557 – 766 802 181 080 – 681 – 2 122 120 – – – – 2 122 120
4 455 997 – 163 275 722 439 736 089 227 775 – 6 305 575 – – 230 095 230 095 6 535 670
3 948 813 – 124 727 1 353 837 2 164 730 341 475 – 7 933 582 – – 2 176 062 2 176 062 10 109 644
714 841 758 2 419 344 288 735 520 722 11 349 360 51 124 089 3 454 904 – 3 935 635 121 346 512 477 81 819 896 61 694 051 490 026 424 4 425 661 545
77 327 364 10 397 884 2 040 695 32 997 197 342 413 767 19 637 190 (7 505 772 097) 981 700 319 (6 039 257 681) 19 814 277 535 503 151 346 512 477 901 829 905 (5 137 427 776) 1 901 882 341 7 837 828 143 (93 842 155) 135 024 358 9 780 892 687 4 643 464 911
2 677 857 6 024 997 175 644 17 662 392 – – 3 216 699 964 – 3 243 240 854 – 154 396 639 – 154 396 639 3 397 637 493 (611 114 112) (2 573 830 252) (185 548 048) (331 894) (3 370 824 306) 26 813 187
– – – – – – 137 232 364 – 137 232 364 – – – – 137 232 364 (241 879 391) (182 568 285) (9 732 776) (155 534) (434 335 986) (297 103 622)
84 000 6 275 565 88 071 5 797 187 – – 1 745 302 786 – 1 757 547 609 – 55 304 390 – 55 304 390 1 812 851 999 (252 010 334) (1 353 485 616) (173 461 239) (175 175) (1 779 132 364) 33 719 635
– 1 261 224 42 685 4 287 199 – – 623 047 441 – 628 638 549 – 72 559 092 – 72 559 092 701 197 641 (182 331 260) (428 235 230) (88 415 187) (93 844) (699 075 521) 2 122 120
– 3 127 172 14 673 4 703 130 – – 1 063 459 410 – 1 071 304 385 – 65 070 579 – 65 070 579 1 136 374 964 (296 187 469) (752 047 782) (81 300 730) (303 313) (1 129 839 294) 6 535 670
– 2 632 093 (37 987) 4 700 981 – – 779 497 641 – 786 792 728 – 56 283 576 – 56 283 576 843 076 304 (229 663 815) (513 130 638) (90 019 493) (152 714) (832 966 660) 10 109 644
80 089 221 29 718 935 2 323 781 70 148 086 342 413 767 19 637 190 59 467 509 981 700 319 1 585 498 808 19 814 277 939 117 427 346 512 477 1 305 444 181 2 890 942 989 88 695 960 2 034 530 340 (722 319 628) 133 811 884 1 534 718 556 4 425 661 545
Note. The Regional Office for the Americas is managed by PAHO and at month end, the summary accounting data are consolidated. There are no bank accounts held in the name of the Regional Office for the Americas; all liabilities for staff and suppliers are in the name of PAHO. For this reason, liabilities for staff and suppliers are not consolidated and reported in WHO’s Financial Report.
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8.2
Statement of Financial Performance by segments For the year ended 31 December 2013 (In US dollars) Regional Office for Africa Regional Office for the Americas Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific
Headquarters Revenue Member States’ assessed contributions Decrease/(increase) in allowance for doubtful accounts receivable Voluntary contributions Voluntary contributions in-kind and in-service Reimbursable procurement Other operating revenue Finance revenue Total revenue Expenses Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Depreciation and amortization Finance costs Total expenses TOTAL SURPLUS/(DEFICIT) FOR THE YEAR 390 544 633 46 226 688 148 869 230 11 462 935 73 110 336 48 375 082 2 353 088 1 116 194 6 858 443 728 916 629 1 888 578 269 474 640 515 1 005 011 2 017 104 332 43 827 944 34 413 016 32 603 576 13 900 504 2 617 494 898
Total
– – – – – (2 925 400) 1 028 383 (1 897 017)
– – – – – (2 711 189) – (2 711 189)
– – – – – 753 787 303 425 1 057 212
– – 32 415 – – (986 402) 873 764 (80 223)
– – – – – 334 651 271 841 606 492
– – – – – (541 637) 488 680 (52 957)
474 640 515 1 005 011 2 017 136 747 43 827 944 34 413 016 26 527 386 16 866 597 2 614 417 216
202 576 538 27 794 205 93 349 391 156 796 525 42 675 320 101 556 491 14 454 397 158 423 933 314 640 294 604 (642 191 621)
43 709 788 4 622 335 9 188 883 2 080 046 7 135 172 3 758 719 – – (10) 70 494 933 (73 206 122)
78 230 563 78 537 531 95 044 558 70 798 137 14 247 724 24 906 798 11 921 053 340 444 534 743 374 561 551 (373 504 339)
64 257 091 401 053 22 912 214 359 991 10 625 728 7 944 764 969 065 – 189 269 107 659 175 (107 739 398)
52 333 399 32 954 908 54 669 273 16 925 097 15 256 026 12 851 044 4 126 746 28 761 249 247 189 394 501 (188 788 009)
58 905 340 9 723 379 32 127 653 23 896 386 11 469 179 7 511 072 5 347 217 435 214 261 496 149 676 936 (149 729 893)
890 557 352 200 260 099 456 161 202 282 319 117 174 519 485 206 903 970 39 171 566 2 079 036 9 026 502 2 260 998 329 353 418 887
Note. The revenue balance shows a high surplus for headquarters and deficits for other offices. This is a consequence of the policy of centralized accounting for revenue and decentralized accounting for expenses.
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9.
Amounts written-off and ex-gratia payments
During 2013, a total of US$ 40 430 was approved for write-off. This balance relates to two separate incidents: (i) US$ 37 576 concerns a fraud committed by a staff member in Angola in 1998 that was deemed impossible to recover; and (ii) US$ 2854 relates to VAT refunds rejected by the Government of Nepal. No ex-gratia payments were made in 2013.
10.
Related party and other senior management disclosures
Staff members considered to be “key management personnel” are the Director-General, regional directors and all other ungraded staff. The table below details the number of key management personnel who held these positions over the course of the year as well as their aggregate remuneration. Key management personnel Number of individuals Compensation and post adjustment Entitlements Pension and health plans Total remuneration Outstanding advances against entitlements Outstanding loans (in addition to normal entitlements, if any) 16 3 882 929 281 552 974 903 5 139 384 128 541 –
The aggregate remuneration of key management personnel includes: net salaries, post adjustment, entitlements such as representation allowance and other allowances, assignment and other grants, rental subsidy, personal effect shipment costs, and employer pension and current health insurance contributions. Key management personnel are also qualified for post-employment benefits at the same level as other employees. These benefits cannot be reliably quantified. Key management personnel are ordinary members of the United Nations Joint Staff Pension Fund. The Regional Director for the Americas is included among the key management personnel. However, as the Regional Director is receiving all entitlements and benefits from PAHO, the entitlements and benefits concerned are disclosed in PAHO ’s financial statements and not in WHO ’s financial statements. During the year, no loans were granted to key management personnel beyond those widely available to staff outside this grouping.
11.
Events after the reporting date
WHO’s reporting date is 31 December 2013. On the date of the signing of these accounts, no material events, favourable or unfavourable, had arisen between the balance sheet date and the date when the financial statements were authorized for issue that would have had an impact on the financial statements.
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12.
Contingent liabilities, commitments and contingent assets
Contingent liabilities As at 31 December 2013, WHO had a number of legal cases pending. Most involve disputes that are not recorded because the likelihood of repayment has been determined to be remote. However, there are five cases involving contractual disputes that are to be considered contingent liabilities. The total potential cost to the Organization is estimated at US$ 105 286 (US$ 95 000 as at 31 December 2012). Operating leases commitments WHO enters into operating lease arrangements for renting office space in various country offices. Future minimum lease rental payments for the following periods are as follows. Total 2013 Under 1 Year 1 to 5 years 5 years + Total lease commitments 5 118 048 10 989 557 3 744 785 19 852 390 2012 3 319 313 5 183 137 3 838 114 12 340 564
The Organization has no outstanding leases qualifying as finance leases at the reporting date. WHO leased office space to seven tenants. As at 31 December 2013, total revenue from the leasing activities was US$ 1.4 million (US$ 1.2 million as at 31 December 2012). Current lease agreements are renewable on a yearly basis. Contingent assets In accordance with IPSAS 19, contingent assets will be disclosed for cases where an event will give rise to a probable inflow of economic benefits. As at 31 December 2013, there are no material contingent assets to disclose.
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Schedule I. Statement of Financial Performance by major funds For the year ended 31 December 2013 (In US dollars) General Fund Member States – regular budget Revenue Member States’ assessed contributions Decrease/(increase) in allowance for doubtful accounts receivable Voluntary contributions Voluntary contributions in-kind and in-service Reimbursable procurement Other operating revenue Finance revenue Total revenue Expenses Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Depreciation and amortization Finance costs Total expenses TOTAL SURPLUS/(DEFICIT) FOR THE YEAR Fund balance – 1 January 2013 Fund balance – 31 December 2013 350 150 281 5 477 469 36 753 797 22 949 805 20 837 561 35 171 859 4 730 146 – – 476 070 918 4 574 228 84 121 732 88 695 960 546 784 417 114 637 373 381 215 424 258 831 922 144 622 933 266 790 393 30 102 337 – – 1 742 984 799 392 521 871 1 642 008 469 2 034 530 340 – – – – – (128 122 253) – – – (128 122 253) – – – 896 934 698 120 114 842 417 969 221 281 781 727 165 460 494 173 839 999 34 832 483 – – 2 090 933 464 397 096 099 1 726 130 201 2 123 226 300 – 16 489 945 – – – – (674 183) 2 079 036 6 261 892 24 156 690 (24 984 939) 129 557 780 104 572 841 4 610 430 31 399 877 461 302 8 258 334 247 2 783 559 2 442 890 – – 42 040 563 (586 695) 9 577 959 8 991 264 120 581 560 979 010 15 792 498 – 3 044 082 39 089 835 2 518 913 – 2 764 567 184 770 465 (3 440 338) (832 443 395) (835 883 733) 23 019 972 31 276 425 22 916 106 3 534 631 5 702 797 7 645 837 63 978 – 43 94 159 789 (14 665 240) 148 477 124 133 811 884 148 211 962 80 145 257 39 169 906 3 542 889 9 081 126 49 519 231 4 351 598 2 079 036 9 026 502 345 127 507 (43 677 212) (544 830 532) (588 507 744) (154 589 308) – (977 925) (3 005 499) (22 135) (16 455 260) (12 515) – – (175 062 642) – – – 890 557 352 200 260 099 456 161 202 282 319 117 174 519 485 206 903 970 39 171 566 2 079 036 9 026 502 2 260 998 329 353 418 887 1 181 299 669 1 534 718 556 39% 9% 20% 13% 8% 9% 2% 0% 0% 100% 474 640 515 1 666 156 – – – 3 875 601 462 874 480 645 146 – (661 145) 1 929 938 157 41 229 090 – 154 901 154 10 099 414 2 135 506 670 (128 122 253) – – – – – (128 122 253) 474 640 515 1 005 011 1 929 938 157 41 229 090 – 30 654 502 10 562 288 2 488 029 563 – – – – – – (828 249) (828 249) – – – – 34 413 016 7 040 852 – 41 453 868 – – 61 616 2 598 854 – 171 799 903 6 869 754 181 330 127 – – 90 267 473 – – (11 035 728) 262 804 79 494 549 – – 90 329 089 2 598 854 34 413 016 167 805 027 6 304 309 301 450 295 – – (3 130 499) – – (171 932 143) – (175 062 642) 474 640 515 1 005 011 2 017 136 747 43 827 944 34 413 016 26 527 386 16 866 597 2 614 417 216 18% 0% 77% 2% 1% 1% 1% 100% Voluntary funds Eliminations Subtotal Common Fund Member States – other Enterprise Fund Special Purpose Fund Fiduciary Fund Fiduciary Fund Subtotal Eliminations Total Percentage
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Schedule II. General Fund expenses For the year ended 31 December 2013 (In US dollars) Programme budget utilization Strategic objectives 1 Communicable diseases 2 HIV/AIDS, tuberculosis and malaria 3 Chronic noncommunicable conditions 4 Child, adolescent, maternal, sexual and reproductive health, and ageing 5 Emergencies and disasters 6 Risk factors for health 7 Social and economic determinants of health 8 Healthier environment 9 Nutrition, food safety and food security 10 Health systems and services 11 Medical products and technologies 12 WHO leadership, governance, and partnerships 13 Enabling and support functions Total Basis differences In-kind/in-service expenses Transfer from assessed contributions to Real Estate Fund Tax Equalization Fund expenses Other non-programme budget utilization Total basis differences Total expenses – General Fund 38 562 107 10 000 000 11 423 628 749 427 60 735 162 2 090 933 464 Assessed contributions 34 102 180 21 849 447 24 136 369 29 542 567 9 336 049 19 276 069 10 609 748 14 023 837 10 392 247 75 385 716 16 001 009 92 587 878 97 414 106 454 657 221 Voluntary funds 728 220 314 184 603 459 36 456 109 94 186 521 175 349 577 29 384 746 9 813 465 29 557 424 22 374 842 93 022 860 58 692 742 35 908 546 82 776 204 1 580 346 810 Total 2013 762 322 493 206 452 907 60 592 478 123 729 088 184 685 626 48 660 814 20 423 214 43 581 261 32 767 090 168 408 576 74 693 751 128 496 424 180 190 310 2 035 004 032 Assessed contributions 3 156 (10 545) 2 790 (45 507) – (226) – 220 1 562 (3 124) 1 404 1 053 39 360 (9 857) Previous bienniums Voluntary funds (3 611 968) (340 439) (5 570) (61 261) (782 095) 3 886 34 499 6 069 (6 882) (33 727) (79) 414 1 281 (4 795 872) Total (3 608 812) (350 984) (2 780) (106 768) (782 095) 3 660 34 499 6 289 (5 320) (36 851) 1 325 1 467 40 641 (4 805 730) Assessed contributions 34 105 336 21 838 902 24 139 158 29 497 060 9 336 049 19 275 843 10 609 748 14 024 057 10 393 809 75 382 591 16 002 413 92 588 931 97 453 466 454 647 364 General Fund total Voluntary funds 724 608 345 184 263 021 36 450 539 94 125 260 174 567 482 29 388 631 9 847 964 29 563 493 22 367 961 92 989 133 58 692 663 35 908 960 82 777 484 1 575 550 938 General Fund total expenses 758 713 681 206 101 923 60 589 697 123 622 320 183 903 531 48 664 474 20 457 713 43 587 550 32 761 770 168 371 725 74 695 076 128 497 891 180 230 951 2 030 198 302
The balances of General Fund expenses include US$ 138 million of the approved programme budget allocation for the Post Occupancy Charge Fund, which is transferred to the Special Purpose Fund to finance additional enabling and support functions under strategic objective 13bis.
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Schedule III. Programme budget utilization 2012‒2013 For the year ended 31 December 2013 (In US dollars) Strategic objectives 1 Communicable diseases 2 HIV/AIDS, tuberculosis and malaria 3 Chronic noncommunicable conditions 4 Child, adolescent, maternal, sexual and reproductive health, and ageing 5 Emergencies and disasters 6 Risk factors for health 7 Social and economic determinants of health 8 Healthier environment 9 Nutrition, food safety and food security 10 Health systems and services 11 Medical products and technologies 12 WHO leadership, governance, and partnerships 13 Enabling and support functions Total Programme budget 1 278 130 000 540 298 000 113 763 000 218 306 000 382 028 000 122 255 000 42 789 000 86 825 000 54 898 000 348 093 000 137 283 000 257 570 000 376 741 000 3 958 979 000 Expenses 2012–2013 (Note a) 1 376 344 543 388 167 520 108 005 314 221 401 678 328 847 897 93 437 339 37 272 343 82 435 815 59 921 561 303 255 564 136 603 466 252 821 648 340 169 708 3 728 684 425 Encumbrances 2012–2013 55 608 805 26 502 927 4 071 222 15 418 864 35 029 750 3 163 566 1 077 992 3 029 682 2 019 347 18 650 556 4 051 575 4 503 893 12 193 953 185 322 132 Implementation 2012–2013 (Note b) 1 431 953 348 414 670 447 112 076 536 236 820 542 363 877 647 96 600 905 38 350 335 85 465 497 61 940 908 321 906 120 140 655 041 257 325 541 352 363 661 3 914 006 557 Remaining balance (153 823 348) 125 627 553 1 686 464 (18 514 542) 18 150 353 25 654 095 4 438 665 1 359 503 (7 042 908) 26 186 880 (3 372 041) 244 459 24 377 339 44 972 443 Percentage implementation 112% 77% 99% 108% 95% 79% 90% 98% 113% 92% 102% 100% 94% 99%
Note a. Expenses 2012 –2013 are as per the Statement of Comparison of Budget and Actual Amounts (Statement V). Note b. Total implementation reflects total expenses and encumbrances for 2012–2013. Further details are contained in the Programme budget 2012 –2013: performance assessment (document A67/42).
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Schedule IV. Expenses by major office ‒ General Fund only For the year ended 31 December 2013 (In US dollars) Headquarters Expenses Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Total expenses Percentage of expenses by expense type across major office Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Total percentage Percentage of expenses by expense type within each major office Staff and other personnel costs Medical supplies and materials Contractual services Transfers and grants to counterparts Travel General operating expenses Equipment, vehicles and furniture Total percentage 63% 1% 19% 2% 11% 4% 0% 100% 33% 4% 14% 25% 7% 15% 2% 100% 67% 5% 11% 3% 10% 4% 0% 100% 23% 14% 28% 21% 4% 7% 3% 100% 60% 0% 22% 0% 10% 7% 1% 100% 29% 15% 30% 9% 8% 7% 2% 100% 42% 4% 22% 17% 8% 4% 3% 100% 43% 6% 20% 13% 8% 8% 2% 100% 44% 7% 28% 4% 40% 16% 6% 30% 23% 21% 22% 56% 25% 54% 36% 30% 5% 3% 2% 1% 4% 2% 0% 3% 9% 41% 23% 25% 9% 13% 32% 16% 7% 0% 5% 0% 6% 4% 3% 5% 6% 23% 13% 6% 9% 7% 11% 9% 6% 5% 7% 8% 7% 4% 12% 7% 100% 100% 100% 100% 100% 100% 100% 100% 392 971 877 8 593 552 117 783 259 10 933 803 66 449 727 28 160 712 2 129 924 627 022 854 203 917 543 24 617 796 90 322 557 156 788 267 41 590 519 95 249 633 12 500 551 624 986 866 46 536 667 3 772 630 7 976 658 2 080 046 6 987 093 2 685 196 – 70 038 290 78 736 892 49 032 846 94 339 186 70 798 137 13 810 697 22 644 709 11 160 245 340 522 712 61 673 878 400 251 22 679 817 359 991 10 223 648 6 867 161 947 534 103 152 280 53 040 656 27 596 286 53 917 998 16 925 097 15 077 780 11 891 311 3 881 503 182 330 631 60 057 185 6 101 481 30 949 746 23 896 386 11 321 030 6 341 277 4 212 726 142 879 831 896 934 698 120 114 842 417 969 221 281 781 727 165 460 494 173 839 999 34 832 483 2 090 933 464 Regional Office for Africa Regional Office for the Americas Regional Office for the Eastern Mediterranean Regional Office for Europe Regional Office for South-East Asia Regional Office for the Western Pacific Total