42 ECSO Financial Report and Financial Statements and the Report of the External Auditor 202 4 Organization for Security and Co-oper ation in Europe
Letter of Transmittal to the Chairperson of the Permanent Council to the OSCE from the Secretary General
Letter of Transmittal to the Chairperson of the Permanent Council of the OSCE from the Secretary General Organization for Security and Co-operation in Europe The Secretariat 1 July 2025 Madam Chairperson, Pursuant to Financial Regulation 7.04, I have the honour to submit the Financial Report and Financial Statements of the Organization for Securityand Co-operation in Europe for the year ended 31 December 2024 and the Report of the External Auditor thereon for your consideration and approval. Yours sincerely, Feridun H. Sinirliolu SecretaryGeneral
Letter of Transmittal to the President of the Austrian Court of Auditors from the Secretary General
Letter of Transmittal to the President of the Austrian Court of Audit from the Secretary General S Organization for Security and Co-operation in Europe The Secretariat c, ( March 2025 Madame, Pursuant to Financial Regulation 704, I have the honour to submit the draft Financial Statements of the Organization for Security and Co-operation in Europe for the year ended 31 December 2024. Yours sincerely, Feridun H. Sinirliolu Secretary General Dr. Margit Kraker President of the Austrian Court of Audit, RechnungshofDampfschiffstra1e 2 1030 Wien, Austria
Financial Report of the Secretary General
Financial Report of the Secretary General for the year ended 31 December 2024 INTRODUCTION 1.The Secretary General of the Organization for Security and Co-operation in Europe hereby submits the Financial Report, the Financial Statements, and the Report of the External Auditor, with their opinion, for the year ended 31 December 2024 , in accordance with Financial Regulation 7.04. 2.The Financial Statements are prepared on an accrual basis in accordance with International Public Sector Accounting Standards (IPSAS) and the OSCE’s Financial Regulations. 3.The OSCE is a forum for political dialogue on a wide range of security issues and a platform for joint action to improve the lives of individuals and communities. Through its comprehensive approach to security that encompasses the politico- military, economic and environmental, and human dimensions and its inclusive membership, the OSCE helps bridge differences and to build trust between States by co- operating on conflict prevention, crisis management and post- conflict rehabilitation. With 57 participating States in North America, Europe, and Asia, the OSCE is the world’s largest regional security organization. The OSCE is a regional organization in the sense of Chapter VIII of the United Nations Charter and is an observer in the United Nations General Assembly. 4.This report focuses on the financial position and performance of the OSCE, its expenditure against all provisional expenditure authorizations issued in 2024 , in line with FR 3.04 and the relevant PC decisions , including the Financial Regulations. 5.An organizational chart of OSCE Structures and Institutions as at 31 December 2024 is included as an Annex to the Financial Report. SUMMARY OF THE YEAR 20 24 6.The most significant factor influencing the financial performance of OSCE during 2024 was the continued lack of consensus on approval of the Unified Budget (UB). 2024 marks the third successive year tha t OSCE has operated without an approved budget. In consequence of this, Financial Regulation 3.04 was applied throughout 2024 and an allotment of 25% of the last approved budget was made to cover th e first three months of the year, followed by monthly allotments for the remainder of the year. Since the Permanent Council also had not approved the 2022 and 2023 Unified Budgets, the budgetary allotments were made on the basis of the 2021 Unified Budget. In an environment of high inflation, this de facto Zero Nominal Growth budget proved to be inadequate to meet the needs of the o rganization, despite the implementation of concerted cost containment measures , thus adversely affecting both programmatic activity and the efficient utilisation of resources. Four additional provisional expenditure authorizations totalling EUR 3.0 million were necessary and were approved by Permanent Council during 2024 to cover the resource requirements of various programmes (PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494).
7.2024 marked a record year for new e xtra-budgetary (ExB) pledges received by the organization, with new pledges and donor reallocations growing from EUR 52.4 million in 2023 and EUR 77.1 million in 2024 (EUR 51.5 million in 2023 and EUR 76.8 million in 2024 inclusive of prior- year pledg e adjustments). As at 31 December 2024, deferred funds held for the implementation of extra -budgetary project activities increased to EUR 113.4 million. Th e sustained growth in extra-budgetary activities underlines the continued confidence of donors in the OSCE and the positive impact of the organizations mandated activiti es . 8.The 2024 consolidated surplus of EUR 7.0 million highlighted the continued resilience of the organizations financial operations. International Organizations are expected to maintain balanced financial performance over time , with fluctuations in the operating surplus and deficit caused by timing differences between revenue and expenditure recognition considered normal. The 2024 surplus is primarily driven by the performance of Treasury operations over the 12-month period, with revenues of EUR 5.8 million generated through investments, an increase of 55% year -on-year. The surplus was also supplemented by the billing of EUR 3.6 million for the closed Project Co-ordinator in Ukraine, in line with Financial Regulation 4.04, against which there was no budgetary allotment. 9.The Cash Surplus resulting from operations during 2024 totals EUR 6.8 million, of which EUR 6.5 million relates to the Unified Budget and EUR 0.3 million for the former Special Monitoring Mission to Ukraine (revenue generated from the receipt of assessed contribution arrears and proceeds from the sale of vehicles). The total Cash Surplus reported as at 31 December 2024 has, as a result of 2024 performanc e less the four additional provisional expenditure authorizations of EUR 3.0 million, increased by 15 % to EUR 28.4 million. 10.The overall financial position remains sound, with significant liquid assets in the form of cash and short- term investments. FINANCIAL STATEMENTS TREND ANALYSIS 11.Direct comparison of financial information over the period remains complex due to the impact of Covid- 19 on operational activities in the years 2020-2023, together with the financial impact of the closure of the former OSCE missions in Ukraine. For these reasons, variances between the years should be treated with caution and do not represent a deterioration in financial performance over the period, rather, that despite the decreased scale of OSCE operations the organization has strengthened its financial position as highlighted by Statements of Financial Position. 12.The key financial information for the period 2020-2024 is presented in the tables below and analysed in further detail beneath. STATEMENT OF FINANCIAL POSITION 2020 2021 2022 2023 2024 EUR’000 Cash, bank and investments 134,744 133,347 159,910 173,945 173,353 Contributions receivable 18,861 29,129 26,765 18,713 43,428 Other current assets 11,167 12,708 11,983 12,295 10,829 CURRENT ASSETS 164,772 175,183 198,658 204,953 227,609 Non-current assets 17,823 20,110 13,783 11,660 9,801 TOTAL ASSETS 182,594 195,293 212,441 216,613 237,411 CURRENT LIABILITIES 130,007 141,825 158,063 153,371 170, 502 NON-CURRENT LIABILITIES 3,434 3,544 3,737 3,513 3,786 TOTAL LIABILITIES 133,441 145,369 161,800 156,883 174,288 TOTAL NET ASSETS 49,154 49,924 50,641 59,730 63,122
STATEMENT OF FINANCIAL PERFORMANCE 2020 2021 2022 2023 2024 EUR’000 Assessed Contributions 227,218 229,570 183,862 138,204 138,204 Extra-budgetary contributions 30,512 34,899 41,340 47,888 56,501 Contributions in kind 72,042 75,491 43,081 30,089 31,406 Other revenue 5,734 3,276 3,661 7,470 9,919 TOTAL REVENUE 335,506 343,236 271,944 223,651 2 36,030 Staff costs 214,820 217,674 163,604 128,235 132,983 Consultancy and sub-contracting 31,196 35,235 25,458 25,092 24,989 Travel 7,988 11,794 17,654 14,629 15,331 Services and office costs 32,130 38,238 34,543 34,192 36,284 Other expenses 32,020 29,601 28,302 11,306 20,829 TOTAL EXPENSES 318,153 332,542 269,561 213,453 230,416 Gains/(Losses) (1,875) 1,310 2,748 (1,350) 1,351 SURPLUS/(DEFICIT) FOR THE YEAR 15,478 12,003 5,131 8,848 6,964 13.The cash position of the organization remains sound, with current assets at 1.33 times current liabilities and total assets at 1.36 times total liabilities. The quick ratio, which is the generally accepted measure of liquidity and one which should ideally be above 1.0, remains at 1.29. All three key financial ratios underline that the organization retains a healthy financial position, with assets considerably exceeding liabilities. 14.The tables below present these ratios over the course of the past five years, demonstrating that the organization continues to ensure robust liquidity. The positive improvement of these three key financi al indicators over the period is a result of the sound management actions taken, notwithstanding the zero nominal growth budgets in 2020 and 2021 and the lack of an approved Unified Budget in the years 2022 through 2024. Current Ratio (EUR’000) 2020 2021 2022 2023 2024 Current assets 164,772 175,183 198,658 204,953 227,609 Current liabilities 130,007 141,825 158,063 153,371 170,502 Ratio 1.27 1.24 1.26 1.34 1.33 Total Assets to Total Liabilities (EUR’000) 2020 2021 2022 2023 2024 Total assets 182,594 195,294 212,441 216,613 237,411 Total liabilities 133,441 145,369 161,800 156,883 174,288 Ratio 1.37 1.34 1.31 1.38 1.36 Quick Ratio (EUR’000) 2020 2021 2022 2023 2024 Liquid assets* 157,150 166,921 191,400 197,639 220,564 Current liabilities 130,007 141,825 158,063 153,371 170,502 Ratio 1.21 1.18 1.21 1.29 1.29 *Liquid assets include investments as these consist only of term- deposits which can be readily converted into cash.
Assets 15.Current assets have grown by EUR 62.8 million (38.1%) over the five-year period, with the development attributed to the increase in the cash surplus on account totalling EUR 28.4 million as at 31 December 2024, the growth in contributions receivable, and the increased volume of extra-budgetary fundin g received by the organization. 16.Cash, bank and investments are managed centrally by the Secretariat in order to safeguard funds, better monitor cash flows and optimise investment strategy. Holdings in cash, bank and investments have grown steadily since 2020, rising to EUR 173.4 million as at 31 December 2024, with over 99% of funds held in banks carrying an investment grade of BBB- and above. The upturn in cash holdings can be primarily attributed to the increase in extra -budgetary activities , with deferred ExB funds of EUR 113.4 million recorded at year-end awaiting project implementation. Other factors which have contributed t o the rise in cash holdings include the enlargement of the cash surplus to EUR 28.4 million and the funds held for third parties totalling EUR 17.9 million, largely for the payment of seconded personnel salaries. 17.Contributions receivable have surged to the highest level in 2024, increasing by EUR 24.7 million year- on-year. This is made up of outstanding Unified Budget assessed contribution receivables of EUR 18.3 million, open assessed contribution receivables for the former Special Monitoring Mission to Ukraine of EUR 1.7 million, extra-budgetary contribution receivables of EUR 30.6 million and an offsetting allowance for doubtful debt of EUR 7.0 million on assessed contributions. The trend in ExB receivables is not a cause for concern, as various new pledges were agreed during 2024 and the variance is largely down to timing differences between billing and payment by the donor. The increase in Unified Budget assessed contribution receivables of EUR 5.6 million follows payment patterns over recent years, with associated liquidity risks mitigated in 2024 through Treasury cash management operations. 18.Other current assets have remained steady over recent years at between EUR 11-12 million, and consist mainly of taxes receivable, prepayments made to implementing partners and suppliers, and inventories held for distribution to third-party beneficiaries. 19.Total non-current assets amount to EUR 9.8 million as at 31 December 2024, out of which property, plant and equipment (PP&E) represents the largest component at EUR 6.3 million, with intangible assets totalling EUR 3.5 million. With a gross PP&E cost of EUR 41.8 million as at 31 December 2024 and accumulated depreciation of EUR 35.5 million, the PP&E average age ratio of 0.85 in 2024 is the lowest over the period, indicating that the organization continues to be faced with considerable capital under- investment and ageing equipment. The main driver for the decrease of EUR 9.2 million in non- current assets over the five-year period is however related to the disposal of PP&E from the former OSCE Missions in Ukraine at the end of their mandates. PP&E Average Age Ratio (EUR’000) 2020 2021 2022 2023 2024 Cost as at 31 December 2024 71,162 75,804 53,538 44,122 41,751 Accumulated Depreciation and Impairment Losses as at 31 December 2024 (55,706) (59.838) (43,774) (36,207) (35,475) Net Carrying Amount as at 31 December 2024 15,456 15,966 9,764 7,915 6,276 Ratio 0.78 0.79 0.82 0.82 0.85
Liabilities 20.Non-current liabilities, which are relatively low at the OSCE compared to many other International Organizations, are made up of liabilities for employee benefits that are expected to fall due after mor e than one year, specifically for the expected cost of repatriation. The principal reason they are low is that the OSCE does not offer After Service Health Insurance (ASHI), which is a significant liability for many International Organizations. Non-current employee benefits have remained stable through the period as there has been no update to the post table since it was last approved in 2021, limiting any major changes in staff composition. 21.The principal movement in current liabilities relates to the growth in extra-budgetary funding through the period. Liabilities for extra-budgetary contributions consist of deferred revenues for pledged funds which have not yet met the criteria for recognition and provisions for the return of unused pledges, which totalled EUR 128.5 million in 2024 (EUR 109.5 million in 2023). It is important to highlight that, although the liability for extra-budgetary deferred revenue and provisions has increased by 43% to EUR 128.5 million through the period 2020-2024, this is fully offset by corresponding account receivables and cash received in advance of extra- budgetary activities commencing, eliminating any liquidity risk. 22.Funds held on behalf of third parties has remained steady at EUR 17.9 million year -on-year (EUR 17.7 million in 2023), and consists primarily of funds held for the payment of seconded personnel on behalf of seconding States (EUR 9.5 million), and the overpayment of assessed contribution for the Special Monitoring Mission to Ukraine (EUR 7.4 million) held on account whilst awaiting instruction from the relevant participating States (the primary driver for the overall increase in the period 2020-2024). Revenue 23.Analysis of the consolidated revenue figures over the period 2020 through 2024 must be considered carefully in respect of the closure of the former Special Monitoring Mission to Ukraine which accounted for approximately EUR 90 million of the assessed contributions revenue and EUR 45 million of the contributions in-kind recognized in the years 2020 and 2021 (and approximately half of this in 2022) . With SMM excluded, it can be seen that the organizations revenue has grown progressively over the 5 - year period due to the increase in extra-budgetary funded activities ( a EUR 27.0 million increase over the EUR 34.7 million in ExB revenue recognized in 2020) , whilst revenue from assessed contributions for the Secretariat, Institutions and Field Offices remained stable at EUR 138.2 million in all five years 0F 1 , due to Zero Nominal Growth budgets in 2020 and 2021 and the fact that Financial Regulation 3.04 had the same practical effect in the years 2022 through 2024. 24.Overall, total revenue of the OSCE increase d by 5.5% year-on-year to EUR 236.0 million in 2024 (EUR 223.7 million in 2023), due principally to the increased volume of conditional extra -budgetary activities conducted over the 12-month period (an increase of EUR 8.6 million year-on-year), the increase of EUR 2.0 million in finance revenue generated through investments, and the additional provisional expenditure authorizations of EUR 3.0 million which were approved by the Permanent Council in 2024 (EUR 1.0 million in 2023). 1 In the years 2022 , 2023 and 2024, the revenue was provisionally billed and recognized at EUR 138.2 million, whilst the Permanent Council also approved additional provisional expenditure authorizations to finance unfunded requirements of the organization.
Expenses 25.Total expenditure of the organization has reduced significantly over the period 2020 through 2024, falling by EUR 87.7 million (27.6%) due to the closure of the former Special Monitoring Mission to Ukraine and the Project Co- ordinator in Ukraine. This variance should therefore be considered prudently in line with the performance of the other OSCE Executive Structures, as the expenditures of these two Executive Structures alone amounted to EUR 143.2 million in 2020. Comparing 2020 with 2024 on a like- for-like basis, expenditures have increased from EUR 1 75.0 million to EUR 230.4 million (31.7%), due to the resumption of programmatic activities after the COVID-19 pandemic and the marked increase in extra-budgetary funded activities through the period. 26.As at 31 December 2024, total expenditure amounted to EUR 230.4 million, growing 7.9% versus the expenditure of EUR 213.5 million recorded in 2023. The primary drivers for the increase in expenditures relate to staff costs, extra-budgetary funded travel costs and assets acquired for third-parties, and the increase in the allowance for doubtful debt on outstanding assessed contribution receivables. 27.Staff costs remain the largest category of OSCE expense and inflation-driven pay increases promulgated by the International Civil Service Commission (ICSC) have driven cost growth each year, with costs ris ing by EUR 4.7 million (3.7%) year-on-year in 2024. Staff seconded by participating States remained an essential resource for the organization, and these contributions had a total estimated value to the OSCE of EUR 25.0 million in 2024, a slight increase over the 2023 cost of EUR 24.4 million, but significantly less than in the years up to 2022 due to the closure of the SMM. 28.The levelling-off of travel costs in 2023 and 2024 highlights the impact of the cost containment measures imposed during this period, with the fall in travel costs under the Unified Budget offset by increases in travel costs for extra-budgetary related activities of EUR 0.6 million year-on-year in 2024. 68% 67% 68% 62% 59% 9% 10% 15% 21% 24% 21% 22% 16% 13% 13% 2% 1% 1% 3% 4% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 2020 2021 2022 2023 2024 Principal Sources of Revenue (EUR 000) Assessed ContributionsExtra-Budgetary ContributionsContributions in KindOther Revenue
29.Although OSCE has not historically acted as a traditional donor organization, the recent requirements of many extra-budgetary projects have resulted in increased levels of equipment and supplies procured for donation to third- party beneficiaries, with the issuance expense of inventories for donation rising by EUR 3.3 million (157.6%) to EUR 5.4 million in 2024. 30.The increase in the allowance for doubtful debt on outstanding assessed contribution receivables of EUR 5.5 million in 2024 has resulted in a total allowance of EUR 7.0 million. This change in the a llowance is a result of the forward- looking impairment model introduced following the adoption of IPSAS 41 on 01 January 2023, taking into account historical payments patterns of all participating States. This allowance does not relieve participating States of their obligations towards any outstanding contributions. Operating Surplus/Deficit 31.Since International Organizations are not generally operated to make profits, there is an expectation that surpluses and deficits will broadly balance over time as they are driven by timing differences between the recognition of revenue and the expenditure of funds. Consequently, fluctuations are not unusual and do not necessarily present any cause for concern. EUR’000 2020 2021 2022 2023 2024 Unified Budget 10,112 3,117 5,336 8,692 4,460 Special Purpose Funds 5,836 8,319 (3,702) (897) (797) Extra-budgetary funds (470) 567 3,497 1,053 3,301 Total Surplus/(Deficit) for the period 15,478 12,003 5,131 8,848 6,964 68% 65% 61% 60% 58% 10% 11% 9% 12% 11% 3% 4% 7% 7% 7% 10% 11% 13% 16% 16% 10% 9% 10% 5% 9% - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2020 2021 2022 2023 2024 Principal Expenditure Categories (EUR 000) StaffConsultancy & SubcontractingTravelServices and Office CostsOther
32.The large operating surpluses in the years 2020 and 2021 were a result of two factors, the COVID-19 pandemic and the former Special Monitoring Mission to Ukraine (SMM) for which the mandate ended in 2022. The impact of the pandemic on OSCE operations was considerable, with programmatic activities heavily scaled down in accordance with national restrictions during this period, reducing expenditures incurred and therefore increasing the operating surplus under the Unified Budget. Since then, operations have normalised and despite the Unified Budget provisional allotment implementation nearing 100% in 2022 and 2023, the organization generated considerable surpluses primarily through Treasury investment activities and the unallotted funds billed for the former Project Co- ordinator in Ukraine. 33.Special Purpose Funds (SPF) were historically dominated by SMM, which accounts for the majority of the surpluses recorded in the years 2020-2021 and the deficit of EUR 3.7 million in 2022. The deficits recorded under SPF in the years 2023-2024 relate to timing differences between the recognition of revenues and expenditures. 34.Extra-budgetary project surpluses are largely balanced through the period as the pledged funds ar e conditional and therefore deferred, with revenues recognised upon implementation of project activities (and therefore expenditures) in line with the respective pledge agreements. 35.The cash surplus differs from operating surplus shown above for three reasons: (i)It relates only to those Executive Structures that make up the Unified Budget, with a separate calculation carried out for the SMM cash surplus; (ii)The budget and IPSAS definitions of both revenue and expenditure differ and adjustments are necessary to reconcile the two; and (iii)An adjustment is made for net Assessed Contributions received by adding the amount outstanding as at 1 January and deducting the amount as at 31 December of the year in question. 36.The Unified Budget cash surplus of EUR 6.5 million in 2024 marks an increase of 74.3% when compared to 2023, although the total 2024 cash surplus is down EUR 17.6 million year -on-year due to the substantial one-off cash surplus generated in 2023 through the administrative closure activities for the former Special Monitoring Mission to Ukraine. 37.The growth in the Unified Budget cash surplus is, as previously described, driven by the Treasury investment activities which generated cash revenues of EUR 5.8 million in 2024, together with the unallotted funds billed for the former Project Co- ordinator in Ukraine in the amount of EUR 3.6 million which were neither allotted or consumed, the budgetary surplus of EUR 2.1 million and other minor revenues generated. These amounts were partially offset by the increase of EUR 5.6 million in Unified Budget assessed contributions receivable during 2024. 38.The scale of the cash surplus should however be treated with caution, as the budgetary surplus remains extremely low, despite the cost containment measures implemented in order to remain within the lev el of the 2021 provisional allotments. This highlights the budgetary constraints under which the organization continues to operate.
EUR’000 2020 2021 2022 2023 2024 Budget Surplus/(Deficit) for the period 10,112 3,117 3,931 2,028 2,087 IPSAS adjustments (7,506) (540) 427 2,971 6,425 Project Co-ordinator in Ukraine unallotted provision - - - 3,619 3,619 Net Assessed Contributions received 1,434 1,250 (4,338) (4,893) (5,638) Cash surplus1F 2 4,040 3,827 19 3,725 6,492 Final Unified Budget/Provisional Expenditure Authorizations 138,204 138,204 139,117 135,544 137,588 Cash Surplus percentage of UB 2.9% 2.8% 0.0% 2.7% 4.7% SMM Cash Surplus - - - 20,669 268 Balance of other closed Special Purpose Funds - - 198 1 - Total Cash surplus 4,040 3,827 218 24,395 6,760 SEGMENTAL BREAKDOWN 39.The OSCE had three principal revenue streams during 2024: Assessed Contributions (AC) for the Secretariat, Institutions and Field Missions; projects financed through Extra-Budgetary (ExB) contributions accepted under the terms of Article IX of the Financial Regulations; and other Special Purpose (SP) and ExB Funds as necessary to meet the various objectives established by the Permanent Council. The following table shows the principal elements of the financial statements pertinent to each part of the OSCE’s budgetary structure. STATEMENT OF FINANCIAL POSITION EUR’000 UB SP ExB Total Current Assets 61, 398 23,232 142,979 227,609 Non-current Assets 7,438 385 1,978 9,801 TOTAL ASSETS 68,836 23,617 144,958 237,411 Current Liabilities 36,373 211 133,918 170,502 Non-current Liabilities 3,429 - 357 3,786 TOTAL LIABILITIES 39,802 211 134,275 174,288 TOTAL NET ASSETS 29,034 23,406 10,682 63,122 STATEMENT OF FINANCIAL PERFORMANCE EUR’000 UB SP ExB Total Revenue 178, 139 214 57,677 236,030 Expenses 174,021 1,011 55,384 230,416 Foreign Exchange Gains/(Losses) 342 - 1,009 1,351 SURPLUS/(DEFECIT) FOR THE YEAR 4,460 (797) 3,302 6,964 2 The cash surplus relates purely to those Executive Structures that form the Unified Budget. The Unified Budget cash surplus recorded in the Financial Statements 2022-2024 includes the additional provisional expenditure authorizations.
2024 PROVISIONAL RESOURCE UTILISATION 2F 3 40.Expenditure for 2024 is presented on a modified cash basis, which records expenses when they are incurred or when binding commitments made, whereas expenses in the Statement of Financial Performance are recognised as goods or services are delivered in accordance with the accruals basis of IPSAS. The Statement of Comparison of Budget and Actual Amounts (Statement V) compares amounts on the budgetary basis, whilst Note 10 of the Financial Statements Note disclosures provides detailed reconciliations between the two. In addition, the two accounting frameworks use different systems of cost classification to reflect the differing needs of the users. The following section of the report considers the budgetary performance on the budgetary basis, as distinct from the IPSAS basis discussed in the foregoing sections. 41.The Permanent Council could not find consensus on the Unified Budget Proposals tabled by the Chair and consequently there was no approved budget for 2024. Financial Regulation 3.04 provides that, in these circumstances, the Secretary General and Heads of Institution are authorized to incur obligations and make payments until 31 March of the current financial year up to the level of 25 per cent of the previous Budget, and thereafter, on a monthly basis up to 1/12th of the previous Budget until the new Budget is adopted. Since the Budget was not approved during the year, the Organization operated under provisional expenditure authorizations throughout 2024 at the level of the approved 2021 Unified Budget (PC.DEC/1413 dated 18 August 2021), with four additional provisional expenditure authorizations also approved by the Permanent Council in the total amount of EUR 3.0 million, funded from the cash surplus reported as at 31 December 2023 . 42.The information below, and further detailed in the 2024 Resource Utilization Report, represents an assessment of the extent to which the resources available in 2024 under the total provisional expenditure authorization have been used to report on progress towards outcomes. Furthermore, information is provided on financial utilization, comparing actual expenditure to available resources as at the end of 2024, as well as the post table occupancy rate. The financial utilization rates are calculated with reference to the original provisional expenditure authorization made available at the level of the 2021 Unified Budget, in line with Financial Regulation 3.04. 43.The provisional expenditure authorization made available in line with Financial Regulation 3.04 amounted to EUR 134.6 million (at the level of the 2021 approved UB as per PC.DEC/1413, dated 18 August 2021, excluding the closed structures). In order for the Organization to meet its 2024 financial obligations, the Permanent Council approved the additional provisional expenditure authorizations in the total amount of EUR 3.0 million through the following decisions: EUR 397 thousand under PC.DEC/1485 (dated 02 August 2024) , EUR 1,166 thousand under PC.DEC/1487 (dated 19 September 2024), EUR 861 thousand under PC.DEC/1491 (dated 26 November 2024), and EUR 578 thousand under PC.DEC/1494 (dated 19 December 2024 ). The total 2024 provisional expenditure authorization amounted to EUR 137.6 million. 44.The absence of a consensus among participating States regarding the approval of the 2022, 2023 and 2024 Unified Budget significantly hampered the OSCE’s ability to commit resources in a planned manner . This posed serious challenges to the Organization’s ability to fund mandated activities and meet its contractual obligations and staff salaries, led to a real loss of purchasing power given the accumulated but unfunded level of inflation across the whole OSCE area, and prevented the Organization from achieving planned cost efficiencies. The lack of budget approval continues to damage the reputation of the OSCE, renders the Organization less reliable in terms of delivery of the programmatic activities, an d makes it a less attractive contracting partner, thus leading to a loss of credibility, trust and legitimacy . 3 Noting that agreement could not yet be found on all programmatic activities.
45.Over the last five years, the average Unified Budget utilization remained at the level of 98%. However, in most Executive Structures, the implementation rate is closer to 100%, and starting with 2022, i t exceeded 100%, necessitating alternative means of funding (additional provisional expenditure authorizations and Repository Programme ‘Core Support Mechanism’). The achieved utilization rate is a reflection of the increased efforts by programmes to sustain, constrain and adapt their operations to the monthly provisional allotments and respond to the dire financial situation by reducing and reprioritizing their activities. *2024 budgetary expenditure includes EUR 93 thousand from the Repository Programme “Core Support Mechanism” 46.The 2024 total provisional expenditure authorization comprises EUR 65.1 million (47%) for the Secretariat and Institutions, and EUR 72.4 million (53%) for the Field Operations. The geographical distribution of resources made available under the total provisional expenditure authorization and the 2024 actual expenditure is shown below. 47.The distribution of the resources by main cost category, as highlighted in the below charts, indicates that staff costs represent the largest cost category with 65% of the 2024 total provisional expenditure authorization, followed by operational costs, the second largest cost category with 28%. The actual expenditure in 2024 by main cost category reflects a proportion of 68% for s taff costs and 32% for non- staff costs as shown below. 138,204 138,204 139,117 135,544 137,588 134,875 135,723 135,185 134,756 135,594 90% 91% 92% 93% 94% 95% 96% 97% 98% 99% 100% 100,000 110,000 120,000 130,000 140,000 150,000 160,000 170,000 2020 2021 2022 2023 2024 Budget v Expenditure 2020 -2024 (EUR 000) Implementation Rate (%) Approved Unified Budget (Provisional Expenditure Authorisations for 2022 - 2024)Budgetary Expenditure Budget Utilisation 98.2% 97.6% 97.2% 99.4% 98.6%
48.Due to the lack of an approved budget for 2022, 2023 and 2024, the 2021 post table remained binding in 2024. The distribution of the approved posts, as highlighted below, shows that 73% of all posts ar e located in Field Operations with the remaining 27% in the Secretariat and Institutions. From a staff category point of view, the post table shows the following breakdown: General Services 53%, National Professional 18%, International Seconded 18% and International Contracted 11% (as below). 49.While staff costs continue to represent the largest share of total expenditures, the lack of an updated and approved Post Table to meet the Organization’s critical needs hampered its ability to deliver on its mandate. Due to the absence of an approved Unified Budget in 2022, 2023, and 2024, the Organization's human resources, which remained tied to the 2021 Unified Budget approved post table, were stretched to the limit. The l ack of a Unified Budget approval in the past three years meant that none of the proposed post table changes could be implemented. Taking into account the vacancy rate per staff category, secondments, while being the most cost- effective category of staffing, continue to be the most challenging to fill, resulting either in the inability to carry out planned activities or the requirement to hire more expensive temporary staff. 50.During 2024, the OSCE advertised 182 international positions. Of these, 115 recruitment processes concluded successfully, resulting in the hiring of 60 contracted and 55 seconded staff, and attracting 9,995 applications (8,518 for contracted and 1,477 for seconded posts). Of all applicants, 44% were long- listed for international contracted roles, exceeding DHR’s target of 35%. Conversely, the proportion of applications for seconded positions that met the minimum requirements declined substantially from 67% in 2023 to 41% long-listed per vacancy in 2024, falling below the 75% target. Consequently, 82 % of the seconded roles required extensions and re-advertisement, considerably exceeding the 15% target.
Nevertheless, the recruitment process itself remained efficient, with an average time to hire of 112 days at the organizational level and 108 days at the Secretariat level in 2024. 51.The OSCE continues to rely heavily on the secondment system for a significant proportion of its post table (18% in 2024, which constitutes 61% of all international posts), and therefore the continuity of programmatic activities depends on the participating States’ sustained support and commitment to actively second qualified personnel. In 2024, the overall quality of applications for seconded positions did not meet the expectations, with only 41% being long -listed per vacancy, falling short of the 75% target.
Summit Periodic meeting of OSCE Heads of State or Government Permanent Council Regular body for political consultation and decision-making (weekly in Vienna) Forum for Security Co-operation Regular body for arms control and CSBMs (weekly in Vienna) Chairman-in-Office (CiO) Malta (2024) Troika (North Macedonia, Malta, Finland) High-Level Planning Group Vienna OSCE Assistance in Implementation of Bilateral Agreements Representative to the Latvian-Russian Joint Commission on Military Pensioners Personal Representatives of the CiO Court of Conciliation and Arbitration Geneva Open Skies Consultative Commission Promotes implementation of Open Skies Treaty, Meets in Vienna Joint Consultative Group Promotes implementation of CFE Treaty, Meets in Vienna OSCE related Bodies Ministerial Council Annual meeting of OSCE Foreign Ministers (except in years with Summit) Secretary General Vienna Office for Democratic Institutions and Human Rights Warsaw OSCE Representative on Freedom of the Media Vienna OSCE Parliamentary Assembly Copenhagen High Commissioner on National Minorities The Hague OSCE Secretariat Vienna and Prague Office Legend: ______ Line of Responsibility ............ Provides Support OSCE Field Operations OSCE Centre in Ashgabat OSCE Programme Offices: Dushabe Bishkek Astana Presence in Albania The Personal Representative of CiO on the Conflic t Dealt with by the OSCE Minsk Conference Project Co-ordinator in Uzbekistan The Minsk Process OSCE Mission in/to: Serbia Montenegro Moldova Kosovo Bosnia and Herzegovina Skopje Capital Investment Plan Technical Fund OSCE Structures and Institutions As at 31 December 202 4
Statement of Responsibilities of the Secretary General and Conformity of the Financial Statements
Statement of the Responsibilities of the Secretary General and Conformity ofthe Financial Statements with the Financial Regulations ofthe OSCE and with International Public Sector Accounting Standards RESPONSIBILITIES OF THE SECRETARY GENERAL 1. The Secretary General, assisted by the heads ofmission and heads of institution, is required by FinancialRegulation 7.01 to maintain such accounting records for all Funds operated by the OSCE asare necessary according to International Public Sector Accounting Standards, and to prepare annual financial statements. 2. Financial Regulation 7.02 requires that the financial statements shall contain: a statement of financial position; a statement of financial performance; a cash flow statement; a statement of changes in net assets; a statement ofcomparison ofbudget and actuals; accompanied by segment reporting by Fund and such other information as may be requested by the Permanent Council or deemed necessary or useful by theSecretary General. 3. The Secretary General is further required to establish and issue Financial and Administrative Instructions, in consultation with the heads of institution whererequired, to provide for the appropriate implementation of the FinancialRegulations as approved by the Permanent Council, including effective financial administration and the exercise ofeconomy.Mechanisms for internal oversight and financial control are required to support theSecretary General’s management of theOrganization’s resources. The Secretary General and the heads of institution, to the extent that their institutions are concerned, are responsible and accountable for the proper application ofthe Financial Regulations. STATEMENT OF CONFORMITY 4. We hereby confirm that the financial statements and supporting notes were properly prepared in accordance with the Financial Regulations and applicable International Public Sector Accounting Standards. I Miroslawa Boryczka James Oxley Director for Management Chief of Accounts and Finance and Treasury Unit Feridun H. Sinirlioglu Secretary General 30 June 2025
I AUDITED FINANCIAL STATEMENTS
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Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) VI. Audit Opinion Opinion We have audited the Financial Statements of the Organization for Security and Co-operation in Europe (OSCE) for the 12-months period ended 31 December 2024. These Financial Statements 2024 comprise the Statement of Financial Position as at 31 December 2024, the Statement of Financial Performance, the Statement of Changes in Net Assets, the Cash Flow Statement and the Statement of Comparison of Budget and Actual Amounts the year then ended, and Notes to the Financial Statements, including a summary of significant accounting policies. In our opinion, the accompanying Financial Statements 2024 present fairly, in all material respects the Financial Position of the OSCE as at 31 December 2024 and of its Financial Performance and its Cash Flows for the year then ended in accordance with the International Public Sector Accounting Standards (IPSAS). Basis for Opinion We conducted our audit in accordance with the International Standards of Supreme Audit lnstitutions (ISSAls). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements' section of our report. We are independent from the OSCE in accordance with the ethical requirements that are relevant to our audit of the OSCE's Financial State- ments, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suffici- ent and appropriate to provide a basis for our opinion. Responsibilities of Management and those charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the Finan- cial Statements in accordance with the IPSAS and according to Regulation7.01 of OSCE's Financial Regulations as well as for such internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing OSCE's ability to continue as a going concern, disclosing, as applicable, matters rela- ted to going concern and using the going concern basis of accounting unless Management either intends to liquidate the OSCE or to cease operations, or has no realistic alternative but to do so.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) Those charged with Governance are responsible for overseeing OSCE's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Audit Report that includes our Audit Opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conduc- ted in accordance with ISSAls will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISSAIs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of OSCE's internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncer- tainty exists related to events or conditions that may cast significant doubt on OSCE's ability to continue as a going concern. lf we conclude that a material uncertainty exists, we are required to draw attention in our Audit Report to the related disclosu- res in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are strictly based on the audit evidence obtained up to the date of our Audit Report. W e communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls we identify during our audit.
Financial Statements
EUR '000 1000 Note 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 54,777 112,818 Investments 3.2 118,576 61,127 Contributions Receivable 3.3 43,428 18,713 Accounts Receivable 3.4 3,783 4,980 Prepayments 3.5 5,168 6,526 Inventory 3.6 1,857 792 Other Current Assets 3.7 20 (4) 227,609 204,953 Non-Current Assets Property, Plant and Equipment 3.8 6,276 7,915 Intangible Assets 3.9 3,506 3,725 Other Non-Current Assets 3.7 20 20 9,801 11,660 Total Assets 237,411 216,613 LIABILITIES Current Liabilities Accounts Payable 4.1 2,536 3,505 Accruals 4.2 7,930 7,903 Deferred Revenue 4.3 3,337 5,764 Conditional ExB Contributions 4.4 113,377 102,639 Funds Held for Third Parties 4.5 17,919 17,657 Employee Benefits Current 4.6 8,360 8,387 Cash Surplus Current 4.7 0 0 Provisions 4.8 15,155 6,897 Other Current Liabilities 4.9 1,888 618 170,502 153,371 Non-Current Liabilities Employee Benefits Non-Current 4.6 3,786 3,513 Other Non-Current Liabilities 4.9 0 0 3,786 3,513 Total Liabilities 174,288 156,883 Net Assets 63,122 59,730 NET ASSETS/EQUITY Cash Surplus 5.1 28,371 24,613 Cash Surplus Withheld 5.2 15 15 Revolving Fund 5.3 2,710 2,710 Contingency Fund 5.3 2,180 2,180 Other Reserves 5.4 (3,414) (2,844) Accumulated Surplus/(Deficit) 5.5 33,260 33,056 Total Net Assets/Equity 63,122 59,730 (Signed) (Signed) (Signed) Feridun H. Sinirlioğlu James Oxley Secretary General Chief of Accounts and Treasury 30 June 2025 Director for Management and Finance TOTAL OSCE I. Statement of Financial Position Total OSCE As at 31 December 2024 Miroslawa BoryczkaThe accompanying Notes are an integral part of these Statements
EUR '000 1000 Note 2024 2023 REVENUE Assessed Contributions 6.1 138,204 138,204 Extra-Budgetary Contributions 6.2 56,501 47,888 Finance Revenue 6.3 5,623 3,630 Contributions In-Kind 6.4 31,406 30,089 Revenue from Exchange Transactions 6.5 636 1,178 Other Revenue 6.6 3,660 2,662 Total Revenue 236,030 223,651 EXPENSES Staff Costs 7.1 132,983 128,235 Consultancy and Subcontracting 7.2 24,989 25,092 Travel Expenses 7.3 15,331 14,629 Services and Office Costs 7.4 36,284 34,192 Consumables and Supplies 7.5 3,630 3,204 Depreciation and Amortisation 7.6 2,904 3,297 Equipment Expenses 7.7 8,228 3,701 Other Operating Expenses 7.8 6,068 1,104 Total Expenses 230,416 213,453 Foreign Exchange Gains/(Losses) 8 1,351 (1,350) Surplus/(Deficit) for the Period 10.1 6,964 8,848 (Signed) (Signed) (Signed) Feridun H. Sinirlioğlu James Oxley Secretary General Chief of Accounts and Treasury 30 June 2025 Director for Management and Finance TOTAL OSCE II. Statement of Financial Performance Total OSCE For the Year Ended 31 December 2024 Miroslawa BoryczkaThe accompanying Notes are an integral part of these Statements
III. Statement of Changes in Net Assets Total OSCE For the Year Ended 31 December 2024 EUR '000 Note Cash Surplus Cash Surplus Withheld Revolving Fund Contingency Fund Other Reserves Accumulated Surplus/(Deficit) Total Net Assets Balance as at 31 December 2023 24,613 15 2,710 2,180 (2,844) 33,056 59,730 Changes in Net Assets for 2024 Increase/(Decrease) in Cash Surplus Withheld 5.2 0 Allocation of Current Year Cash Surplus 4.7 (3,002) (3,002) Actuarial Gains/(Losses) 4.6 (570) (570) Surplus/(Deficit) for the Period 5.1, 10.1 6,760 204 6,964 Balance as at 31 December 2024 28,371 15 2,710 2,180 (3,414) 33,260 63,122 (Signed) (Signed) (Signed) Feridun H. Sinirlioğlu James Oxley Secretary General Chief of Accounts and Treasury 30 June 2025 Miroslawa Boryczka Director for Management and FinanceThe accompanying Notes are an integral part of these Statements
EUR '000 1000 Note 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Surplus/(Deficit) for the Period 10.1 6,964 8,848 Non-Cash Movements Deduction of Unrealized Foreign Exchange Gains/Losses on Cash and Cash Equivalents 8 (602) 982 Deduction of Depreciation, Amortisation and Impairments 7.6, 3.10 2,904 3,297 Deduction of Loss on Disposal of PP&E 6.5 1,422 238 Deduction of Non-Cash Changes in Net Assets 5.4 (570) 253 (Increase) / Decrease in Contributions Receivable 3.3 (24,715) 8,052 (Increase) / Decrease in Accounts Receivable 3.4 1,198 (255) (Increase) / Decrease in Prepayments 3.5 1,358 428 (Increase) / Decrease in Inventory 3.6 (1,065) (501) (Increase) / Decrease in Other Current/Non-Current Assets 3.7 (24) 16 Increase / (Decrease) in Accounts Payable 4.1 (969) 215 Increase / (Decrease) in Accruals 4.2 27 723 Increase / (Decrease) in Deferred Revenue 4.3 (2,427) 157 Increase / (Decrease) in Conditional ExB Contributions 4.4 10,738 10,918 Increase / (Decrease) in Funds Held for Third Parties 4.5 262 (1,369) Increase / (Decrease) in Employee Benefits 4.6 246 605 Increase / (Decrease) in Cash Surplus Payable 4.7 0 (3,827) Increase / (Decrease) in Provisions 4.8 8,258 (10,353) Increase / (Decrease) in Other Liabilities 4.9 1,270 (1,986) Net Cash Flows from Operating Activities 4,275 16,441 CASH FLOWS FROM INVESTING ACTIVITIES (Purchase) / Sale of Investments 3.2, 9.2 (57,449) 50,469 (Addition) / Disposal of PP&E and Intangibles 3.8, 3.9, 9.2 (2,468) (1,412) Net Cash Flows from Investing Activities (59,916) 49,058 CASH FLOWS FROM FINANCING ACTIVITIES Credits for Cash Surplus Withheld 5.2 0 (12) Allocation of Cash Surplus 4.7 (3,002) 0 Transfer between Funds - - Net Cash Flows from Financing Activities (3,002) (12) Net Increase/(Decrease) in Cash and Cash Equivalents 3.1, 9.1 (58,643) 65,487 Cash and Cash Equivalents at Beginning of Period 3.1, 9.1 112,818 48,313 Foreign Exchange Gains/(Losses) on Cash and Cash Equivalents 8 602 (982) Cash and Cash Equivalents at End of Period 54,777 112,818 (Signed) (Signed) (Signed) Feridun H. Sinirlioğlu James Oxley Secretary General Chief of Accounts and Treasury 30 June 2025 Director for Management and Finance IV. Cash Flow Statement Total OSCE For the Year Ended 31 December 2024 TOTAL OSCE Miroslawa BoryczkaThe accompanying Notes are an integral part of these Statements
Note 2024 Provisional Expenditure Authorization (FR 3.04) 1 Additional Provisional Expenditure Authorization 2 Total Provisional Expenditure Authorizations 3 Actuals 4 Variance Repository Programme Expenditure 5 Total Variance Under/(Over) Total Authorization s 40,874 2,330 43,204 43,065 139 17 43,082 122 16,394 397 16,791 16,790 1 0 16,790 1 3,504 39 3,543 3,543 0 0 3,543 0 1,609 0 1,609 1,609 0 0 1,609 0 62,381 2,766 65,147 65,007 140 17 65,024 123 47,043 236 47,279 47,147 131 51 47,198 81 2,308 - 2,308 2,157 152 8 2,165 144 2,339 - 2,339 891 1,447 0 891 1,447 20,516 - 20,516 20,299 217 17 20,316 200 72,205 236 72,441 70,494 1,947 76 70,570 1,871 Total 10.2 134,586 3,002 137,588 135,501 2,087 93 135,594 1,994 (731) 7,156 Project Co-ordinator in Ukraine unallotted provision 3,619 12,130 Add:Assessed Contributions receivable as at 1 January 2024 12,615 Less:Assessed Contributions receivable as at 31 December 2024 8 18,253 Cash Surplus for the year 2024 5.1, 10.1 6,492 (Signed) (Signed) (Signed) Feridun H. Sinirlioğlu James Oxley Secretary General Chief of Accounts and Treasury 30 June 2025 Director for Management and Finance Reconciliation to Cash Surplus 1 - No Unified Budget for 2024 was approved by the Permanent Council and allotments were made under Financial Regulation 3.04 up to the level of the last approved budget (the Unified Budget for 2021). Revenue credits 6 A full breakdown by Fund, Main Programme and Programme can be found in the Resource Utilization Report at Annex 2 to these Financial Statements. 3 - The Total Provisional Expenditure Authorization represents the level of 2021 Unified Budget complemented by PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494. 4 - The budget basis and the accounting basis differ. Actuals are reported on this statement on a budget basis. Refer to Note 9 for more information on the difference in bases. 6 - Revenue credits represent additional revenue items which are recorded as credits to expenditure to finance purchase of replacement assets. 7 - Non-budget revenue represents amounts received over and above the Assessed Contributions, principally interest received from banks. 8 - Contributions were assessed in accordance with Financial Regulation 4.04 and a second bill was issued to fund the allotments made under Financial Regulation 3.04. 5 - The Repository Programme "Core Support Mechanism", described in Annex 1, constitutes extra-budgetary expenditure and therefore does not contribute to the cash surplus. Non-budget revenue 7 V. Statement of Comparison of Budget and Actual Amounts Secretariat, Institutions and Field Operations For the Year Ended 31 December 2024 Miroslawa Boryczka 2 - Additional Provisional Expenditure Authorizations approved under PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494. The Secretariat EUR '000 Eastern Europe Caucasus Central Asia Total Field Operations Office for Democratic Institutions and Human Rights High Commissioner on National Minorities Representative on Freedom of the Media Total Secretariat and Institutions South-Eastern Europe Budgetary excess of revenue over expenditureThe accompanying Notes are an integral part of these Statements
Notes to the Financial Statements
Notes Notes to the Financial Statements NOTE 1: REPORTING STRUCTURE 1.1 – Reporting Entity 1.2 – Fund Accounting and Segment Reporting NOTE 2: SIGNIFICANT ACCOUNTING POLICIES 2.1 – Basis of Presentation 2.2 – Financial Instruments 2.3 – Uncollected Assessed Contributions 2.4 – Inventories 2.5 – Property, Plant and Equipment 2.6 – Intangible Assets 2.7 – Impairment of Assets 2.8 – Operating Leases 2.9 – Accruals 2.10 – Employee Benefits 2.11 – Cash Surplus or Deficit 2.12 – Deferred Revenue 2.13 – Provisions 2.14 – Contingent Liabilities and Contingent Assets 2.15 – Revenue from Non-Exchange Transactions 2.16 – Contributions In-Kind 2.17 – Revenue from Exchange Transactions 2.18 – Indirect Common Costs 2.19 – Expenses 2.20 – Critical Accounting Estimates and Judgments NOTE 3: ASSETS 3.1 – Cash and Cash Equivalents 3.2 – Investments 3.3 – Contributions Receivable 3.4 – Accounts Receivable 3.5 – Prepayments and Services Receivable 3.6 – Inventory 3.7 – Other Current and Non-Current Assets 3.8 – Property, Plant and Equipment 3.9 – Intangible Assets 3.10 – Impairment of Assets NOTE 4: LIABILITIES 4.1 – Accounts Payable 4.2 – Accruals 4.3 – Deferred Revenue 4.4 – Conditional Extra-Budgetary Contributions These Notes are an integral part of the Financial Statements
Notes 4.5 – Funds Held for Third Parties 4.6 – Employee Benefits 4.7 – Cash Surplus Current 4.8 – Provisions 4.9 – Other Current and Non-Current Liabilities NOTE 5: RESERVES 5.1 – Cash Surplus 5.2 – Cash Surplus Withheld 5.3 – Revolving and Contingency Funds 5.4 – Other Reserves 5.5 – Accumulated Surplus/(Deficit) NOTE 6: REVENUE 6.1 – Assessed Contributions 6.2 – Extra-Budgetary Contributions 6.3 – Finance Revenue 6.4 – Contributions In-Kind 6.5 – Revenue from Exchange Transactions 6.6 – Other Revenue NOTE 7: EXPENSES 7.1 – Staff Costs 7.2 – Consultancy and Subcontracting 7.3 – Travel Expenses 7.4 – Services and Office Costs 7.5 – Consumables and Supplies 7.6 – Depreciation and Amortization 7.7 – Equipment Expense 7.8 – Other Operating Expenses NOTE 8: FOREIGN EXCHANGE GAINS/(LOSSES) NOTE 9: CASH FLOW STATEMENT 9.1 – Cash and Cash Equivalents 9.2 – Cash Flows from Investing Activities NOTE 10: RECONCILIATIONS OF BUDGETS TO FINANCIAL STATEMEN TS 10.1 – Reconciliation of Surplus/ (Deficit) for the Period 10.2 – Reconciliation of Actual Amounts on a Comparable Basis and Cash Flow Statement NOTE 11: OTHER DISCLOSURES 11.1 – Financial Risk Management 11.2 – Contingent Assets and Contingent Liabilities 11.3 – Leases and Contractual Obligations 11.4 – Related Party Disclosures 11.5 – Events After the Reporting DateThese Notes are an integral part of the Financial Statements
Notes Notes to the Financial Statements NOTE 1: REPORTING STRUCTURE 1.1 – Reporting Entity The OSCE traces its origins to the early 1970s, to the Helsinki Final Act (1975) and the creation of the Conference on Security and Co-operation in Europe (CSCE). In 1994, the CSCE, having evolved well beyond its initial role, was renamed the Organization for Security and Co-operation in Europe. Now with 57 participating States in Europe, North America and Asia, the OSCE is the world’s largest regional security organization, working to ensure peace and stability for more than a billion people. The OSCE is a regional organization in the sense of Chapter VIII of the United Nations Charter and is an observer in the United Nations General Assembly. The OSCE operates in three dimensions: Politico-military dimension – includes mechanisms for conflict prevention and resolution, and military confidence-building measures. Economic and environmental dimension – activities aimed at counteracting threats and challenges to security and stability caused by economic and environmental factors. Human dimension – set of norms and activities related to human rights and the rule of law. With its Secretariat, specialized Institutions, expert units and network of Field Operations, the OSCE addresses a range of issues that have an impact on common security, including arms control, terrorism, good governance, energy security, human trafficking, democratization, media freedom and minority rights. OSCE’s Secretariat is based in Vienna. Most of the OSCE’s activities are implemented in South-Eastern Europe, Eastern Europe, the South Caucasus and Central Asia. Field Operations play a major role in this regard, they are established at the invitation of the respective host countries, and their mandates are agreed by consensus by the participating States. Additional activities, funded from extra-budgetary contributions, are undertaken in accordance with Article IX of the Financial Regulations to supplement the Unified Budget and other programmes. 1.2 – Fund Accounting and Segment Reporting The basic financial governing document of OSCE is the Financial Regulations approved by the Permanent Council on 27 June 1996 (DOC.PC/1/96) and subsequently revised. The latest revision is PC.DEC/1419 dated 16 November 2021. In accordance with these Regulations, the OSCE operates a system of fund accounting and the audited Financial Statements present the consolidated financial results of Budgetary Funds, as well as Special Purpose Funds and Extra-Budgetary Funds. For purposes of the presentation of the 2024 Unified Budget Proposal, Funds were grouped under Secretariat and Institutions; and Field Operations, with the latter, in turn, being grouped into Regions. This hierarchical presentation is also followed in the segmental reports annexed to the 2023 Financial Statements. The segmental information also includes an analysis of extra-budgetary expenses broken down by Executive Structure. Full details of the Funds budgeted and segments reported in 2024 can be found in Annex 1 to these Statements. These Notes are an integral part of the Financial Statements
Notes NOTE 2: SIGNIFICANT ACCOUNTING POLICIES 2.1 – Basis of Presentation 2.1.1 – Applicable Accounting Standards These Financial Statements are prepared on an accrual basis, in accordance with the requirements of International Public Sector Accounting Standards (IPSAS) and the OSCE Financial Regulations, and using the historic cost convention. Where IPSAS is silent concerning any particular matter, the appropriate International Financial Reporting Standard (IFRS) or International Accounting Standard (IAS) is applied. The last change to the accounting standards came in 2023 with the adoption of IPSAS 41, “Financial Instruments”, with effect from 1 January 2023. 2.1.2 – Reporting Year These Financial Statements cover the calendar year ended 31 December 2024. The reporting period coincides with the calendar year. 2.1.3 – Going Concern basis The Financial Statements have been prepared on the basis that the OSCE is a going concern. Management’s assessment takes into consideration all significant decisions and available financial evidence, including the decisions of the Permanent Council to extend the mandates of all Executive Structures, the continued positive historical trend of collection of assessed contribution and voluntary contribution payments, and the fact that the Permanent Council has taken no decision to cease the operations of OSCE. 2.1.4 – Currency The Financial Statements are presented in Euro which is also the functional currency of the Organization. The figures are presented rounded to the nearest thousand Euros and to the nearest one-tenth of a percent, which may result in totals that differ slightly from the sum of their constituents. Foreign currency transactions are translated into Euros based on the prevailing United Nations Operational Rates of Exchange (UNORE). The UNORE are normally set on the first day of each month, and revised mid- month with effect from the 15 th of the month. Assets and liabilities are valued at the end of the reporting period using the UNORE prevailing on 31 December. Gains and losses arising from transactions and translation are recorded as currency exchange adjustments. 2.2 – Financial Instruments Financial instruments consist of cash, bank accounts, short-term deposits, contributions and other accounts receivable and accounts payable. Financial instruments maturing within one year of the reporting date are classified as current. Financial instruments with a maturity date of more than one year after the reporting date are classified as non-current assets. The OSCE does not engage in transactions involving hedging or derivative financial instruments. Financial instruments are recognized when OSCE becomes a 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. Financial instruments are initially recognized at fair value, normally being the transaction price. The subsequent measurement depends on their classification. The OSCE classifies its financial instruments at amortized cost based on the Organizations management model and the contractual cash flow characteristics of the financial instruments. The OSCE assesses impairment of its financial assets on a forward-looking expected credit loss basis. These Notes are an integral part of the Financial Statements
Notes Classification and measurement principles for financial assets IPSAS 41 introduced a principles-based approach to the classification of financial assets and requires the use of two criteria: the entity’s model for managing its financial assets and the contractual cash-flow characteristics of those assets. Depending on these criteria, financial assets are classified in the following categories: ‘financial assets at amortized cost’ (AC), ‘financial assets at fair value through net assets/equity’ (FVNA), or ‘financial assets at fair value through surplus or deficit’. Impairment model IPSAS 41 requires the use of a forward-looking impairment model based on expected credit losses (ECL) over the lifetime of the financial assets (the simplified approach). The ECL is the present value of the difference between the contractual cash flows and the cash flows that the OSCE expects to receive and takes into account possible default events and the evolution of the credit quality of the financial assets. The impairment model applies to all financial assets measured at AC or at FVNA. The measurement category of each group of financial instruments was reviewed during the year. The table below identifies the measurement category for each group of financial instruments under IPSAS 41. FINANCIAL ASSETS Asset Category Financial Asset Classification IPSAS 41 Management Model Test SPPI Test* Classification Category Cash & Cash Equivalents Cash in bank and on hand – convertible & non-convertible Hold to collect cash flows N/A Amortized cost Term Deposits & Others (< 90 days) Passed Amortized cost Investments Term Deposits (90 days or more) Hold to collect cash flows Passed Amortized cost Certificate of Deposit Amortized cost Receivables Assessed Contributions Hold to collect cash flows Passed Amortized cost Voluntary Contributions Amortized cost Other Receivables Amortized cost Derivatives (Not applicable for OSCE) Forward contracts/ Foreign currency options Held for trading N/A Fair Value Through Surplus and Deficit *The “SPPI test” takes the contractual terms of a financial asset and considers whether the cash flows give rise to payments on specified dates that are solely payments of principal and interest (SPPI) on the principal amount outstanding. These Notes are an integral part of the Financial Statements
Notes FINANCIAL LIABILITIES Category of Financial Liabilities Classification IPSAS 41 Accounts payable and accrued liabilities Amortized cost Contributions received in advance N/A Funds held on behalf of third parties Amortized cost Derivative liabilities (Not applicable for OSCE) Fair Value Through Surplus and Deficit All financial liabilities other than those at fair value through surplus or deficit Amortized cost Other liabilities In accordance with the relevant accounting standard. 2.3 - Uncollected Assessed Contributions The forward-looking impairment model, introduced following the adoption of IPSAS 41, incorporates reasonable and supportable information that is available without undue cost or effort at the reporting date. The asset’s carrying amount is reduced by the amount of the impairment lifetime loss which is recognised in the Statement of Financial Performance. If, in a subsequent period, the amount of the impairment loss decreases, the previously recognised impairment loss is reversed through the Statement of Financial Performance. This allowance does not relieve the participating States in arrears from their obligations to the OSCE. 2.4 - Inventories Inventories consist of two classes: - Consumables and supplies held for use by the Organization to support the delivery of its programmatic objectives and - Inventories held for distribution to beneficiaries at no or nominal charge. Consumables and supplies are expensed upon purchase. Where a material stock is purchased and is in store at year end for future consumption, it is stated at the lower of cost or net realisable value, subject to capitalization thresholds of EUR 150 per item and EUR 50 thousand per class and location. Cost is determined using a weighted average cost formula. Net realisable value is the estimated selling price, less any costs of disposal. Inventories held for distribution to beneficiaries at no or nominal charge are stated at the lower of either cost or current replacement cost, subject to a capitalization threshold of EUR 150 per item. These items are uniquely identifiable and cost is therefore determined using the specific identification method. Current replacement cost is that which the OSCE would incur to acquire the asset as at the reporting date. Write downs from cost to current replacement cost or net realizable value are recognized in the Statement of Financial Performance as incurred. These Notes are an integral part of the Financial Statements
Notes 2.5 - Property, Plant and Equipment Property, plant and equipment is stated at historical cost less accumulated depreciation and any recognized impairment losses. The threshold for capitalization of property, plant and equipment is EUR 1 thousand. Subsequent costs that are included in an asset’s carrying amount include freight and installation. Repairs and maintenance costs are charged to the Statement of Financial Performance during the period in which they are incurred. Gains and losses on disposal are determined by comparing the proceeds with the carrying amount of the asset, and are included in the Statement of Financial Performance. Depreciation is charged using the straight-line method and the residual values are estimated at zero. The estimated useful lives for the different property, plant and equipment classes are shown in the following table. For leasehold improvements, the shorter of the useful life or the lease agreement applies. Asset Class Useful Life (Years) ICT Equipment 3 to 10 Vehicles, including Unmanned Aerial Vehicles 5 to 12 Household and Office Equipment 3 to 10 Security and Safety Equipment 3 to 25 Other Equipment 3 to 10 Leasehold Improvements 7 to 35 2.5.1 – Leasehold Improvements Leasehold improvements refer to improvements made by the OSCE to the buildings occupied by the Secretariat and Institutions. Leasehold improvements in all other Executive Structures are expensed immediately due to the short term nature of their mandates. These improvements revert to the lessor at the expiration of the lease or right to use agreement and include building adjustments, fixtures, technical, communication and security infrastructure. The threshold for capitalization of leasehold improvements is established at EUR 50 thousand. 2.5.2 – Buildings Buildings are not capitalized as assets because, although the OSCE has been given the right to use them, there is no full transfer of the risks and rewards incidental to ownership. The buildings affected by this decision are those used by the Secretariat and Institutions in the following locations: - The Secretariat, Wallnerstrasse 6-6a and part of Wallnerstrasse 8, 1010 Vienna, Austria; - The Secretariat (Documentation Centre in Prague), Náměstí Borisa Němcova, 160 00 Prague 6, Czechia; - Office for Democratic Institutions and Human Rights, Ul. Miodowa 10, 00-251 Warsaw, Poland; and - High Commissioner on National Minorities, Prinsessegracht 22, 2514 AP The Hague, The Netherlands. 2.6 - Intangible Assets Intangible assets consist of software and are stated at cost less accumulated amortization and any recognized impairment losses. Intangible assets are amortized using the straight line method over their estimated useful life; residual values are estimated at zero. The OSCE has identified two main reporting classes of intangible assets: software licenses externally acquired and internally-developed software. The capitalisation thresholds and useful lives for the different asset classes are tabulated below. Self-constructed intangible assets, including those under development, are recorded at cost, including any directly attributable costs of preparing the asset for its intended use. These include salaries and employee These Notes are an integral part of the Financial Statements
Notes benefits, as well as external consultancy costs. Amortization starts once the completed assets are available for use. Software maintenance and service costs are charged to the Statement of Financial Performance during the period in which they are incurred. Asset Class Capitalisation Threshold (EUR '000) Useful Life (Years) Externally Purchased Software 1 5 Internally-Developed Software 50 7 Internally-Developed Software Under Development 50 7 2.7 - Impairment of Assets The OSCE performed a review of its assets in conjunction with revenue earned to identify whether it owned any cash-generating assets. Cash-generating assets are assets held with the primary objective of generating a commercial return. In 2024 there were no intangible assets or items of property, plant and equipment which met this definition, therefore all assets were classified as non-cash-generating and IPSAS 21 - Impairment of Non-Cash-Generating Assets was applied to the reporting of impairments. Intangible assets and items of property, plant and equipment are reviewed annually for impairment to determine if the carrying amount is still considered to be recoverable. Situations that could lead to impairment include major damage or obsolescence. Impairment losses are recognized in the Statement of Financial Performance for the amount by which the asset’s carrying amount exceeds its recoverable service amount, and are reported together as amortization and depreciation. 2.8 - Operating Leases Leases where the OSCE does not retain a significant portion of the risks and rewards inherent in ownership are classified as operating leases. As explained in Note 2.6.2, buildings occupied by the Secretariat and Institutions are not capitalised. Buildings occupied by other Missions are regarded as operating leases due to the short terms of their mandates. Rent under operating leases, both cash payments and contributions in- kind, is charged to the Statement of Financial Performance as incurred. 2.9 - Accruals Accruals include liabilities for goods and services delivered during the year, but for which invoices were not received at the year-end. Unliquidated obligations (ULOs) represent obligations for goods ordered but not yet delivered to the Organization at the year-end. ULOs are recognized for budgetary purposes, but do not satisfy the delivery principle under IPSAS and are therefore not included in these financial statements, except for the actuals in Statement V - Statement of Comparison of Budget and Actual Amounts. 2.10 - Employee Benefits Employee benefits entitlements are set out in the OSCE Staff Regulations and Staff Rules approved by the Permanent Council. 2.10.1 - Employee Benefits Current Current employee benefits are expected to be settled within 12 months of the reporting date and include pay and allowances, assignment grants, education grants, annual leave, home leave and rest and recuperation for employees in certain Field Operations. The amounts related to these liabilities are calculated by OSCE and These Notes are an integral part of the Financial Statements
Notes determined by an independent actuary using the methodology and assumptions as described in Note 4.6 – Employee Benefits, based on personnel data and past experience, and are as follows: - Annual leave – in accordance with OSCE’s Staff Rules, OSCE officials may carry forward up to thirty days of unused leave from one leave year to the next. The leave year runs from 1 January to 31 December of each year. In addition, a fixed-term staff or mission member may be granted advance annual leave up to a maximum of fifteen days. Annual leave is considered as a current benefit and hence is not subject to actuarial valuation. The liability for annual leave is calculated by multiplying the net number of unused leave days as of 31 December 2024 up to a maximum of thirty days by the basis of the monthly net salary, including post adjustment if applicable, and employer’s provident fund contributions. - Home leave and rest and recuperation leave – Heads of Mission and other fixed-term international Mission Members, both contracted and seconded, are entitled to home leave once every twelve months. In addition, for those staff serving in duty stations designated as hazardous or hardship, there is an additional entitlement to rest and recuperation leave once every twelve months. For international fixed- term contracted Staff Members, the entitlement for home leave is once every two years. The OSCE also covers the travel expenses of spouse and dependent children who reside at the duty station with the Staff Member. The liabilities for home leave and rest and recuperation are calculated by using estimates of travel expenses based on historical average costs. The effect of discounting on these liabilities is deemed to be immaterial and these liabilities were classified as current. The duty stations that qualified for rest and recuperation at 31 December 2024 were as follows: - Centre in Ashgabat; - Programme Office in Bishkek; - Project Co-ordinator in Uzbekistan; - Programme Office in Dushanbe; 2.10.2 - Employee Benefits Non-Current Non-current employee benefits are disclosed in accordance with IPSAS 39. They relate to post-employment benefits, including repatriation benefits such as: - Repatriation Grant – OSCE makes a grant towards the costs of repatriation for international fixed term contracted staff members and their eligible dependents, upon separation from service. This entitlement is subject to minimum qualifying periods ranging from one to five years depending on grade and date of entry into service. The amount of the grant is calculated on the basis of the staff member’s last salary, excluding post adjustment, and the staff member’s completed years and months of qualifying service. - Repatriation Travel – upon separation, the OSCE covers the travel expenses for fixed-term contracted OSCE officials, seconded officials and international short-term contracted staff. The spouse and dependent children of international fixed-term contracted staff members are also entitled to repatriation travel. - Removal of Household Effects – upon separation, international contracted staff members appointed for a period of one year or more are entitled to the payment of the removal of household effects. The costs to be reimbursed shall be the actual expenses incurred. The present value of non-current employee benefits liabilities is determined by discounting the estimated cash outflows using interest rates of high-quality corporate bonds with a duration that approximates the maturity terms of the related liabilities. Although some benefits classed as non-current will fall due for payment within twelve months, the amount is not considered material and is not separately recognised under current liabilities. These Notes are an integral part of the Financial Statements
Notes 2.11 - Cash Surplus or Deficit The calculation and treatment of the cash surplus is laid down in Financial Regulation 7.07, which is reproduced in the next three sub-paragraphs. (a) At the end of each financial year the cash surplus or deficit for the Funds financed through assessed contributions shall be determined by calculating the excess of revenue received over the expenditure, or the excess of the expenditure over revenue received, as the case may be. (b) Unless otherwise determined by the Permanent Council, the cash surplus of all Funds financed through assessed contributions shall be credited against contributions of the participating States during the year following the one in which the financial statements were accepted by the Permanent Council. The crediting shall be done in accordance with the scale of distribution for the year to which the surplus relates. The allocation to a participating State of its share of the cash surplus shall be deferred in cases where that State is in arrears for the year to which the surplus relates and until such time as these arrears have been paid in full. (c) In the event of a cash deficit the Secretary General shall bring the matter to the attention of the Permanent Council and make proposals for appropriate action by the Council. Cash surplus is not calculated for Extra-Budgetary Funds. Unspent amounts are refunded upon request of donors after expiration of the pledges. Cash surpluses for Special Purpose Funds are calculated in accordance with the Permanent Council Decisions that established each of the Funds. Cash surpluses are regarded as a part of Equity until the conditions in sub-paragraph (b) above are met, at which point they are transferred to liabilities and are recognised as current liabilities at the end of the year in which the statements are accepted. 2.12 - Deferred Revenue Unified Budget deferred revenue consists mainly of assessed contributions received in advance and credits to participating States to be deducted from future assessments. Extra-budgetary contributions are either used as agreed in the project related to the pledge, or are returned or redeployed at the direction of the donor. Such pledges are therefore considered to be conditional and are initially recognised as deferred revenue until such time as the condition is met and project expenditure incurred. 2.13 - Provisions Provisions are recognized in circumstances when the OSCE has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. The amount of the provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date. 2.14 - Contingent Liabilities and Contingent Assets Contingent liabilities are disclosed when there are possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the OSCE. Contingent assets are disclosed when there are probable assets that arise from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the OSCE. These Notes are an integral part of the Financial Statements
Notes 2.15 - Revenue from Non-Exchange Transactions Revenue from assessed contributions and revenue from extra-budgetary contributions are recognized as non-exchange transactions in accordance with IPSAS 23. Revenue from assessed contributions from participating States is recorded on an accrual basis, independent from when the cash is received. It reflects the Unified Budget assessed for the year, including any revisions, and adjusted for any shortfall between the Budget and the approved Scales of Contribution; together with any Special Purpose Funds that are financed by assessed contributions, also including any applicable revisions. Extra-budgetary contributions are initially recognized in the Statement of Financial Position, as they are all considered to be conditional (see note 2.12), and are subsequently recognized as revenue in the Statement of Financial Performance when project expenditure occurs. Where the criteria for recognition as stipulated under a donor agreement are not fulfilled, the contributions are refundable to donors. 2.16 – Contributions In-Kind Contributions in-kind in the form of goods (including inventory, property, plant and equipment and intangible assets) are measured at fair value and recorded as contributions in-kind in the Statement of Financial Performance. Contributions in-kind of services comprise seconded staff occupying posts approved by the Permanent Council or agreed as part of an extra-budgetary project, certain ancillary services related to premises provided free of rent (security, maintenance, utilities etc.) and other services. Although recognition is not required by IPSAS 23, these classes of services in-kind are measured at fair value and recorded as contributions in-kind in the Statement of Financial Performance. The estimated value of seconded personnel is based on a calculation of the additional cost of employing international contracted staff and mission members in their place, and is not intended to reflect the actual costs to the States seconding them. 2.17 - Revenue from Exchange Transactions Revenue from exchange transactions refers mainly to the occasional sales of assets. Revenue is measured at the fair value of the consideration received or receivable and is recognized as goods and services are delivered. 2.18 – Indirect Common Costs Indirect Common Costs are levied on Extra-budgetary projects and some third-party payments and are intended to defray costs incurred for provision of administrative support that cannot be easily attributed to specific projects. As revenue is recognised, it is transferred to a separate extra-budgetary accounting fund for subsequent allotment and use. 2.19 - Expenses Expenses are accounted for on an accrual basis and are recognized when the goods or services are delivered to the OSCE. 2.20 - Critical Accounting Estimates and Judgments The preparation of the Financial Statements involves the use of accounting estimates and professional judgment; therefore there is a risk that actual amounts could differ from the related estimates. The areas where those are more significant in the preparation of OSCE’s Financial Statements include inter alia: useful lives of tangible and intangible assets, provisions, accruals, deferred revenue, contingent assets and liabilities and employee benefits. These Notes are an integral part of the Financial Statements
Notes NOTE 3: ASSETS 3.1 – Cash and Cash Equivalents Cash and cash equivalents comprise cash on hand, cash at bank, and short-term deposits with initial maturity of 90 days or less. OSCE operates a pooling system for banking purposes and most cash is held in Secretariat bank accounts. Consequently, some Funds, particularly Extra-Budgetary and Special Purpose Funds, hold comparatively little or no cash as it is transferred from the Secretariat accounts to local accounts as required, under internal financial regulatory arrangements. The inter-fund balances shown in Annex 1 complete the picture of each Fund’s net asset position. In accordance with Financial Regulation 5.02, funds not needed for immediate requirements are pooled in bank accounts administered by the Secretariat and invested in the form of money market deposits. Those deposits with an initial maturity of 90 days or less were classified as cash equivalents. Cash, cash equivalents and investments are adjusted at each reporting date to reflect lifetime expected credit losses calculated using weighted long-term average default rates per the financial rating of the banking institutions in which they are held. As at 31 December 2024 As at 31 December 2023 Total EUR '000 Secretariat, Institutions, Field Offices and Cash Pools Special Purpose Funds Extra- Budgetary Funds Total Cash 199 - - 199 231 Bank 45, 072 - 4,506 49,578 92,587 Short-term Deposits - - 5,000 5,000 20,000 Total 45,271 - 9,506 54,777 112,818 3.2 – Investments Investments consist of money-market deposits with initial maturity over 90 days. At the end of the reporting period, investments (including Revolving and Contingency Funds) amounted to EUR 118,576 thousand (EUR 61,127 thousand in 2023), made up principally of deposits held in relation to Extra-Budgetary Funds. 3.3 – Contributions Receivable Contributions receivable include assessments billed to participating States and extra-budgetary contributions billed to donors that have not yet been received by OSCE. EUR ’000 2024 2023 Secretariat, Institutions and Field Offices Assessed Contributions Receivable 18,253 12,615 Special Monitoring Mission to Ukraine Assessed Contributions Receivable 1,659 1,675 Extra-budgetary Contributions Receivable 30,561 6,003 Total Contributions Receivable 50,473 20,292 Allowance for Doubtful Debts (7,045) (1,579) Total Net Contributions Receivable 43,428 18,713 The forward-looking impairment model, introduced following the adoption of IPSAS 41, incorporates reasonable and supportable information that is available without undue cost or effort at the reporting date. The asset’s carrying amount is reduced by the amount of the impairment lifetime loss which is recognised in the Statement of Financial Performance. If, in a subsequent period, the amount of the impairment loss These Notes are an integral part of the Financial Statements
Notes decreases, the previously recognised impairment loss is reversed through the Statement of Financial Performance. With assessed contributions receivable increasing year-on-year in 2024, payment patterns, which form the basis of the forward-looking expected credit loss (ECL) model, indicate that the trend in outstanding obligations is likely to persist over the near-term. As a result, the allowance for doubtful debts have increased to EUR 7,045 thousand in 2024 (EUR 1,579 thousand in 2023). 3.3.1 - Unified Budget Assessed Contributions Receivable A schedule of outstanding Assessed Contributions Receivable by participating State is shown below: EUR ‘000 Participating State Outstanding for 2022 and Prior Years 2023 2024 Outstanding Balance as at 31 December 2024 Armenia - - 45 45 Azerbaijan - 44 46 90 France - - 867 867 Kyrgyzstan 737 46 46 829 Russian Federation 5,285 5,569 5,569 16,423 Total 6,022 5,659 6,572 18,253 An allowance for doubtful debt of EUR 6,361 thousand (EUR 1,176 thousand in 2023) has been created to leave a net carrying balance of EUR 11,892 thousand (EUR 11,439 thousand in 2023). 3.3.2 - Special Purpose Funds Assessed Contributions Receivable Assessed Contributions Receivable for Special Purpose Funds related to the bills issued for the financing of the Special Monitoring Mission to Ukraine are tabulated below. The open contributions receivable for the financial year 2022 take into account the revised provisional bill for the Special Monitoring Mission to Ukraine (SMM) from 1 April 2022 onwards: EUR ‘000 Participating State Outstanding for 2022 and Prior Years 2023 2024 Outstanding Balance as at 31 December 2024 Azerbaijan 5 - - 5 Belarus 9 - - 9 Hungary 87 - - 87 Russian Federation 1,141 - - 1,141 Tajikistan 21 - - 21 Turkmenistan 111 - - 111 Uzbekistan 285 - - 285 Total 1,659 - - 1,659 An allowance for doubtful debts of EUR 684 thousand (EUR 403 thousand in 2023) has been created to leave a net carrying balance of EUR 975 thousand (EUR 1,272 thousand in 2023). These Notes are an integral part of the Financial Statements
Notes 3.3.3 – Extra-budgetary Contributions Receivable Extra-budgetary contributions receivable relates to the agreements and pledge acceptances with donors which are due for payment. The breakdown by Extra-budgetary Funds is as follows: EUR’ 000 2024 2023 Fund to Support OSCE Action for Peace, Democracy and Stability in Bosnia and Herzegovina 703 108 Fund for Activities Relating to Economic and Environmental Aspects of Security 1,051 432 Fund for Activities Related to Special Monitoring Mission to Ukraine 10 10 Other PC Established Funds – Partnership Fund 11 120 Other Activities and Special Projects 28,786 5,333 Total 30,561 6,003 The aging of the extra-budgetary accounts receivable is as follows: EUR’ 000 Outstanding Balance Less than one year 1 – 3 years 3 – 4 years More than 4 years Fund to Support OSCE Action for Peace, Democracy and Stability in Bosnia and Herzegovina 703 662 41 - - Fund for Activities Relating to Economic and Environmental Aspects of Security 1,051 887 164 - - Fund for Activities Related to Special Monitoring Mission to Ukraine 10 - - - 10 Other PC Established Funds - Partnership Fund 11 11 - - - Other Activities and Special Projects 28,786 27,875 523 232 156 Total 30,561 29,435 728 232 166 3.4 – Accounts Receivable Accounts receivables are carried at the original invoice amount, less an allowance for estimated doubtful debts based on a review of all outstanding amounts at the year-end. Accounts receivables consist mainly of recoverable Value Added Tax and other receivables. The receivables from customers include EUR 175 thousand (EUR 1,336 thousand in 2023) held in the Stability Fund, the excess of premiums paid to the insurance company Cigna over settlements made, which will be used in the future to defray cost increases or provide additional services. EUR '000 2024 2023 Tax Receivable from Governments 2,688 2,684 Receivable from Customers 901 1,884 Other Receivables 70 76 Accrued Interest Receivable 758 960 Allowance for Doubtful Debts (634) (624) Total 3,783 4,980 These Notes are an integral part of the Financial Statements
Notes 3.5 – Prepayments and Services Receivable Prepayments do not meet the definition of financial instruments as defined by IPSAS 41 – Financial Instruments because they are intended to be settled through delivery of goods or services, rather than cash. Furthermore, prepayments are considered non-monetary items as defined by IPSAS 4 - The Effects of Changes in Foreign Exchange Rates, and therefore are translated at the transaction exchange rate. EUR '000 2024 2023 Prepayments to and services receivable from Suppliers 2,831 4,372 Prepayments to and services receivables from Implementing Partners 1,464 1,350 Prepayments to Staff 855 768 Other Prepayments 18 36 Total 5,168 6,526 3.6 – Inventory Inventory recognized in the Statement of Financial Position consists of project assets held for distribution to beneficiaries. The total amount of inventories recognized as an expense during 2024 was EUR 5,450 thousand (EUR 2,115 thousand in 2023). EUR '000 2024 2023 Project assets held for distribution to beneficiaries 1,857 792 Total 1,857 792 3.7 – Other Current and Non-Current Assets Other current and non-current assets include payroll prepayments, deposits for rent recoverable after the termination of the leases and insurance premium receivable. EUR '000 2024 2023 Current Payroll Prepayments 20 (4) Total Other Current Assets 20 (4) Long Term Deposit for Rent 20 20 Total Other Non-Current Assets 20 20 Total 40 16 These Notes are an integral part of the Financial Statements
Notes 3.8 – Property, Plant and Equipment Property, Plant and Equipment is initially recognized at cost and subsequently depreciated using the straight line method over the assets’ useful life to an assumed residual value of zero. 2024 2023 EUR'000 ICT Equipment Vehicles Household and Office Equipment Security and Safety Equipment Leasehold Improve- ments Other Equipment Total Property, Plant and Equipment Cost as at 1 January 2024 8,374 24,839 4,417 1,716 4,381 396 44,122 Additions 1,323 616 154 8 - 9 2,110 Disposals (700) (2,976) (322) (336) - (147) (4,481) Cost as at 31 December 2024 8,997 22,478 4,249 1,388 4,381 258 41,751 Accumulated Depreciation and Impairment Losses as at 1 January 2024 7,030 20,222 3,999 1,331 3,255 370 36,206 Depreciation 867 1,027 147 103 81 9 2,234 Impairments - - - - - - - Disposals (614) (1,843) (232) (135) - (142) (2,965) Accumulated Depreciation and Impairment Losses as at 31 December 2024 7,283 19,406 3,915 1,299 3,336 236 35,475 Net Carrying Amount as at 31 December 2024 1,714 3,072 334 89 1,045 22 6,276 EUR'000 ICT Equipment Vehicles Household and Office Equipment Security and Safety Equipment Leasehold Improve- ments Other Equipment Total Property, Plant and Equipment Cost as at 1 January 2023 9,313 33,380 4,478 1,560 4,381 426 53,538 Additions 426 1,615 172 331 - 8 2,552 Disposals (1,366) (10,157) (233) (175) - (38) (11,968) Cost as at 31 December 2023 8,374 24,839 4,417 1,716 4,381 396 44,122 Accumulated Depreciation and Impairment Losses as at 1 January 2023 7,313 27,636 4,007 1,282 3,174 362 43,775 Depreciation 1,007 1,129 174 161 81 12 2,564 Impairments - 38 - - - - 38 Disposals (1,291) (8,581) (182) (112) - (5) (10,170) Accumulated Depreciation and Impairment Losses as at 31 December 2023 7,030 20,222 3,999 1,331 3,255 370 36,206 Net Carrying Amount as at 31 December 2023 1,344 4,617 418 385 1,126 26 7,915 These Notes are an integral part of the Financial Statements
Notes The Property, Plant and Equipment total cost as at 31 December 2024 of EUR 41,751 thousand includes fully depreciated assets still in use to the amount of EUR 28,239 thousand (EUR 27,582 thousand in 2023). 3.9 – Intangible Assets Internally developed software and intangible assets under development consist of software licenses and costs incurred to make the software operational. These costs include salaries and professional fees. 2024 EUR'000 Software Licenses Purchased Internally Developed Software Intangible Assets under Development Total Intangible Assets Cost as at 1 January 2024 1,857 6,968 1,228 10,053 Additions 32 - 428 460 Disposals (9) - - (9) Assets under Construction Capitalized - 207 (207) - Cost as at 31 December 2024 1,881 7,174 1,449 10,504 Accumulated Amortization as at 1 January 2024 1,360 4,968 - 6,328 Amortization 211 459 - 670 Impairments - - - - Disposals - - - - Accumulated Amortization and Impairment Losses as at 31 December 2024 1,571 5,427 - 6,998 Net Carrying Amount as at 31 December 2024 309 1,748 1,449 3,506 2023 EUR'000 Software Licenses Purchased Internally Developed Software Intangible Assets under Development Total Intangible Assets Cost as at 1 January 2023 2,102 6,894 944 9,940 Additions 76 - 357 433 Disposals (321) - - (321) Assets under Construction Capitalized - 73 (73) - Cost as at 31 December 2023 1,857 6,968 1,228 10,053 Accumulated Amortization as at 1 January 2023 1,458 4,483 - 5,941 Amortization 210 485 - 695 Impairments - - - - Disposals (308) - - (308) Accumulated Amortization and Impairment Losses as at 31 December 2023 1,360 4,968 - 6,328 Net Carrying Amount as at 31 December 2023 497 2,000 1,228 3,725 The 2023 table has been restated to reflect the transfer of a completed internally developed software, in the amount of EUR 73 thousand, from intangible assets under development to internally developed software. This restatement increased the cost of internally developed software, as at 31 December 2023, from EUR These Notes are an integral part of the Financial Statements
Notes 6,894 thousand to EUR 6,968 thousand, with the cost of intangible assets under development reduced from EUR 1,301 thousand to EUR 1,228 thousand. There is no impact in the amortization expense in 2023. 3.10 - Impairment of Assets No new impairment losses were recorded in 2024 (EUR 38 thousand in 2023), accumulated impairment losses carried forward relate to the vehicles of the former missions in Ukraine. There were no reversals of impairment recorded during the year. NOTE 4: LIABILITIES 4.1 – Accounts Payable Accounts Payable consisted mainly of invoiced amounts due to suppliers and payments due to OSCE staff. EUR '000 2024 2023 Payables to Suppliers 1,574 2,478 Payables to Implementing Partners (28) 4 Amounts Owed to Staff 990 1,023 Total 2,536 3,505 4.2 – Accruals Accruals include liabilities for goods and services delivered during the year, but for which invoices were not received at the year-end. EUR ’000 2024 2023 Accruals 7,930 7,903 Total 7,930 7,903 Payroll-related accruals are reported as part of Employee Benefits Current in note 4.6. 4.3 – Deferred Revenue The Permanent Council approved deferral of the use by the Office for Democratic Institutions and Human Rights of EUR 849 thousand (PC.DEC/1288) which was originally approved through a supplementary budget in 2016 (PC.DEC/1177) and carried forward to 2017 (PC.DEC/1240). This amount is deferred until the time the observations of local elections are carried out in certain areas of Donetsk and Luhansk. Total deferred revenue is summarized by source of funds in the table below: EUR ’000 2024 2023 Advance Assessed Contributions payments by participating States 2,488 4,915 Deferred funds per PC.DEC/1288 849 849 Total Unified Budget Deferred Revenue 3,337 5,764 Total Deferred Revenue 3,337 5,764 These Notes are an integral part of the Financial Statements
Notes 4.4 – Conditional Extra-Budgetary Contributions In line with the requirements of IPSAS 23 - Revenue from Non-Exchange Transactions, extra-budgetary contributions subject to conditions are classified as deferred revenue. As the conditions are satisfied, the carrying amount of the liability is reduced and an amount of revenue equal to that reduction is recognized. The amount recognized as a liability is the best estimate of the amount that would be required to settle the obligation as at the reporting date. As the conditions on extra-budgetary contributions are satisfied through performance as set within projects, the carrying amount of the liability is reduced and an amount of revenue is recognized equal to the amount expensed in the period for the activities specified in the extra-budgetary projects. EUR ’000 2024 2023 Extra-Budgetary Contributions Subject to Conditions 110,518 101,240 Extra-Budgetary Contributions Advances 2,859 1,399 Total Extra-Budgetary Contributions 113,377 102,639 4.5 – Funds Held for Third Parties Funds held for Third Parties are mainly funds received from participating States for payment on their behalf of salaries to personnel seconded to the OSCE at no cost to the Organization, and overpayments for the Special Monitoring Mission to Ukraine resulting from the adjustment described in note 6.1 where the participating State concerned had not notified its intended disposition of the funds. In 2024 there were six participating States (five participating States in 2023) on whose behalf the salary is paid by OSCE. The services of these personnel are donated by participating States. The personnel concerned are paid by the OSCE on behalf of the States concerned from the third-party funds held in its accounts for this purpose. Depending on the timing differences between receipt of funds from the participating States concerned and disbursements to individuals, large sums may be held for salary payments at the end of the reporting period. EUR ’000 2024 2023 Seconded personnel salary funds 9,539 9,509 Special Monitoring Mission to Ukraine overpayments 7,395 7,441 Other third party funds 985 707 Total Funds Held for Third Parties 17,919 17,657 4.6 – Employee Benefits Actuarial assumptions are required to be disclosed in the Financial Statements in accordance with IPSAS 39 – Employee Benefits. The following key assumptions and methods have been used by the actuary to determine the value of non-current employee benefits in order to estimate the liability. Discount rate of 2.70% (3.14% in 2023) derived in reference to market yields of high quality corporate bonds - iBoxx Euro Corporate AA Euro bonds, with a duration of 1.47 years, which approximates the maturity terms of the related liabilities; Present value of future benefits based on salary projections; Average increases in salary of 9.5% in 2025 followed by 2.0% per year thereafter (4.9% in the first year and 2.5% thereafter projected in 2023); No increase in shipment; Increase in travel costs of 2.0% annually for the years 2025-2027 (increases of 2.5% for the first year, 2.1% for the second year and 0% thereafter projected in 2023) in line with the AMEX projected air travel increases and ECB inflation forecast; and Estimated years of service based on OSCE’s historical averages. The actuarial valuation of the defined benefits obligation is determined by discounting the probable future payment required to settle the obligation resulting from employee service rendered in the current and prior periods. These Notes are an integral part of the Financial Statements
Notes Actuarial gains or losses arise when the actuarial assessment differs from the long term expectation on the obligations: they result from experience adjustments (differences between the previous actuarial assumptions and what has actually occurred) and the effects of change in actuarial assumptions. Actuarial gains or losses for non-current benefit obligations are recognized directly in Equity/Net Assets. Current service cost is the increase in the present value of the defined obligation resulting from employee service in the current period. The service cost is recognized in the Statement of Financial Performance. The following table provides more details regarding how the different types of benefits have changed in 2024: EUR’000 Defined Benefit Obligation as at 1 January 2024 Current Service Cost Interest Cost Actual Payments Actuarial (Gains)/ Losses Defined Benefit Obligation as at 31 December 2024 Home leave and rest and recuperation 225 279 - (296) - 208 Annual leave 6,612 574 - (447) - 6,739 Total annual leave, home leave and rest and recuperation 6,837 853 - (743) - 6,947 Repatriation grant 2,440 365 74 (562) 309 2,626 Repatriation shipment 863 218 26 (428) 281 960 Repatriation travel 210 50 6 (45) (21) 200 Total repatriation benefits 3,513 633 106 (1,035) 569 3,786 Total 10,350 1,486 106 (1,778) 569 10,733 Liabilities for current employee benefits also include payroll-related accruals in the amount of EUR 1,413 thousand (EUR 1,550 thousand in 2023), for total current employees liabilities of EUR 8,360 thousand (EUR 8,387 thousand in 2023). The repatriation benefits estimates in the table are based on the actuarial assumptions set out above. If these assumptions were to change, the effects on the defined benefit obligation would be as tabulated below. Discount Rate Effect 2024 Effect 2023 Effect on Defined Benefit Obligation in % of +0.1% -0.15% -0.17% Effect on Defined Benefit Obligation in % of -0.1% +0.15% +0.18% Future salary increase Effect on Defined Benefit Obligation in % of +1% +1.42% +1.69% Effect on Defined Benefit Obligation in % of -1% -1.40% -1.66% The post-employment repatriation benefits are entirely unfunded and the liabilities will be met from budget allotments for the years in which they fall due, or from extra-budgetary revenue, as appropriate. The expected servicing cost of repatriation liabilities, net of payments, in 2025 amount to minus EUR 683 thousand, due to the increased number of staff reaching the end of their contracts during the year (expected servicing cost for 2024 of minus EUR 492 thousand reported in 2023). These Notes are an integral part of the Financial Statements
Notes 4.6.1 - Provident Fund The Provident Fund is a defined contribution plan. The employer contributions of 15% of staff salaries are fixed and are recognized as payroll expense. Employees contribute 7.5% of their salary and may make additional voluntary contributions of up to 15%. The assets are held by Utmost Worldwide in the beneficial ownership of the employee. The Secretary General's responsibility is to establish arrangements to provide a Provident Fund facility to employees and to monitor these arrangements. The balance of funds held for the benefit of OSCE Staff by the Provident Fund as at 31 December 2024 was EUR 127,477 thousand (EUR 123,678 thousand in 2023). The Provident Fund is administered by Utmost Worldwide Limited in accordance with the contract. The OSCE obtains the Financial Statements of Utmost Worldwide Limited on an annual basis. The latest available Financial Statements were in respect of the year ended 31 December 2024 and were audited by PricewaterhouseCoopers CI LLP, Chartered Accountants, who gave an unmodified opinion on the Financial Statements. The Provident Fund summary statement for the year ending 31 December 2024 is shown in the Appendix. 4.7 – Current Cash Surplus Unless otherwise determined by the Permanent Council, the cash surplus is credited against assessed contributions of the participating States in the year following the year in which the financial statements are accepted by the Permanent Council. As the Permanent Council has not to date accepted the Financial Statements for 2022 and 2023, the cash surplus as reported as at 31 December 2023 is not yet payable and remains in reserves (see Note 5.1- Cash Surplus). Following the Permanent Council decisions PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494 on the Additional Provisional Expenditure Authorizations, for a total of EUR 3,002 thousand, the remaining cash surplus as reported at 31 December 2023 stands at EUR 21,610 thousand. 4.8 – Provisions The provision for unearned revenue of extra-budgetary pledges currently expiring on or before 31 December 2024 amounts to EUR 15,155 thousand (EUR 6,897 thousand in 2023). This represents funds pledged for extra-budgetary projects prior to 31 December 2024 where the pledge is now time-expired and the Organization awaits instructions from the donor on whether to extend the pledge validity for a further period of time or to return or re-purpose the unspent amounts. 4.9 – Other Current and Non-Current Liabilities Other current liabilities consist primarily of pending refunds of Provident Fund reimbursements to staff and refunds of office rent received in advance from Governments. EUR '000 2024 2023 Governments Advance Refunds 1,467 393 Other Current Liabilities 421 225 Total Other Current Liabilites 1,888 618 Non-Current Liabilities - - Total Other Non-Current Liabilities - - Total 1,888 618 These Notes are an integral part of the Financial Statements
Notes NOTE 5: RESERVES 5.1 - Cash Surplus The cash surplus for 2024 is not due for settlement until the year following acceptance of these Financial Statements, and it is therefore classified as Equity until the date of that acceptance. The Secretariat, Institutions and Field Offices total cash surplus for 2024 of EUR 6,490 thousand is calculated as shown in Statement V and reconciled to the IPSAS Surplus/(Deficit) in Note 9.1. Since the Permanent Council has not to date accepted the Financial Statements for 2022 and 2023, the cash surpluses are not yet payable and remain in reserves. Permanent Council decisions PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494, on utilisation of the Cash Surplus as at 31 December 2023 totalled EUR 3,002 thousand, leaving a remaining balance of EUR 942 thousand. An interim cash surplus of EUR 20,669 thousand for the Special Monitoring Mission to Ukraine was calculated from the sum of all revenues and expenses during all mandates from 2014 to 31 March 2022 and the closure period to 31 October 2022, as at 31 December 2023. The Special Monitoring Mission cash surplus of EUR 268 thousand in 2024 consists primarily of funds received from the sale of the remaining assets from the SMM vehicle fleet. Further transactions are expected during 2025 and a further cash surplus/deficit position will be calculated when all known transactions have been completed. EUR ‘000 2024 2023 Unified Budget - Secretariat, Institutions and Field Offices 19 19 Border Observer Mission 198 198 Total Cash Surpluses for 2022 218 218 Unified Budget - Secretariat, Institutions and Field Offices 3,725 3,725 Special Monitoring Mission to Ukraine cash surpluses as at 31 December 2023 20,669 20,669 Closure of the Information Security Enhancement Fund 1 1 Closure of the Fund for the Purpose of Financing Agreed Capital Requirements - - Total Cash Surpluses for 2023 24,395 24,395 PC.DEC/1485 – provisional authorization for the ODIHR Elections Programme (397) - PC.DEC/1487 – provisional authorization for the Conference and Language Services Programme (1,166) - PC.DEC/1491 – provisional authorization for the anticipated financing requirements of the Secretariat ODIHR Elections Programme (861) - PC.DEC/1494 – provisional authorization for the anticipated financing requirements of the Secretariat, High Commissioner on National Minorities and Mission in Kosovo (578) - Total Additional Provisional Expenditure Authorizations for 2024 (3,002) 24,395 Unified Budget - Secretariat, Institutions and Field Offices 6,492 - Special Monitoring Mission to Ukraine 268 Total Cash Surpluses for 2024 6,760 - Total Cash Surpluses as at 31 December 2024 28,371 24,613 5.2 - Cash Surplus Withheld The cash surplus for those participating States that have not settled their assessed contributions in full is withheld by the OSCE until the outstanding payments are received. Cash surplus withheld does not meet the definition of a liability and is therefore included in the reserves. The table below is a summary of the cash surplus withheld by participating State and by year. There were no cash surplus distributions related to the fiscal years 2014 through 2017 and cash surpluses for 2022, 2023 and 2024 are not yet due for distribution, and therefore none are retained for those years. The longest outstanding cash surplus withheld is from the fiscal year 2006. In 2024 Kyrgyzstan paid EUR 23 thousand against the outstanding receivables, although there were no releases of the Cash Surplus withheld. These Notes are an integral part of the Financial Statements
Notes EUR ‘000 2019 and Prior Years 2020 2021 Total Kyrgyzstan 13 1 1 15 Total Cash Surplus Withheld 13 1 1 15 5.3 – Revolving and Contingency Funds The Revolving Fund, in the amount of EUR 2,710 thousand, was established by the Permanent Council (PC.DEC/133 dated 27 June 1996) to meet the short-term cash requirements of duly authorized OSCE activities that could result from the period between the billing and payment of assessed contributions. The Contingency Fund, in the amount of EUR 2,180 thousand, was established by the Permanent Council (PC.DEC/182 dated 17 July 1997) to allow OSCE to act immediately after the adoption of a Permanent Council decision on a new activity and to cover the corresponding financial requirements prior to the approval of the relevant supplementary budget. 5.4 – Other Reserves Other Reserves consists of actuarial gains and losses related to employee benefits of EUR 3,414 thousand in 2024 (EUR 2,844 thousand in 2023). 5.5 – Accumulated Surplus/(Deficit) The increase in the Accumulated Surplus/Deficit during 2024 to EUR 33,260 thousand (EUR 33,056 thousand in 2023) as shown in Statement III includes the Cash Surplus for 2024 in the amount of EUR 28,371 thousand (see Note 5.1 – Cash Surplus) and the surplus for the period in the amount of EUR 6,964 thousand (see Note 9.1 – Reconciliation of Surplus/(Deficit) for the Period). NOTE 6: REVENUE 6.1 – Assessed Contributions Accrued revenue from provisional assessed contributions amounted to EUR 138,204 thousand (EUR 138,204 thousand in 2023). Participating States could not reach consensus on the Unified Budget for 2024 and provisional asessments in the sum of EUR 138,204 thousand (also EUR 138,204 thousand in 2023) were made in pursuance of Financial Regulation 4.04 and to fund obligations incurred and payments made under Financial Regulation 3.04. EUR ’000 2024 2023 Provisional assessments for the 2024 Unified Budget 138,204 138,204 Total Revenue from Assessed Contributions 138,204 183,204 During 2024, four Provisional Expenditure Authorizations were approved by the Permanent Council for a total of EUR 3,002 thousand to address the financing requirements of the Organization (see Note 6.6 – Other Revenue). 6.2 – Extra-Budgetary Contributions Revenue from extra-budgetary contributions includes proceeds from new pledges received in 2024, as well as revenue from conditional agreements previously recorded as deferred revenue, for which conditions were satisfied during the year. Total proceeds from extra-budgetary contributions pledged and billed during the reporting period amounts to EUR 75,502 thousand in 2024 (EUR 50,626 thousand in 2023) and includes an amount of EUR 275 thousand pledged (EUR 4,144 thousand in 2023) in respect of the Repository Programme (RP) “Core Support Mechanism”. The total amount pledged towards the RP as at 31 December 2024 stands These Notes are an integral part of the Financial Statements
Notes at of EUR 4,419 thousand (EUR 4,144 thousand as at 31 December 2023). Donor reallocations from third- party funds to ExB projects totalled EUR 1,319 thousand during the financial year (EUR 918 thousand in 2023). As all extra-budgetary contributions pledged to the organization are conditional, revenue is recorded as the conditions of the pledges are fulfilled, with the remaining funds recorded as a deferred revenue. During the period, deferred revenue increased by EUR 20,320 thousand (EUR 3,656 thousand in 2023), with the total extra-budgetary deferred revenue at 31 December 2024 climbing to EUR 113,377 thousand (EUR 102,639 as at 31 December 2023), ref. Note 4.4. Extra-budgetary revenue, recorded in line with IPSAS 23, increased to EUR 56,501 thousand in 2024 (EUR 47,888 thousand in 2023) in line with project activity during the year. The RP was established to accept contributions from participating States to cover the underfunding of core costs across all Executive Structures, bridging the gap between the UB funding level and the expected actual requirements. Unspent amounts are carried forward into 2025. The RP was funded via three sources of income: - Pledges from participating States which had overpaid on their contributions towards the SMM administrative closure assessment, and who subsequently agreed to transfer funds held on account to the RP; - Certain participating States who agreed to the use of all or some of their share of the 2021 cash surplus for this purpose; and - Additional voluntary contributions made by participating States. A breakdown of expenditure on the RP can be found in Schedule J of Annex 1 to these financial statements. EUR '000 2024 2023 Revenue from Extra-Budgetary Contributions 75,502 50,626 Revenue from Conditional Agreements Recognized/(Deferred) during the period (20,320) (3,656) Reallocation of Project Funds 1,319 918 Total 56,501 47,888 The reallocation of project funds resulted in a net inflow of EUR 1,319 thousand (EUR 918 thousand in 2023) from Third Party Funds to Extra-Budgetary Funds. 6.3 – Finance Revenue Finance revenue includes interest from bank balances and short-term cash deposits. EUR '000 2024 2023 Interest received from banks 5,825 3,100 Accrual adjustments (202) 530 Total 5,623 3,630 6.4 – Contributions In-Kind Revenue from contributions in-kind consists of contributions in-kind from seconded staff, ancillary services and donated goods as shown in the table below: EUR '000 2024 2023 Seconded Staff 24,985 24,352 Ancillary Services 977 855 Goods In-Kind 5,444 4,882 Total Contributions In-Kind 31,406 30,089 These Notes are an integral part of the Financial Statements
Notes The total value of contributions in-kind of the services of seconded personnel is recorded as Contributions In-Kind in the Statement of Financial Performance. The estimated value of seconded personnel is based on a calculation of what it would cost to employ international contracted staff and mission members in their place, and does not reflect the actual costs to the participating States seconding them. EUR '000 2024 2023 Seconded Staff 23,891 23,434 Seconded Staff - Extra-Budgetary Projects 1,094 918 Total Contributions In-Kind of Seconded Staff Services 24,985 24,352 In addition, certain ancillary services, such as security, maintenance and utilities, were provided in respect of premises provided free of charge. EUR '000 2024 2023 Ancillary Services 977 855 Total Contributions In-Kind of Ancillary Services 977 855 Contributions in-kind in the form of goods (including supplies, inventory, property, plant and equipment and intangible assets) are measured at fair value and recorded as Contributions In-Kind in the Statement of Financial Performance. The total fair value of goods in-kind received consists of the following items: EUR '000 2024 2023 Donated Property, Plant and Equipment and Intangible Assets - - Premises 5,440 4,876 Equipment 4 6 Premises and Equipment provided rent-free 5,444 4,882 7 Total Revenue from Goods In-Kind 5,444 4,882 6.5 – Revenue from Exchange Transactions Revenue from Exchange Transactions of EUR 636 thousand (EUR 1,178 thousand in 2023) refers to gains and losses related to the sale of assets and minor equipment. 6.6 – Other Revenue Revenue Reallocated from Internal Sources in 2024 represents funds reallocated from the Cash Surplus, as reported in the 2023 Financial Statements as at 31 December 2023, to finance the Additional Provisional Expenditure Authorizations as approved by the Permanent Council. - PC.DEC/1485, dated 2 August 2024, approved the additional provisional expenditure authorization of EUR 397,300 for the activities of the ODIHR Elections Programme. - PC.DEC/1487, dated 19 September 2024, approved the additional provisional expenditure authorization of EUR 1,166,300 for the activities of the Conference and Language Services Programme. - PC.DEC/1491, dated 26 November 2024, approved the additional provisional expenditure authorization of EUR 860,600 for the anticipated financing requirements of the Secretariat. - PC.DEC/1494, dated 19 December 2024, approved the additional provisional expenditure authorization of EUR 578,100 for the anticipated financing requirements of the Secretariat, High Commissioner on National Minorities and Mission in Kosovo. These Notes are an integral part of the Financial Statements
Notes Indirect Common Costs (ICC) revenue of EUR 69 thousand (EUR 57 thousand in 2023) derived from charges for the processing on behalf of participating States of salaries for personnel seconded by them to OSCE. The remaining EUR 3,958 thousand (EUR 3,132 thousand in 2023) of ICC revenue recognised in segment report H.2 represents charges levied on extra-budgetary projects as described in Note 2.18 and is recorded as Extra- Budgetary Revenue. Other revenue includes, inter alia, revenue from certain shared conference services, insurance claims and discounts taken. EUR '000 2024 2023 Revenue Reallocated from Internal Sources 3,002 958 Indirect Common Costs Revenue 69 57 Other Revenue 589 1,647 Total 3,660 2,662 NOTE 7: EXPENSES 7.1 – Staff Costs Salaries include amounts paid to international and local contracted staff, local professional staff, and temporary assistance. The board and lodging allowance (BLA) consists of a daily allowance payable by the OSCE which is intended to partially cover the living costs incurred by international mission members. BLA is paid to international contracted and seconded staff. The BLA rates are established for each Mission in December each year and remain valid for the following year. Other staff costs include hazard pay, personal income tax, medical services, overtime, vacancy advertisement costs and ex gratia payments to staff and mission members. Insurance refers to health, life and accident insurance. Other employee benefits include education grant, child and spouse allowance, appointment travel, assignment grant, rental subsidy, training, interns compensation and service cost for employee benefits (see Note 2.11 - Employee Benefits). EUR '000 2024 2023 Salaries 76,196 73,143 BLA for international seconded staff 9,140 9,382 BLA for international contracted staff 1,451 1,441 Provident fund 10,456 9,804 Other staff costs 1,074 1,123 Insurance 3,739 3,239 Other employee benefits 5,942 5,751 In-kind seconded staff costs 24,985 24,352 Total 132,983 128,235 The in-kind seconded staff costs recognize the value to the Organisation of staff seconded free of charge by participating States. The estimated value is based on a calculation of what it would cost to employ international contracted staff and mission members in their place, and does not reflect the actual costs to the participating States seconding them. These Notes are an integral part of the Financial Statements
Notes 7.1.1 - Ex Gratia Payments Ex gratia payments are made in extraordinary situations when the OSCE has a moral obligation or it is in the overall interest of the Organization to do so. Disclosure of ex gratia payments is required by Financial Regulation 6.05. During 2024 ex gratia payments to staff and mission members totalling EUR 2.5 thousand were made (EUR 2.5 thousand in 2023). Details of other ex gratia payments may be found in note 7.8.1. The list of Executive Structures concerned is as follows: EUR ‘000 2024 2023 Secretariat 3 3 Total 3 3 7.2 – Consultancy and Subcontracting Other contractual services include, inter alia, subcontracting services related to the implementation of projects. Paramedical services were provided to ODIHR for Human Rights Department activities in Ukraine. EUR ‘000 2024 2023 Special Services Agreements 15,045 14,523 Implementing Partner costs 5,494 6,403 Paramedical services 84 133 Other contractual services 4,366 4,033 Total 24,989 25,092 7.3 – Travel Expenses Travel expenses include travel ticket costs, daily subsistence allowance, local transportation, terminal allowances and other travel costs. Travel of non-OSCE officials includes the same types of cost and is related mainly to their attendance at conferences and seminars and recruitment of new staff. EUR '000 2024 2023 Travel of non-OSCE officials 9,119 8,378 Duty travel for OSCE officials 5,894 5,996 Travel for training of OSCE officials 318 255 Total 15,331 14,629 These Notes are an integral part of the Financial Statements
Notes 7.4 – Services and Office Costs Communication services include, among others, internet access fees, rental of communication equipment and leased lines. IT services refer to software maintenance and support fees, as well as rental and installation of IT equipment. EUR '000 2024 2023 Rental and maintenance of buildings 15,078 15,257 Conferences, seminars, workshops 9,438 7,792 IT services 5,716 5,507 Communication services 1,077 1,143 Interpreters, translators and typing services 1,871 1,829 Bank charges 445 495 Printing and copying services 573 419 Vehicles maintenance costs 257 267 Freight and transportation 437 266 Insurance other than staff 415 361 Ancillary services in-kind 977 856 Total 36,284 34,192 Incurred costs of EUR 177 thousand (EUR 117 thousand in 2023) of services and office costs relates to agreements with third parties which are fully reimbursable. 7.5 – Consumables and Supplies Consumables and supplies include items that are either used or consumed in rendering services, such as office supplies, ICT supplies and spare parts. Other supplies include mainly safety and security supplies and stationery. EUR '000 2024 2023 Fuel and lubricants 389 424 Other supplies 1,920 1,547 Communication and IT supplies 401 453 Publications, newspapers and printed materials 231 227 Spare parts 94 107 Building/Household Supplies 595 446 Total 3,630 3,204 7.6 – Depreciation, Amortization and Impairments Amortization charges are applied to intangible assets capitalized on the OSCE Statement of Financial Position. Depreciation relates to tangible property, plant and equipment. EUR '000 2024 2023 Amortization 670 695 Depreciation 2,234 2,564 Impairments - 38 Total 2,904 3,297 Impairments reported relate to the disposal of assets of the former missions in Ukraine. These Notes are an integral part of the Financial Statements
Notes 7.7 – Equipment Expense Equipment expenses include costs related to the acquisition of equipment which would otherwise meet the definition of Property, Plant and Equipment but are below the capitalization threshold of EUR 1 thousand, both those purchased by OSCE and those donated to the Organization. Also included is the estimated value of equipment loaned by donors on cost-free rentals. Inventory donated to third parties includes all items donated and is not subject to the capitalisation threshold. Assets retired represents the remaining net book value of project assets donated or otherwise disposed of, except through sale (see Note 6.5 – Revenue from Exchange Transactions). EUR '000 2024 2023 Equipment Purchased 1,352 1,579 Inventory Donated to Third Parties 5,450 2,116 Equipment Received In-kind 4 6 Assets retired 1,422 - Total Equipment Expenses 8,228 3,701 7.8 – Other Operating Expenses The increase in other operating expenditures is driven by the change in Allowance for Doubtful Debts in relation to the forward-looking impairment model introduced following the adoption of IPSAS 41 (see Note 3.3). This increase is partially offset by the cost containment measures taken during 2024 to reduce non- critical expenditures such as on representation. 7.8.1 – Ex Gratia Payments Ex gratia payments, included under other operating costs (Note 7.8), are made in extraordinary situations when the OSCE has a moral obligation or it is in the overall interest of the Organization to do so. Disclosure of ex gratia payments is required by Financial Regulation 6.05. During 2024 ex gratia payments other than to staff and mission members totalling EUR 21.5 thousand were approved by the Secretary General (EUR 11 thousand in 2023). Details of ex gratia payments to staff and mission members may be found in note 7.1.1. The list of Executive Structures concerned is as follows: EUR '000 2024 2023 Presence in Albania 1.5 - Mission to Bosnia and Herzegovina - 1 Mission to Moldova 5 3 Office for Democratic Institutions and Human Rights 2.5 Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference 2.5 5 Special Monitoring Mission to Ukraine 7.5 2 Secretariat – Support Programme to Ukraine 2.5 - Total 21.5 11 EUR '000 2024 2023 Other Operating Costs 311 522 Representation Costs 209 344 Project Costs 82 231 Change in Allowance for Doubtful Debts 5,466 7 Total 6,068 1,104 These Notes are an integral part of the Financial Statements
Notes 7.8.2 – Cash and Other Losses and Write-Offs The Joint Consultative Group (JCG) on the Conventional Forces in Europe Treaty has been underpaying its invoiced contributions towards the costs of Hofburg, with the rate of underpayment for 2024 standing at 4.384% (9.0% in 2023). OSCE continues to press its claim for these funds without success to date. Consequently, a bad debt allowance has been created in full (an expected credit loss of 100% in line with IPSAS 41) with a corresponding write-down in 2024 of EUR 10 thousand (EUR 20 thousand in 2023), increasing the cumulative allowance for JCG to EUR 255 thousand (EUR 245 thousand in 2023). This allowance does not represent an abandonment of the claim or release the JCG from its obligation to pay under the terms of its Financial Agreement with the OSCE. Cash and other losses and write-offs are included under other operating costs (Note 7.8). EUR '000 2024 2023 Cash and other losses - - Bad debt allowance for the Joint Consultative Group (JCG) 10 20 Write-off of uncollectible receivables 19 3 Total 29 23 NOTE 8: FOREIGN EXCHANGE GAINS/(LOSSES) Gains and losses made on transactions in currencies other than the Euro consist of amounts realized when the payable balance is settled and those not yet realized because the payable remains open. The latter may change with future exchange rate movements until the moment that they are realized. EUR '000 2024 2023 Unrealized Gains/(Losses) – cash and cash equivalents 602 (982) Unrealized Gains/(Losses) – other 883 9 Subtotal Unrealized Gains/(Losses) 1,485 (973) Realized Gains/(Losses) (134) (377) Total 1,351 (1,350) NOTE 9: CASH FLOW STATEMENT 9.1 – Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, balances with banks, and investments in term-deposits with an initial maturity of 90 days or less. Cash and cash equivalents included in the Cash Flow Statement (Statement IV) are further detailed in Note 3.1. 9.2 – Cash Flows from Investing Activities Cash Flows from Investing Activities as listed in the Cash Flow Statement (Statement IV) consist of investments in term-deposits with initial maturity over 90 days (ref. Note 3.2), the acquisition of property, plant and equipment (ref. Note 3.8) and intangible assets (ref. Note 3.9), and the sale of any fixed assets deemed obsolete or surplus to operations requirements. EUR '000 2024 2023 Investments in term-deposits (367,300) (305,410) Proceeds from matured term-deposits 309,852 355,880 Purchase of property, plant and equipment and intangible assets (2,570) (2,985) Sale of property, plant and equipment 102 1,573 Total (59,916) 49,058 These Notes are an integral part of the Financial Statements
Notes NOTE 10: RECONCILIATIONS OF BUDGETS TO FINANCIAL STATEMENTS Statement V (comparison of budget and actual amounts) is provided in accordance with the principles of IPSAS 24, which requires “a comparison of budget amounts and the actual amounts arising from execution of the budget to be included in the financial statements of entities that are required to, or elect to, make publicly available their approved budget(s), and for which they are, therefore, held publicly accountable”. Since only the Unified Budget is publicly available, Statement V does not consider the Special Purpose or extra-budgetary Funds and other projects. The Permanent Council could not find consensus on the Unified Budget Proposals tabled by the Chairperson and therefore there was no approved budget for 2024. Financial Regulation 3.04 provides that, in these circumstances, the Secretary General and Heads of Institution are authorized to incur obligations and make payments until 31 March of the current financial year up to the level of 25 per cent of the previous Unified Budget, and thereafter, on a monthly basis up to 1/12th of the previous approved Budget until the Unified Budget is adopted. Since no Budget was approved during the year, the Organization operated under Provisional Expenditure Authorizations throughout 2024 at the level of the last approved Unified Budget, that for 2021 (EUR 138,204 thousand, PC.DEC/1413 dated 18 August 2021), and PC.DEC/1485 dated 2 August 2024, PC.DEC/1487 dated 19 September 2024, PC.DEC/1491 dated 26 November 2024 and PC.DEC/1494 dated 19 December 2024 approved Additional Provisional Expenditure Authorizations in the amount of EUR 3,002 thousand, funded from the cash surplus as at 31 December 2023 as reported in the 2023 Financial Statements. Statement V is therefore presented on the basis of the final Provisional Expenditure Authorizations approved under the aforementioned Permanent Council decisions. The difference of EUR 2,087 thousand between the the actual amounts and the 2021 Unified Budget total (EUR 2,028 thousand in 2023), excluding the Project Co-ordinator in Ukraine, plus the Total Provisional Expenditure Authorization are tabulated by Secretariat and Institution and by region and reconciled to the cash surplus in Statement V and are further broken down by Main Programme and Programme in the Resource Utilization Report at Annex 2 to these Statements. Reporting on the Performance against the Provisional Expenditure Authorization is in summary in the Financial Report that accompanies these Statements, and elaborated in more detail in the Resource Utilization Report (RUR) available to participating States. These Notes are an integral part of the Financial Statements
Notes 10.1 - Reconciliation of Surplus/ (Deficit) for the Period The Financial Statements are prepared on an accrual basis, while the budget is prepared on a modified cash basis. The following table shows a reconciliation of the Cash Surplus in the Statement of Comparison of Budget and Actual Amounts (Statement V), and the Surplus/(Deficit) for the Period as reported in the Statement of Financial Performance (Statement II). The differences are due to IPSAS adjustments affecting revenue and expenses. EUR ‘000 2024 2023 Cash Surplus for the year 6,492 3,725 Assessed Contributions receivable as at 1 January (12,615) (7,722) Assessed Contributions receivable as at 31 December 18,253 12,615 Budgetary Excess of Income over Expenditure 12,130 8,618 IPSAS Adjustments: Revenue Accrued Interest (202) 530 Contributions In-Kind 30,312 29,171 Revenue from Exchange Transactions 4 (29) Other Revenue 4 213 Revenue from Change in Allowance for Doubtful Debts - 1,152 Subtotal Revenue 30,118 31,037 Expense Expense from Change in Allowances for Doubtful Debts (5,185) - Unliquidated Obligations (528) 457 Accruals Adjustments 46 (61) Budget Deferrals (77) 42 Prepayments Adjustments (397) (459) Employee Benefits 629 517 Contributions In-Kind Expense (30,312) (29,171) Insurance Adjustments (1,154) (698) Inventory Adjustments (208) (377) Property, plant and equipment Adjustments (198) (682) Intangibles Adjustments (404) (531) Subtotal Expense (37,788) (30,963) Gains/(Losses) - - Total IPSAS Adjustments (7,760) 74 IPSAS Budget Surplus/(Deficit) for the Period 4,460 8,692 Special Purpose Funds Surplus/(Deficit) for the Period (797) (897) Extra-Budgetray Surplus/(Deficit) for the Period 3,301 1,053 IPSAS Total OSCE Surplus/(Deficit) for the Period 6,964 8,848 10.2 – Reconciliation of Actual Amounts on a Comparable Basis and Cash Flow Statement The expenditure authorizations are calculated on a modified cash basis (actual expenditure plus contractual and other obligations), whereas the Financial Statements are prepared on an accrual basis, which therefore differs from the budget basis. For the purpose of preparing the comparison of budget and actuals in the Statement of Comparison of Budget and Actual Amounts, actuals are calculated on a modified cash basis comparable with the expenditure authorizations. Since the Financial Statements and budgetary accounting are prepared on different bases, the actual amounts presented on a comparable basis to the budget in Statement V - Statement of Comparison of Budget and Actual Amounts need to be reconciled to the net cash flow from operating, investing and financing activities as required under IPSAS 24 – Presentation of Budget Information in Financial Statements. These Notes are an integral part of the Financial Statements
Notes The reconciliation requires that any differences be separately identified: - Basis differences - in order to reconcile the budgetary results to the Cash Flow Statement, differences between the budgetary framework and IPSAS such as unliquidated obligations, prepayments and depreciation need to be considered as basis differences; - Presentation differences - differences in the content and classification used in the Statement of Cash Flow versus the Statement of Comparison of Budget and Actual Amounts; for example, the budgetary framework makes no distinction between operating, investing and financing activities; - Timing differences - occur in such cases when the budget cycle differs from the financial reporting cycle. There are no timing differences, since both cycles coincide. - Entity differences - the Statement of Comparison of Budget and Actual Amounts refers to the Unified Budget of the Secretariat, Institutions and Field Missions only whereas the Cash Flow Statement includes also Special Purpose Funds and Extra-Budgetary funds. The latter two are excluded from Statement V because annual budgets are not publicly available. EUR’000 Operating Activities Investing Activities Financing Activities Total Actual Amount on Comparable Basis 2,087 - - 2,087 Basis Differences (54,172) - - (54,172) Presentation Differences 14,375 (1,945) (3,002) 9,428 Timing Differences - - - - Entity Differences 41,986 (57,972) - (15,986) Actual Amount in the Cash Flow Statement 4,275 (59,916) (3,002) (58,643) NOTE 11: OTHER DISCLOSURES 11.1 - Financial Risk Management Financial risk management is carried out by the Treasury Unit in the Secretariat under policies approved by the Investment Committee and by applying the guidelines included in OSCE’s Financial/Administrative Instruction Five - Income and Cash Management. IPSAS 30 - Financial Instruments: Disclosures states the types of risks that the Organization should disclose: (a) Liquidity risk – is the risk that an entity will encounter difficulty in meeting its financial commitments. The OSCE invests funds not required for immediate operational purposes in short-term deposits up to a maximum of nine months. Maturities are scheduled on the basis of operational requirements as identified by the Treasury Unit and OSCE Executive Structures’ cash flow forecasts. Liquidity is monitored through actual and forecasted cash flow reports for a period of 12 months into the future, reviewed on monthly basis. The timing of payment of assessed contributions by participating States has an impact on the liquidity of the Organization. Delays in payment by large contributors can affect normal operations, although the comfortable Cash position is available to meet short-term cash requirements. (b) Currency risk - is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The OSCE is exposed to currency risk on all transactions that are denominated in a currency other than Euro. The OSCE has a policy of not using derivative financial instruments to hedge against currency risk. Risk is mitigated by limiting the amount of cash held in currencies other than euro; by concluding most of the OSCE contracts in euro; and by not converting one currency to another to avoid realization of gains and losses. In 2024, the majority of net expenditures were transacted in euro or currencies pegged to the euro. Transactions in foreign currencies are recorded in euro at the UN Operational Rates of Exchange in effect on the date of the transactions. At the end of the reporting period assets and liabilities are valued at the rates applicable as at 31 December 2024. Gains and losses arising from transactions and translation are recorded as currency exchange adjustments. In compliance with Financial Administrative Instruction These Notes are an integral part of the Financial Statements
Notes Five (FAI 5) on Income and Cash Management, large exchange rate gains or losses incurred under Extra- Budgetary Funds have been credited or charged to the respective Fund. (c) Interest rate risk – is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The OSCE did not enter into any transactions involving variable interest rates in 2023 and only made short-term deposits for fixed durations and fixed interest rates. Fluctuations in interest rates only affect the interest revenue forecasts for short-term deposits to be concluded in the future; however, the OSCE is not dependent on interest revenue for the continuation of its activities. (d) Market risk – is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices. None of the OSCE’s financial instruments in 2024 were affected by changes in market prices. (e) Credit risk – is the risk that one party to a financial instrument will fail to meet its contractual obligations, incurring a financial loss for OSCE. The largest exposures to such risk for the OSCE are Assessed Contributions Receivable and bank risk. The Treasury Unit monitors the creditworthiness of its banks on a regular basis and has strict guidelines to limit the amount deposited with each approved bank. The table below shows the amounts deposited with banks according to their credit rating. At the end of the reporting period, 99.31% of the total (99.43% in 2023) was held in bank accounts carrying an investment grade (BBB- and above). The table reflects the fact that due to the financial crisis most bank ratings have been revised downwards in recent years. The remaining balances are held in non- investment grade or unrated banks to support OSCE local operational needs. At the end of the reporting period, 98.08% of the total cash (98,37% in 2023) was held in bank accounts administered by the Treasury Unit. The remaining 1.92% was held in bank accounts throughout OSCE locations for daily operational purposes (1.63% in 2023). EUR ‘000 Rating Total as at 31 December % Total as at 31 December 2024 2023 High Grade AA- to AA+ 69,908 40.3% 32,764 Upper Medium Grade A- to A+ 70,117 40.5% 110,548 Lower Medium Grade BBB- to BBB+ 32,123 18.5% 29,401 Non-Investment Grade BB- to BB+ 159 0.1% 297 Highly Speculative B- to B+ - 0.0% - Unrated N/A 847 0.5% 703 Total Bank Balances 173,154 99.9% 173,714 Cash N/A 199 0.1% 231 Total Cash and Bank Balances 173,353 100% 173,945 (f) Cash flow risk – is the risk that future cash flows associated with a monetary financial instrument will fluctuate in amount. For the OSCE such fluctuations relate to future money-market deposits in the event of changes in interest rates. As mentioned in (b) above, the OSCE is not dependent on the cash flows resulting from money-market deposits for the continuation of its activities. (g) There were no significant changes in the OSCE’s exposure to risk or to its risk management policies during the reporting period. 11.2 – Contingent Assets and Contingent Liabilities The OSCE has no contingent assets. Contingent liabilities exist in respect of the closure of the Special Monitoring Mission to Ukraine, for contracts held with suppliers which had to be terminated in accordance with the closure of the Mission. It is not possible to estimate the amount of such liabilities with certainty, as this depends upon submission by the suppliers and it is unknown whether such claims will materialise. To date, no such claims have been made. These Notes are an integral part of the Financial Statements
Notes 11.3 – Leases and Contractual Obligations Lease agreements in the Secretariat, Institutions and Field Offices refer to leases of premises and office equipment. These agreements are classified as operating leases and the related payments are charged as an expense over the period of the lease. The total lease expense for the year 2024 amounted to EUR 5,755 thousand (EUR 5,837 thousand in 2023). Future minimum lease payments include payments for such rented premises that would be required until the earliest possible termination date under the respective agreements. The minimum lease payments also include Host Country reimbursments in the amount of EUR 1,946 thousand expected to be received (EUR 1,947 thousand in 2023). There are no agreements that contain purchase options. The total amount of future minimum lease payments under non-cancellable operating leases is as follows: EUR ‘000 Less than 1 Year 1 to 5 Years More than 5 Years Total Minimum Lease Payments 3,257 429 - 3,686 In the majority of cases operating lease arrangements for field office premises can be cancelled by providing notice up to 90 days. Also the majority of the operating lease agreements contain renewal clauses which enable the Organization to extend the terms of the leases at the end of the original lease terms. 11.4 – Related Party Disclosures 11.4.1 - Governing Bodies Based in Vienna, the Permanent Council is the body for regular political consultation and decision-making on all issues pertinent to the OSCE and is responsible for the day-to-day business of the Organization. The OSCE Permanent Council is formed by the delegates of the 57 participating States. Representatives of the OSCE Parliamentary Assembly and of executive structures may attend meetings of the decision-making bodies as observers. The OSCE's 11 Partners for Co-operation may be invited to attend as observers. A delegation to the Permanent Council consists of a team of diplomats of the participating State headed by an ambassador. Members of the delegations are appointed separately by the Governments of each participating State and are not considered key management personnel as defined by IPSAS. They do not receive remuneration from the Organization. OSCE decisions have to be taken by consensus and the Chairman seeks approval from all delegations. In the case of one or more delegations opposing a decision, the issue is renegotiated. If all delegates agree, the decision becomes politically binding for all participating States. During periods between Summits, decision-making and governing power lies with the Ministerial Council, whose members are the Foreign Ministers of the OSCE participating States. The Ministerial Council meets once a year to consider issues relevant to the OSCE and make appropriate decisions. At OSCE Summits, the Heads of State or Government of the OSCE participating States set the Organization’s priorities and provide orientation for several years. There are no general rules determining how often Summits take place. Any participating State can propose a Summit. The decision has then to be taken by consensus. The last OSCE summit took place in 2010 in Astana (Kazakhstan). 11.4.2 - Key Management Personnel The Secretary General, Heads of Institutions and Heads of Missions, including Personal Representatives who are Fund Managers, as well as the Secretariat’s Main Programme Managers at the Director level represent the key management personnel as they have authority for planning, directing and controlling the activities of OSCE. These Notes are an integral part of the Financial Statements
Notes The aggregate remuneration paid to key management personnel includes: net salaries, post adjustment, entitlements such as allowances, grants and subsidies, and employer contributions to the provident fund and health insurance. As defined in the Staff Regulations and Rules, Heads of Mission and Personal Representatives who are Fund Managers are seconded by or through a participating State and therefore do not receive a salary remuneration from OSCE, but are entitled to a board and lodging allowance. Advances are those made against entitlements in accordance with Staff Regulations and Rules and are available to all OSCE staff. The table below details the number of key management personnel positions and the number of key management staff who held these positions over the course of the year. Of the 42 individuals holdings key management positions during 2024, one individual held two positions during the year, whilst four other individuals temporarily acted as Officer-in-Charge for the Secertary General and Head of Instituation posts. EUR’000 Number of Individuals Number of Posts Remuneration and Post Adjustment Entitlements Provident Fund and Health Plan Total Remuneration 2024 Outstanding Advances Against Entitlements SG and Heads of Institutions 11 4 1,189 392 192 1,773 - Secretariat’s Directors 11 8 1,307 207 169 1,683 - Heads of Mission and Personal Representatives 20 13 811 7 2 820 - Key Management Personnel 42 25 3,307 606 363 4,276 - 11.5 – Events After the Reporting Date The Financial Statements were submitted to the External Auditors on and were authorized for issuance by the Secretary General on 30 June 2025. In pursuance of the requirements set out in IPSAS 14 - Events After the Reporting Date, significant events which occurred between the reporting date and the date of issuance are set out below. 11.5.1 - Adjusting Events There are no adjusting events. 11.5.2 - Non-Adjusting Events On 24 January 2025, the United States government announced a temporary suspension of foreign aid to re- evaluate its international funding priorities. Since this event occurred after the reporting date, it is classified as a non-adjusting event under IPSAS and no adjustments have been made to these Financial Statements. As of the reporting date, approximately EUR 686 thousand in extra-budgetary contributions receivable due from the United States were recognized on the Statement of Financial Position, representing 1.36% of the organization's total contributions receivable (excluding any allowance for doubtful debt), or 2.24% of the open extra-budgetary contributions receivable (Note 3.3). There were no open assessed contributions receivable for the United States as at the reporting date. The following table summarizes the exposure: These Notes are an integral part of the Financial Statements
Notes Contributions receivable Ref. EUR ‘000 Percentage Contributions receivable as at 31 December 2024 (excluding the allowance for doubtful debt) Note 3.3 50,473 - United States funded Extra-budgetary contributions receivable as at 31 December 2024 Note 3.3.3 686 1.36% Of which collected since 31 December 2024 - - - United States funded receivables balance remaining open as at 30 June 2025 - 686 1.36% As OSCE’s policy on extra-budgetary funds is to receive cash in advance of project activities, the full amount of EUR 686 thousand is reported as deferred revenue in the Statement of Financial Position as at 31 December 2024. As of the date of authorization of these Financial Statements, no further collections have been made on the contributions receivable which were open as at the reporting date. As at 30 June 2025, United States funded receivables in the amount of EUR 232 thousand relate to projects which have since been terminated. The following table summarizes the exposure as of 30 June 2025. United States funded contributions receivable EUR’ 000 Contributions receivable as at 31 December 2024 (excluding the allowance for doubtful debt) 686 Of which collected since 31 December 2024 - Additional assessed contributions receivable recognized after 31 December 2024 17,839 Of which collected through 30 June 2025 (3,473) Remaining outstanding balance of contributions receivable as at 30 June 2025 15,052 From which relating to terminated or fully suspended projects 232 As of the reporting date, EUR 35.0 million in United States funded extra-budgetary contributions were received in advance and deferred on the Statement of Financial Position. Of the funds received in advance, EUR 5.6 million has been spent on project activities in 2025, whilst OSCE has received formal termination letters on project activites with available funds of EUR 2.2 million, subject to final closout costs, with these funds pending refund to the donor. All other project activites have since been unfrozen and continue unaffected in line with the donor agreements. Since the reporting date, no new pledge agreements on extra-budgetary activities have been entered into with the United States. Assessed contributions in the amount of EUR 17.8 million have been provisionally billed to the United States for the financial year 2025, with EUR 3.5 million received as of 30 June 2025. While OSCE receives funding from the United States government, the organization maintains financial flexibility through diversified funding streams. Management continues to closely monitor developments to mitigate any potential impact on OSCE’s operations. At the date of authorization of these Financial Statements, no mitigation measures taken have resulted in the creation of onerous contracts, and no reliably measurable contingent liabilities have been identified as a result of these mitigation measures. These Notes are an integral part of the Financial Statements
II ANNEXES TO THE FINANCIAL STATEMENTS
ANNEX 1 SEGMENTAL REPORTING BY FUND
Fund Accounting and Segment Reporting For purposes of the presentation of the 2024 expenses, Funds were grouped as presented and approved in the 2021 Unified Budget: under Secretariat and Institutions; and Field Operations, with the latter, in turn, being grouped into Regions. This presentation is also followed in the segmental reports. In addition, the segmental information is presented based on the main sources of financing of the Organization (Assessed Contributions other than for the OSCE Special Monitoring Mission to Ukraine (SMM), Special Purpose Funds, Extra-Budgetary Funds and other Extra-Budgetary projects undertaken in accordance with Article IX of the Financial Regulations and not specifically approved by the Permanent Council). The segmental information also includes an analysis of Extra- Budgetary expenses broken down by Executive Structure. The Funds listed below were operational in 2024. The letters indicated in brackets correspond to the Reporting Segment in this Annex. Segments A to F reflect the structure of the approved 2021 Unified Budget while G and H report Special Purpose and Extra-Budgetary Funds and projects respectively. These annexes are not separately audited and do not fall within the scope of the audit opinion. Secretariat and Institutions (A) These Funds are financed through the Standard Scale of Contributions for 2019 (PC.DEC/1325) on a provisional basis, pending agreement of Scales for 2024: • The Secretariat • Office for Democratic Institutions and Human Rights • High Commissioner on National Minorities • Representative on Freedom of the Media Field Operations (B) Segment B presents the Missions funded through the Unified Budget, aggregated into the geographical Regions in the approved 2021 budget. These Funds are financed through the Field Operations Scale of Contributions for 2019 (PC.DEC/1325) on a provisional basis, pending agreement of Scales for 2024: South-Eastern Europe (C) Eastern Europe (D) • Augmentations 1 • Mission in Kosovo • Mission to Bosnia and Herzegovina • Mission to Serbia • Presence in Albania • Mission to Skopje • Mission to Montenegro • Mission to Moldova • Project Co-ordinator in Ukraine (closed in 2022) • Representative to the Latvian-Russian Joint Commission on Military Pensioners Caucasus (E) Central Asia (F) • High Level Planning Group • The Minsk Process • Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference • Programme Office in Astana • Centre in Ashgabat • Programme Office in Bishkek • Project Co-ordinator in Uzbekistan • Programme Office in Dushanbe 1 The Augmentations Fund, including posts based in the Secretariat and in the Office for Democratic Institutions and Human Rights, was established on a provisional basis under PC.DEC/827 dated 21 December 2007 and is financed on the basis of the Field Operations Scale of Contributions.
Closed Funds (B) Missions and Field Operations funded by the Unified Budget and whose mandate has expired are grouped under Closed Funds and included in Field Operations. Special Purpose Funds (G) The Information Security Enhancement Fund was established by PC.DEC/1247 dated 6 April 2017 to finance the strengthening of OSCE information security and was allocated total funding of EUR 800 thousand. The Fund initially covered an implementation period extending to 24 months, with the balance carried forward from one year to the next, and was extended until 6 October 2020 by PC.DEC/1324 dated 4 April 2019. The validity of the Fund was further extended until 6 July 2021 by PC.DEC/1374 dated 30 July 2020, at which point it was closed. The IT Infrastructure Upgrade Fund was established by PC.DEC/1322 dated 28 March 2019 for the financing of the upgrade to the latest version of the ICT core platform technologies and the re-architecture and deployment of a secure OSCE IT infrastructure and was allocated EUR 3,560 thousand. This amount was supplemented by PC.DEC/1345 to finance necessary 2019 measures aimed at mitigating the risk of vendor support expiration for the ICT Core Platform Infrastructure in the amount of EUR 630 thousand, and further supplemented by PC.DEC/1422 dated 25 November 2021 in the sum of EUR 482 thousand taking the total to EUR 4,672 thousand. The Fund covers the implementation period, with the balance carried forward from one year to the next. Following completion of all mandated activity, the Fund was closed in 2023. The CIP Technical Fund was established by PC.DEC/1422 dated 25 November 2021 for the purpose of financing agreed capital requirements under the Capital Investment Programme (CIP) and was allocated an amount of EUR 960 thousand taken from identified 2021 underspending. Unless otherwise decided by the Permanent Council, the Fund will be closed upon completion of the agreed capital investment projects. The Special Monitoring Mission to Ukraine, originally established pursuant to PC.DEC/1117 dated 21 March 2014, was financed through provisional assessed contributions on the basis of the Field Operations Scale of Contributions set out in PC.DEC/1325 dated 11 April 2019, and through voluntary contributions, the latter reported as part of segment H. The Permanent Council was unable to find consensus on an extension of its mission beyond 31 March 2022 and it was administratively closed on 31 October of that year. The Observer Mission to Two Russian Checkpoints on the Russian-Ukrainian Border, established by PC.DEC/1130 dated 24 July 2014, deployed observers to the two Russian checkpoints of Donetsk and Gukovo until the expiry of the mandate on 30 September 2021 and subsequent winding down operation approved by PC.DEC/1415 dated 23 September 2021.
Extra-Budgetary Funds (H) The following Extra-Budgetary Funds were established by Permanent Council decisions and are shown individually in the segment reports: • The Fund to support OSCE Action for Peace, Democracy and Stability in Bosnia and Herzegovina (PC.DEC/101 dated 11 January 1996); • The Voluntary Fund for Activities Related to Economic Aspects of Security (PC.DEC/150 dated 19 December 1996); • The following Extra-Budgetary Funds, established by Permanent Council decisions are grouped together and shown as Other PC Established Funds in the segment reports; • The Fund to foster the integration of recently admitted participating States (PC.DEC/23 dated 2 March 1995); • The Fund related to the Stability Pact for South Eastern Europe (PC.DEC/306 dated 1 July 1999); • The Fund for Activities Related to the Removal and Destruction of Russian Ammunition and Armaments from Moldova (PC.DEC/329 dated 9 December 1999); • The Fund for Activities related to the reduction of Military Forces and equipment from Georgia (293rd Reinforced Meeting of the Permanent Council on Georgia dated 17 July 2000); • The Bishkek International Conference on Enhancing Security and Stability in Central Asia: Strengthening Comprehensive Efforts to Counter Terrorism (PC.DEC/440 dated 11 October 2001); • The Partnership Fund (PC.DEC/812 dated 30 November 2007); • That element of the Special Monitoring Mission to Ukraine financed through voluntary contributions in accordance with PC.DEC/1401 dated 31 March 2021. Extra-budgetary contributions accepted under Article IX of the Financial Regulations are not individually approved by the Permanent Council and are shown under a separate Extra-Budgetary grouping of projects called Other Activities and Special Projects. This also includes the Repository Programme “Core Support Mechanism” described in Note 6.2 of the Financial Statements. Indirect Common Costs levied on these projects and certain third-party payments as described in Note 2.19 are also disclosed separately. Expenses of other activities and special projects are shown inclusive of Indirect Common Costs, and an eliminations column eliminates these internal revenues and expenses to reconcile to the totals in the statement of financial performance. Extra-Budgetary Expenditure by Executive Structure (J) Extra-budgetary expenditure shown in Segment report H.2 is summarised by Executive Structure in Schedule J, with the Core Support Mechanism disclosed separately.
1. Segment Reporting Schedule of Financial Position Summary by Source of Funds As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 42,558 85,138 2,713 2,287 45,271 87,424 0 0 9,506 25,394 54,777 112,818 Investments 3.2 0 0 0 0 0 0 0 0 118,576 61,127 118,576 61,127 Contributions Receivable 3.3 7,573 7,217 4,319 4,222 11,892 11,439 975 1,272 30,561 6,003 43,428 18,713 Accounts Receivable 3.4 3,068 3,531 715 1,482 3,783 5,013 (0) (33) 0 0 3,783 4,980 Prepayments 3.5 3,187 4,437 1,843 1,956 5,031 6,393 22 23 115 110 5,168 6,526 Inventory 3.6 0 0 176 304 176 304 0 0 1,681 488 1,857 792 Inter-Fund Balances (12,065)(55,802) 7,291 6,995 (4,774)(48,807) 22,235 22,618 (17,460) 26,189 0 0 Other Current Assets 3.7 20 (4) 0 0 20 (4) 0 0 0 0 20 (4) 44,341 44,516 17,057 17,246 61,398 61,762 23,232 23,880 142,979 119,311 227,609 204,953 Non-Current Assets Property, Plant and Equipment 3.8 1,787 1,993 3,654 3,674 5,440 5,666 373 595 462 1,655 6,276 7,915 Intangible Assets 3.9 1,931 2,356 47 68 1,978 2,424 12 31 1,516 1,269 3,506 3,725 Other Non-Current Assets 3.7 20 20 0 0 20 20 0 0 0 0 20 20 3,738 4,369 3,700 3,742 7,438 8,111 385 626 1,978 2,924 9,801 11,660 Total Assets 48,079 48,885 20,757 20,988 68,836 69,873 23,617 24,506 144,958 122,234 237,411 216,613 LIABILITIES Current Liabilities Accounts Payable 4.1 1,915 2,616 208 527 2,123 3,143 145 149 267 213 2,536 3,505 Accruals 4.2 781 1,046 3,154 2,787 3,935 3,833 34 132 3,961 3,939 7,930 7,903 Deferred Revenue 4.3 3,337 5,764 0 0 3,337 5,764 0 0 0 0 3,337 5,764 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 113,377 102,639 113,377 102,639 Funds Held for Third Parties 4.5 17,882 17,629 37 28 17,919 17,657 0 0 0 0 17,919 17,657 Employee Benefits Current 4.6 3,125 3,404 4,264 4,187 7,389 7,591 8 5 963 791 8,360 8,387 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 15,155 6,897 15,155 6,897 Other Current Liabilities 4.9 1,488 419 181 182 1,669 601 23 18 196 0 1,888 618 28,529 30,879 7,844 7,710 36,373 38,589 211 303 133,918 114,478 170,502 153,371 Non-Current Liabilities Employee Benefits Non-Current 4.6 3,214 3,413 215 68 3,429 3,481 0 0 357 32 3,786 3,513 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 3,214 3,413 215 68 3,429 3,481 0 0 357 32 3,786 3,513 Total Liabilities 31,742 34,292 8,060 7,778 39,802 42,070 211 303 134,275 114,510 174,288 156,883 Net Assets 16,336 14,593 12,697 13,210 29,034 27,802 23,406 24,203 10,682 7,724 63,122 59,730 NET ASSETS Cash Surplus 5.1 2,181 (730) 5,252 4,674 7,434 3,944 20,937 20,669 0 0 28,371 24,613 Cash Surplus Withheld 5.2 11 11 4 4 15 15 0 0 0 0 15 15 Revolving Fund 5.3 2,710 2,710 0 0 2,710 2,710 0 0 0 0 2,710 2,710 Contingency Fund 5.3 2,180 2,180 0 0 2,180 2,180 0 0 0 0 2,180 2,180 Other Reserves 5.4 (3,583) (3,524) 398 565 (3,185) (2,959) 427 427 (655) (312) (3,414) (2,844) Accumulated Surplus/(Deficit) 5.5 12,837 13,945 7,043 7,967 19,880 21,913 2,043 3,108 11,338 8,036 33,260 33,056 Total Net Assets 16,336 14,593 12,697 13,210 29,034 27,802 23,406 24,203 10,682 7,724 63,122 59,730 Total Extra-Budgetary Funds TOTAL OSCE Total Secretariat and Institutions Total Field OperationsTotal Unified Budget Total Special Purpose Funds
2. Segment Reporting Schedule of Financial Performance Summary by Source of Funds For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 60,392 60,392 77,812 77,812 138,204 138,204 0 0 0 0 138,204 138,204 Extra-Budgetary Contributions 6.2 0 9 0 0 0 9 0 0 56,501 47,879 56,501 47,888 Finance Revenue 6.3 5,623 3,630 0 0 5,623 3,630 0 0 0 0 5,623 3,630 Contributions In-Kind 6.4 14,169 12,469 16,143 16,702 30,312 29,171 0 0 1,094 918 31,406 30,089 Revenue from Exchange Transactions 6.5 50 15 403 397 452 412 173 784 10 (18) 636 1,178 Other Revenue 6.6 3,045 2,062 502 761 3,548 2,823 41 (222) 72 61 3,660 2,662 Total Revenue 83,279 78,577 94,860 95,672 178,139 174,248 214 562 57,677 48,840 236,030 223,651 EXPENSES Staff Costs 7.1 53,442 50,909 62,562 62,083 116,005 112,992 244 566 16,734 14,676 132,983 128,235 Consultancy and Subcontracting 7.2 5,687 5,579 5,719 6,156 11,406 11,735 21 369 13,562 12,988 24,989 25,092 Travel Expenses 7.3 2,045 2,272 4,979 5,166 7,024 7,438 3 12 8,304 7,180 15,331 14,629 Services and Office Costs 7.4 15,490 13,891 12,222 11,429 27,713 25,320 304 236 8,267 8,635 36,284 34,192 Consumables and Supplies 7.5 343 365 1,506 1,890 1,849 2,255 0 29 1,780 920 3,630 3,204 Depreciation and Amortisation 7.6 1,184 1,432 1,335 1,305 2,519 2,738 147 213 239 346 2,904 3,297 Equipment Expenses 7.7 190 95 1,587 1,855 1,777 1,950 3 26 6,447 1,725 8,228 3,701 Other Operating Expenses 7.8 3,564 435 2,163 389 5,728 824 289 4 51 276 6,068 1,104 Total Expenses 81,946 74,979 92,075 90,274 174,021 165,253 1,011 1,454 55,384 46,746 230,416 213,453 Foreign Exchange Gains/(Losses) 8 470 (231) (128) (73) 342 (304) 0 (5) 1,009 (1,041) 1,351 (1,350) Surplus/(Deficit) for the Period 10.1 1,803 3,366 2,656 5,326 4,460 8,692 (797) (897) 3,302 1,053 6,964 8,848 Total Extra-Budgetary Funds Total OSCE Total Secretariat and Institutions Total Field OperationsTotal Unified Budget Total Special Purpose Funds
3. Segment Reporting Cash Flow Schedule Summary by Source of Funds For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Surplus/(Deficit) for the Period 10.1 1,803 3,366 2,656 5,326 4,460 8,692 (797) (897) 3,302 1,053 6,964 8,848 Non-Cash Movements Deduction of Unrealized Foreign Exchange Gains/Losses on Cash and Cash Equivalents 8 (494) 164 (10) 22 (504) 187 0 0 (99) 795 (602) 982 Deduction of Depreciation, Amortisation and Impairments7.6, 3.10 1,184 1,432 1,335 1,305 2,519 2,738 147 213 239 346 2,904 3,297 Deduction of Loss on Disposal of PP&E 6.5 3 25 95 (280) 98 (256) 1 327 1,324 167 1,422 238 Deduction of Non-Cash Changes in Net Assets 5.4 (60) 180 (166) (9) (226) 172 0 1 (344) 81 (570) 253 (Increase) / Decrease in Contributions Receivable 3.3 (356) (3,707) (97) (2,338) (453) (6,045) 296 2,629 (24,558) 11,468 (24,715) 8,052 (Increase) / Decrease in Accounts Receivable 3.4 463 (447) 767 125 1,230 (322) (32) 67 0 0 1,198 (255) (Increase) / Decrease in Prepayments 3.5 1,250 (204) 112 630 1,362 426 1 31 (5) (30) 1,358 428 (Increase) / Decrease in Inventory 3.6 0 0 128 (164) 128 (164) 0 0 (1,193) (337) (1,065) (501) (Increase) / Decrease in Other Current/Non-Current Assets3.7 (24) 16 0 0 (24) 16 0 0 0 0 (24) 16 Increase / (Decrease) in Accounts Payable 4.1 (701) 403 (318) (234) (1,020) 169 (3) (143) 54 189 (969) 215 Increase / (Decrease) in Accruals 4.2 (265) (255) 367 (185) 103 (440) (97) 19 22 1,144 27 723 Increase / (Decrease) in Deferred Revenue 4.3 (2,427) 1,239 0 0 (2,427) 1,239 0 (1,082) 0 0 (2,427) 157 Increase / (Decrease) in Conditional ExB Contributions4.4 0 0 0 0 0 0 0 0 10,738 10,918 10,738 10,918 Increase / (Decrease) in Funds Held for Third Parties 4.5 253 (1,368) 9 (0) 262 (1,369) 0 0 0 0 262 (1,369) Increase / (Decrease) in Employee Benefits 4.6 (478) (17) 224 238 (254) 222 3 (24) 498 408 246 605 Increase / (Decrease) in Cash Surplus Payable 4.7 0 (2,001) 0 (1,826) 0 (3,827) 0 0 0 0 0 (3,827) Increase / (Decrease) in Provisions 4.8 0 0 0 0 0 0 0 0 8,258 (10,353) 8,258 (10,353) Increase / (Decrease) in Other Liabilities 4.9 1,069 (1,650) (1) (12) 1,068 (1,661) 6 (325) 196 0 1,270 (1,986) Increase / (Decrease) in Inter-Fund Balances (43,737) 13,622 (296) (1,553)(44,033) 12,070 383 (1,776) 43,650 (10,293) 0 0 Net Cash Flows from Operating Activities (42,518) 10,801 4,807 1,047 (37,711) 11,848 (94) (961) 42,080 5,554 4,275 16,441 CASH FLOWS FROM INVESTING ACTIVITIES (Purchase) / Sale of Investments 3.2, 9.2 0 40,000 0 0 0 40,000 0 0 (57,449) 10,469 (57,449) 50,469 (Addition) / Disposal of PP&E and Intangibles 3.8, 3.9, 9.2 (556) (225) (1,389) (777) (1,945) (1,002) 94 1,161 (617) (1,570) (2,468) (1,412) Net Cash Flows from Investing Activities (556) 39,775 (1,389) (777) (1,945) 38,998 94 1,161 (58,065) 8,899 (59,916) 49,058 CASH FLOWS FROM FINANCING ACTIVITIES Credits for Cash Surplus Withheld 5.2 0 (9) 0 (3) 0 (12) 0 0 0 0 0 (12) Allocation of Cash Surplus 4.7 0 0 (3,002) 0 (3,002) 0 0 0 0 0 (3,002) 0 Refund of Unspent Extra-budgetary Contributions 0 0 0 0 0 0 0 0 (0) 0 (0) 0 Retention of Unspent Extra-budgetary Contributions 0 0 0 0 0 0 0 0 0 (0) 0 (0) Transfer between Funds 0 51 0 149 0 200 0 (200) 0 0 0 0 Net Cash Flows from Financing Activities 0 42 (3,002) 146 (3,002) 188 0 (200) (0) (0) (3,002) (12) Net Increase/(Decrease) in Cash and Cash Equivalents 3.1, 9.1 (43,074) 50,617 416 416 (42,658) 51,034 0 (0)(15,986) 14,453 (58,643) 65,487 Cash and Cash Equivalents at Beginning of Period 3.1, 9.1 85,138 34,685 2,287 1,893 87,424 36,578 0 0 25,394 11,735 112,818 48,313 Foreign Exchange Gains/(Losses) on Cash and Cash Equivalents 8 494 (164) 10 (22) 504 (187) 0 0 99 (795) 602 (982) Cash and Cash Equivalents at End of Period 42,558 85,138 2,713 2,287 45,271 87,424 0 (0) 9,506 25,394 54,777 112,818 Total OSCE Total Secretariat and Institutions Total Field OperationsTotal Unified Budget Total Special Purpose Funds Total Extra-Budgetary Funds
A.1. Segment Reporting Schedule of Financial Position Secretariat and Institutions As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 41,941 84,584 565 434 52 120 0 0 42,558 85,138 Investments 3.2 0 0 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 4,900 4,667 2,031 1,938 440 419 202 192 7,573 7,217 Accounts Receivable 3.4 2,601 2,840 376 532 87 132 3 27 3,068 3,531 Prepayments 3.5 2,097 3,423 1,000 946 48 52 43 17 3,187 4,437 Inventory 3.6 0 0 0 0 0 0 0 0 0 0 Inter-Fund Balances (9,884)(55,119) (1,559) (380) (438) (264) (185) (39)(12,065)(55,802) Other Current Assets 3.7 13 0 8 (4) 0 0 0 0 20 (4) 41,668 40,395 2,421 3,466 189 459 63 197 44,341 44,516 Non-Current Assets Property, Plant and Equipment 3.8 1,460 1,707 295 271 29 11 4 3 1,787 1,993 Intangible Assets 3.9 1,930 2,354 0 0 1 2 0 0 1,931 2,356 Other Non-Current Assets 3.7 20 20 0 0 0 0 0 0 20 20 3,409 4,081 295 271 30 13 4 3 3,738 4,369 Total Assets 45,077 44,476 2,716 3,737 219 472 66 200 48,079 48,885 LIABILITIES Current Liabilities Accounts Payable 4.1 1,642 2,371 272 243 2 3 (0) (0) 1,915 2,616 Accruals 4.2 509 648 222 354 40 35 10 9 781 1,046 Deferred Revenue 4.3 2,488 4,915 849 849 0 0 0 0 3,337 5,764 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 17,437 17,191 446 438 0 0 0 0 17,882 17,629 Employee Benefits Current 4.6 2,168 2,210 704 812 145 234 108 148 3,125 3,404 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 1,392 346 7 (0) 89 73 0 0 1,488 419 25,636 27,681 2,499 2,696 276 345 118 157 28,529 30,879 Non-Current Liabilities Employee Benefits Non-Current 4.6 1,746 1,816 1,101 1,183 250 335 116 79 3,214 3,413 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 1,746 1,816 1,101 1,183 250 335 116 79 3,214 3,413 Total Liabilities 27,382 29,497 3,600 3,879 526 680 235 236 31,742 34,292 Net Assets 17,695 14,979 (883) (143) (306) (208) (168) (36) 16,336 14,593 NET ASSETS Cash Surplus 5.1 4,968 783 (2,056) (1,084) (500) (297) (230) (132) 2,181 (730) Cash Surplus Withheld 5.2 10 10 1 1 0 0 0 0 11 11 Revolving Fund 5.3 2,710 2,710 0 0 0 0 0 0 2,710 2,710 Contingency Fund 5.3 2,180 2,180 0 0 0 0 0 0 2,180 2,180 Other Reserves 5.4 (1,701) (1,714) (1,518) (1,459) (259) (260) (106) (90) (3,583) (3,524) Accumulated Surplus/(Deficit) 5.5 9,528 11,011 2,690 2,400 452 349 167 186 12,837 13,945 Total Net Assets 17,695 14,979 (883) (143) (306) (208) (168) (36) 16,336 14,593 The Secretariat Office for Democratic Institutions and Human Rights High Commissioner on National Minorities Representative on Freedom of the Media Total Institutions
A.2. Segment Reporting Schedule of Financial Performance Secretariat and Institutions For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 39,120 39,120 16,160 16,160 3,504 3,504 1,609 1,609 60,392 60,392 Extra-Budgetary Contributions 6.2 0 9 0 0 0 0 0 0 0 9 Finance Revenue 6.3 5,621 3,628 2 1 0 0 0 0 5,623 3,630 Contributions In-Kind 6.4 10,916 9,000 2,172 2,352 626 607 456 510 14,169 12,469 Revenue from Exchange Transactions 6.5 31 1 10 14 9 0 0 0 50 15 Other Revenue 6.6 2,624 1,789 398 206 39 46 (15) 20 3,045 2,062 Total Revenue 58,310 53,547 18,742 18,733 4,178 4,158 2,049 2,139 83,279 78,577 EXPENSES Staff Costs 7.1 37,571 34,795 10,400 10,557 3,515 3,682 1,957 1,875 53,442 50,909 Consultancy and Subcontracting 7.2 1,210 1,120 4,420 4,412 56 33 0 14 5,687 5,579 Travel Expenses 7.3 1,058 1,173 735 831 215 168 38 99 2,045 2,272 Services and Office Costs 7.4 12,615 11,123 2,556 2,533 261 176 59 60 15,490 13,891 Consumables and Supplies 7.5 141 152 184 195 10 9 8 9 343 365 Depreciation and Amortisation 7.6 1,068 1,327 102 89 11 14 3 3 1,184 1,432 Equipment Expenses 7.7 82 (11) 92 98 6 7 10 1 190 95 Other Operating Expenses 7.8 2,339 371 930 41 203 17 92 5 3,564 435 Total Expenses 56,084 50,050 19,419 18,755 4,278 4,106 2,165 2,067 81,946 74,979 Foreign Exchange Gains/(Losses) 8 475 (186) (5) (45) (0) (0) 0 0 470 (231) Surplus/(Deficit) for the Period 10.1 2,702 3,310 (682) (67) (100) 52 (116) 72 1,803 3,366 The Secretariat Office for Democratic Institutions and Human Rights High Commissioner on National Minorities Representative on Freedom of the Media Total Institutions
EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 0 0 1,534 1,083 60 62 94 51 1,025 1,090 2,713 2,287 0 0 2,713 2,287 Investments 3.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 114 113 2,610 2,552 325 316 129 125 1,128 1,096 4,306 4,202 13 20 4,319 4,222 Accounts Receivable 3.4 0 0 477 949 5 27 1 6 233 501 715 1,482 0 0 715 1,482 Prepayments 3.5 32 29 563 768 71 70 3 4 1,173 1,084 1,843 1,956 0 0 1,843 1,956 Inventory 3.6 0 0 6 172 0 0 0 0 170 132 176 304 0 0 176 304 Inter-Fund Balances (174) (153) 74 113 5,368 4,755 2,188 2,226 (181) 1 7,275 6,943 15 52 7,291 6,995 Other Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (28) (11) 5,265 5,637 5,829 5,231 2,414 2,412 3,548 3,904 17,028 17,173 28 73 17,057 17,246 Non-Current Assets Property, Plant and Equipment 3.8 0 0 2,224 2,321 233 295 92 125 1,105 933 3,654 3,674 0 0 3,654 3,674 Intangible Assets 3.9 0 0 27 40 1 1 0 0 19 27 47 68 0 0 47 68 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,251 2,361 233 297 92 125 1,124 960 3,700 3,742 0 0 3,700 3,742 Total Assets (28) (11) 7,516 7,997 6,063 5,527 2,507 2,537 4,672 4,864 20,729 20,915 28 73 20,757 20,988 LIABILITIES Current Liabilities Accounts Payable 4.1 0 0 218 284 (25) 47 (2) 0 17 196 208 527 (0) (0) 208 527 Accruals 4.2 14 33 1,409 1,335 98 85 16 8 1,617 1,326 3,154 2,787 0 0 3,154 2,787 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 0 0 36 27 0 0 0 0 0 0 37 28 0 0 37 28 Employee Benefits Current 4.6 170 144 3,164 3,177 173 108 99 42 658 715 4,264 4,187 0 0 4,264 4,187 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 0 0 169 173 1 1 1 (0) 10 8 181 182 0 0 181 182 184 177 4,996 4,996 248 242 114 50 2,302 2,245 7,844 7,710 0 0 7,844 7,710 Non-Current Liabilities Employee Benefits Non-Current 4.6 150 (0) 37 43 4 1 1 1 24 23 215 68 0 0 215 68 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 150 (0) 37 43 4 1 1 1 24 23 215 68 0 0 215 68 Total Liabilities 334 177 5,033 5,039 252 243 115 51 2,326 2,268 8,060 7,778 0 0 8,060 7,778 Net Assets (362) (187) 2,483 2,958 5,811 5,285 2,392 2,486 2,346 2,596 12,669 13,137 28 73 12,697 13,210 NET ASSETS Cash Surplus 5.1 (73) (79) (1,587) (1,639) 5,309 4,639 2,191 2,240 (613) (549) 5,228 4,613 24 61 5,252 4,674 Cash Surplus Withheld 5.2 0 0 2 2 0 0 0 0 1 1 3 3 1 1 4 4 Revolving Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Reserves 5.4 182 350 377 372 (1) 3 (7) (8) (145) (146) 406 572 (8) (8) 398 565 Accumulated Surplus/(Deficit) 5.5 (471) (459) 3,691 4,223 502 643 207 253 3,103 3,290 7,032 7,949 11 18 7,043 7,967 Total Net Assets (362) (187) 2,483 2,958 5,811 5,285 2,392 2,486 2,346 2,596 12,669 13,137 28 73 12,697 13,210 As at 31 December 2024 B.1. Segment Reporting Schedule of Financial Position Field Operations by Region Closed Funds Total Field Operations Augmentations South-Eastern Europe Eastern Europe Caucasus Central Asia Total Regions
B.2. Segment Reporting Schedule of Financial Performance Field Operations by Region For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 1,988 1,988 47,043 47,043 5,927 5,927 2,339 2,339 20,516 20,516 77,812 77,812 0 0 77,812 77,812 Extra-Budgetary Contributions 6.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Finance Revenue 6.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 0 0 11,540 12,339 794 897 562 691 3,246 2,776 16,143 16,702 0 0 16,143 16,702 Revenue from Exchange Transactions 6.5 0 0 295 355 13 22 7 0 87 20 403 397 0 0 403 397 Other Revenue 6.6 129 15 329 412 19 39 4 10 21 256 502 731 0 30 502 761 Total Revenue 2,117 2,003 59,207 60,148 6,753 6,884 2,912 3,039 23,870 23,568 94,860 95,642 0 30 94,860 95,672 EXPENSES Staff Costs 7.1 2,046 1,932 46,111 46,391 2,202 2,053 1,115 1,413 11,088 10,295 62,562 62,083 0 0 62,562 62,083 Consultancy and Subcontracting 7.2 49 45 2,293 2,410 134 151 5 6 3,238 3,544 5,719 6,156 0 0 5,719 6,156 Travel Expenses 7.3 21 31 1,753 1,863 62 129 28 55 3,114 3,088 4,979 5,166 0 0 4,979 5,166 Services and Office Costs 7.4 2 15 7,029 6,790 491 564 299 281 4,402 3,779 12,222 11,429 0 0 12,222 11,429 Consumables and Supplies 7.5 3 4 806 1,013 73 123 21 21 604 729 1,506 1,890 0 0 1,506 1,890 Depreciation and Amortisation 7.6 0 0 854 846 94 94 36 44 351 321 1,335 1,305 0 0 1,335 1,305 Equipment Expenses 7.7 0 0 641 836 18 22 0 15 928 981 1,587 1,855 0 0 1,587 1,855 Other Operating Expenses 7.8 52 0 1,254 120 171 56 60 11 621 202 2,158 389 5 0 2,163 389 Total Expenses 2,174 2,026 60,739 60,269 3,246 3,193 1,563 1,847 24,347 22,940 92,071 90,274 5 0 92,075 90,274 Foreign Exchange Gains/(Losses) 8 0 0 (1) (4) 3 1 (4) (1) (126) (70) (128) (73) 0 0 (128) (73) Surplus/(Deficit) for the Period 10.1 (57) (23) (1,533) (125) 3,510 3,693 1,344 1,192 (603) 558 2,661 5,296 (5) 30 2,656 5,326 Closed Funds Total Field Operations Augmentations South-Eastern Europe Eastern Europe Caucasus Central Asia Total Regions
C.1 Segment Reporting Schedule of Financial Position South-Eastern Europe As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 211 258 277 277 278 322 128 128 439 41 200 57 1,534 1,083 Investments 3.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 972 952 648 633 347 339 165 161 360 352 119 116 2,610 2,552 Accounts Receivable 3.4 22 164 127 226 6 41 101 62 221 443 1 14 477 949 Prepayments 3.5 155 236 115 133 151 232 31 41 94 96 18 31 563 768 Inventory 3.6 0 13 5 94 0 0 0 0 1 2 0 63 6 172 Inter-Fund Balances 531 111 (206) (132) (117) (384) 77 2 (342) 107 131 409 74 113 Other Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,891 1,733 966 1,231 665 549 501 394 772 1,040 469 690 5,265 5,637 Non-Current Assets Property, Plant and Equipment 3.8 1,039 994 536 625 172 175 82 117 334 391 61 19 2,224 2,321 Intangible Assets 3.9 24 36 1 2 0 0 1 1 1 1 0 0 27 40 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,063 1,029 537 627 172 175 83 118 335 392 61 19 2,251 2,361 Total Assets 2,954 2,762 1,503 1,858 837 724 584 512 1,107 1,432 531 709 7,516 7,997 LIABILITIES Current Liabilities Accounts Payable 4.1 44 21 77 29 7 36 73 88 4 99 13 10 218 284 Accruals 4.2 383 283 228 412 324 260 104 74 167 133 204 173 1,409 1,335 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 0 0 14 7 2 2 0 0 21 18 0 0 36 27 Employee Benefits Current 4.6 1,519 1,317 724 725 269 322 247 133 356 640 49 40 3,164 3,177 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 59 131 99 17 4 20 (0) (0) 2 4 5 2 169 173 2,005 1,752 1,141 1,190 604 640 424 296 550 893 271 224 4,996 4,996 Non-Current Liabilities Employee Benefits Non-Current 4.6 15 17 6 11 3 4 3 2 7 7 3 2 37 43 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15 17 6 11 3 4 3 2 7 7 3 2 37 43 Total Liabilities 2,021 1,769 1,147 1,201 607 644 427 298 557 900 274 226 5,033 5,039 Net Assets 934 993 355 657 230 80 157 214 551 532 256 483 2,483 2,958 NET ASSETS Cash Surplus 5.1 (678) (749) (433) (427) (284) (298) (59) (33) (165) (184) 33 53 (1,587) (1,639) Cash Surplus Withheld 5.2 1 1 0 0 0 0 0 0 0 0 0 0 2 2 Revolving Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Reserves 5.4 272 273 39 34 32 30 17 17 17 17 0 1 377 372 Accumulated Surplus/(Deficit) 5.5 1,339 1,467 749 1,050 482 348 200 230 698 700 223 428 3,691 4,223 Total Net Assets 934 993 355 657 230 80 157 214 551 532 256 483 2,483 2,958 Mission to Skopje Mission to Montenegro Total South-Eastern Europe Mission in Kosovo Mission to Bosnia and Herzegovina Mission to Serbia Presence in Albania
C.2. Segment Reporting Schedule of Financial Performance South-Eastern Europe For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 17,463 17,463 11,682 11,682 6,259 6,259 2,981 2,981 6,506 6,506 2,152 2,152 47,043 47,043 Extra-Budgetary Contributions 6.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Finance Revenue 6.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 5,460 5,755 1,715 1,908 1,183 1,321 981 923 1,722 1,896 478 535 11,540 12,339 Revenue from Exchange Transactions 6.5 164 118 92 98 17 27 6 6 15 103 0 2 295 355 Other Revenue 6.6 272 119 34 180 2 32 6 32 14 40 1 9 329 412 Total Revenue 23,359 23,455 13,523 13,868 7,461 7,639 3,975 3,942 8,257 8,546 2,632 2,698 59,207 60,148 EXPENSES Staff Costs 7.1 19,179 19,187 10,838 10,926 5,250 5,573 3,059 2,917 6,308 6,294 1,477 1,493 46,111 46,391 Consultancy and Subcontracting 7.2 660 707 366 451 347 353 118 133 341 377 460 390 2,293 2,410 Travel Expenses 7.3 388 405 320 368 454 412 146 184 272 351 172 142 1,753 1,863 Services and Office Costs 7.4 2,329 2,083 1,667 1,550 1,124 1,108 563 542 1,012 1,176 333 332 7,029 6,790 Consumables and Supplies 7.5 382 451 209 319 50 68 54 45 91 113 20 17 806 1,013 Depreciation and Amortisation 7.6 370 352 222 240 72 71 43 51 134 125 13 8 854 846 Equipment Expenses 7.7 144 240 164 282 22 76 8 77 35 92 267 68 641 836 Other Operating Expenses 7.8 446 23 318 30 162 13 80 6 168 24 80 23 1,254 120 Total Expenses 23,898 23,448 14,105 14,167 7,482 7,674 4,070 3,955 8,361 8,551 2,823 2,473 60,739 60,269 Foreign Exchange Gains/(Losses) 8 0 (0) 0 (0) (22) (17) 17 6 4 8 0 0 (1) (4) Surplus/(Deficit) for the Period 10.1 (539) 7 (581) (299) (43) (53) (78) (7) (101) 2 (191) 225 (1,533) (125) Mission to Montenegro Total South-Eastern Europe Mission in Kosovo Mission to Bosnia and Herzegovina Mission to Serbia Presence in Albania Mission to Skopje
D.1. Segment Reporting Schedule of Financial Position Eastern Europe As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 60 62 0 0 0 0 60 62 Investments 3.2 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 127 123 198 193 0 0 325 316 Accounts Receivable 3.4 5 26 0 0 0 0 5 27 Prepayments 3.5 71 70 (0) (0) 0 0 71 70 Inventory 3.6 0 0 0 0 0 0 0 0 Inter-Fund Balances 189 107 5,171 4,640 8 8 5,368 4,755 Other Current Assets 3.7 0 0 0 0 0 0 0 0 451 390 5,369 4,833 9 8 5,829 5,231 Non-Current Assets Property, Plant and Equipment 3.8 233 295 0 0 0 0 233 295 Intangible Assets 3.9 1 1 0 0 0 0 1 1 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 233 297 0 0 0 0 233 297 Total Assets 684 686 5,369 4,833 9 8 6,063 5,527 LIABILITIES Current Liabilities Accounts Payable 4.1 (52) (10) 27 57 0 0 (25) 47 Accruals 4.2 98 85 0 0 0 0 98 85 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 0 0 0 0 0 0 0 0 Employee Benefits Current 4.6 173 108 0 0 0 0 173 108 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 1 0 1 1 0 0 1 1 220 184 28 58 0 0 248 242 Non-Current Liabilities Employee Benefits Non-Current 4.6 4 1 0 0 0 0 4 1 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 4 1 0 0 0 0 4 1 Total Liabilities 224 185 28 58 0 0 252 243 Net Assets 460 501 5,342 4,775 9 8 5,811 5,285 NET ASSETS Cash Surplus 5.1 123 14 5,178 4,617 8 8 5,309 4,639 Cash Surplus Withheld 5.2 0 0 0 0 0 0 0 0 Revolving Fund 5.3 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 Other Reserves 5.4 (10) (6) 9 9 0 0 (1) 3 Accumulated Surplus/(Deficit) 5.5 347 493 155 150 0 0 502 643 Total Net Assets 460 501 5,342 4,775 9 8 5,811 5,285 Mission to Moldova Project Co-ordinator in Ukraine Representative on the Latvian-Russian Joint Commission on Military Pensioners Total Eastern Europe
D.2. Segment Reporting Schedule of Financial Performance Eastern Europe For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 2,303 2,303 3,619 3,619 6 6 5,927 5,927 Extra-Budgetary Contributions 6.2 0 0 0 0 0 0 0 0 Finance Revenue 6.3 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 794 807 0 0 0 90 794 897 Revenue from Exchange Transactions 6.5 13 22 0 0 0 0 13 22 Other Revenue 6.6 19 13 0 26 0 0 19 39 Total Revenue 3,129 3,144 3,619 3,644 6 95 6,753 6,884 EXPENSES Staff Costs 7.1 2,202 1,963 0 0 0 90 2,202 2,053 Consultancy and Subcontracting 7.2 134 151 0 0 0 0 134 151 Travel Expenses 7.3 62 129 0 0 0 0 62 129 Services and Office Costs 7.4 491 557 0 7 0 0 491 564 Consumables and Supplies 7.5 73 122 0 1 0 0 73 123 Depreciation and Amortisation 7.6 94 94 0 0 0 0 94 94 Equipment Expenses 7.7 18 22 0 0 0 0 18 22 Other Operating Expenses 7.8 85 56 86 0 0 0 171 56 Total Expenses 3,160 3,094 86 8 0 90 3,246 3,193 Foreign Exchange Gains/(Losses) 8 3 1 0 (0) 0 0 3 1 Surplus/(Deficit) for the Period 10.1 (28) 51 3,532 3,636 5 5 3,510 3,693 Mission to Moldova Project Co-ordinator in Ukraine Representative on the Latvian-Russian Joint Commission on Military Pensioners Total Eastern Europe
E.1. Segment Reporting Schedule of Financial Position Caucasus As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 0 0 0 0 94 51 94 51 Investments 3.2 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 14 13 50 49 65 63 129 125 Accounts Receivable 3.4 0 2 0 0 1 4 1 6 Prepayments 3.5 1 0 0 0 2 4 3 4 Inventory 3.6 0 0 0 0 0 0 0 0 Inter-Fund Balances 134 161 1,331 1,538 723 527 2,188 2,226 Other Current Assets 3.7 0 0 0 0 0 0 0 0 148 176 1,381 1,587 885 649 2,414 2,412 Non-Current Assets Property, Plant and Equipment 3.8 0 1 0 0 92 124 92 125 Intangible Assets 3.9 0 0 0 0 0 0 0 0 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 0 1 0 0 92 124 92 125 Total Assets 148 177 1,381 1,587 977 773 2,507 2,537 LIABILITIES Current Liabilities Accounts Payable 4.1 0 0 0 0 (2) 0 (2) 0 Accruals 4.2 1 2 0 0 15 6 16 8 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 0 0 0 0 0 0 0 0 Employee Benefits Current 4.6 12 12 0 0 88 30 99 42 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 0 0 0 0 1 (0) 1 (0) 13 14 0 0 101 36 114 50 Non-Current Liabilities Employee Benefits Non-Current 4.6 0 0 0 0 1 1 1 1 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 Total Liabilities 13 14 0 0 102 37 115 51 Net Assets 135 163 1,381 1,587 875 736 2,392 2,486 NET ASSETS Cash Surplus 5.1 96 122 1,498 1,704 597 413 2,191 2,240 Cash Surplus Withheld 5.2 0 0 0 0 0 0 0 0 Revolving Fund 5.3 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 Other Reserves 5.4 0 0 0 0 (7) (8) (7) (8) Accumulated Surplus/(Deficit) 5.5 39 41 (117) (118) 285 330 207 253 Total Net Assets 135 163 1,381 1,587 875 736 2,392 2,486 The Minsk Process Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference Total Caucasus High-Level Planning Group
E.2. Segment Reporting Schedule of Financial Performance Caucasus For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 248 248 911 911 1,180 1,180 2,339 2,339 Extra-Budgetary Contributions 6.2 0 0 0 0 0 0 0 0 Finance Revenue 6.3 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 411 450 0 0 151 241 562 691 Revenue from Exchange Transactions 6.5 0 0 0 0 7 0 7 0 Other Revenue 6.6 0 1 0 4 4 5 4 10 Total Revenue 659 698 911 916 1,342 1,426 2,912 3,039 EXPENSES Staff Costs 7.1 519 546 0 0 595 867 1,115 1,413 Consultancy and Subcontracting 7.2 0 0 0 0 4 6 5 6 Travel Expenses 7.3 0 5 0 0 28 50 28 55 Services and Office Costs 7.4 81 80 0 0 218 201 299 281 Consumables and Supplies 7.5 1 1 0 0 20 20 21 21 Depreciation and Amortisation 7.6 1 1 0 0 35 43 36 44 Equipment Expenses 7.7 0 1 0 0 0 14 0 15 Other Operating Expenses 7.8 6 0 22 0 32 11 60 11 Total Expenses 608 635 22 0 933 1,212 1,563 1,847 Foreign Exchange Gains/(Losses) 8 0 0 0 0 (4) (1) (4) (1) Surplus/(Deficit) for the Period 10.1 51 64 889 916 404 213 1,344 1,192 Total Caucasus High-Level Planning Group The Minsk Process Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference
F.1. Segment Reporting Schedule of Financial Position Central Asia As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 66 65 88 101 85 196 91 277 695 452 1,025 1,090 Investments 3.2 0 0 0 0 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 123 120 91 89 375 364 137 133 402 391 1,128 1,096 Accounts Receivable 3.4 1 7 1 8 59 90 41 34 130 363 233 501 Prepayments 3.5 24 50 22 24 820 650 63 62 245 298 1,173 1,084 Inventory 3.6 69 0 2 0 66 40 16 24 17 68 170 132 Inter-Fund Balances 143 122 56 18 (478) (444) 146 65 (48) 240 (181) 1 Other Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 427 363 260 239 927 896 494 594 1,440 1,812 3,548 3,904 Non-Current Assets Property, Plant and Equipment 3.8 128 104 90 81 249 175 113 103 525 471 1,105 933 Intangible Assets 3.9 1 1 2 2 12 17 2 3 3 4 19 27 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 129 105 91 83 261 192 115 106 528 474 1,124 960 Total Assets 556 468 352 322 1,188 1,088 609 699 1,968 2,286 4,672 4,864 LIABILITIES Current Liabilities Accounts Payable 4.1 59 5 32 3 (199) (95) 21 3 105 281 17 196 Accruals 4.2 125 143 41 62 634 488 147 136 670 497 1,617 1,326 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 0 0 0 0 0 0 0 0 0 0 0 0 Employee Benefits Current 4.6 93 96 48 87 165 171 64 65 287 296 658 715 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 0 1 2 3 3 (0) 1 2 4 2 10 8 277 245 123 155 603 564 234 205 1,065 1,076 2,302 2,245 Non-Current Liabilities Employee Benefits Non-Current 4.6 4 3 3 3 5 5 2 1 10 11 24 23 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 4 3 3 3 5 5 2 1 10 11 24 23 Total Liabilities 281 248 126 158 608 569 236 206 1,075 1,087 2,326 2,268 Net Assets 275 220 225 164 580 518 373 494 893 1,200 2,346 2,596 NET ASSETS Cash Surplus 5.1 (49) (71) (4) (65) (286) (313) 69 50 (343) (150) (613) (549) Cash Surplus Withheld 5.2 0 0 0 0 0 0 0 0 0 0 1 1 Revolving Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 Other Reserves 5.4 (16) (15) (10) (10) (56) (58) (13) (12) (50) (51) (145) (146) Accumulated Surplus/(Deficit) 5.5 340 306 239 239 922 889 317 455 1,285 1,400 3,103 3,290 Total Net Assets 275 220 225 164 580 518 373 494 893 1,200 2,346 2,596 Total Central Asia Programme Office in Astana Centre in Ashgabat Programme Office in Bishkek Project Co-ordinator in Uzbekistan Programme Office in Dushanbe
F.2. Segment Reporting Schedule of Financial Performance Central Asia For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 2,233 2,233 1,661 1,661 6,811 6,811 2,499 2,499 7,312 7,312 20,516 20,516 Extra-Budgetary Contributions 6.2 0 0 0 0 0 0 0 0 0 0 0 0 Finance Revenue 6.3 0 0 0 0 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 527 463 607 448 802 766 294 283 1,017 815 3,246 2,776 Revenue from Exchange Transactions 6.5 0 (5) 3 (3) 73 (19) 11 34 0 13 87 20 Other Revenue 6.6 4 23 1 9 6 28 1 9 9 186 21 256 Total Revenue 2,764 2,714 2,273 2,116 7,692 7,586 2,804 2,825 8,337 8,326 23,870 23,568 EXPENSES Staff Costs 7.1 1,304 1,188 1,125 1,188 3,277 3,215 1,213 1,105 4,169 3,599 11,088 10,295 Consultancy and Subcontracting 7.2 238 329 176 170 1,351 1,558 510 417 963 1,070 3,238 3,544 Travel Expenses 7.3 415 428 241 202 998 984 332 337 1,128 1,137 3,114 3,088 Services and Office Costs 7.4 620 480 522 389 1,421 1,159 526 578 1,313 1,173 4,402 3,779 Consumables and Supplies 7.5 60 53 51 47 188 216 48 65 256 349 604 729 Depreciation and Amortisation 7.6 45 48 31 29 69 69 50 45 155 130 351 321 Equipment Expenses 7.7 (24) 135 57 46 323 454 138 173 435 173 928 981 Other Operating Expenses 7.8 101 82 50 16 196 13 73 18 201 74 621 202 Total Expenses 2,759 2,742 2,255 2,086 7,824 7,669 2,889 2,737 8,620 7,705 24,347 22,940 Foreign Exchange Gains/(Losses) 8 5 (8) 2 (2) (9) 2 (3) 7 (121) (69) (126) (70) Surplus/(Deficit) for the Period 10.1 10 (36) 20 28 (141) (81) (87) 96 (404) 552 (603) 558 Total Central Asia Programme Office in Astana Centre in Ashgabat Programme Office in Bishkek Project Co-ordinator in Uzbekistan Programme Office in Dushanbe
G.1. Segment Reporting Schedule of Financial Position Special Purpose Funds As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 0 0 0 0 0 0 0 0 0 0 0 0 Investments 3.2 0 0 0 0 0 0 0 0 0 0 0 0 Contributions Receivable 3.3 0 0 0 0 0 0 975 1,272 0 0 975 1,272 Accounts Receivable 3.4 0 0 0 7 0 0 (0) (39) 0 0 (0) (33) Prepayments 3.5 0 5 4 8 4 8 15 2 0 0 22 23 Inventory 3.6 0 0 0 0 0 0 0 0 0 0 0 0 Inter-Fund Balances 0 0 185 456 575 862 21,480 21,305 (5) (5) 22,235 22,618 Other Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 5 189 471 579 870 22,469 22,539 (5) (5) 23,232 23,880 Non-Current Assets Property, Plant and Equipment 3.8 0 5 0 2 102 144 271 443 0 0 373 595 Intangible Assets 3.9 4 12 2 12 5 7 0 0 0 0 12 31 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 4 17 2 14 107 151 271 443 0 0 385 626 Total Assets 4 22 191 485 686 1,022 22,741 22,983 (5) (5) 23,617 24,506 LIABILITIES Current Liabilities Accounts Payable 4.1 0 0 0 0 0 0 145 149 0 0 145 149 Accruals 4.2 0 0 0 56 26 36 9 40 0 0 34 132 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 0 0 0 0 0 0 0 0 0 0 0 0 Funds Held for Third Parties 4.5 0 0 0 0 0 0 0 0 0 0 0 0 Employee Benefits Current 4.6 0 0 0 0 0 0 8 5 0 0 8 5 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 0 0 0 0 0 0 0 0 0 0 0 0 Other Current Liabilities 4.9 0 0 0 0 0 0 23 18 0 0 23 18 0 0 0 56 26 36 185 212 0 0 211 303 Non-Current Liabilities Employee Benefits Non-Current 4.6 0 0 0 0 0 0 0 0 0 0 0 0 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Liabilities 0 0 0 56 26 36 185 212 0 0 211 303 Net Assets 4 22 191 429 660 986 22,556 22,771 (5) (5) 23,406 24,203 NET ASSETS Cash Surplus 5.1 0 0 0 0 0 0 20,937 20,669 0 0 20,937 20,669 Cash Surplus Withheld 5.2 0 0 0 0 0 0 0 0 0 0 0 0 Revolving Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 Other Reserves 5.4 0 0 0 0 0 0 428 428 (1) (1) 427 427 Accumulated Surplus/(Deficit) 5.5 4 22 191 429 660 986 1,191 1,674 (4) (4) 2,043 3,108 Total Net Assets 4 22 191 429 660 986 22,556 22,771 (5) (5) 23,406 24,203 Special Monitoring Mission to Ukraine Observer Mission to Two Russian Checkpoints on the Russian-Ukrainian Border Total Special Purpose Funds Information Security Enhancement IT Infrastructure Upgrade Fund CIP Technical Fund
G.2. Segment Reporting Schedule of Financial Performance Special Purpose Funds For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 0 0 0 0 0 0 0 0 0 0 0 0 Extra-Budgetary Contributions 6.2 0 0 0 0 0 0 0 0 0 0 0 0 Finance Revenue 6.3 0 0 0 0 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 0 0 0 0 0 0 0 0 0 0 0 0 Revenue from Exchange Transactions 6.5 0 0 0 (0) 0 0 173 784 0 0 173 784 Other Revenue 6.6 0 (2) 0 0 (1) 0 42 (220) 0 0 41 (222) Total Revenue 0 (2) 0 (0) (1) 0 215 564 0 0 214 562 EXPENSES Staff Costs 7.1 0 0 184 220 0 0 60 345 0 0 244 566 Consultancy and Subcontracting 7.2 0 0 38 172 0 51 (17) 146 0 0 21 369 Travel Expenses 7.3 0 0 0 36 0 1 3 (25) 0 0 3 12 Services and Office Costs 7.4 5 20 4 5 277 71 19 139 0 0 304 236 Consumables and Supplies 7.5 0 0 0 0 (0) 29 0 0 0 0 0 29 Depreciation and Amortisation 7.6 13 21 12 23 46 40 76 129 0 0 147 213 Equipment Expenses 7.7 0 0 0 0 3 26 0 0 0 0 3 26 Other Operating Expenses 7.8 0 0 0 0 0 0 289 4 0 0 289 4 Total Expenses 18 41 238 456 325 218 430 739 0 0 1,011 1,454 Foreign Exchange Gains/(Losses) 8 0 0 0 0 0 0 0 (5) 0 0 0 (5) Surplus/(Deficit) for the Period 10.1 (18) (43) (238) (456) (326) (218) (215) (179) 0 0 (797) (897) Special Monitoring Mission to Ukraine Observer Mission to Two Russian Checkpoints on the Russian-Ukrainian Border Total Special Purpose Funds Information Security Enhancement IT Infrastructure Upgrade Fund CIP Technical Fund
H.1. Segment Reporting Schedule of Financial Position Extra-Budgetary Funds As at 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 ASSETS Current Assets Cash and Cash Equivalents 3.1 0 0 0 0 0 0 0 0 9,506 25,394 0 0 9,506 25,394 Investments 3.2 0 0 0 0 0 0 18,576 11,127 100,000 50,000 0 0 118,576 61,127 Contributions Receivable 3.3 703 108 1,051 432 10 10 11 120 28,786 5,333 0 0 30,561 6,003 Accounts Receivable 3.4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Prepayments 3.5 0 0 1 1 0 0 0 0 83 97 32 12 115 110 Inventory 3.6 387 224 0 0 0 0 0 0 1,294 264 0 0 1,681 488 Inter-Fund Balances 2,644 2,888 6,595 6,775 451 441 (7,501) (943)(27,743) 11,167 8,094 5,861 (17,460) 26,189 Other Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 3,734 3,220 7,647 7,207 461 451 11,086 10,304 111,926 92,255 8,126 5,873 142,979 119,311 Non-Current Assets Property, Plant and Equipment 3.8 7 0 0 0 163 196 0 0 217 1,454 75 4 462 1,655 Intangible Assets 3.9 0 0 0 0 0 0 0 0 1,516 1,269 0 0 1,516 1,269 Other Non-Current Assets 3.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 7 0 0 0 163 196 0 0 1,733 2,724 75 4 1,978 2,924 Total Assets 3,741 3,220 7,647 7,207 624 647 11,086 10,304 113,659 94,979 8,201 5,877 144,958 122,234 LIABILITIES Current Liabilities Accounts Payable 4.1 0 0 0 0 0 0 0 0 267 213 0 0 267 213 Accruals 4.2 259 223 728 856 0 0 0 0 2,952 2,847 21 13 3,961 3,939 Deferred Revenue 4.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Conditional ExB Contributions 4.4 3,043 3,249 7,291 6,315 (0) (0) 293 7,573 102,750 85,501 0 0 113,377 102,639 Funds Held for Third Parties 4.5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Employee Benefits Current 4.6 47 45 26 13 0 0 0 0 792 683 99 49 963 791 Cash Surplus Current 4.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Provisions 4.8 842 285 461 998 0 0 7,392 197 6,460 5,417 0 0 15,155 6,897 Other Current Liabilities 4.9 0 0 0 0 0 0 0 0 196 0 0 0 196 0 4,191 3,801 8,506 8,183 0 0 7,684 7,771 113,417 94,661 120 63 133,918 114,478 Non-Current Liabilities Employee Benefits Non-Current 4.6 2 3 12 4 0 0 0 0 318 9 26 16 357 32 Other Non-Current Liabilities 4.9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 3 12 4 0 0 0 0 318 9 26 16 357 32 Total Liabilities 4,193 3,804 8,518 8,187 0 0 7,684 7,771 113,734 94,670 146 78 134,275 114,510 Net Assets (452) (584) (871) (980) 624 647 3,401 2,533 (75) 309 8,055 5,799 10,682 7,724 NET ASSETS Cash Surplus 5.1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cash Surplus Withheld 5.2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Revolving Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency Fund 5.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Reserves 5.4 1 (1) (12) (7) (5) (5) 0 0 (600) (276) (39) (24) (655) (312) Accumulated Surplus/(Deficit) 5.5 (453) (584) (859) (973) 629 652 3,401 2,533 525 585 8,094 5,823 11,338 8,036 Total Net Assets (452) (584) (871) (980) 624 647 3,401 2,533 (75) 309 8,055 5,799 10,682 7,724 Fund to Support OSCE Action for Peace, Democracy and Stability in Bosnia and Herzegovina Fund for Activities Related to Economic and Environmental Aspect of Security Other PC Established Funds Other Activities and Special Projects Total Extra-Budgetary Funds Funds for Activities Related to Special Monitoring Mission to Ukraine Indirect Common Costs Fund
H.2. Segment Reporting Schedule of Financial Performance Extra-Budgetary Funds For the Year Ended 31 December 2024 EUR '000 1000 Note 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 REVENUE Assessed Contributions 6.1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Extra-Budgetary Contributions 6.2 2,858 2,524 3,963 3,563 0 0 118 116 49,561 41,650 3,958 3,158 (3,958) (3,132) 56,501 47,879 Finance Revenue 6.3 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contributions In-Kind 6.4 0 0 0 0 0 0 0 0 1,094 918 0 0 0 0 1,094 918 Revenue from Exchange Transactions 6.5 0 (1) 0 0 10 65 0 0 0 (81) 0 0 0 0 10 (18) Other Revenue 6.6 0 0 0 0 0 0 0 0 (3) 0 75 61 0 0 72 61 Total Revenue 2,858 2,523 3,963 3,563 10 65 118 116 50,652 42,487 4,033 3,219 (3,958) (3,132) 57,677 48,840 EXPENSES Staff Costs 7.1 764 827 440 291 0 0 42 39 14,089 12,475 1,399 1,045 0 0 16,734 14,676 Consultancy and Subcontracting 7.2 653 371 1,512 2,100 0 0 0 2 11,294 10,388 103 126 0 0 13,562 12,988 Travel Expenses 7.3 164 98 732 514 0 0 55 48 7,234 6,491 119 29 0 0 8,304 7,180 Services and Office Costs 7.4 386 610 807 273 0 0 14 18 6,888 7,556 172 178 0 0 8,267 8,635 Consumables and Supplies 7.5 213 103 25 89 0 0 0 0 1,538 715 5 13 0 0 1,780 920 Depreciation and Amortisation 7.6 1 0 0 0 33 47 0 0 199 299 6 0 0 0 239 346 Equipment Expenses 7.7 411 438 92 2 (54) (54) 0 0 6,042 1,337 (45) 3 0 0 6,447 1,725 Other Operating Expenses 7.8 189 163 241 215 0 0 8 8 3,568 3,009 2 14 (3,958) (3,133) 51 276 Total Expenses 2,782 2,610 3,849 3,484 (21) (7) 119 116 50,851 42,269 1,761 1,408 (3,958) (3,133) 55,384 46,746 Foreign Exchange Gains/(Losses) 8 0 (0) (0) 8 0 0 869 (595) 140 (454) 0 0 0 0 1,009 (1,041) Surplus/(Deficit) for the Period 10.1 77 (87) 114 86 31 72 868 (594) (59) (236) 2,272 1,811 0 1 3,302 1,053 Other PC Established Funds Total Extra-Budgetary Funds Fund to Support OSCE Action for Peace, Democracy and Stability in Bosnia and Herzegovina Fund for Activities Related to Economic and Environmental Aspect of Security Funds for Activities Related to Special Monitoring Mission to Ukraine Other Activities and Special Projects Indirect Common Costs Fund Eliminations
EUR '000 Project Costs ICC Total Secretariat 24,418 761 25,179 Office for Democratic Institutions and Human Rights 8,817 557 9,374 High Commissioner on National Minorities 684 14 698 Representative on Freedom of the Media 922 8 930 Total – Secretariat and Institutions 34,841 1,340 36,181 Mission in Kosovo 849 - 849 Mission to Bosnia and Herzegovina 2,460 113 2,573 Mission to Serbia 1,505 7 1,512 Presence in Albania 1,661 67 1,728 Mission to Skopje 1,426 99 1,525 Mission to Montenegro 994 31 1,025 Total – South-Eastern Europe 8,895 319 9,213 Mission to Moldova 288 - 288 Representative on the Latvian-Russian Joint Commission on Military Pensioners - - - Total – Eastern Europe 288 - 288 High Level Planning Group - - - The Minsk Process - - - Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference - - - Total - Caucasus - - - Programme Office in Astana 624 - 624 Centre in Ashgabat 233 9 242 Programme Office in Bishkek 2,509 42 2,551 Project Co-ordinator in Uzbekistan 65 - 65 Programme Office in Dushanbe 3,985 28 4,013 Total – Central Asia 7,416 79 7,495 TOTAL - EXTRA-BUDGETARY PROJECTS 51,440 1,737 53,177 REPOSITORY PROGRAMME - CORE SUPPORT MECHANISM Secretariat 276 276 Mission in Kosovo 11 11 Mission to Bosnia and Herzegovina 2 2 Mission to Serbia 2 2 Presence in Albania 2 2 Mission to Skopje 7 7 Mission to Moldova 8 8 Programme Office in Astana 2 2 Programme Office in Bishkek 8 8 TOTAL - REPOSITORY PROGRAMME - CORE SUPPORT MECHANISM 318 - 318 GRAND TOTAL 51,758 1,737 53,495 IPSAS Adjustments: Staff Costs 1,229 29 1,258 Depreciation and Amortisation 232 6 238 Other 4,362 (12) 4,351 Total – IPSAS Adjustments 5,823 23 5,847 GRAND TOTAL 57,581 1,761 59,342 Elimination of ICC charges (3,958) NET TOTAL - EXTRA-BUDGETARY EXPENSES 55,384 J Segment Reporting Project Costs include ICC charges, which are removed to reconcile to total Extra-budgetary expenses presented in Segment report H2. Extra-budgetary expenditure by Executive Structure Extra-budgetary and Indirect Common Cost (ICC) sub-fund expenditure shown in Segment report H.2 is presented by Executive Structure in the table below. Various IPSAS adjustments are not attributed to individual Executive Structures and are summarized at the foot of the table to show the total spent on an IPSAS basis. The Repository Programme "Core Support Mechanism" is described in Note 6.2 to the Financial Statements and is included in "Other Activities and Special Projects" in Schedules H.1 and H.2.
ANNEX 2 YEAR-END EXPENDITURE REPORT AND STAFFING OVERVIEW
Expenditure funded via Provisional Revised Additional Total Revised Repository Final Fund Expenditure Provisional Provisional Provisional Implementation Available Programme Total Implementation Main Programme Authorization Expenditure Expenditure Expenditure Rate Balance Core SupportExpenditure Rate 3 Programme Fin. Reg 3.04 Authorization 1 Authorization 2 Authorization % Mechanism % Figures in EUR A B C D=B+C E F=E/D G=D-E H I=F+H J=I/E I. FUNDS RELATED TO SECRETARIAT AND INSTITUTIONS The Secretariat Secretary General and Central Services Executive Management 1,190,500 1,212,140 41,100 1,253,240 1,253,239 100 1 - 1,253,239 100 Security Management 636,500 635,660 12,900 648,560 648,558 100 2 14,503 663,061 102 External Co-operation 653,700 645,330 68,100 713,430 713,423 100 7 - 713,423 100 Office of Legal Affairs 786,800 779,740 - 779,740 779,739 100 1 - 779,739 100 Communication and Media Relations Section 1,664,000 1,649,551 - 1,649,551 1,649,550 100 1 - 1,649,550 100 Conference and Language Services 5,437,500 5,453,119 1,166,300 6,619,419 6,619,411 100 8 - 6,619,411 100 The OSCE Documentation Centre in Prague 640,100 641,810 24,500 666,310 666,309 100 1 2,513 668,822 100 Gender Issues 437,100 428,850 25,800 454,650 454,636 100 14 - 454,636 100 TOTAL 11,446,200 11,446,200 1,338,700 12,784,900 12,784,867 100 33 17,017 12,801,883 100 Chairman-in-Office Short-Term Mission/Visits of CiO and PR of the CiO 500,000 500,000 - 500,000 494,568 99 5,432 - 494,568 99 Advisory Committee on Management and Finance (ACMF) 11,000 11,000 - 11,000 15 0 10,985 - 15 0 Panel of Adjudicators 32,800 32,800 - 32,800 6,068 19 26,732 - 6,068 19 Audit Committee 34,000 34,000 - 34,000 22,574 66 11,426 - 22,574 66 External Auditors 85,200 85,200 - 85,200 6,102 7 79,098 - 6,102 7 TOTAL 663,000 663,000 - 663,000 529,327 80 133,673 - 529,327 80 Internal Oversight Internal Oversight 1,828,900 1,828,900 72,900 1,901,800 1,901,144 100 656 - 1,901,144 100 TOTAL 1,828,900 1,828,900 72,900 1,901,800 1,901,144 100 656 - 1,901,144 100 Office of the Special Representative/Co-ordinator for Combating Trafficking in Human Beings Office of the Special Representative/Co-ordinator for Combating Trafficking in Human Beings 1,073,700 1,073,700 58,100 1,131,800 1,131,293 100 507 - 1,131,293 100 TOTAL 1,073,700 1,073,700 58,100 1,131,800 1,131,293 100 507 - 1,131,293 100 Addressing Transnational Threats Co-ordination of TNT Activities 547,300 547,300 - 547,300 546,909 100 391 - 546,909 100 Strategic Police Matters Unit 706,900 706,900 - 706,900 706,658 100 242 - 706,658 100 Action Against Terrorism 830,600 830,600 - 830,600 830,463 100 137 - 830,463 100 Borders Security and Management 684,800 684,800 - 684,800 683,912 100 888 - 683,912 100 TOTAL 2,769,600 2,769,600 - 2,769,600 2,767,942 100 1,658 - 2,767,942 100 Activities Related to the Economic and Environmental Aspects of Security Co-ordinator of OSCE Economic and Environmental Activities1,979,200 1,979,200 - 1,979,200 1,979,200 100 0 - 1,979,200 100 Economic and Environmental Forum 256,500 256,500 - 256,500 256,391 100 109 - 256,391 100 TOTAL 2,235,700 2,235,700 - 2,235,700 2,235,591 100 109 - 2,235,591 100 Expenditure OSCE 2024 Year-end Expenditure Report
Provisional Revised Additional Total Revised Repository Final Fund Expenditure Provisional Provisional Provisional Implementation Available Programme Total Implementation Main Programme Authorization Expenditure Expenditure Expenditure Rate Balance Core SupportExpenditure Rate 3 Programme Fin. Reg 3.04 Authorization 1 Authorization 2 Authorization % Mechanism % Figures in EUR A B C D=B+C E F=E/D G=D-E H I=F+H J=I/E Expenditure Conflict Prevention CPC Direction and Management 460,400 497,462 - 497,462 496,997 100 465 - 496,997 100 Policy Support Service 1,474,000 1,453,852 - 1,453,852 1,453,851 100 1 - 1,453,851 100 Operations Service 1,184,700 1,213,462 - 1,213,462 1,213,461 100 1 - 1,213,461 100 Programming and Evaluation Support Unit 530,000 537,442 - 537,442 537,442 100 0 - 537,442 100 FSC Chairmanship 12,700 12,700 - 12,700 12,670 100 30 - 12,670 100 FSC Support 696,200 627,080 - 627,080 626,495 100 585 - 626,495 100 Communications and Technology Unit 633,900 649,902 - 649,902 649,902 100 0 - 649,902 100 TOTAL 4,991,900 4,991,900 - 4,991,900 4,990,819 100 1,081 - 4,990,819 100 Human Resources Management Department of Human Resources 4,171,600 4,171,600 - 4,171,600 4,170,845 100 755 - 4,170,845 100 TOTAL 4,171,600 4,171,600 - 4,171,600 4,170,845 100 755 - 4,170,845 100 Department of Management and Finance Management and Co-ordination 888,200 916,833 41,500 958,333 958,333 100 0 - 958,333 100 Budget and Finance Services 2,162,200 2,145,056 14,400 2,159,456 2,159,456 100 0 - 2,159,456 100 Information and Communication Technology Services 4,370,900 4,345,999 426,800 4,772,799 4,772,798 100 1 - 4,772,798 100 Mission Support Services 2,517,600 2,531,012 248,900 2,779,912 2,779,911 100 1 - 2,779,911 100 TOTAL 9,938,900 9,938,900 731,600 10,670,500 10,670,498 100 2 - 10,670,498 100 TOTAL FOR THE SECRETARIAT 39,119,500 39,119,500 2,201,300 41,320,800 41,182,325 100 138,475 17,017 41,199,342 100 Office for Democratic Institutions and Human Rights Direction and Policy 1,294,600 1,344,300 - 1,344,300 1,344,242 100 58 - 1,344,242 100 Fund Administration Unit 2,970,700 3,138,950 - 3,138,950 3,138,810 100 140 - 3,138,810 100 Human Dimension Meetings 603,000 230,300 - 230,300 230,142 100 158 - 230,142 100 Democratization 1,580,300 1,576,610 - 1,576,610 1,576,605 100 5 - 1,576,605 100 Human Rights 1,232,200 1,109,700 - 1,109,700 1,109,552 100 148 - 1,109,552 100 Elections 6,505,200 6,968,440 397,300 7,365,740 7,365,739 100 1 - 7,365,739 100 Tolerance and Non-Discrimination 1,418,200 1,276,400 - 1,276,400 1,276,284 100 116 - 1,276,284 100 Roma and Sinti Issues 555,700 515,200 - 515,200 515,098 100 102 - 515,098 100 TOTAL 16,159,900 16,159,900 397,300 16,557,200 16,556,472 100 728 - 16,556,472 100 High Commissioner on National Minorities Fund Administration Unit 544,700 529,695 - 529,695 529,695 100 0 - 529,695 100 Office of the High Commissioner 2,959,300 2,974,305 38,800 3,013,105 3,013,105 100 0 - 3,013,105 100 TOTAL 3,504,000 3,504,000 38,800 3,542,800 3,542,799 100 1 - 3,542,799 100 Representative on Freedom of the Media Freedom of the Media 1,608,800 1,608,800 - 1,608,800 1,608,800 100 0 - 1,608,800 100 TOTAL 1,608,800 1,608,800 - 1,608,800 1,608,800 100 0 - 1,608,800 100 TOTAL FOR FUNDS RELATED TO THE SECRETARIAT AND INSTITUTIONS 60,392,200 60,392,200 2,637,400 63,029,600 62,890,396 100 139,204 17,017 62,907,412 100
Provisional Revised Additional Total Revised Repository Final Fund Expenditure Provisional Provisional Provisional Implementation Available Programme Total Implementation Main Programme Authorization Expenditure Expenditure Expenditure Rate Balance Core SupportExpenditure Rate 3 Programme Fin. Reg 3.04 Authorization 1 Authorization 2 Authorization % Mechanism % Figures in EUR A B C D=B+C E F=E/D G=D-E H I=F+H J=I/E Expenditure II. FUNDS RELATED TO OSCE FIELD OPERATIONS AUGMENTATIONS Secretariat Augmentations Policy Support Service 247,800 247,800 - 247,800 247,748 100 53 - 247,748 100 Information and Communication Technology Services 768,200 792,200 77,000 869,200 869,039 100 161 - 869,039 100 Mission Support Service 738,300 714,300 52,000 766,300 765,988 100 312 - 765,988 100 TOTAL 1,754,300 1,754,300 129,000 1,883,300 1,882,774 100 526 - 1,882,774 100 ODIHR Augmentations ODIHR Democratization 234,100 234,100 - 234,100 234,026 100 74 - 234,026 100 TOTAL 234,100 234,100 - 234,100 234,026 100 74 - 234,026 100 TOTAL FOR AUGMENTATIONS 1,988,400 1,988,400 129,000 2,117,400 2,116,801 100 599 - 2,116,801 100 SOUTH-EASTERN EUROPE Mission in Kosovo Office of Head of Mission 2,750,300 2,780,300 160,600 2,940,900 2,940,646 100 254 10,854 2,951,500 100 Fund Administration Unit 5,495,100 5,529,200 75,300 5,604,500 5,604,357 100 143 - 5,604,357 100 Security and Public Safety 1,582,700 1,553,000 - 1,553,000 1,552,801 100 199 - 1,552,801 100 Democratization 1,744,600 1,656,200 - 1,656,200 1,656,060 100 140 - 1,656,060 100 Human Rights and Communities 5,889,900 5,943,900 - 5,943,900 5,943,720 100 180 - 5,943,720 100 TOTAL 17,462,600 17,462,600 235,900 17,698,500 17,697,585 100 915 10,854 17,708,439 100 Mission to Bosnia and Herzegovina Office of Head of Mission 1,593,400 1,635,400 - 1,635,400 1,634,926 100 474 1,818 1,636,744 100 Fund Administration Unit 3,974,900 3,987,000 - 3,987,000 3,987,000 100 0 - 3,987,000 100 Shared Service Centre, ICT Help Desk 253,800 251,200 - 251,200 250,987 100 213 - 250,987 100 Security Co-operation 581,300 605,300 - 605,300 602,464 100 2,836 - 602,464 100 Human Dimension 5,278,600 5,203,100 - 5,203,100 5,201,706 100 1,394 - 5,201,706 100 TOTAL 11,682,000 11,682,000 - 11,682,000 11,677,082 100 4,918 1,818 11,678,900 100 Mission to Serbia Office of Head of Mission 995,400 964,200 - 964,200 964,054 100 146 2,231 966,285 100 Fund Administration Unit 1,700,600 1,808,900 - 1,808,900 1,807,365 100 1,535 - 1,807,365 100 Security Co-operation 950,800 949,300 - 949,300 949,109 100 191 - 949,109 100 Democratization 1,115,400 1,104,400 - 1,104,400 1,104,211 100 189 - 1,104,211 100 Media 443,200 469,700 - 469,700 469,433 100 268 - 469,433 100 Rule of Law and Human Rights 1,053,200 962,100 - 962,100 961,412 100 688 - 961,412 100 TOTAL 6,258,600 6,258,600 - 6,258,600 6,255,583 100 3,017 2,231 6,257,814 100 Presence in Albania Office of Head of Mission 487,300 492,049 - 492,049 491,752 100 297 1,879 493,631 100 Fund Administration Unit 1,035,900 1,073,510 - 1,073,510 1,073,509 100 1 - 1,073,509 100 Security Co-operation 346,100 338,440 - 338,440 338,438 100 2 - 338,438 100 Governance in Economic and Environmental Issues 308,200 297,580 - 297,580 297,579 100 1 - 297,579 100 Democratization 432,100 409,811 - 409,811 409,764 100 47 - 409,764 100 Rule of Law and Human Rights 371,600 369,810 - 369,810 369,808 100 2 - 369,808 100 TOTAL 2,981,200 2,981,200 - 2,981,200 2,980,851 100 349 1,879 2,982,729 100
Provisional Revised Additional Total Revised Repository Final Fund Expenditure Provisional Provisional Provisional Implementation Available Programme Total Implementation Main Programme Authorization Expenditure Expenditure Expenditure Rate Balance Core SupportExpenditure Rate 3 Programme Fin. Reg 3.04 Authorization 1 Authorization 2 Authorization % Mechanism % Figures in EUR A B C D=B+C E F=E/D G=D-E H I=F+H J=I/E Expenditure Mission to Skopje Office of Head of Mission 987,000 1,085,700 - 1,085,700 1,085,034 100 666 33,020 1,118,054 103 Fund Administration Unit 1,939,500 2,133,400 - 2,133,400 2,120,887 99 12,513 - 2,120,887 99 Public Safety and Community Outreach 1,778,700 1,608,700 - 1,608,700 1,583,348 98 25,352 - 1,583,348 98 Human Dimension 1,800,900 1,678,300 - 1,678,300 1,663,429 99 14,871 - 1,663,429 99 TOTAL 6,506,100 6,506,100 - 6,506,100 6,452,699 99 53,401 33,020 6,485,719 100 Mission to Montenegro Office of Head of Mission 316,100 316,100 - 316,100 306,224 97 9,876 1,118 307,342 97 Fund Administration Unit 603,800 596,800 - 596,800 569,252 95 27,548 - 569,252 95 Democratization 467,900 462,900 - 462,900 457,388 99 5,512 - 457,388 99 Media 361,700 361,700 - 361,700 336,387 93 25,313 - 336,387 93 Security Co-operation and Governance 402,600 414,600 - 414,600 413,951 100 649 - 413,951 100 TOTAL 2,152,100 2,152,100 - 2,152,100 2,083,201 97 68,899 1,118 2,084,319 97 TOTAL FOR SOUTH-EASTERN EUROPE 47,042,600 47,042,600 235,900 47,278,500 47,147,001 100 131,499 50,920 47,197,921 100 EASTERN EUROPE Mission to Moldova Office of Head of Mission 421,200 421,200 - 421,200 408,075 97 13,125 8,029 416,104 99 Fund Administration Unit 874,000 874,000 - 874,000 857,999 98 16,001 - 857,999 98 Conflict Prevention/Resolution 532,400 532,400 - 532,400 502,781 94 29,619 - 502,781 94 Human Rights 475,100 475,100 - 475,100 387,774 82 87,326 - 387,774 82 TOTAL 2,302,700 2,302,700 - 2,302,700 2,156,629 94 146,071 8,029 2,164,658 94 Representative to the Latvian-Russian Joint Commission on Military Pensioners Office of Head of Mission 5,500 5,500 - 5,500 - - 5,500 - - - TOTAL 5,500 5,500 - 5,500 - - 5,500 - - - TOTAL FOR EASTERN EUROPE 2,308,200 2,308,200 - 2,308,200 2,156,629 93 151,571 8,029 2,164,658 94 CAUCASUS High-Level Planning Group Office of Head of Mission 247,600 247,600 - 247,600 188,798 76 58,802 - 188,798 76 TOTAL 247,600 247,600 - 247,600 188,798 76 58,802 - 188,798 76 The Minsk Process Office of Head of Mission 911,200 911,200 - 911,200 - - 911,200 - - - TOTAL 911,200 911,200 - 911,200 - - 911,200 - - - Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference Office of Head of Mission 467,300 467,300 - 467,300 215,916 46 251,384 - 215,916 46 Fund Administration Unit 712,400 712,400 - 712,400 486,600 68 225,800 - 486,600 68 TOTAL 1,179,700 1,179,700 - 1,179,700 702,516 60 477,184 - 702,516 60 TOTAL FOR CAUCASUS 2,338,500 2,338,500 - 2,338,500 891,313 38 1,447,187 - 891,313 38
Provisional Revised Additional Total Revised Repository Final Fund Expenditure Provisional Provisional Provisional Implementation Available Programme Total Implementation Main Programme Authorization Expenditure Expenditure Expenditure Rate Balance Core SupportExpenditure Rate 3 Programme Fin. Reg 3.04 Authorization 1 Authorization 2 Authorization % Mechanism % Figures in EUR A B C D=B+C E F=E/D G=D-E H I=F+H J=I/E Expenditure CENTRAL ASIA Programme Office in Astana Office of Head of Mission 225,000 235,000 - 235,000 228,252 97 6,748 8,678 236,930 101 Fund Administration Unit 669,600 727,600 - 727,600 723,601 99 3,999 - 723,601 99 Politico-Military Activities 444,800 422,800 - 422,800 417,795 99 5,005 - 417,795 99 Economic and Environmental Activities 448,400 429,400 - 429,400 420,246 98 9,154 - 420,246 98 Human Dimension Activities 444,900 417,900 - 417,900 415,071 99 2,829 - 415,071 99 TOTAL 2,232,700 2,232,700 - 2,232,700 2,204,966 99 27,734 8,678 2,213,644 99 Centre in Ashgabat Office of Head of Mission 407,400 447,100 - 447,100 441,369 99 5,731 - 441,369 99 Fund Administration Unit 547,100 566,800 - 566,800 560,385 99 6,415 - 560,385 99 Conflict Prevention and Confidence and Security Building 233,100 210,100 - 210,100 202,357 96 7,743 - 202,357 96 Economic and Environmental Activities 249,100 235,100 - 235,100 227,265 97 7,835 - 227,265 97 Human Dimension Activities 224,500 202,100 - 202,100 169,896 84 32,204 - 169,896 84 TOTAL 1,661,200 1,661,200 - 1,661,200 1,601,272 96 59,928 - 1,601,272 96 Programme Office in Bishkek Office of Head of Mission 1,240,300 1,264,600 - 1,264,600 1,264,206 100 394 8,133 1,272,339 101 Fund Administration Unit 1,427,300 1,570,000 - 1,570,000 1,569,288 100 712 - 1,569,288 100 Politico-Military Activities 1,490,400 1,391,200 - 1,391,200 1,389,611 100 1,589 - 1,389,611 100 Economic and Environmental Activities 1,449,700 1,396,100 - 1,396,100 1,395,115 100 985 - 1,395,115 100 Human Dimension Activities 1,203,300 1,189,100 - 1,189,100 1,188,155 100 945 - 1,188,155 100 TOTAL 6,811,000 6,811,000 - 6,811,000 6,806,375 100 4,625 8,133 6,814,507 100 Project Co-ordinator in Uzbekistan Office of Head of Mission 261,300 266,800 - 266,800 249,838 94 16,962 - 249,838 94 Fund Administration Unit 529,600 573,600 - 573,600 565,711 99 7,889 - 565,711 99 Politico-Military Activities 532,200 482,700 - 482,700 450,624 93 32,076 - 450,624 93 Economic and Environmental Activities 639,700 653,700 - 653,700 646,149 99 7,551 - 646,149 99 Human Dimension Activities 536,400 522,400 - 522,400 480,543 92 41,857 - 480,543 92 TOTAL 2,499,200 2,499,200 - 2,499,200 2,392,867 96 106,333 - 2,392,867 96 Programme Office in Dushanbe Office of Head of Mission 1,169,300 1,052,400 - 1,052,400 1,047,139 100 5,261 - 1,047,139 100 Fund Administration Unit 2,035,500 2,238,650 - 2,238,650 2,238,300 100 350 - 2,238,300 100 Political and Military Aspects of Security 1,857,300 1,800,740 - 1,800,740 1,800,648 100 92 - 1,800,648 100 Economic and Environmental Activities 1,112,000 1,082,400 - 1,082,400 1,078,580 100 3,820 - 1,078,580 100 Human Dimension Activities 1,137,500 1,137,410 - 1,137,410 1,128,961 99 8,449 - 1,128,961 99 TOTAL 7,311,600 7,311,600 - 7,311,600 7,293,627 100 17,973 - 7,293,627 100 TOTAL FOR CENTRAL ASIA 20,515,700 20,515,700 - 20,515,700 20,299,108 99 216,592 16,811 20,315,918 99 TOTAL FOR FUNDS RELATED TO THE OSCE FIELD OPERATIONS 74,193,400 74,193,400 364,900 74,558,300 72,610,852 97 1,947,448 75,760 72,686,612 97 TOTAL OSCE 134,585,600 134,585,600 3,002,300 137,587,900 135,501,248 98 2,086,652 92,777 135,594,024 99 1 Includes all transfers processed to end of December 2024, including transfers in line with Financial Regulation 3.02(b) and Financial Regulation 3.02(a)(iv) as approved in PC.DEC/1485 on Revised Provisional Expenditure Authorization for 2024. 3 Final implementation rate consists of total UB expenditure and expenditure funded via Repository Programme "Core Support Mechanism" calculated against the total provisional expenditure authorization. 2 Additional Provisional Expenditure Authorizations approved with PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494.
Budget ActualBudget ActualBudget ActualBudget ActualBudget ActualBudget ActualBudget Actual The Secretariat 142.0 123.0 73.0 48.0 215.0 171.0 0.0 0.0 183.6 165.9 183.6 165.9 398.6 336.9 Office for Democratic Institutions and Human Rights 63.0 54.0 24.0 14.0 87.0 68.0 0.0 0.0 56.0 52.0 56.0 52.0 143.0 120.0 High Commissioner on National Minorities 16.0 14.0 5.0 4.0 21.0 18.0 0.0 0.0 11.5 11.5 11.5 11.5 32.5 29.5 Representative on Freedom of the Media 7.0 7.0 6.0 4.0 13.0 11.0 0.0 0.0 4.0 4.0 4.0 4.0 17.0 15.0 Total for the Secretariat and Institutions 228.0 198.0 108.0 70.0 336.0 268.0 0.0 0.0 255.1 233.4 255.1 233.4 591.1 501.4 Mission in Kosovo 7.0 6.0 108.0 78.0 115.0 84.0 102.0 99.0 273.5 258.5 375.5 357.5 490.5 441.5 Mission to Bosnia and Herzegovina 5.0 4.0 29.0 23.0 34.0 27.0 135.0 122.0 145.5 125.5 280.5 247.5 314.5 274.5 Mission to Serbia 1.0 1.0 20.0 16.0 21.0 17.0 35.5 32.5 62.0 54.0 97.5 86.5 118.5 103.5 Presence in Albania 1.0 1.0 18.0 13.0 19.0 14.0 19.0 18.0 45.5 34.5 64.5 52.5 83.5 66.5 Mission to Skopje 2.0 2.0 36.0 26.0 38.0 28.0 26.0 23.0 89.5 72.0 115.5 95.0 153.5 123.0 Mission to Montenegro 1.0 1.0 8.0 8.0 9.0 9.0 8.0 8.0 15.0 13.0 23.0 21.0 32.0 30.0 South-Eastern Europe 17.0 15.0 219.0 164.0 236.0 179.0 325.5 302.5 631.0 557.5 956.5 860.01,192.51,039.0 Mission to Moldova 1.0 1.0 12.0 12.0 13.0 13.0 9.0 9.0 30.0 20.0 39.0 29.0 52.0 42.0 Eastern Europe 1.0 1.0 12.0 12.0 13.0 13.0 9.0 9.0 30.0 20.0 39.0 29.0 52.0 42.0 High Level Planning Group 0.0 0.0 8.0 4.0 8.0 4.0 0.0 0.0 1.0 1.0 1.0 1.0 9.0 5.0 Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference 1.0 1.0 5.0 2.0 6.0 3.0 0.0 0.0 11.0 11.0 11.0 11.0 17.0 14.0 Caucasus 1.0 1.0 13.0 6.0 14.0 7.0 0.0 0.0 12.0 12.0 12.0 12.0 26.0 19.0 Programme Office in Astana 1.0 1.0 5.0 5.0 6.0 6.0 4.0 4.0 18.0 16.0 22.0 20.0 28.0 26.0 Centre in Ashgabat 1.0 1.0 5.0 5.0 6.0 6.0 2.0 2.0 21.0 19.0 23.0 21.0 29.0 27.0 Programme Office in Bishkek 3.0 3.0 10.0 9.0 13.0 12.0 23.0 23.0 87.0 77.0 110.0 100.0 123.0 112.0 Project Co-ordinator in Uzbekistan 0.0 0.0 4.0 4.0 4.0 4.0 6.0 6.0 30.0 25.0 36.0 31.0 40.0 35.0 Programme Office in Dushanbe 4.0 4.0 18.0 13.0 22.0 17.0 20.0 19.0 90.0 81.0 110.0 100.0 132.0 117.0 Central Asia 9.0 9.0 42.0 36.0 51.0 45.0 55.0 54.0 246.0 218.0 301.0 272.0 352.0 317.0 Total for Funds related to OSCE Field Operations 28.0 26.0 286.0 218.0 314.0 244.0 389.5 365.5 919.0 807.51,308.51,173.01,622.51,417.0 Total OSCE 2024 Post Table 256.0 224.0 394.0 288.0 650.0 512.0 389.5 365.51,174.11,040.91,563.61,406.42,213.61,918.4 Professional General Services Sub-Total Staffing Overview - Budget and Actual Staff Positions Post table as at 31 December 2024 Fund number of positions International Staff Local Staff Grand TotalContracted Seconded Sub-Total
ANNEX 3 STATEMENT ON INTERNAL CONTROL
Organization for Security and Co-operation in Europe Statement on Internal Control 2024 e,f March2025 The Secretary General ofthe OSCE is responsible to the PermanentCouncil for overseeing the efficient use of the Organization’s resources, in accordance with the responsibilityassigned under Ministerial Council (MC) Decision No. 15/04 and Financial Regulation 1. 05. To this end, and being vested with the executive and administrative authority in their role as Chief Administrative Officer of the OSCE, Secretaries General have establishedmechanisms of internal oversight and financial control in accordance with Financial Regulation 6. 01. In line with Financial Regulation 7. 02, and as part of the exercise of my duties as Secretary General, I am accompanying theannual financialstatements with this Statement on Internal Control.The governance structure ofthe OSCE relies on a decentralized fund management architecture, with dual reporting lines for the executive structures. Fund Managersreport directly to the Chairperson-in-Office and participating States (PS) on policy and programmatic matters, and to the Secretary General on administrative matters. This architecture has a potential to result in challenges when exercising the role as Chief Administrative Officer.The Directors ofthe Department ofHuman Resources (DHR) and the Department ofManagement and Finance (DMF) support the Secretary General in this role in their respective areas, including by maintaining close contact with the Chiefs of Fund Administration (CFA5) in all executive structures, who currently do not directly report to the SecretaryGeneral. Re-invigorating discussions on strengthening the administrativereporting lines of the CFAs wouldhave a positive effect on control activities and translate into a reinforcement ofthe CommonRegulatory Management System (CRMS). The revision of Staff Instruction 1 7/Rev.2 — Standard Recruitment and Selection Procedures, effective 1 September 2024, has strengthened the role ofthe Secretary General in the selection ofposts that carry out administrative approval or security duties. This Statement on Internal Control applies for the year ended 3 1 December 2024, and up to the issuance of the OSCE’s Financial Statements. I was appointed the Secretary General of the OSCE by the Ministerial Council on 6 December 2024.
I. Internal Control and RiskManagement provide assurance on the efficient use of OSCE resources The resources entrusted tothe OSCE by participating States demandthat the organization is accountable for thoseresources, that it has in place a system of internal control, and that a sufficient level ofassurance is derived fromthe application ofthese control activities. Internal control forms a set of systematic measures implemented by the Permanent Council, the Secretary General, the Fund Managers, senior management, and other OSCE officials, which are designed to provide reasonable assurance on the following objectives: - the achievement oforganizational programme objectives and outcomes, - the effectiveness and efficiency of operations, - the safeguarding of assets, - the reliability, accuracy and completeness of the recording of transactions and their related financialreporting process, and - compliance with the OSCE’s Common Regulatory Management System (CRMS). The OSCE Internal Control framework includes MinisterialCouncil (MC) and Permanent Council decisions related to the management ofOSCE’s activities, the OSCECode of Conduct, the current Financial and Staff Regulations, Staff Rules and financial, staff administrative and security instructions. The framework provides mechanisms for the management of financial, human and material resources of the OSCE’s activities and contributes to the efficient use of OSCE resources, ensuring that the OSCE’s objectives are achieved efficiently. The framework supports the Secretary General, Heads of Institutions and other executive structures for the proper application ofthe Common Regulatory Management System (CRMS), and establishes automated and manual monitoring activities and contributes to the efficient use ofOSCE resources. The framework also includes a co-ordinated review by the Secretariat of all Unified Budget (UB) documents, to ensure compliance with the OSCE Performance Based Programme Budgeting (PBPB) methodology, and the undertaking ofactivities to ensure compliance with the CRMS. Records Management enables internal control by ensuring the availability of records, information, and knowledge of the Organization’s activities. It directly contributes to the attainment of a number of internal control objectives, e.g., by reducing the risk of alteration. loss. data breaches. unauthorizedaccess. fraudulent activities, and/or misuse of personal, private and proprietary information. Records Management also enhances accountability by documenting actionstaken, decisions made, and by whom. In addition, it is an essential part of business continuityinitiatives. 2
The OSCE has in place a risk management system covering major administrative risks affecting the Organization as a whole, as well as operational risks affectingindividual executivestructure and programmes. Risk Management allows for the identification, assessment and management ofrisks which are applicable to the appropriate executive structure. This includes periodic interactions with risk owners andan annual review of the major risks. Risk assessment is complemented by the issuance of adequate control measures. II. Issues in 2024 hindering the effectiveness of internal controls Most of the issues affecting the effectiveness of controlactivities at the OSCE in 2023 continued to exist in 2024. The following section provides a summary ofthese issuesand the progress made since last year, as well as indicatesnew issues which have emerged during the reporting year. Lack ofapproval ofthe budget 2024 is the third year in a row in which the OSCE Unified Budget has not beenadopted. Lack of adoption of the budget continued to weaken the ability of the OSCE to operate in an effectiveand efficient manner. Mandatory use of monthly provisional expenditure authorizations derived from the 2021 Unified Budget significantlyimpeded the implementation of programmatic activities and limited the Organisation’s ability to exercise sound financial management. In turn, this diminished the OSCE’s capability to react to emerging issues and risks. The unavoidable increase in costs, particularly as a result of accumulated inflationary increases against stagnant resources, has not been sustainable.This has led to several programmes at the Secretariat and other executive structuresfacing financial shortfall. Additional provisional expenditureauthorizations were approved by the Permanent Council on an exceptional basis to be financed from the cash surplus reported in the 2023 Financial Report and Financial Statements for the year ended 3 1 December 2023, for a total amount of 3,002,300 euros. While it addressed the Unified Budget shortfall in 2024, it does not represent a sustainable solution going forward and is not a replacement for a sufficientlyresourced Unified Budget financed fromthe assessed contributions from all participating States. Scales of Contribution The participating States (PS) have notreached consensus on a systematic reform ofscales of contribution. An interim arrangement for 2019 expired on 31 December 2019 (PC Decision No. 1325). Since then, p5 have been assessed on a provisional basis. Some p5 continue to find it difficult to pay their assessedcontributions without existing scales, which results in increased financial risk to the Organization, includingpossible cash deficits due to late payment or under- payment of assessments. Overall, thissituation is detrimental to the proper functioning of the Organization and is not sustainable 3
Appointment ofan External Auditor The mandate of the Court of Audit (Rechnungshoj) of the Republic of Austria as the OSCE External Auditor in accordance with Article VIII ofthe Financial Regulations, was approved by the Permanent Council on 7 September 2023 with PC Decision No. 1460. Acknowledging the offer ofthe Court ofAudit ofthe Republic ofAustria, the appointment was exceptionally extended for an additional twoaudit cyclesuntil 1 July 2026, as per PC Decision No. 1486. Challenges to StaffRecruitment and Retention Internal control activities rely primarily on the availability, competence, capacity and continuity ofstaff. The OSCE continues to face challenges in attracting and retainingqualified candidates and staff, primarily due to the less competitive nature ofthe compensationpackages compared to the United Nations (UN) common system, particularly in field operations, combined withlimited periods of service. The Organization has facedincreasing challenges towards aligning all local Mission members’salaries to a level of atleast 80 per cent of the applicable local relevant UN salary scale. The lack ofthe UnifiedBudget adoption in the last three years has forced increases in unfilled vacancies for long periods, in order to generate savings to mitigate year-end shortfall. Furthermore, the non-adoption ofthe budget negatively affectslearning and development opportunities for staff. Addressing these issues remains a top priority, with ongoing efforts to introduce equitable compensation for local missionmembers, to change the methodology for determining the board and lodging allowance for seconded mission members, andto increaselearning and development opportunities for staff. Legal Framework ofthe OSE The lack of a uniformset of privileges and immunities across the Organization continues to pose legal, financial and compliance risks as well as safety and security risks for the OSCE. The Organization remains highly dependent on bilateral arrangements with, or the national legislation of, p5 to serve as the basis for the legal capacity of field operations as well as the privileges and immunities offield operations and ofthe OSCE officials assigned to them. This fragmentedstructure results in a lack ofuniformity and certaintyregarding the existence, scope, and extent of such privileges and immunities and carriesthe additionalrisk that a p5 may unilaterally cease to recognize a bilateral arrangement or terminate it. Similarly, in those p5 where the OSCEcarriesout activities but doesnot have an established field presence, and where there is no bilateral arrangement or national legislation in place granting the OSCE appropriate status and protection, the Organization’s ability to conduct basic operational functions can be impaired and the Organization mayface legal and financial risks. The OSCEcontinued to make determined efforts in 2024 to engage with p5 where OSCE activities takeplace and where the current bilateral legal arrangements are less than optimal. Negotiations on bilateral MoUswithseveral p5 progressed, but agreements on these have yet to be concluded. The ModelStanding Arrangements continue to provide a promising model for bilateral recognition of the OSCE’s legal status and privileges and immunities. 4
III. Long-standing internal control mechanisms in key areas of OSCE activities My review ofthe effectiveness ofthe internal control framework is mainly informed by: Accountability for performance and results falls, in the first instance, on Fund Managers from the field operations and Institutions, as well as Main Programme Managers at the Secretariat. This includes balancing the control of activities and the resources entrusted to the tasks.Managing Programmes and Projects. The framework includes the management of UB programmes, as well as extra-budgetary (ExB) projects supplementing UB programmes. OSCE’s Conflict Prevention Centre(CPC) provides UB and ExB programming advice and supports and organized trainings on PBPB methodology as well ason project cycle management and related administrative processes to stafffrom the executive structures in 2024. The Department of Human Resources (DHR) works on defining the HR-related part of CRMS, ensuring robust yet lean policies and practices. Enforcement ofthe CRMS and talent outreach procedures aim at ensuring the OSCE attracts, employs, manages and develops high- quality and diversehuman resources through compliant, responsive, effective and efficient talent management. Advisory support to field operations and Institutions on human resources matters aims at reducing the risk of non-compliance. Regular revision of staff developmentopportunities and working conditions aims to promote an enabling working environment and conditions ofservice, and to reduce the risk ofhigh staff turnover that goes well beyond predefined periods of service and the principle of non-career service in the OSCE. The four-eye verification principle is applied at HR payroll data entry and administration ofentitlements before approval, which ensures smooth and accurate payroll runs. Learning and development opportunities facilitated by DHR aim at ensuring staff and mission members have the skills and knowledge to effectively meet their performance objectives.The Department of Management and Finance (DMF) supports compliance with the CRMS through actions which include checks on financial transactions, verification of initiatives that use OSCE resources, and the provision ofadvice and training on administrative matters. DMF also provides second line of defence internal control activities in its area of expertise for administrative processes such as the annual physical inventory of assets, the overseeing of monthly bank reconciliations, the approval of credit cards, the opening of bank accounts, procurement and contracting, travel approval, and the month-end closure checklists. When exceptions to the CRMS are requested, DMF ensures that these are kept to a minimum and are well-documented. 5
Following a recommendation from theExternal Auditor, the OSCE, through DMF co ordination, implementedverifications ofthe effectiveness of internal controls for all executive structure. The findings are formalized in the form of Letters of Attestation. These are cross- checked by DMF and the Office oflnternal Oversight, based on their findings in internalaudits, and are submitted by every executive structure in support ofthe Financial Report and Financial Statements. Additionally, the CPC co-ordinates its own exercise around the subject of project management. Ifimprovements in project monitoring and project risk management practices are identified,these are addressed through training workshops and instructions. The third line of defence is entrusted to the Office of Internal Oversight (010) through its internal audits, advisory services, evaluations, and investigations. Reports on the results of internal audit activities provide independent and objective assessment ofthe adequacy of the OSCE’sgovernance, risk management, and internal control processes, and on compliance with the CRMS. Independent evaluations provide evidence forthe relevance and effectiveness of programmeswhileinvestigations help ensure zero tolerance for fraud and other forms of misconduct. 010 recommendations contribute to enhancing performance, learning and the efficiency and effectiveness of operations. 010 regularly tracksimplementation of accepted 010 recommendations to ensure that the risks and opportunities associated with the issues identified are being addressed. The internal control of extra-budgetary project proposals is exercised across different parties of the OSCE, including the CPC, DMF and relevant technical focal points, in accordance with article 6.2 of FAI 04/2004 on Extra-budgetary Contributions. CPC in particular acts in three ways:first, it directlyreviews extra-budgetary projects planned by the field operations, the Secretariat and the Representative on Freedom ofthe Media (RFOM), to ensure compliance with the CRMS and OSCE projectmanagement standards; second, it provides expertise and advice to theOffice for DemocraticInstitutions and Human Rights (ODIHR) and the High Commissioner on National Minorities (HCNM) as they carryout their own reviews; third, CPCalso provides input to policy updates,delivers training seminars and carries out regular reviews ofproject management practices, including review of programmatic matters in donor applications and agreementsrequirements.OSG/ExCo and theSenior Resource MobilizationAdvisor (SRMA) regularlyengage withCPC, DMF, project staff and relevant focal points on projectproposals and advise on resource mobilization and donor engagement strategies. The OSCE’s extra-budgetary project portfolio has been steadily increasing in terms of programme sizeand project budget, bringing with it adaptations to project management and the need for technical infrastructure to maintainoperational agility. The Audit Committee was established in December 2004 through adoption of PC.DEC/656, to strengthen internal andexternal control mechanisms which are essential for ensuring the effective and efficient management of the OSCE.The Audit Committee strives to provide the participating States with independentassurancethat the Organization’s controls are in place 6
and operatingproperly, throughindependent reviews of the work carried out by the OSCE’s system of internal and externalcontrols, including Internal Oversight, the External Auditors and the administration and management ofthe Organization. The Audit Committee also reviews and monitors the adequacy, efficiency and effectiveness of the Organization’s system of internal and external controls, including OSCE internal oversight functions, the external auditor functions and the implementation ofaudit recommendations. The External Auditor is appointedaccording to the Financial Regulations, DOC.PC/]/96, Rev PC. DEC/14] 9, Article VIII. Regulation 8.02 outlines the scope ofthe audit: ‘The ExternalAuditor maymake observations with respect to the efficiency ofthe financial procedures, the accounting system, the internal financial controls and, in general, the administration and management ofthe OSCE.’ Iv. External factors limiting effectiveness of internal control The effectiveness of the OSCE’s internal control is subject to limitations imposed by insufficientresources, dueto the lack of a 2024 unifiedbudget; the impact of the evolving political environment on decisionmaking and on mandate implementation offield operations; and ongoing challenges to the integrity of OSCE’s information security. These factors have been mitigated by the Organization, but only partially. The ability to continue to provide this mitigation is, to a large extent, subject to the OSCE being able to attract and retain sufficient financial and human resources. This report will explain each external factor in turn: Insufficient resources Continuous underfunding ofthe Organization and the lack ofan approved budget in 2024, 2023 and 2022, has resulted in the OSCE continuing to operate with inadequate resources. The lack ofan approved UB for the past three years exacerbates the already dire situation, as the OSCE was forced to operate at the 2021 level ofresources in 2024, a defacto Zero Nominal Growth budget, allocated in a piecemeal fashion. Significantinflationarycost increases, both in staff and non-staff costs, were not followed by commensurate increases in funding. This had a detrimental impact on the financialstability ofall ES. Asa result,the capacity ofthe Organization to provideappropriate levels ofassurance across all executive structures has dangerously eroded. The Organization must be equipped with the necessary resources to effectively carryout its internal control responsibilities, notleast as I work to strengthen governance at all levels.The internal justice system, which remains high on the agenda, and emphasizes the early resolution of disputes, is also negativelyaffected by having insufficient resources. The Audit Committee itself has echoed the risks to the well functioning of the Organization as a consequence of long-term underfunding. 7
Six-month mandate extension ofthe Mission to Moldova The mandate of the Mission to Moldova has been extended only for a period of six months until 30 June 2025, due to lack of consensus for a twelve-month extension. This short period increases the administrative burden and poses significantoperational challenges on the Mission, due to the short planning horizon. Moreover, it compounds already existing problems in retaining staff due to the competition with other organizations who not only offer higher salaries, but also longer-term contracts. Information Security The OSCE has experienced major informationsecurity incidents in the past, which impacted the confidentiality, integrity, and availability of our systems and information. In response, DMF implemented a multi-year Information Security Plan (ISP) to strengthen the OSCE’s information security. An Information Security Management System (ISMS) based on the 15027001 standard was introduced to bolster technical controls and enhance oversight. New policies, tools, and processes were established, including the creation of an ICT Security Operations Centre(SOC), the introduction oftools for preventing and detectingcyber-security incidents, the inclusion of informationsecurity in the internal control walkthroughs, improved security awareness training for staff, and delivery ofthe major Secure Microsoft Infrastructure (SMI) project to upgrade and secure the entire ICT architecture of the OSCE. Although the original ISP and SMI projects have now completed, DMF continues to implement further initiatives to strengthen our cyber security defences. In 2024 it introduced process improvements for theSOC, adopted new security controls for mobile devices, modernized the Global Wi-Fi infrastructure, and is implementing the essential “SMI 2.0” project to further secure and modernize the OSCE’s core ICT services. In addition, to strengthen the Secretariat’s role as the second line of defence in information security, DMF has undertaken a number of actions: it has met each executive structure and discussed bilateral information security risk assessments; it has issued regular publications and conducted webinars on informationsecurity related topics. The improvements made to the OSCE’s information security defences were tested in 2024, when the OSCE was the target of a sophisticated cyber-attackexploiting what is known as a “zero-day vulnerability”. This refers to a security flaw in software or hardwarethat is unknown to the vendor and for which no patch orfix is available. Despite the severity and sophistication of the attack, the impact on the confidentiality, integrity,and availability of the OSCE’s information was assessed as being low. The attack was quicklydetected and remediated by the DMF/ICT Security Incident Response Team and the SOC. This successful incident response demonstrated that the multi-year ISP and SM! investments have improved the OSCE’scyber defences.Nevertheless, the OSCE continues to be targeted by sophisticated cyber threat actors,and like all international organizations, it is exposed to the risk of cyber-attacks on our systems and data. Continuedinvestment in the OSCE’s ICT infrastructure and informationsecurity controls 8
is essential to protect the organizationagainst cyberthreats. The OSCE budget and human resources allocated for ICTand Information Security are well below the averages of comparable organizations, impairing the level and scope of informationsecurity controls that the Organization is able to offer. The non-approval ofthe Unified Budget since 2021 and the lack of consensus on funding major ICTCapital Investment Plan (CIP) projects has delayed several activities to update or replace aging ICT hardware and software, and has severely limited the OSCE’s ability to further improve its cyber security defences.Without the necessary resources to maintain our defences there is a risk that the improvements made in recent years will belost, and that the OSCE will becomeincreasingly vulnerable to expensive and damaginginformation securityincidents. V. Improvements in Policies, Procedures and Systems It is my key objective to create a safer,more inclusive, and an enabling yet structuredworking environmentconducive to effective implementation of organizational and programmatic priorities.In 2024, Stafflnstruction 1 7/Rev.2 — StandardRecruitment andSelectionProcedures, and Staff Instruction 34 - Medical Clearance were promulgated and issued. Furthermore, revisions of Stafflnstruction 15 - Performance Management in the OSCE and Stafflnstruction 21 — OSCE Policy on Professional Working Environment are in the pipeline, with the aim of improving our regulatory management system. Stafflnstruction 1 7/Rev.2 ensured lean recruitment and selection procedures with increased oversight by theSecretaryGeneral and enhances control activities in candidates’ vetting process. Staff Instruction 34 filled an importantregulatory gap by introducing procedure for themedical clearance process prescribed in the Staff Regulations and Staff Rules. In 2025, revisions of Staff Instruction 1 5 on Performance Management and Staff Instruction 2 1 on ProfessionalWorking Environment will be developed to enhance checks and balances, ensuring proper use ofthe prescribedmechanisms and reduce their misuse In line with the OSCE strategic directions and operationalrequirements,security-related training and exercises continue. Security Management continues to organize and deliver security certification training for Security Officials to ensure standard and effective implementation ofthe 2020 Security Instructions and Guidelines across Executive Structures. Security Management also initiated a new training program for Security Management Teams aimed at enhancing the effectiveness of the OSCESecurity Management System,improve security planning and crisis preparedness across Executive Structures. In 2024, two Women’s Security Awareness Trainings were delivered to empower female personnel withthe knowledge and practical skills to mitigatesecurity risks in various environments, raise awareness and create a safespace for related discussions. 9
Security Management launched the extra-budgetary Project ‘Safe Travel System’ in August 2023 asa vital toolfor the OSCE to fulfill its Duty ofCare obligation. It is directly beneficial for OSCE staff and is used for daily operations,emergency notifications, and headcounts in two locations, in order to enhance the Organization’s crisis response. However, due to the limited financialresources, the project could not be further expanded to includeother locations. Supported by funds provided from the Repository Programme “Core SupportMechanism”, Security Management was able to procuresecurity equipment aiming at upgrading physical security systems and at acquiring essentialsecurity supplies required for the Secretariat and the rest of Executive Structures. With thanks to the co- operation with the Austrian Armed Forces International Centre,the CPC and Security Management also secured the continuation ofthe Hostile EnvironmentAwareness Training coursewhich is crucial for OSCEpersonnel to equipthem withthe skills and knowledge to protect themselves in high-risk areas. CPC, in co-operation withSecurity Management and other relevant Secretariat departments, continued conducting, on a rolling basis, table-top crisis simulation exercises to stress-test crisis responseprocedures and capacities of al Field Operations. I endorse this initiative as a recommendation to enhance duty ofcare and integrateoperational and security lessonslearned during the evacuation of 5MM mission members. In 2024, DMF continued to work on the revision ofFinancial and Administrative Instructions, including FAI 06 (Procurement and Contracting), FAI 07 (Asset Management), FAI 09 (Travel), FAI 12 (Computing Resources), FAI 13 (Information Security) and FAI 18 (Risk Management).OSG andDMF re-launched the IT Steering Committee, issuing a new Terms ofReference with wider membership from the executive structures and a strengthened governance role to promote the efficient and effective use of information technology in all OSCE locations. The proposal to reinstate Records Management asa separate unit (as was the case until 2019), directly reporting to the Director of the Office of the Secretary General resulted in a reinvigorated effort to relaunch the Records Management programme across the OSCE with the aim ofincreasing the globalmaturity ofmanaging records across the OSCE. A Task Force to update the current Organization’s Records Management framework has been working during 2024 to ensure the FAI-3 - Records Management and its Implementation Policy meet the expectations for flexibility,adaptability and provide the definition for clear attributions ofresponsibilities. Both policies have been submitted for final promulgation. Building onpast experiences, the network of staff withRecords Management functions has been reactivated by soliciting nominations and organizing of informal meetings. Parallel to this, an intense effort to review and improve the File Plan for the Secretariat — dated2007 — has started with theaim of serving as the blueprint to the rest of the Organization. 10
ConclusionThe effectiveness ofan internal control framework, no matter how well designed, has inherent limitations — including the possibility of circumvention — and, can therefore, only provide reasonableassurance.However, I am committed to continuously improveour internalcontrol framework, as well as overall accountability and oversightmechanisms. We will continue to work on initiatives to safeguard the OSCE’s capacity to deliver on its mandate,exercise its duty of care, increase effectiveness and efficiency in theuse of its resources. I reiterate that the decentralized nature ofOSCE and the indirectreporting lines ofFund Managers and CFAs continue to be a risk to the effectiveness ofthese activities. More urgently, the lack offinancial and human resources will sooner or later negatively affectour capacity to maintain thelevel of internal control I want to see moving forward. Based on the above, I hereby conclude that, to the best ofmy knowledge and information, there areno material weaknesses which would prevent the ExternalAuditor from providing an unqualifiedopinion on the OSCE’s financialstatements, nor are there other significant matters arising which wouldneed to be raised in the present document for the year ended 3 December 2024.Feridun H. Sinirlioglu OSCE Secretary General 11
ANNEX 4 REPORT OF THE EXTERNAL AUDITOR
GZ 2025-0.493.437 External Audit on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) Audit Report of the Austrian Court of Audit
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) PHOTOS Cover: Austrian Court of Audit/Achim Bieniek FOR FURTHER INFORMATION PLEASE CONTACT Austrian Court of Audit Phone (+43 1) 711 71 – 8946 Email info@rechnungshof.gv.at facebook/RechnungshofAT Twitter @RHSprecher DISCLOSURE Published by: Austrian Court of Audit 1030 Vienna, Dampfschiffstraße 2 www.rechnungshof.gv.at Edition and Design: Austrian Court of Audit Vienna, in June 2025
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 1 Table of Contents Introduction _____________________________________________________ 3 I. Extent and character of the audit_________________________________4 1. Appointment of the Austrian Court of Audit as External Auditor_________4 2. Scope and timing of the External Audit of the Financial Statements 2024__4 3. Engagement letter_____________________________________________5 4. Preparation and submission of the Financial Statements 2024 by the Secretary General________________________________________6 5. Audit approach_______________________________________________7 6. Reporting___________________________________________________10 II. Key financial data of the OSCE as of 31 December 2024______________10 III. Efficiency of the financial procedures, the accounting system and the internal control________________________________________12 7. Special circumstances and issues in the financial year 2024____________12 8. Resource utilization___________________________________________15 9. Internal control______________________________________________21 IV. Key audit findings related to the Financial Statements 2024___________24 10. Cash and Cash Equivalents, Investments___________________________24 11. Allowance for Assessed Contributions_____________________________26 12. Outstanding Receivables for Third Party projects____________________27 13. Clearance of Extra-Budgetary Contributions Receivables______________28 14. Disposal of Fixed assets and Inventories___________________________29 15. Reconciliation and completeness of employee lists__________________32 16. Retrospective change of salary scales for annual leave liability__________33 17. Special Service Agreements ____________________________________34 18. Recommendations – Prioritization________________________________36 V. Follow-up of the External Auditor's recommendations_______________39 VI. Audit Opinion _______________________________________________41 VII. Annexes____________________________________________________45 Acronyms and abbreviations _______________________________________ 96
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 2
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 3 Introduction In September2024, the Organization for Security and Co-operation in Europe (OSCE) appointed the Austrian Court of Audit (ACA) as External Auditor for the Financial Statements 2024. The OSCE's Financial Regulations include the provisions for the appointment and tenure of office, the scope and the conduct of the External Audit as well as the Audit Report of the External Auditor. The responsibilities of the ACA as External Auditor were to express an Audit Opinion on the Financial Statements 2024 and issue an Audit Report addressing the effi ciency of the financial procedures, the accounting system and the internal control based on its audit. Supplemental to the Financial Audit, the ACA conducted a Performance Audit on the Field Operation in North Macedonia. A separate Audit Report was issued to the Field Operation and the Secretariat covering the findings and recommendations of the Performance Audit. In case these findings had an impact on the Financial State- ments 2024, they are attached as an annex to this Audit Report. On 30June2025, the ACA issued an unqualified Audit Opinion on the OSCE's Finan- cial Statements 2024, which is included within this Audit Report. In addition to the Audit Opinion, the following Audit Report provides an overview, a comprehensive analysis and audit observations leading to a number of audit findings and recommendations for improvements of procedures or more comprehensive disclosures, which were taken up by the Secretariat (SEC) of the OSCE. Finally, the Audit Report includes a follow-up of the recommendations made by the ACA in 2023. The structure of this Audit Report is as follows: I. Extent and character of the audit II. Key financial data of the OSCE as of 31 December 2024 III. Efficiency of the financial procedures, the accounting system and the internal control IV. Key audit findings related to the Financial Statements 2024 V. Follow-up of the External Auditor's recommendations VI. Audit Opinion VII. Annexes
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 4 The ACA would like to express its appreciation for the cooperation and assistance provided by the Secretary General, the management and the staff of the OSCE. The ACA values their support throughout the audit. I. Extent and character of the audit 1. Appointment of the Austrian Court of Audit as External Auditor (1)In September2023, the ACA was appointed as the new External Auditor of the OSCE by the Permanent Council (PC) for one audit period until 15September2024. On 19September2024 the Permanent Council appointed the ACA as the External Auditor of the OSCE for additional two audit cycles covering the Financial State- ments2024 and 2025, expiring on 1July2026. The Engagement Letter for the audit of the Financial Statements2024 was signed on 23October2024 by the President of the ACA, DrMargitKraker, and on 5Novem- ber2024 by the Officer in Charge/Secretary General of the OSCE, Her Excellency MrsCatherineFearon. (2)The mandate for the audit of the financial year2023 expired on 15Septem- ber2024, and the mandate for the financial year2024 was granted by the Perma- nent Council on 19September2024. The ACA noticed that an External Auditor was practically engaged throughout the financial year2024. 2. Scope and timing of the External Audit of the Financial Statements 2024 ArticleVIII of the OSCE's Financial Regulations includes the provisions for the appointment and tenure of office, the scope and the conduct of the External Audit as well as the Audit Report. Pursuant to OSCE's Financial Regulation8.01, the tenure of office shall normally be three years unless otherwise determined by the Permanent Council. According to the first appointment in 2023, the tenure of the ACA was limited to one year. Only after the new appointment in September2024, the total period of the mandate was extended to the regular three-year period.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 5 The ACA conducted a Performance Audit of one Field Operation in addition to the audit of the Financial Statements2024. A separate Audit Report was issued to the Head of the OSCE Mission to Skopje, North Macedonia, and the Secretary General in order to address the audit findings and recommendations identified by the ACA during this Performance Audit. To the extent that such findings and recommenda- tions were relevant to the Financial Statements2024, they have been included as an annex to this Audit Report. However, such findings are not covered by the Audit Opinion on the Financial Statements2024. 3. Engagement letter The conditions for the audit of the Financial Statements2024 were set out in an engagement letter signed by the ACA on 23October2024 and the OSCE on 5Novem- ber2024. The letter referred to the decision by the Permanent Council of the OSCE from 19September2024 (PC.DEC/1486). It stated that the audit would be conducted with the objective of expressing an opinion on the Financial Statements2024 of the OSCE, which comprise the Statement of Financial Position as at 31December2024, the Statement of Financial Performance, the Statement of Changes in Net Assets/ Equity, the Cash Flow Statement, the Statement of Comparison of Budget and Actual Amounts for the year then ended, and a summary of significant accounting policies and other explanatory information. In addition to the submission of an Audit Opinion on the Financial Statements2024 and an Audit Report in accordance with the OSCE Financial Regulations, the engage- ment letter stated undertaking a Performance Audit on one individual OSCE Field Operation including a report on the results of that audit. The engagement letter also outlined the responsibilities of the OSCE's management during the audit by the ACA. Accordingly, the OSCE was in charge of: (a) the preparation and fair presentation of the Financial Statements in line with the International Public Sector Accounting Standards (IPSAS); (b) the implementation of internal controls to the extent determined necessary by the OSCE's management to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error; and
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 6 (c) providing the External Auditor with: • access to all information of which OSCE's management was aware that was relevant to the preparation of the Financial Statements such as records, documentation and other matters; • additional information requested by the ACA from OSCE's management for the purpose of the audit; and • unrestricted access to persons within the OSCE from whom the ACA determined it necessary to obtain audit evidence. 4. Preparation and submission of the Financial Statements 2024 by the Secretary General (1)In accordance with Financial Regulation7.01 and Financial and Administrative Instruction (FAI)11–The Accounts and Annual Financial Statements– the annual Financial Statements shall be prepared by the Secretary General. All Fund Managers are required to close the accounts of the annual Budget of their respective Funds by 31December of each year. In doing so, the Secretary General, assisted by the Heads of Institutions and the Heads of Field Operations, shall maintain such accounting records and procedures for all Funds operated by the OSCE as required by IPSAS, or any other standards as determined by the Permanent Council, and shall prepare annual Financial Statements. (2)In accordance with Financial Regulation7.04, the Secretary General shall submit the annual Financial Statements to the External Auditor no later than 31 March following the financial year to which they relate. (3)On 31March2025, the Secretary General formally submitted the Financial State- ments2024 as a draft. As required by Financial Regulation7.02 and pursuant to IPSAS 1 they contained: • a Statement of Financial Position • a Statement of Financial Performance • a Statement of Changes in Net Assets • a Cash Flow Statement • a Statement of Comparison of Budget and Actual Amounts and • the Supporting Notes to the Financial Statements. In addition, OSCE's Secretary General signed an annual letter of representation addressed to the Auditor General of the ACA (dated 30June2025).
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 7 Audit finding No. 1: The draft Financial Statements 2024 provided by the Secretary General fulfilled the structural requirements of IPSAS1 – Presentation of Financial Statements. 5. Audit approach 5.1. Audit team and timeline The External Audit of the Financial Statements2024 was carried out by the ACA at OSCE's headquarters in Vienna (OSCE Secretariat). Overall, the audit team conducted its audit work from the end of September2024 to June2025. From October to December2024, the ACA interviewed various units of the OSCE, including the Office of the Secretary General, the Department of Management and Finance, the Office of Legal Affairs and the Department of Human Resources. The purpose of these meetings was to obtain sufficient understanding of the audited organization and the environment in which it operates. This covered OSCE's proces- ses and systems, as well as the Common Regulatory Management System (CRMS) including as follows: Decisions of the Ministerial Council (MC) and the Permanent Council related to the management of the OSCE's activities, the Rules of Procedure, the Financial Regulations, the FAIs, the Staff Regulations and Staff Rules as well as the StaffInstructions (SI) and Policy Guidance. In accordance with standard practice, the audit team issued a number of requests for information, documentation and explanations, in particular on the OSCE's accounting system (Chart of Accounts, posting rules, accounting policies, accounting records, funds structure, preparation of Financial Statements etc.). From December2024 to February2025, the preliminary audit mainly consisted of an audit of the trial balance for the period of 1January to 30September2024; as well as of a review of the internal control system in preparation for the detailed testing of the Financial Statements. Risk assessment procedures helped to identify the nature and extent of the audit work. From Marchto June2025, the final audit of the Financial Statements 2024 took place – mainly on the spot at the OSCE's headquarters in Vienna. In May and June2025, the audit team also formed its Audit Opinion and drafted its Audit Report on the Financial Statements2024.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 8 5.2. Audit standards The ACA conducted its audit in accordance with the International Standards for Supreme Audit Institutions (ISSAIs) issued by the International Organization of Supreme Audit Institutions (INTOSAI). ISSAIs2200–2899 contain the financial audi- ting standards applicable for audits of Financial Statements. ISSAI2000 incorporates the International Standards on Auditing (ISAs) into the Financial Audit Standards as stipulated by ISSAI100 – Fundamental Principles of Public Sector Auditing. Those standards require that the auditors comply with the organizational require- ments of the ISSAIs including • ISSAI 130 – Code of Ethics and • ISSAI 140 – Quality Control for Supreme Audit Institutions and that the auditors plan and perform the audit to obtain reasonable assurance about whether the Financial Statements or other forms of presentation of financial information are fairly and/or in all material respects presented in accordance with the applicable financial reporting and regulatory framework. Reasonable assurance is a high but not absolute level of assurance, which means it is not a guarantee that the audit detects all cases of material misstatement. The ACA communicated its scope of the audit and approach to the Secretary Gene- ral. 5.3. Audit principles and assessment In carrying out the audit, the ACA maintained appropriate professional behavior by applying professional skepticism, professional judgement and due care throughout the audit. The ACA applied the concept of materiality, both in quantitative (by amount) and, when relevant, in qualitative (by nature) terms, when planning and performing the audit, evaluating the findings and reporting on the results. The ACA also assessed the risks of material misstatement of the Financial Statements2024, obtained an understanding of the internal control relevant to the audit, designed and performed audit procedures responsive to those risks, and obtained sufficient and appropriate evidence (in terms of quantity and quality) to provide a basis for their conclusions and opinion. The ACA established effective communication during the audit process.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 9 5.4. Analytical procedures As required in attestation engagements, the audit was carried out on a test basis, by testing certain key controls and substantive testing of transactions recorded in the Financial Statements' areas on a sample basis. In order to achieve the audit objec- tive, the ACA examined the financial and accounting procedures applied by OSCE, assessed the internal control system, performed substantive testing of selected transactions and control testing of selected processes, reconciled supporting docu- ments with bank statements and analyzed such supporting evidence as was consi- dered necessary in the circumstances. The audit team also checked the correspondence of the Financial Statements with the underlying records from the Integrated Resource Management System (IRMA), an Oracle-application. 5.5. Further contacts Office of Internal Oversight During the audit, the ACA met the Office of Internal Oversight (OIO) on several occa- sions. The OIO's2024 and 2025 oversight plans and the implementation of the 2024 work plan were discussed. This exchange included the sharing of ideas and know- ledge, audit reports and findings. Audit Committee The ACA met the Audit Committee of the OSCE two times, in November2024 and in April2025. Following the established practice, the Audit Committee was informed about the External ACA's working plan on the audit of the Financial Statements2024. Advisory Committee on Management and Finance During the audit, the ACA met the Chair of OSCE's Advisory Committee on Manage- ment and Finance (ACMF) on several occasions. The ACA was informed about the OSCE budgeting process for the Unified Budgets2024 and 2025. The ACA informed on the status of the audit of the OSCE's Financial Statements and the Audit Report. Moreover, at the request of the OSCE, a gathering between the ACMF Delegates and the ACA took place on 17 October 2024. The ACA explained its audit approach and walked through the results of its Financial Audit on the Financial Statements 2023.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 10 6. Reporting (1)The ACA submitted the draft of the Audit Report to the Secretary General for clearance on 18June2025; the OSCE's comments and written answers were, where applicable, considered in the final Audit Report. On 30June2025, the ACA, in its capacity as External Auditor, issued an unqualified Audit Opinion on the Financial Statements for the financial year ended 31Decem- ber2024. The Audit Opinion was included within this Audit Report under point VI, a copy of the audited Financial Statements2024 was included as annex2. (2)The Secretary General shall submit the audited Financial Statements of the OSCE and the Audit Report of the ACA thereon to the Permanent Council for consideration and acceptance. II. Key financial data of the OSCE as of 31 December 2024 The financial data of the year2024 were significantly influenced by an increase in the Extra-Budgetary Contributions Receivable (+EUR24.558million), leading to an increase of the Total Assets of 9.6% at year-end2024. The Total Liabilities were especially marked by higher deferred amounts for Extra-Budgetary Contributions (+EUR10.738million) and Provisions (+EUR8.258million), whereas the Deferred Revenue for prepaid Assessed Contributions decreased compared to 2023 (-EUR2.427million).
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 11 In contrast to the unchanged level of Assessed Contributions the Revenues from Extra-Budgetary Contributions increased significantly by 18.0%. The rise in Total Expenses was mainly caused by an increase in Staff Costs (+EUR4.748million) and a change in the allowance for doubtful debts (+EUR5.466million). Table 1: Key financial data for the financial years 2024 and 2023 2024 2023 change in EUR million in % Cash and Cash Equivalents 54.777112.818-58.041 -51.4 Investments 118.57661.127+57.449 +94.0 Contributions Receivable 43.42818.713+24.715+132.1 Total Assets 237.411216.613+20.797 +9.6 Total Liabilities 174.288156.883+17.405 +11.1 Total Net Assets 63.12259.730+3.392 +5.7 Assessed Contributions 138.204138.204 0 0.0 Extra-Budgetary Contributions 56.50147.888+8.613 +18.0 Total Revenues 236.030223.651+12.379 +5.5 Staff Costs 132.983128.235+4.748 +3.7 Total Expenses 230.416213.453+16.964 +7.9 SURPLUS FOR THE PERIOD 6.964 8.848-1.884 -21.3 Cash Flows from Operating Activities 4.27516.441-12.166 -74.0 Cash Flows from Investing Activities -59.91649.058-108.974-222.1 Cash Flows from Financing Activities -3.002 -12-2.990 – Source: OSCE, Financial Statements 2024
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 12 III. Efficiency of the financial procedures, the accounting system and the internal control 7. Special circumstances and issues in the financial year 2024 7.1. No acceptance of the Financial Statements 2022 and 2023 (1)Pursuant to Financial Regulation7.04, the Secretary General submitted the Financial Report and the Financial Statements of the OSCE for the year ended 31December2022, as well as the Audit Report of the External Auditor, in which an unqualified opinion was issued, to the Chairperson of the Permanent Council on 14July2023. The Financial Statements for the year ended 31December2023 were issued to the Permanent Council on 18July2024, together with an unqualified Audit Opinion and an Audit Report of the External Auditor. (2)Financial Regulation7.05 provides for the acceptance of the annual Financial Statements. The Permanent Council shall accept the annual Financial Statements or take such other action with regard to them as the Permanent Council may consider necessary. Audit finding No.2: The Financial Statements2022 and 2023, along with the corre- sponding Audit Reports, had both been discussed by the Permanent Council but had not been accepted by the time the Audit Report 2024 was issued. 7.2. No approval of the Unified Budgets 2022–2024 The Unified Budget (UB) of the OSCE comprises the individual budgets of the Secre- tariat and Institutions of the OSCE, the OSCE Field Operations and other OSCE acti- vities approved by the Permanent Council. Between 2017 and 2021, the participating States did not reach formal consensus on the Unified Budget before the end of the preceding year, as stipulated in the Finan- cial Regulations. The Unified Budgets for the financial years2022–2024 were not approved. Therefore, the OSCE was operating under the provisional expenditure authorization in accordance with OSCE's Financial Regulation3.04 for the entire year. The provisional expenditure authorization made available in line with OSCE's Financial Regulation3.04 amounted to EUR138.204million (at the level of the 2021 approved Unified Budget as per PC.DEC/1413). In order for the Organization to meet its 2024 financial obligations, the Permanent Council approved the Additional Provi- sional Expenditure Authorizations (APEAs) in the total amount of EUR3.002 million
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 13 (PC.DEC/1485, PC.DEC/1487, PC.DEC/1491 and PC.DEC/1494), funded from the Cash Surplus for the year2023. Audit finding No.3: Despite the non-acceptance of the Financial Statements 2023, the Permanent Council decided to use parts of the Cash Surplus generated in 2023in the following financial year 2024. The amount of EUR3.002 million was allocated to the OSCE's current expenses for 2024. 7.3. Proposal of the Unified Budget 2025 In accordance with Financial Regulation2.05, the Secretary General shall submit to the Permanent Council a Unified Budget Proposal (UBP) for the following year until 1October. The proposal shall be referred to the ACMF for discussion. The ACMF Chair may report to the Permanent Council on the progress of these discussions and may seek guidance from the Permanent Council in order to help the Committee to conclude its consideration of the Budget proposals. The ACMF's recommendations on the following year's budget shall be submitted to the Permanent Council by 15December and shall be approved by 20December. As of 31 December2024, the Permanent Council had not reached a consensus on the approval of a Unified Budget2025. This situation of non-approval remained unchanged until the submission of the Audit Report in June2025. Audit finding No. 4: No approved Unified Budget for 2025 was available until the end of June2025. The provisions of the Financial Regulations regarding the absence of an approved Unified Budget shall therefore be applied and the last approved Unified Budget from 2021 will form the basis for OSCE's operations. 7.4. Going Concern assessment by the Organization The Financial Statements were prepared under the assumption that the Organiza- tion is a going concern and will continue its operation and meet its statutory obliga- tions for the foreseeable future. In assessing whether the going concern assumption is appropriate, those responsible for the preparation of the Financial Statements take into account all available information about the future, which is at least, but is not limited to, twelve months from the date of the Financial Statements. IPSAS1.38 requires an organization to disclose material uncertainties related to events or conditions that may cast significant doubt upon the organization's ability to continue as a going concern.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 14 The OSCE provided the ACA with the management's written positive going concern assessment in March2025, which formed the basis for the preparation of the Finan- cial Statements2024 under the going concern assumption. The ACA performed the necessary audit procedures stipulated by the audit standards1 with regard to this topic. 7.5. Status of the Repository Programme "Core Support Mechanism" In 2023 the Repository Programme "Core Support Mechanism" was established as an emergency and temporary measure by accepting voluntary contributions from participating States to cover the underfunding of essential non-staff core support costs across all Executive Structures (ES). As of 31December2024, more than 30 participating States had provided financial contributions to the Repository Programme "Core Support Mechanism". The Repository Programme "Core Support Mechanism" had three sources of reve- nue: • a number of participating States that had already paid more than their revised provi- sional first bill for the Special Monitoring Mission (SMM) in Ukraine; • certain participating States that agreed to the use of all or some of their share of the 2021 Cash Surplus for this purpose; and • additional voluntary contributions made by participating States. The overall amount pledged by 31December2024 amounted to EUR4.419million – of which EUR1.240million were utilized to cover deficits under the Unified Budget2023 provisional expenditure authorization (see ACA's Audit Report on the Financial Statements2023) and EUR0.673million for two capital investment plan projects in 2023. In 2024, the Secretary General authorized the allocation of the funds pledged to the Repository Programme "Core Support Mechanism" in support of a security manage- ment project aimed at addressing the need for essential security materials and equipment for the Secretariat and nine other Executive Structures. In total, the OSCE allocated an amount of approximately EUR0.100million from its resources in 2024, which resulted in a remaining amount of EUR2.403million at year-end 2024. 1 ISSAI 2570
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 15 8. Resource utilization 8.1. General Pursuant to a decision by the Permanent Council from 27June2003 (PC.DEC/553), the Secretary General shall provide the Permanent Council with a detailed annual report on Programme and Unified Budget-performance in the course of the first quarter of the year following implementation. This report shall contain a detailed assessment of the extent to which the resources provided in the Unified Budget have been used to achieve the planned objectives and outputs by Fund, Main Programme and Programme. By the time this Audit Report was issued, no annual report on the Programme and Unified Budget-performance had been prepared, but a "Resource Utilization Report (RUR) for 2024" – covering an overall analysis for the Organization as well as the resource utilization by Executive Structures. Audit finding No.5: As there was no Unified Budget approved and no annual report prepared for 2024, the Secretary General issued a "Resource Utilization Report for 2024" providing accountability and transparency for 2024. It identified the resour- ces used and the overall outcomes achieved in 2024. 8.2. Total provisional resource utilization The OSCE's total resources consist of Unified Budget Assessed Contributions, Volun- tary Contributions and Contributions in-kind. The Unified Budget is the main funding source of the Organization. As the Unified Budget 2024 was not approved (see paragraph7.2), the OSCE opera- ted in accordance with Financial Regulation3.04 on a provisional expenditure authorization throughout 2024 at the level of the last approved Unified Budget by the Permanent Council from 2021 with an amount of EUR138.204million (PC.DEC/1413). Without an approved Unified Budget, the Secretary General and Heads of Institution are authorized to incur obligations and make payments until 31March of the current financial year up to the level of 25.0% of the previous Unified Budget, and there after, on a monthly basis up to 1/12 th of the previous approved Budget until the Unified Budget is adopted. This means that the OSCE has neither changed the contributions of the participating States nor the planned expenditures since 2021. In its Audit Report2023, the ACA raised the point of potential budget deficits in certain areas and recommended an amendment of Financial Regulation3.02 in order to authorize, to an extent and in a
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 16 manner to be specified, provisional transfers between the Main Programmes and Funds in excess of the current threshold of 10.0%. Over the last six years, the average utilization of the Unified Budged remained at the level of 98.0%. However, in most Executive Structures, the implementation rate was closer to 100.0%, and starting with 2023 it exceeded 100.0%, necessitating alterna- tive means of funding. Due to the funding gap in the provisional Unified Budget 2024, the OSCE • reprioritized and reallocated resources across Programmes within Executive Struc- tures, • used Additional Provisional Expenditure Authorization to be approved by participa- ting States, such as for the Conference and Language Services Programme (CLS), and • used the Repository Programme "Core Support Mechanism" as an emergency measure. Audit finding No.6: The ACA noted that the OSCE has regulations in its Financial Regulations on the status of an unapproved Unified Budget with regard to the quar- terly or monthly limits to incur obligations or make payments. Recommendation No. 1 to the Permanent Council: The ACA reiterated the audit recommendation from 2023 to modify Financial Regulation 3.02 to allow for greater flexibility in provisional transfers of funds between Main Programmes and Funds in times when budget is not approved. 8.3. Post utilization – Human Resources The utilization of Human Resources is reported against the Post Table within the latest approved Unified Budget in 2021. Overall, the average post utilization in 2024 was as follows: • Secretariat and Institutions: 85.7 % • Field operations: South-Eastern Europe: 88.0 %; Eastern Europe: 80.5 %; Caucasus: 72.0 %; Central Asia: 89.4 %.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 17 Figure 1: Overview of the post utilization rates in 2024 99 005.364 OSCE Abbildung: 8 0 40 50 70% 10 20 30 60 Source: OSCE; graph: ACA 1009080 Secretariat and Institutions Secretariat ODIHR High Commissioner on National Minorities Representative on Freedom of the Media South-Eastern Europe Mission in Kosovo Mission to Bosnia and Herzegovina Mission to Serbia Presence in Albania Mission to Skopje Mission to Montenegro Eastern Europe Mission to Moldova Caucasus High-Level Planning Group Minsk Conference Central Asia Programme Office in Astana Centre in Ashgabat Programme Office in Bishkek Project Co-ordinator in Uzbekistan Programme Office in Dushanbe 85.7 85.7 83.3 93.6 90.9 88.0 90.2 87.6 88.2 85.7 84.0 83.5 80.5 80.5 72.0 58.3 79.0 89.4 90.8 90.7 87.4 94.3 89.2 ODIHR: OSCE Office for Democratic Institutions and Human Rights Minsk Conference: Personal Representative of the CiO on the Conflict Dealt with by the Minsk Conference
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 18 Secretariat The Secretariat post utilization was on average 85.7%. It varied between 82.1% for the Department of Human Resources (DHR) and 91.0% for the Main Programme Addressing Transnational Threats (TNT). According to the Resource Utilization Report for 2024, limited funding led to delays in hiring, hindering the department's overall performance, whereas significant cutbacks in learning and development opportunities negatively affected professio- nal growth of employees across the OSCE. This in particular hit the DHR and the DMF including the Budget and Finance Section (BFS). The adherence to the 2021 post table and the 2021 level of available financial resources resulted in the OSCE applying various cost containment measures, including prolonged vacancy periods for positions as they became vacant (see paragraph8.4). Institutions The Institutions achieved a post utilization to an extent as follows: • Office for Democratic Institutions and Human Rights: 83.3 % • High Commissioner on National Minorities: 93.6 % • Representative on Freedom of the Media: 90.9 % Field Operations In South-Eastern Europe the overall post utilization was 88.0%. The rate varied between 83.5% (Mission to Montenegro) and 90.2% (Mission in Kosovo). In Eastern Europe, the utilization rate of human resources was 80.5%. This value refers to the Mission to Moldova. In the Caucasus, the overall post utilization rate stood at 72.0%, yet it also experi- enced the lowest value of 58.3% at the High-Level Planning Group. In Central Asia, the overall post utilization rate was 89.4%. The lowest value of 89.2% was measured at the Project Co-ordinator in Uzbekistan. Staff costs The budgetary expenditure in 2024 by main cost category reflected a proportion of 65.0% for staff costs (EUR89.558million) and 35.0% for non-staff costs (EUR48.029million). Furthermore, the inflation-driven pay increases promulgated by the International Civil Service Commission (ICSC) led to a steady cost growth.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 19 Taking into account the vacancy rate per staff category, secondments –while being the most cost-effective category of staffing– continue to be the most challenging to fill, resulting either in the inability to carry out planned activities or the requirement to hire more expensive temporary staff. Efficiency was also affected by the high proportion of staff costs in total costs. A Zero Nominal Growth (ZNG) Budget means less budget on non-staff costs supporting OSCE's operations. In longer phases of non-approved Unified Budgets, this has adverse effects on the implementation of the mandate. Audit finding No.7: Due to the lack of an approved Unified Budget2024, the 2021 post table remained binding in 2024. This meant that none of the proposed post table changes in the Budget proposals2022–2024 could be implemented, which had a compromising impact on the operational efficiency. Recommendation No.2 to the Permanent Council: The ACA reiterated the audit recommendation from 2023. In the case of non-approved Unified Budgets, the OSCE should consider a mechanism for indexing the last approved Unified Budget accor- ding to the use of Financial Regulation3.04 – by taking into account the effects of inflation or consumer price indexes. 8.4. Cost containment measures As the Unified Budget for 2024 had not been approved, the OSCE continued to operate under provisional expenditure authorization, effectively a de-facto Zero Nominal Growth Budget. This situation had significant impact on the programme implementation and led to efficiency losses. One of the measures introduced by the OSCE to manage the effects of provisional expenditure authorization was the enhancement of financial forecasts. In July2024, these forecasts showed a deficit up to EUR5.500million for year-end 2024. This emphasized the need for measures across the entire OSCE were necessary to prevent a potential deficit. Throughout the financial year 2024 the Secretary General adopted extensive measu- res to prevent an impending deficit at the end of 2024. These were the cost contain- ment measures.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 20 Among others, the following Unified Budget cost containment measures were intro- duced by all Secretariat Departments: • several hiring freeze measures • avoidance of overtime • limited Special Service Agreements • reduction in travel and conference attendance • reduction in staff training activities • mandatory minimum 3-month break between vacated post and reappointments. Audit finding No. 8: Ultimately, the OSCE managed to avoid the impending deficit for 2024 by obtaining Additional Provisional Expenditure Authorizations using a large portion of the Cash Surplus from 2023 and by implementing numerous cost contain- ment measures among the whole organization which led to a full reduction of the forecasted deficit. Whereas the decision to not fill posts had a positive effect on cost savings in 2024, this also resulted in a critical situation in the DMF including the BFS. There was only one staff member each responsible for performing essential tasks including the preparation of the Financial Statements, the Unified Budget Proposal and year-end forecasts. A minimum replacement period of three months for vacant positions, which was exceeded in many cases, poses an inherent risk for the OSCE, as essential reports for the organization could no longer be produced in the required quality and within the necessary time frame. Audit finding No.9: The ACA considered the staff shortage within the DMF and BFS critical for the organization, especially in meeting its internal and external reporting requirements. Recommendation No.3 to the Secretary General: When considering cost contain- ment measures, the Secretary General should not lose sight of the existing staff shortage and the fact that in some departments, especially in the DMF including the BFS, only one staff member was left to perform essential tasks in the required quality and within the necessary time frame.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 21 9. Internal control 9.1. Office of Internal Oversight (1)The Permanent Council established the OIO as an independent appraisal func- tion within the Organization to examine and evaluate its activities. The OIO reports directly, and is responsible to the Secretary General who approves its annual work plan. The principles governing internal oversight are reflected in the Financial Regu- lations, the Internal Oversight Mandate, and the Evaluation Framework Administra- tive Instruction. (2)In 2024, the OIO faced – like in the year 2023 – a systemic risk driven by staff turn-over. Based on the last approved Unified Budget 2021, OIO's approved post table in 2024 comprised 14professional posts and three general service posts. Due to increased staff cost, three posts were kept vacant once they became available in 2024. The issue was further exacerbated by continued inflationary pressures. (3)The OIO conducts internal audits, independent evaluations, and investigations of the OSCE's operations, activities, outputs, and progress towards outcomes, inclu- ding those of Field Operations and Institutions according to an annual working plan. The aforementioned staff turn-over resulted in adjustments to OIO's working plan. Furthermore, the lack of an approved Unified Budget2024 and the required quar- terly and monthly provisional expenditure authorizations led to the delay of several Field visits for audits and evaluations and to a postponement of engagements. Audit finding No.10: The resources of the OIO were still limited, which posed a risk for fulfilling the full mandate. As already mentioned last year, the ACA noted that the reduction in operational resources of the OIO combined with vacant posts had a negative impact on OIO's timeline for completing, reporting on and following up on missions. This needs to be addressed as the third line of defense is entrusted to the OIO through its internal audits, evaluations, advisory services and investigations. Recommendation No.4 to the Permanent Council: The ACA reiterated the audit recommendation from 2023 to provide the OIO with the necessary human and financial resources to properly fulfil its tasks as an independent appraisal function within the OSCE.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 22 9.2. Fraud prevention and detection FAI14 –OSCE Fraud Prevention and Detection Policy– covers the OSCE fraud prevention and detection policy. The OIO is designated as the office within the OSCE to receive reports on the inappropriate use of OSCE resources or on other types of fraud. The OIO is also responsible for examining and evaluating the adequacy and effectiveness of the OSCE's internal control environment including its assessment of fraud risks. FAI10 –Reporting on inappropriate Use of OSCE Resources– describes the procedures for reporting. The OIO provided the ACA with the following information on fraud prevention and detection from 2019 to 2024: Table 2: Fraud prevention and detection from 2019 to 2024 201920202021202220232024 Total complaints received (including fraud)55 66 59 61 64 70 thereof allegations of non-financial fraud reported 17 6 11 12 19 6 thereof allegations of financial fraud reported3 4 7 8 8 7 Number of preliminary reviews conducted by OIO (all allegations including fraud) 49 45 32 58 42 51 Number of investigations carried out 3 7 17 5 7 8 Investigation reports issued (allegations substantiated) 3 4 11 3 3 4 Closure reports issued (allegations not substantiated or closed for other reasons) 0 3 6 2 4 4 New investigations opened 6 18 6 9 5 12 Source: OSCE The total number of investigation issues/complaints reported to the OIO increased slightly again from 64 (2023) to 70 (2024), including the misuse of OSCE resources, conflicts of interest, Code of Conduct violations, harassment, abuse of authority, misrepresentation, forgery or false certification. The number of allegations of fraud decreased from 19 (2023) to 6 (2024) for non- financial fraud and from 8 (2023) to 7 (2024) for financial fraud – like attempted procurement fraud by bidders using similar costs or unlawful payment schemes for contractors. As a consequence of the limited human and financial resources, one audit within the working plan 2024 had to be rescoped, two were delayed and two moved to the 2025 working plan. Two evaluation assignments had to be cancelled. Furthermore,
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 23 the planned fraud awareness training could not be performed during the last three years. For the same reason the planned updates of FAI10 and 14 had already been postponed in 2023 and were not implemented in 2024 either. Audit finding No.11: Allegations of financial fraud were brought to the attention of the OIO within the framework of the fraud prevention and detection policy set up by FAI10 and FAI14. The ACA took note of the preliminary reviews and investigations carried out by the OIO and did not find any fraud likely to have a significant impact on the Financial Statements2024 as a whole. Extensive training on fraud awareness could not be performed in three consecutive years (2022–2024) due to a lack of resources in the OIO. The planned updates of FAI10 and FAI14 were postponed and therefore not yet completed. The ACA reiterated its aforementioned recommendation No.4 to the Permanent Council to provide the OIO with the necessary human and financial resources to properly fulfil its tasks as an independent appraisal function within the OSCE. 9.3. Letters of Attestation The Head of Institution/Mission and Chief of Fund Administration of OSCE's Execu- tive Structures (Secretariat, Institutions and Field Operations) are responsible for establishing and maintaining effective control over the use of resources and finan- cial reporting. They have to acknowledge their responsibility for providing all infor- mation necessary for the preparation of accurate Financial Statements for the OSCE and the associated Statement of Internal Control, and for satisfying the External Auditor. As part of the preparation of the Financial Statements2024, the Institutions and Field Operations submitted the required Letters of Attestation to the Secretariat in early 2025. Therein they confirmed the reliability of controls carried out in a decla- rative manner. These letters were reviewed by both DMF and OIO and the findings were included within the Statement on Internal Control 2024, prepared by the Secretary General in March 2025. The ACA identified that the attached Annexes to the Letters of Attestation contained further details to support assertions made in this letter. Some Executive Structures informed on exceptional requests (staff recruitment, extension of contracts, payment of unused leave), details of impairments and loss of assets and actions taken in response to recommendations of previous audits (Internal Audit, Audit Committee, External Audit). Overall, these assertions were not material.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 24 Audit finding No.12: No significant issues were identified in the Letters of Attesta- tion provided by all Executive Structures for the preparation of the Financial State- ments 2024. IV. Key audit findings related to the Financial Statements 2024 10. Cash and Cash Equivalents, Investments While auditing Cash and Cash Equivalents amounting to EUR54.777million in 2024 and Investments amounting to EUR118.576million in 2024, the ACA requested confirmation letters from 27banks, with which the OSCE had business relationships. The ACA requested the balance at year-end, a list of authorized signatories, additio- nal other liabilities, interest rates and any other existing finances. The ACA sent the request letters directly to the banks, with banks being instructed to respond directly by post and/or email. The ACA received 26 confirmation letters. One confirmation was not received, however all business relations to that one bank have been terminated in 2024. For the previous financial year2023, one bank confirmed individual signing autho- rity although FAI5 –Income and Cash Management– point9.2 (Bank Signatory Panel) required two signatories for all bank transactions. After the detection of this finding by the ACA, the DMF instructed the bank to change all accounts to require double signature in March2024. For the financial year 2024, the ACA received confirmation letters from two banks confirming individual signing authority. In total, the Bank Signatory Panels of nine banks were outdated, including individuals who were no longer employed by the OSCE. In one case, both individuals listed as signatories had left the organization during the financial year 2024. These deficiencies increase the risk of unauthorized access to potential fraud.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 25 Following the ACA's findings the OSCE initiated corrective actions. The following table gives an overview on audit finding No.13 and an update on the actions taken until June 2025: Table 3: Overview of findings regarding signing authorities Single signing authority Two former staff members with signing authority One former staff member with signing authority Update June 2025 Bank No. 1 X X in progress Bank No. 2 X removed Bank No. 3 X in progress Bank No. 4 X removed Bank No. 5 X removed Bank No. 6 X removed Bank No. 7 X removed Bank No. 8 X removed Bank No. 9 X X in progress Source: OSCE For two banks, the OSCE requested a change from single to double signing authori- ties; however, no confirmation had been received from the bank until June 2025. In another case involving two former staff members who still held signatory rights, both authorizations were successfully removed by the time this Audit Report was issued. Additionally, for five banks where the signatory rights for one departed staff member had remained on record, the respective signatory rights were also remo- ved. At three other banks, the removal of signatory rights for former staff members had already been initiated by the Organization, but was still in progress by June 2025. Audit finding No.13: The ACA found that two bank confirmations were issued with single signatory rights. Nine bank confirmations contained outdated Bank Signatory Panels, including individuals no longer employed by the OSCE. The ACA noted that the DMF had initiated corrective actions during the audit period. Recommendation No.5 to the DMF: All bank transactions should require double signing authorities in accordance with FAI 5, point 9.2. Internal controls should be implemented to ensure that this requirement is met when establishing any new bank account.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 26 Recommendation No.6 to the DMF: An internal control mechanism should be esta- blished to ensure the continuous accuracy and completeness of all Signatory Panels, especially in cases of personnel changes within the Organization. Recommendation No.7 to the DHR: In order to ensure the prompt removal of signa- tory rights upon termination of an employment, a standardized process should be established and integrated into the employee offboarding process. 11. Allowance for Assessed Contributions Financial Regulation4.09 outlined the required actions in the event of arrears in Assessed Contributions. In 2024 the OSCE did not fully implement the steps speci- fied in the clauses c) to f) of the Financial Regulations2. Despite the required regular submission of quarterly reports on outstanding Assessed Contributions, no formal follow-up measures as defined in Financial Regulation4.09 had been undertaken in 2024. This approach was already applied in 2023 and noted in the ACA's Audit Report2023. While Financial Regulation4.09 required that arrears outstanding for more than two years be reported to the Permanent Council by the Chairmanship, it did not contain provisions regarding the treatment of a bad debt allowance. Likewise, no such guidance was provided in the corresponding FAI5. The OSCE has implemented IPSAS41 –Financial Instruments– as of 1January2023 and has been recognizing a bad debt allowance for overdue receivables from Assessed Contributions in accordance with the requirements of IPSAS41 ever since. This indicated a misalignment between the internal regulations (Financial Regula tions and FAI 5) and the international accounting standards applied. Audit finding No.14: The OSCE did not act in accordance with the Financial Regula- tions and FAI5 regarding actions to be taken in the event of arrears. Furthermore, the current Financial Regulations and FAI5 did not reflect the requirements of IPSAS41 with regard to the treatment of existing financial instruments, such as allo- wances for doubtful debts. However, the ACA noted that the presentation within the Financial Statements 2023 and 2024 was in line with IPSAS 41. 2 Financial Regulation 4.09: c) The Secretary General shall request the participating States to pay arrears within 60 days if a participating State has not paid all its Assessed Contributions and dues for special financing for the preceding financial year by 1 April of the current financial year. d) The Secretary General shall request an explanation for non–payment from the participating States. e) The Secretary General shall inform the ACMF and consult with the Chairmanship. f) The Permanent Council shall take concrete measures to ensure payment.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 27 Recommendation No. 8 to the DMF: The OSCE should revise its Financial Regula tions and FAI5 to ensure their alignment with IPSAS41, particularly with respect to the recognition and disclosure of doubtful receivables. Additionally, the OSCE should either begin implementing the measures outlined in clauses c) to f) of Financial Regulation 4.09 and FAI5 or amend these regulations to reflect a better enforceable process for addressing arrears in Assessed Contributions. 12. Outstanding Receivables for Third Party projects An OSCEThird Party (3P) project was an administrative arrangement used to receive and process contributions from a donor for specific activities. For these arrange- ments, the OSCE acted solely as a processing agent and did not assume responsibi- lity for such projects. Therefore, the financial performance of these projects was not included in the Financial Statements 2024. Donors could be e.g. participating States, outside institutions, organizations as well as individuals or a group of the same. They could make contributions to a 3Pproject, either in cash or in-kind. 3Pprojects were managed organizationally, administra- tively, and financially in the same manner as Extra-Budgetary projects. In the absence of specific 3P provisions, the rules and procedures set out in FAI4 applied. 3Pprojects were primarily used to fund and administer seconded staff. In addition, they also supported the short-term election observers for Election Observation Missions (EOMs), which were mainly implemented under the lead of the Office for Democratic Institutions and Human Rights (ODIHR), Warsaw, Poland. The Interim Policy Guidance for the treatment of 3P projects was issued as an adden- dum to FAI 4 – Extra-Budgetary Contributions. The purpose of this guidance was to outline the framework and provisions for the approval, setup, maintenance, manage- ment and closure of 3P projects established by Executive Structures and the moda- lities of acceptance, management and reporting of contributions made to such projects. The current Interim Policy Guidance does not comprehensively address all operational aspects of Third-Party projects supporting short-term observers. Furthermore, responsibilities for management and the collection of receivables rela- ted to the 3P projects do not clearly delineate institutional responsibilities. Since the Interim Policy Guidance did not contain provisions regarding advance authorizations, the general rule set out in FAI 4 applied. According to FAI 4, costs could only be covered as far as the contributions had been received, unless an advance authorization was granted. However, ODIHR regularly covered operational costs for short-term election observers in advance. The actual costs were subse-
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 28 quently recharged to the donors. Some participating States and donors have, for many years, not always fully reimbursed these recharges to the Organization. Audit finding No.15: The ACA identified that there was no policy regarding Third Party projects in place covering all aspects of short-term observers for Election Observation Missions. There were no clear regulations of the responsibilities of ODIHR and DMF regarding the management and collection of Third Party receivab- les as well as advance authorizations for operational costs. Recommendation No.9 to the DMF and ODIHR: The OSCE should develop and implement a clear and comprehensive policy governing the management of Third Party projects. This policy should define roles and responsibilities, establish proce- dures for approval, monitoring and reporting, and ensure alignment with existing financial and operational regulations. 13. Clearance of Extra-Budgetary Contributions Receivables Extra-Budgetary Contributions Receivables relate to the agreements and pledge acceptances with donors which are due for payment. Unpaid pledges are recognized as a receivable with a corresponding deferred revenue liability, which is recorded as a Conditional Extra-Budgetary Contribution deferred revenue for active pledges and respectively as a Provision for expired pledges pending final donor reporting. Receivables relating to other activities and special projects included outstanding amounts totaling EUR1.031million pertaining to one pledge from the European Commission, which had been overdue for more than three years. The pledge had expired on 22December2024 and had not been renewed. Despite the expiration of the pledge, a payment of EUR0.388million was received from the European Commission on 27December2024. As this payment could not be matched to any pledge valid at that time, the payment was recorded under unapplied receipts. During the year-end closing procedures, based upon the infor- mation available at the time, these unapplied receipts were reclassified as Conditio- nal Extra-Budgetary Contributions deferred revenue, thereby recognizing a liability towards the European Commission. The cash balance was not applied to the open Extra-Budgetary Contributions Receivable. The remaining outstanding receivable balance was not written off against the Provision for pending close, although the pledge had already expired on 22 December 2024.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 29 Audit finding No.16: The presentation of this case in the Financial Statements2024 was not adequate. The payment received on 27December2024 ought to have been applied to the open Extra-Budgetary Contributions Receivable. Additionally, the remaining outstanding receivable balance should have been written off against the Provisions for pending close, as neither a valid receivable nor a corresponding liabi- lity existed any longer. The OSCE fully accepted the ACA's position and implemented the necessary reclas- sifications as at 31December2024. As a result, the Total Assets and Liabilities were reduced by EUR1.031million. Recommendation No.10 to the DMF: The OSCE should strengthen its review proce- dures with regard to outstanding Extra-Budgetary Contributions Receivables, in particular by regularly assessing whether such receivables remain valid or have expi- red. Furthermore, unapplied receipts should be subject to an enhanced review during the year-end closing process to determine whether they could be matched to any existing receivable or pledge, thereby ensuring appropriate presentation in the Financial Statements. 14. Disposal of Fixed assets and Inventories 14.1. Approval of donations During the implementation of projects and activities funded from the Unified Budget as well as Extra-Budgetary Contributions, assets and inventories were regularly donated to beneficiaries. In accordance with FAI7 –Assets Management– these donations could be given to partner agencies, governments, governmental or non- profit organizations, if such action served the best interests of the OSCE. There are, in general, three different types of donations within OSCE: a) donation of equipment no longer needed by the organization, b) provision of equipment for the duration of the project with subsequent dona- tion to the beneficiary at the end of the project or c) purchase for donation. In any case the transfer of ownership shall be documented in a Donation Agree- ment, specifying the date of the legal transfer of ownership as well as the responsi- bilities and obligations of the parties involved. A template of this Donation Agreement was prepared by OIO and submitted to all Executive Structures, however it is not mandatory to use this template, as in some cases the beneficiaries wish to use own templates.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 30 In addition to the Donation Agreement all donations require the approval of the Fund Material Management Committee (FMMC) in line with FAI7, irrespective of the value of the assets or inventory involved. In contrast to that, according to FAI6 –Procurement and Contracting– there were different approval authority thresholds for the purchase of these items, depending on the contract value of the purchase. Once the signed Donation Agreement and the FMMC documentation were submit- ted to the Assets, Logistics and Travel Support Unit (ALTSU) within the Secretariat, the retirement of the assets or inventory was recognized within the accounting. The ACA identified cases amounting to EUR0.579 million in which the physical handover of the donated items to the beneficiaries had occurred before the case was presented at an FMMC meeting and the required approval of the FMMC was obtained. In those cases, the FMMC did not approve the cases ex post, but only "took note" of the donation. Audit finding No.17: Donations amounting to EUR0.579 million made to beneficia- ries in the financial year 2024 were not approved by the FMMC as required by FAI7. Recommendation No.11 to all Executive Structures: The Executive Structures should ensure that all donations are approved by the FMMC prior to the delivery of the items to the beneficiaries in order to comply with FAI7. Recommendation No.12 to the DMF: The DMF should review the existing regulati- ons within FAI6 and FAI7 and implement either a mandatory FMMC approval at the stage of purchasing items to be donated (irrespective of the purchase value) or implement a combined FMMC approval for the purchase and donation of such assets or inventory. 14.2. Documentation of the handover date for donations As stated above in the case of donations, the donating Executive Structures were obliged to prepare and sign a Donation Agreement with the beneficiary. In most cases the Donation Agreement included a handover document as an appendix to the Agreement that specified the items donated. The template used also included information like date or handover location. However, on most of the samples tested no actual handover date was stated, neither were the signatures on the handover document dated. In some cases, the handover document had the date of the Dona- tion Agreement printed, which was not necessarily the date of the physical and legal transfer of the ownership. The actual date of the transfer of ownership must be the
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 31 day that is used to derecognize the assets/inventories for donation3 within the organization's asset accounting module. Without this information, the recognition within the accounting system could be made in the wrong accounting period. Audit finding No.18: It was not mandatory to indicate the actual date on which the donated items were physically handed over on the handover document. This creates a risk of the retirement being recognized in the wrong accounting period. Recommendation No.13 to the DMF: The actual handover date should be a manda- tory information to be included on the handover document as this triggers the reco- gnition of the retirement within IRMA. 14.3. Accounting date of disposals The write-off and disposal of an asset is the final phase of an asset's life cycle. Aside from donations, there may be also other reasons that require the elimination of an asset from the organization's accounts, e.g. sale, damage or theft. Fixed asset write-offs and disposals could be initiated by different departments (Asset Management within the Executives Structures or the Secretariat, Information and Communication Technology (ICT), Facilities Management) or by any individual OSCE official who is responsible for the proper care, use and security of assets under their custody. The write-off requests had to be prepared by the (local) Asset Manage- ment of the Executive Structure, which was also responsible for obtaining the neces- sary approvals in line with FAI7. The derecognition within the asset's accounting module was booked by the ALTSU for all disposals within the organization once the necessary supporting documents had been provided by the relevant Executive Structure. The ACA discovered cases where the transmittal of these documents happened months after the actual trans- fer of the ownership. The ACA found that there was no written requirement to record disposals of fixed assets/inventories for donation retrospectively on the date on which economic ownership was actually transferred or lost. This could lead to misstatements in the Financial Statements due to a possible recognition within the wrong accounting period. 3 According to FAI 7 inventories that were purchased for donation with a purchase value exceeding the threshold of EUR 1,000 were recorded within the asset accounting module for administrative reasons. They were capitalized at the time of the purchase and retired from the asset accounting module after the donation had been completed.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 32 Audit finding No.19: FAI7 did not provide for a retrospective recording of disposals of assets/inventories for donation based on the date of the transfer of the economic ownership. This poses the risk of misstatements in the Financial Statements. Recommendation No.14 to the DMF: The DMF should amend the provisions in FAI7 to ensure that disposals are recorded in the asset accounting module effective with the disposal date to allow for a proper presentation within the Financial State- ments. Recommendation No.15 to all Executive Structures: The necessary supporting documents for documenting the disposal of assets/inventories for donations should be sent to ALTSU without delay to ensure adequate accounting in the correct finan- cial period. 15. Reconciliation and completeness of employee lists The OSCE classified its employees in three main categories: fixed-term, short-term and daily staff. These categories were included in two different employee lists. The Organization used one employee list that contained just the fixed-term staff, while the other list included all categories of staff. The reconciliation of the number of employees from the beginning to the year-end of the financial year2024 was not possible due to various system and reporting limi- tations as well as numerous joiners and leavers during the year2024. In total the reconciliation could not be carried out without discrepancies for 16staff members. Audit finding No.20: Reconciliation procedures for all employee lists could not be carried out without discrepancies due to various system and reporting limitations. Recommendation No.16 to the DHR: The OSCE should ensure that a reconciliation of the employee list is possible for all types of employees.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 33 16. Retrospective change of salary scales for annual leave liability Adjustments to salary scales for general staff occurred periodically. In some cases, such adjustments were made retrospectively. The OSCE neither approved the new salary scales nor made any retrospective changes to the new salary scales in 2024 or during the period in which the Financial Statements2024 were prepared. Never- theless, the calculation of the annual leave liabilities for year-end2024 was done with the new salary scales published by the UN during the financial year2024, although their implementation was not approved by the OSCE until June2025. Due to this approach, the effect on the Financial Statements 2024 was not material. Audit finding No.21: For the calculation of the annual leave liability, the OSCE used retrospectively adjusted salary scales (published by the UN) for general staff although such salary scales were not approved by the OSCE until June 2025. The effect on the Financial Statements2024 was not material. Recommendation No.17 to the DMF: Retrospective adjustments to salary scales that affect the calculation of year-end liabilities and provisions should only be taken into account if the implementation of the UN salary scale adjustments was accepted before year-end or during the period of the preparation of the Financial Statements.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 34 17. Special Service Agreements 17.1. Organization-wide monitoring The rules for Special ServiceAgreements (SSA) were defined in Staff Instruction No.23 (SI23) and set out the terms governing the engagement of consultants under a Special Service Agreement, such as the duration and the selection procedure. SI23, which originally came into effect on 1January2021 (Revision1), was replaced by Revision2, effective from 1January2024. The amendment of SI23 through Revision2 was based on a consultative process with the Secretariat, the Institutions and Field Operations and with the ACMF. Furthermore, the new thresholds concerning the selection procedure of consultants were guided by Advisory Assignments conducted by the OIO.4 According to Revision25, each Executive Structure was responsible for maintaining control and oversight of Special Service Agreements. Before engaging a consultant, due consideration should be given to the option of utilizing the expertise of OSCE staff members available internally at the same or another Executive Structure. Each Executive Structure had to ensure compliance with cumulative duration limits and to report Special Service Agreement-related information to DHR for accurate oversight. The Heads of Mission or designated officials were obliged to monitor and ensure that the permitted number of service days was not exceeded or that multiple (overlapping) assignments were prohibited. This should ensure adherence to SI23. The monitoring process was incomplete as there was no organization-wide monito- ring of the consultants' working days. Overlapping assignments could therefore not be prevented within the OSCE. In September2024, a tool within IRMA was implemented to monitor the assign- ments with consultants. This should ensure adherence to the stipulated limits and provide a comprehensive overview. However, the reporting format of this overview was very complex. At the time of the audit, the OSCE was therefore reviewing and validating the usefulness and accuracy of the corresponding data. It is expected that the quality and clarity of the report would improve over time. 4 "Advisory Assignment on the Management of Special Service Agreements – Task 1: Advice on the adequacy of the proposed new financial thresholds" of 10 August 2023 and "Advisory Assignment on the Management of Special Service Agreements – Task 3: Lessons learned from OiO findings pertaining to SSAs since 20215" of 12 October 2023 5 SI 23/Revision 2, Point 16
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 35 Audit finding No.22: The ACA noted the incomplete monitoring process as there was no organization-wide monitoring of the consultants' working days for Special Service Agreements. Recommendation No.18 to the DHR and DMF: The DHR and DMF should strengthen the oversight and monitoring of Special Service Agreements across all Executive Structures –including the Secretariat, Institutions, and Field Operations– in order to achieve an organization-wide compliance with SI23. Recommendation No.19 to the DHR: Based on a recommendation from OIO issued in 2023, it is recommended that a standardized recording of the related data, beyond the current level of capture, is being made in the relevant organizational systems to enable largely automated monitoring controls – both to monitor compliance as well as to ensure a consistent identification of potentially problematic situations. 17.2. General requirements for invoices and performance documents The ACA audited consultants' invoices and performance notes to verify expenses in the OSCE's Financial Statements. These documents were used to verify the correct- ness of the amounts posted and the correct period allocation. The ACA identified a vulnerability due to missing information regarding the performance of services, the service period or the content. This missing information gave rise to the risk of a wrong recognition of the transactions (with regard to the amount, period, etc.). Audit finding No.23: Due to missing accounting-relevant information (e.g. content or dates) on the consultants' invoices and performance notes, a weakness was iden- tified in the recording and presentation of expenses in the Statement of Financial Performance. Recommendation No.20 to the DHR and DMF: To ensure proper documentation and accountability, the consultants should be encouraged to improve the quality of the invoices and performance notes. The exact performance period and the contents should be stated either on the invoices or on other performance documents.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 36 18. Recommendations – Prioritization The recommendations have been ranked in order of priority: • priority 1, a fundamental point, which requires immediate attention from Manage- ment. This point corresponds to the existence of a high level of risk to the objectives of the Organization; • priority 2, control point of a less urgent nature, which must be handled by Manage- ment. This point corresponds to an intermediate level of risk; • priority 3, point on which controls could be improved and to which the Management's attention is drawn. This point corresponds to a moderate level of risk. The recommendations with priority 1 are intended to avoid reputational risks in the long term. Table 4: Prioritization of recommendations No.Priorityto Paragraph Priority 1 1 1 PC Recommendation: The ACA reiterated the audit recommendation from 2023 to modify Financial Regulation 3.02 to allow for greater flexibility in provisional transfers of funds between Main Programmes and Funds in times when budget is not approved. paragraph 8.2 2 1 PC Recommendation: In the case of non-approved Unified Budgets, the OSCE should consider a mechanism for indexing the last approved Unified Budget according to the use of Financial Regulation 3.04 – by taking into account the effects of inflation or consumer price indexes. paragraph 8.3 3 1 SG Recommendation: When considering cost containment measures, the Secretary General should not lose sight of the existing staff shortage and the fact that in some departments, especially in the DMF including the BFS, only one staff member was left to perform essential tasks in the required quality and within the necessary time frame. paragraph 8.4 4 1 PC Recommendation: The ACA recommended to provide the OIO with the necessary human and financial resources to properly fulfil its tasks as an independent appraisal function within the OSCE. paragraph 9.1 Priority 2 5 2 DMF Recommendation: All bank transactions should require double signing authorities in accordance with FAI 5, point 9.2. Internal controls should be implemented to ensure that this requirement is met when establishing any new bank account. paragraph 10 6 2 DMF Recommendation: An internal control mechanism should be established to ensure the continuous accuracy and completeness of all Signatory Panels, especially in cases of personnel changes within the organization. paragraph 10 7 2 DHR Recommendation: In order to ensure the prompt removal of signatory rights upon termination of an employment, a standardized process should be established and integrated into the employee offboarding process. paragraph 10
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 37 No.Priorityto Paragraph Priority 2 8 2 DMF Recommendation: The OSCE should revise its Financial Regulations and FAI 5 to ensure their alignment with IPSAS 41, particularly with respect to the recognition and disclosure of doubtful receivables. Additionally, the OSCE should either begin implementing the measures outlined in clauses c) to f) of Financial Regulation 4.09 and FAI 5 or amend these regulations to reflect a better enforceable process for addressing arrears in Assessed Contributions. paragraph 11 9 2 DMF and ODIHR Recommendation: The OSCE should develop and implement a clear and comprehensive policy governing the management of Third Party projects. This policy should define roles and responsibilities, establish procedures for approval, monitoring and reporting, and ensure alignment with existing financial and operational regulations. paragraph 12 Priority 3 10 3 DMF Recommendation: The OSCE should strengthen its review procedures with regard to outstanding Extra-Budgetary Contributions Receivables, in particular by regularly assessing whether such receivables remain valid or have expired. Furthermore, unapplied receipts should be subject to an enhanced review during the year-end closing process to determine whether they could be matched to any existing receivable or pledge, thereby ensur- ing appropriate presentation in the Financial Statements. paragraph 13 11 3 ES Recommendation: The Executive Structures should ensure that all dona- tions are approved by the FMMC prior to the delivery of the items to the beneficiaries in order to comply with FAI 7. paragraph 14.1 12 3 DMF Recommendation: The DMF should review the existing regulations within FAI 6 and FAI 7 and implement either a mandatory FMMC approval at the stage of purchasing items to be donated (irrespective of the purchase value) or implement a combined FMMC approval for the purchase and donation of such assets or inventory. paragraph 14.1 13 3 DMF Recommendation: The actual handover date should be a mandatory information to be included on the handover document as this triggers the recognition of the retirement within IRMA. paragraph 14.2 14 3 DMF Recommendation: The DMF should amend the provisions in FAI 7 to ensure that disposals are recorded in the asset accounting module effective with the disposal date to allow for a proper presentation within the Financial Statements. paragraph 14.3 15 3 ES Recommendation: The necessary supporting documents for documenting the disposal of assets/inventories for donations should be sent to ALTSU without delay to ensure adequate accounting in the correct financial period. paragraph 14.3 16 3 DHR Recommendation: The OSCE should ensure that a reconciliation of the employee list is possible for all types of employees. paragraph 15 17 3 DMF Recommendation: Retrospective adjustments to salary scales that affect the calculation of year-end liabilities and provisions should only be taken into account if the implementation of the UN salary scale adjustments was accepted before year-end or during the period of the preparation of the Financial Statements. paragraph 16 18 3 DHR and DMF Recommendation: The DHR and DMF should strengthen the oversight and monitoring of Special Service Agreements across all Executive Structures – including the Secretariat, Institutions, and Field Operations – in order to achieve an organization-wide compliance with SI 23. paragraph 17.1
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 38 No.Priorityto Paragraph Priority 3 19 3 DHR Recommendation: Based on a recommendation from OIO issued in 2023, it is recommended that a standardized recording of the related data, beyond the current level of capture, is being made in the relevant organizational systems to enable largely automated monitoring controls – both to monitor compliance as well as to ensure a consistent identification of potentially problematic situations. paragraph 17.1 20 3 DHR and DMF Recommendation: To ensure proper documentation and accountability, the consultants should be encouraged to improve the quality of the invoices and performance notes. The exact performance period and the contents should be stated either on the invoices or on other performance docu- ments. paragraph 17.2
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 39 V. Follow-up of the External Auditor's recommendations The ACA reviewed the status of the recommendations issued for the previous finan- cial years. The following table presents the status of recommendations based on the Plan for the Implementation of the Recommendations of the External Auditor's Report (2023) and an update by April2025: Table 5: Follow-up of the External Auditor's recommendations 2023 No.Priority Recommendations made by External Auditors Status 1 1 Pursuant to Financial Regulation 8.01, the Permanent Council shall ensure that an External Auditor is appointed at all times. implemented 2 1 The ACA reiterated the recommendation to modify Financial Regulation 3.02 to allow for greater flexibility in provisional transfers of funds between Main Programmes and Programmes in times when budget is not approved. not implemented; to be followed up 3 1 The OSCE should consider in the case of non-approved Unified Budgets a mechanism for indexing the last approved Unified Budget according to the use of Financial Regulation 3.04 – by taking into account the effects of inflation or consumer price indexes. not implemented; to be followed up 4 1 The ACA recommended to provide the human and financial resources necessary for the OIO to properly fulfil its tasks as an independent appraisal function within the OSCE. not implemented; to be followed up 5 2 All bank transactions should require double signing authorities in accordance with FAI 5, point 9.2. An internal control should be in place to ensure the fulfilment of this requirement in any case of creating a new account. Documentation should be retained in a manner that ensures the availability of all necessary documents even in the event of high turn-over. partly implemented; to be followed up 6 2 The bills for the Assessed Contributions sent to the participating States should meet the legal and commercial requirements of a bill. implemented 7 2 The bills issued by the OSCE for Assessed Contributions to the participating States should indicate the amount of the individual contribution. An overview of other outstanding amounts could be submitted in an appendix. implemented 8 2 With regard to the payment of Assessed Contributions, the OSCE should carry out its actions in the event of arrears according to the clauses c) to f) of Financial Regulation 4.09. implemented 9 3 The OSCE should carry out an evaluation of the Investment Policy to optimize and adapt it to the development of the banking landscape and operational framework of the OSCE. The extension of the banking framework from Basel II to Basel III and the maximum term of investments of nine months were cited as examples for reconsideration. partly implemented; to be followed up 10 3 With regard to the large volume of purchases, a technical year-end accruals process within the Integrated Resource Management System (Oracle) should be adopted in order to minimize the need for manual adjustments. not implemented; to be followed up 11 3 In order to align the presentation of the revenues with the corresponding expenses occurred, the accounting policy should be adopted accordingly upon implementation of IPSAS 47. partly implemented; to be followed up
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 40 No.Priority Recommendations made by External Auditors Status 12 3 In order to support the calculation of the revenues on an accrued basis, the necessary reports should be created in Oracle. This will also help to prepare for the upcoming changes due to the new accounting standard IPSAS 47. partly implemented; to be followed up 13 3 The DHR payroll should develop, with the support of ICTS, a system "validation" which technically prevents inaccurate entries. partly implemented; to be followed up 14 3 The year-end reconciliation shall refer back to the original basic data referring to the payslips in the HR module in order to be able to identify manual adjustments to the account numbers. partly implemented; to be followed up 15 3 Retrospective adjustments to salary scales that affect the calculation of year-end liabilities and provisions should be taken into account if they occur during the balance sheet preparation phase. implemented 16 3 The OSCE should be able to reconcile all types of employees on the list, not just one particular category of employee. implemented 17 3 The OSCE should issue an organization-wide rule of procedure regarding standardized documentation requirements. In order to fulfil these requirements, the necessary technical and human resources should be provided to every Executive Structure. partly implemented; to be followed up 18 3 The OSCE should encourage the suppliers and consultants to improve the quality of the invoices and delivery notes. In addition to the signature of the approver, the delivery period or date of receipt and approval should be stated on takeover protocols and other delivery documents. Invoices should be signed by the suppliers and contain information regarding the contents. partly implemented; to be followed up Source: OSCE
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 41 VI. Audit Opinion Opinion We have audited the Financial Statements of the Organization for Security and Co-operation in Europe (OSCE) for the 12-months period ended 31 December 2024. These Financial Statements 2024 comprise the Statement of Financial Position as at 31 December 2024, the Statement of Financial Performance, the Statement of Changes in Net Assets, the Cash Flow Statement and the Statement of Comparison of Budget and Actual Amounts the year then ended, and Notes to the Financial Statements, including a summary of significant accounting policies. In our opinion, the accompanying Financial Statements 2024 present fairly, in all material respects the Financial Position of the OSCE as at 31 December 2024 and of its Financial Performance and its Cash Flows for the year then ended in accordance with the International Public Sector Accounting Standards (IPSAS). Basis for Opinion We conducted our audit in accordance with the International Standards of Supreme Audit lnstitutions (ISSAls). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements' section of our report. We are independent from the OSCE in accordance with the ethical requirements that are relevant to our audit of the OSCE's Financial State- ments, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suffici- ent and appropriate to provide a basis for our opinion. Responsibilities of Management and those charged with Governance for the Financial Statements Management is responsible for the preparation and fair presentation of the Finan- cial Statements in accordance with the IPSAS and according to Regulation7.01 of OSCE's Financial Regulations as well as for such internal control as Management determines is necessary to enable the preparation of Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Financial Statements, Management is responsible for assessing OSCE's ability to continue as a going concern, disclosing, as applicable, matters rela- ted to going concern and using the going concern basis of accounting unless Management either intends to liquidate the OSCE or to cease operations, or has no realistic alternative but to do so.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 42 Those charged with Governance are responsible for overseeing OSCE's financial reporting process. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Audit Report that includes our Audit Opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conduc- ted in accordance with ISSAls will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Financial Statements. As part of an audit in accordance with ISSAIs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of OSCE's internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. • conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncer- tainty exists related to events or conditions that may cast significant doubt on OSCE's ability to continue as a going concern. lf we conclude that a material uncertainty exists, we are required to draw attention in our Audit Report to the related disclosu- res in the Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are strictly based on the audit evidence obtained up to the date of our Audit Report. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls we identify during our audit.
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Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 45 VII. Annexes Annex 1: Recommendations from the Performance Audit for the overall organization As part of this year's Financial Audit, the ACA also conducted a Performance Audit of the OSCE Mission to Skopje, which – in addition to recommendations to the Field Operation – resulted in recommendations to the overall organization. These recom- mendations are presented in Table6 below. The recommendations have been ranked in order of priority: • Priority 1, a fundamental point, which requires immediate attention from Manage- ment. This point corresponds to the existence of a high level of risk to the objectives of the Organization; • Priority 2, control point of a less urgent nature, which must be handled by Manage- ment. This point corresponds to an intermediate level of risk; • Priority 3, point on which controls could be improved and to which the Management's attention is drawn. This point corresponds to a moderate level of risk. Table 6: List of recommendations from the Performance Audit for the overall organization Performance Audit Priorityto Recommendation Priority 1 1 PC Recommendation: The OSCE should consider in the case of non-approved Unified Budgets a mechanism for indexing the last approved Unified Budget according to the use of Financial Regulation 3.04 by taking into account the effects of inflation or consumer price indexes. 1 PC Recommendation: Financial Regulation 3.02 should be modified to allow for greater flexibility in provisional transfers of funds between Main Programmes and Programmes in times when budget is not approved. 1 PC Recommendation: The Permanent Council should consider an organization-wide discussion on the possible added value and achievement of objectives of Executive Structures in order to maximize their impact. 1 Secre tariat Recommendation: The Secretariat should continue with its efforts to separate the Unified Budget from the Extra-Budgetary administration, which is already the case with the Implementing Policy on the Recovery of Indirect Common Costs. Priority 2 2 DHR, DMF Recommendation: The DHR and DMF should strengthen the oversight and monitoring of SSAs over all Executive Structures – including the Secretariat, Institutions, and Field Operations in order to achieve an organization-wide compliance with SI 23.
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 46 Performance Audit Priorityto Recommendation Priority 2 2 PC Recommendation: FAI 6 and the Technical Guidelines should be revised, taking into account – adding the option of purchasing a property to the types of immovable property to ensure best value for money. A buy or lease decision should be made on the basis of economic considerations, taking into account the estimated duration of the mandate and the staffing requirements. – to adapt FAI 8 – OSCE Premises Management – and the Technical Guidelines to the specific needs of Extra-Budgetary projects, – that when conducting a competitive process in accordance with FAI 6, cooperation between the FMU and the PCU should be mandatory, – that general guidelines for the design and content of a rental contract should be provided, also taking into account the possibility of penalties, – to critically evaluate the terms of reference of the technical policy, providing an easy to use, comprehensive and clearly defined document, – to create a standard for the security of premises. This standard should include a general risk assessment before tendering for new premises. Priority 3 3 DHR Recommendation: OSCE‘s DHR should monitor and analyze the implications of the much higher thresholds set in Revision 2 for open competitive selection of international SSA contractors (EUR 50,000) and local SSA contractors (EUR 12,000) in relation to the influx of new talents onto the SSA lists. It should furthermore assess whether the aimed reduction in the administrative workload has actually been achieved. 3 DMF Recommendation: The DMF should implement a document management system which ensures that all individuals working on or within a project have access to the necessary documents. Double storage or the need for duplicate manual uploads should be avoided. 3 DMF Recommendation: A project management software, that meets the current requirements for UB and Extra-Budgetary Projects and minimizes the need for manual analyses by project teams and the usage of single excel-files for planning, executing, and monitoring projects should be adopted. 3 DMF Recommendation: The treatment of ICC allotments as a separate Extra- Budgetary project in accordance with FAI 4 should be evaluated.
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Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 96 Acronyms and abbreviations AC Audit Committee ACA Austrian Court of Audit ACMF Advisory Committee on Management and Finance ALTSU Assets, Logistics and Travel Support Unit APEA Additional Provisional Expenditure Authorization BFS Budget and Finance Section CLS Conference and Language Services CRMS Common Regulatory Management System DHR Department of Human Resources DMF Department of Management and Finance e.g. exempli gratia EOM Election Observation Missions ES Executive Structure FAI Financial / Administrative Instruction FinReg Financial Regulation FMMC Fund and Materials Management Committee FS Financial Statements ICSC International Civil Service Commission ICT Information and Communication technology INTOSAI International Organization of Supreme Audit Institutions IPSAS International Public Sector Accounting Standards IRMA Integrated Resource Management System ISAs International Standards on Auditing ISSAIs International Standards for Supreme Audit Institutions MC Ministerial council No. number ODIHR Office for Democratic Institutions and Human Rights OIO Office of Internal Oversight OSCE Organization for Security and Co-operation in Europe
Audit Report on the Financial Statements 2024 of the Organization for Security and Co-operation in Europe (OSCE) 97 PC Permanent Council Q quarter RUR Resource Utilization Report SEC Secretariat SG Secretary General SMM Special Monitoring Mission (to Ukraine) SSA Special Service Agreement TNT Addressing Transnational Threats UB Unified Budget UBP Unified Budget Proposal
APPENDIX OSCE PROVIDENT FUND STATEMENT
Total Funds Units '000 EUR '000 Units '000 USD '000 Units '000 EUR '000 Units '000 USD '000 Units '000 EUR '000 EUR '000 Opening Balance as at 1 January 2024 110,599 114,361 4,684 5,048 14 1,421 16 1,858 66 1,675 Contributions/Premium Allocation 15,976 16,582 407 444 0 14 0 58 9 232 Unit Adjustments (5) (5) - - - - - - - - Surrenders (10,585) (10,982) (737) (801) - - (2) (283) (8) (204) Withdrawals (2,902) (3,010) (6) (6) (0) (0) (0) (4) (2) (56) Switch Out (220) (228) - - - - (0) (25) (6) (154) Switch In 43 45 23 25 - - - - 12 337 Transfer Out (170) (176) - - (3) (332) - - - - Transfer In - - - - - - - - - - Fees (Administration Fee and Establishment Charge) - - - - - - - - - - Total movements during year 2,137 2,226 (312) (338) (3) (318) (2) (254) 6 154 Guaranteed Interest on Opening Balance - 800 - 101 - - - - - - Guaranteed Interest on units accumulated during year - (1) - (5) - - - - - - Deposit Administration Bonus Units (additional interest) 303 315 9 10 - - - - - - Market Value Adjustment - - - - - 319 - 301 - 73 Closing Balance as at 31 December 2024 113,039 117,702 4,381 4,816 11 1,422 14 1,905 71 1,902 127,477 OSCE Provident Fund Summary Statement Unaudited - For Information Purposes Only For the Year Ended 31 December 2024 Deposit Administration Funds International Equity Funds European Equity Fund