Financial Report and Financial Statements for the year ended 31 December 2008 and the Opinion of the External Auditor

Audited Financial Statements  PC.ACMF/28/09 ENGLISH only

CONTENTS

Letter of Transmittal to the Chairman of the Permanent Council of the OSCE from the Secretary General

AUDIT OPINION OF THE EXTERNAL AUDITOR

Letter of Transmittal to the Auditor General from the Secretary General

Chapter I - OSCE Financial Report for the year ended 31 December 2008 . . . . . . . . . . . . . . . . . . . . . .1

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

2. Unified Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2.1 Income – Assessed Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 2.2 In-Kind Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.3 Budget and Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 2.4 Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

3. Extra-budgetary Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

4. Cash Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

5. Management Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 5.1 Performance Based Programme Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 5.2 Common Regulatory Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Annex A: OSCE Staffing Overview - Budgeted and Actual Staff Positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Chapter II - Budget and Expenditure Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

Chapter III - Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17

STATEMENT 1: OSCE Consolidated Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . .19 STATEMENT 2: OSCE Consolidated Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19 STATEMENT 3: OSCE Consolidated Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 STATEMENT 4: Summary of all OSCE Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . .21 STATEMENT 5: Summary of all OSCE Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 STATEMENT 6: Summary of all OSCE Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 STATEMENT 7: Summary of all OSCE Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24 STATEMENT 8: OSCE Secretariat and Institutions, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 STATEMENT 9: OSCE Secretariat and Institutions, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . .26 STATEMENT 10: OSCE Secretariat and Institutions, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27 STATEMENT 11: OSCE Secretariat and Institutions, Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28 STATEMENT 12: Summary by Region OSCE Field Operations, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 STATEMENT 13: Summary by Region OSCE Field Operations, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30 STATEMENT 14: Summary by Region OSCE Field Operations, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 STATEMENT 15: Summary by Region OSCE Field Operations, Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32 STATEMENT 16: OSCE Field Operations South Eastern Europe, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33 STATEMENT 17: OSCE Field Operations South-Eastern Europe, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34 STATEMENT 18: OSCE Field Operations South-Eastern Europe, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 STATEMENT 19: OSCE Field Operations South-Eastern Europe, Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 STATEMENT 20: OSCE Field Operations Eastern Europe, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37  STATEMENT 21: OSCE Field Operations Eastern Europe, Statement of Assets, Liabilities and Fund Balance . . . . . . . . .38 STATEMENT 22: OSCE Field Operations Eastern Europe, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 STATEMENT 23: OSCE Field Operations Eastern Europe, Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40 STATEMENT 24: OSCE Field Operations Caucasus, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 STATEMENT 25: OSCE Field Operations Caucasus, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . .42 STATEMENT 26: OSCE Field Operations Causasus, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 STATEMENT 27: OSCE Field Operations Causasus, Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 STATEMENT 28: OSCE Field Operations Central Asia, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 STATEMENT 29: OSCE Field Operations Central Asia, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . .46 STATEMENT 30: OSCE Field Operations Cantral Asia, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 STATEMENT 31: OSCE Field Operations Cantral Asia, Statement of Cash Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 STATEMENT 32: Extra-budgetary Part 1, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49 STATEMENT 33: Extra-budgetary Part 1, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50 STATEMENT 34: Extra-budgetary Part 1, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 STATEMENT 35: Extra-budgetary Part 2, Statement of Income, Expenditure and Changes in Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 STATEMENT 36: Extra-budgetary Part 2, Statement of Assets, Liabilities and Fund Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 STATEMENT 37: Extra-budgetary Part 2, Statement of Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

Chapter IV - Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Note 1 - Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Note 2 - Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Note 3 - Extra-budgetary Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Note 4 - Assessed Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Note 5 - Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59 Note 6 - Prepaid Expenditure and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Note 7 - Material Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Note 8 - Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Note 9 - Unliquidated Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Note 10 - Other Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Note 11 - Funds Held for Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Note 12 - Contributions Received in Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Note 13 - Cash and Other Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Note 14 - Contingent Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Note 15 - Ex-Gratia Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Note 16 - Contractual Obligations and Separation Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Note 17 - Post Balance Sheet Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Note 18 - Provident Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Annex I - Provident Fund Summary Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Appendix I - Bank and Cash Balances as at 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64

Appendix II - Short-term Investments and Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66 Appendix III - Assessed Contributions Receivable as at 31 December 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . .67 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

19 June 2009

Madam,

Pursuant to Financial Regulation 7.04 and the PC Decision 553 dated 27 June 2003, I have the honour to submit the Financial Report and Financial Statements of the Organization for Security and Co- operation in Europe for the year ended 31 December 2008 and the Audit Report of the External Auditor thereon for your consideration and approval.

Yours sincerely,

Marc Perrin de Brichambaut Secretary General  Audit Opinion of the External Auditor

The maintenance and integrity of the Organization for Security and Cooperation in Europe's website is the responsibility of the Secretary General; the work carried out by the auditors does not involve consideration of these matters and accordingly the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.  Annex 1

Office of the Auditor General of Norway

AUDIT OPINION

To the Permanent Council of the Organization for Security and Co-operation in Europe

We have audited the accompanying statements, comprising the Budget and Expenditure Report on pages 9 to 15 and Financial statements 1 to 37, and the supporting notes including Annex I and Appendices I to III of the Organization for Security and Co-operation in Europe for the financial period ended 31 December 2008.

Relative responsibilities

These financial statements are the responsibility of the Secretary General. Our responsibility is to express an opinion on these financial statements based on our audit.

Basis of opinion

We conducted the audit in accordance with the auditing standards of the International Organisation of Supreme Audit Institutions, INTOSAI, and in compliance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, and as considered by the auditor to be necessary in the circumstances, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Secretary General, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the audit opinion.

Opinion

In our opinion, these financial statements presents fairly, in all material respects, the financial position as at 31 December 2008 and the results of the operations and cash flows for the period then ended in accordance with the accounting policies set out in notes to the financial statements, which were applied on a basis consistent with that of the preceding financial period, unless otherwise disclosed.

Further, in our opinion, the transactions of the Organization for Security and Co-operation in Europe which we have tested as part of our audit have been, in all significant respects been in accordance with the Financial Regulations and legislative authority.

In accordance with Regulation 8 of the Financial Regulations, we have also issued a long-form Report on our audit of the financial statements.

Oslo, 16 Jult, 009

Thor Kr. Sv ndsen Director Geiteral Letter of Transmittal to the Auditor General from the Secretary General

Organization for Security and Co-operation in Europe

The Secretariat

3 April 2009 Sir/Madam,

Pursuant to Financial Regulation 7.04 and PC Decision 553 dated 27 June 2003, I have the hon- our to submit the Financial Report and Financial Statements of the Organization for Security and Co- operation in Europe for the year ended 31 December 2008.

Yours faithfully,

Marc Perrin de Brichambaut Secretary General

Office of the Auditor General of Norway Pilestredet 42 N-0032 Oslo Norway  OSCE Structures and Institutions as at 31 December 2008

Summit Periodic meeting of OSCE Heads of State or Government

Ministerial Council Annual meeting of OSCE Foreign Ministers (except in years with Summit)

Permanent Council Forum for Security Co-operation Regular body for political consultation and Regular body for arms control and CSBMs decision-making (weekly in Vienna) (weekly in Vienna)

OSCE Parliamentary Assembly Copenhagen Chairman-in-Office (CiO) Finland (2008) Troika (Spain, Finland, Greece) Personal Representatives of the CiO

Office for Democratic OSCE Representative on Secretary General High Commissioner on Institutions and Human Freedom of the Media Vienna National Minorities Rights Vienna The Hague Warsaw

OSCE Secretariat Vienna Prague Office

OSCE Field Operations OSCE Centres in: OSCE Mission in/to: Astana Serbia Ashgabad Montenegro Bishkek Georgia Moldova Tasks in Bosnia and Herzegovina Kosovo Presence in Albania Spillover Monitor Mission to Skopje OSCE Offices in: The Personal Representative of CiO on the Conflict Baku Dealt with by the OSCE Minsk Conference Minsk The Minsk Process Yerevan Project Co-ordinator in Ukraine Zagreb Project Co-ordinator in Uzbekistan Tajikistan

High-Level Planning Group Preparing for an OSCE Peacekeeping Force for Nagorno-Karabakh Legend:

______ Line of Responsibility ............ Provides Support

OSCE Assistance in Implementation of Bilateral Agreements Representative to the Latvian-Russian Joint Commission on Military Pensioners

OSCE related Bodies

Joint Consultative Group Open Skies Consultative Commission Court of Conciliation and Arbitration Promotes implementation of CFE Treaty, Promotes implementation of Open Skies Geneva Meets in Vienna Treaty, Meets in Vienna Representative to the Latvian-Russian Joint Commission on Military Pensioners

Centre in Astana Centre in Bishkek Office in Minsk

Funds Relating to the Conflict Dealt with by the Minsk Conference

Project Co-ordinator in Ukraine Mission to Serbia Project Co-ordinator in Uzbekistan

Mission to Office in Georgia Zagreb Office in Tajikistan OSCE Field Operations as at 31 December 2008

Tasks in Bosnia and Mission to Moldova Herzegovina

Mission in Spillover Monitor Kosovo Mission to Skopje Centre in Ashgabad Presence in Office in Yerevan Office in Mission to Montenegro Albania Baku  FINANCIAL REPORT

Chapter I - Financial Report for the year ended 31 December 2008

1. Introduction Summary of the OSCE’s Results for the Financial Year 2008 The Secretary General of the Organization for Security UNIFIED WALLNER EXTRA- TOTAL and Co-operation in Europe (OSCE) submits herewith EUR million BUDGET STRASSE BUDGETARY the Financial Report and the Financial Statements of INCOME the Organization for the year ended 31 Assessed Contributions 156.4 - 156.4 Extra-budgetary Contributions - 28.5 28.5 December 2008. The Financial Report provides the Other income and adjustments 7.8 0.1 0.9 8.7 financial results for the OSCE’s activities during the TOTAL INCOME 164.2 0.1 29.4 193.7 financial year 2008. EXPENDITURE 153.8 0.8 21.3 175.9 BUDGET 2008 Year-end UB Revision 156.4 The OSCE operates a system of fund accounting and Budget utilisation rate 98% the resulting financial statements present the financial CASH SURPLUS 2008 9.9 results of the Secretariat, Institutions and Field Number of positions Operations, the Wallnerstrasse Fund and Extra-budget- STAFFING – POSITIONS APPROVED ary Funds. This Financial Report provides an overview Professional staff positions 1,360 and analysis of the financial aspects of each of these. General service staff positions 1,906 Total staff positions 3,266

Total income for the OSCE's Consolidated Statement of Income, Expenditure and Changes in Fund Balance includes assessed contributions, extra-budgetary contri- 2. Unified Budget butions, miscellaneous income, currency exchange adjustments, savings on prior year Unliquidated 2.1 Income - Assessed Contributions Obligations (ULO's) and other adjustments. Total The OSCE's source of income for the Unified Budget income for 2008 amounted to EUR 193.7 million is assessed contributions from participating States. The (2007: EUR 194.8 million). level of assessed contributions received is a direct func- tion of the billing schedule defined for the OSCE in its Total expenditure for 2008 including Unified Budget, Financial Regulations. Wallnerstrasse and Extra-budgetary Funds amounted to EUR 175.9 million (2007: EUR 185.1 million). OSCE income from assessed contributions against the 2008 Unified Budget totalled EUR 156.4 million, of The Action Plan for the Implementation of the which EUR 49.0 million is under the Standard Scale of Recommendations of the Report of the External Contributions for 2008-2009 and EUR 107.4 million is Auditors on the Financial Statements for the year ended under the Field Operations Scales of Contributions for 31 December 2007 was circulated (PC.ACMF/37/08) 2008-2009 (PC.DEC/850/08). to all Delegations of participating States on 18 June 2008. Other income for the Unified Budget, which includes miscellaneous income, currency exchange adjustments and savings on prior year unliquidated obligations amounted to EUR 7.8 million.

The OSCE has an excellent payment record of assessed contributions by participating States when compared to other international organizations. The OSCE received 99.4 percent of assessed contributions for 2008 by 31 December 2008 (2007: 99.7 per cent).

1  2.2 In-Kind Contributions regions. This presentation is also followed in this A unique feature of the OSCE is the significant Financial Report and Financial Statements. amount of in-kind contributions provided in the form of seconded staff and premises. It is estimated that 2008 Year-end Budget Revision (PC.DEC/889) these in-kind contributions are valued at approximate- EUR ‘000 2008 % ly EUR 56.5 million for 2008 or approximately one I. Funds Related to The Secretariat and Institutions quarter of total resources put at the disposal of the The Secretariat 30,568 19.5% Office for Democratic Institutions OSCE. This includes an estimated EUR 52.3 million and Human Rights 14,250 9.1% for seconded staff salaries and EUR 4.2 million for High Commissioner on National Minorities 2,957 1.9% buildings provided by host countries. In particular, Representative on Freedom of the Media 1,239 0.8%

generous contributions are acknowledged from the II. Funds Related to OSCE Field Operations (by Region) Austrian government for office rent and conference Augmentations 4,903 3.1% facilities (EUR 3.0 million), the Polish government for South-Eastern Europe 66,995 42.9% Eastern Europe 5,178 3.3% ODIHR (EUR 0.6 million) and the Netherlands gov- Caucasus 15,779 10.1% ernment for HCNM (EUR 0.2 million). These gov- Central Asia 14,507 9.3% ernments have provided further substantial contribu- Total Unified Budget 156,376 100% tions in-kind in the form of tax concessions, security and parking areas. From the operational perspective, the OSCE remains a field-oriented organization, with the share of the budget allocated to field operations representing 2.3 Budget and Expenditure EUR 107.4 (68.7%) of the 2008 Unified Budget. The Budget share of resources in the Secretariat and Institutions of EUR 49.0 (31.3%) showed a slight increase compared The 2008 Unified Budget was approved under to 2007. The Secretariat budget also includes resources PC.DEC/839 on 7 March 2008, in the amount of for thematic activities. EUR 164.2 million. Revised budgets approved under subsequent Permanent Council Decisions amounted to Distribution of Unified Budget 2005-2008 (EUR million) a net decrease of EUR 7.8 million, providing a Year- end Revised Budget of EUR 156.4 million (PC.DEC/889 of 2 April 2009).

The format and structure of the 2008 Unified Budget presented individual Programmes, together with their objectives and outputs and the financial and human resources required for the achievement of these under each Unified Budget Fund.

The Augmentations Fund was established on a provi- sional basis under PC.DEC/827 of December 2007 with the aim to improve administrative transparency, budget presentation and accountability. Prior to 2008, Augmentations were included in the activities of the Field Operations located in South- Eastern Europe.

Performance Based Programme Budgeting (PBPB) The geographical distribution of resources allocated to was fully implemented in all Funds, presenting the OSCE's Field Operations saw an increase in the share objectives, outcomes and outputs. In the presentation of resources allocated to Central Asia, the Caucasus and the approval of the 2008 Unified Budget, Funds and Eastern Europe, and a decrease in the share of were grouped under (i) Funds related to the Secretariat resources allocated to South-Eastern Europe, mainly in and Institutions and (ii) Funds related to Field Kosovo and in Croatia. Operations, with the latter, in turn, being grouped into

2  FINANCIAL REPORT

Geographical Distribution of Unified Budget: Funds Related to Expenditure for the year 2008 against the year-end Field Operations revised Budget of EUR 156.4 million was 98.3 per- EUR million 2008 2007 cent (2007: 98.2 percent) and expenditure against the Funds Related to OSCE Field Operations original Unified Budget approved in March 2008 of (by Region) 164.2 million was 93.7 percent (2007: 95.5 percent). Augmentations 4.9 4.6% South-Eastern Europe* 67.0 62.4% 82.6 71.7% Budget Utilisation Rates for Year-End Budget Revision Eastern Europe 5.2 4.8% 5.0 4.4% Caucasus 15.8 14.7% 15.3 13.3% Central Asia 14.5 13.5% 12.2 10.6% Total Funds Related to OSCE Field Operations 107.4 100% 115.1 100%

*2007 Unified Budget for South-Eastern Europe included EUR 4.9 million for Augmentations.

The following table lists the PC Decisions affecting the Unified Budget in the course of 2008.

2008 Unified Budget and Revisions

The following is a comparison between 2008 and 2007 expenditure.

Unified Budget Expenditure

EUR million 2008 2007 I. Funds Related to The Secretariat and Institutions The Secretariat 29.9 19.4% 29.9 18.6% Office for Democratic Institutions and Human Rights 14.2 9.2% 13.6 8.5% High Commissioner on National Minorities 2.9 1.9% 2.8 1.7% Expenditure Representative on Freedom of the Media 1.2 0.8% 1.2 0.8% Total Funds Related to The The 2008 expenditure against the Unified Budget Secretariat and Institutions 48.2 31.4% 47.5 29.6% amounted to a total of EUR 153.8 million, represent- II. Funds Related to OSCE Field Operations (by Region) ing a decrease of 4.3 percent compared to the previous Augmentations 4.8 3.1% year (2007: EUR 160.7 million). South-Eastern Europe* 66.3 43.1% 81.5 50.7% Eastern Europe 5.1 3.3% 4.9 3.1% Budget vs. Expenditure 2005-2008 Caucasus 15.0 9.8% 14.8 9.2% Central Asia 14.3 9.3% 11.9 7.4% Total Funds Related to OSCE Field Operations 105.6 68.6% 113.1 70.4%

Total OSCE 153.8 100% 160.7 100%

*2007 Unified Budget Expenditure for South-Eastern Europe included EUR 4.9 million for Augmentations.

The overall distribution of expenditure between the Secretariat and Institutions vs. Field Operations, as well as the geographical distribution of expenditure across Field Operations follows the pattern illustrated for the Unified Budget. Secretariat and Representative on Freedom of the Media expenditures are unchanged.

3  Unified Budget Expenditure by Region (2005-2008) Budgeted vs. Filled Positions as at 31 December 2008

number of positions Budgeted Filled % Filled

Professional Staff 1,360 1,127 83% International contracted 290 257 89% Seconded 697 523 75% National professional 373 347 93%

General Services Staff 1,906 1,804 95% Secretariat and Institutions 248 234 94% Field Operations 1,658 1,570 95%

Total Staff 3,266 2,931 90%

3. Extra-budgetary Contributions The distribution of Unified Budget Expenditure by Cost Category between 2008 and 2007 saw a decrease Extra-budgetary contributions are a valuable source of in Staff Costs, Operational Costs and Assets/ funding for the OSCE to finance projects and activi- Equipment and an increase in Office Costs. ties that are consistent with OSCE objectives but are not funded under the Unified Budget. Expenditure of extra-budgetary resources in 2008 amounted to Unified Budget Expenditure by Cost Category EUR 21.3 million (2007: EUR 20.3 million). EUR million 2008 2007 Staff costs 91.2 59.3% 97.0 60.4% Unlike resources provided under the Unified Budget, Operational Costs 47.5 30.9% 48.5 30.2% extra-budgetary resources are normally multi-year in Assets/Equipment 4.6 3.0% 5.3 3.3% nature and balances are brought forward from one year Office Costs 10.1 6.6% 9.5 5.9% HoM Facility 0.3 0.2% 0.3 0.2% to the next. The Fund balance of all extra-budgetary resources brought forward into 2008 from 2007 Total 153.8 100% 160.7 100% amounted to EUR 32.6 million (2007: EUR 28.3 million). Staff costs continue to represent the most significant share of OSCE's annual expenditures. Extra-budgetary contributions received in 2008 amounted to EUR 28.5 million (2007: EUR 26.0 million). Of this amount, EUR 8.0 million was received in respect of pledges made in previous years. 2.4 Staffing Total budgeted positions as at 31 December 2008 were 3,266, representing a 7.3 percent decrease over the previous year (2007: 3,524 budgeted positions). The 4. Cash Management distribution of positions within the Organization is shown in Annex A. Cash and bank balances are managed in strict compli- ance with the OSCE's Financial Regulations. Accordingly, all amounts received from participating Budgeted Positions States against assessed contributions billed are used for the purposes authorised within the relevant year's number of positions 2008 2007 budget, and any cash surplus is credited to participat- Professional Staff 1,360 100% 1,393 100% ing States within the timelines set out in Financial International contracted 290 21% 287 21% Regulation 7.07. Seconded 697 52% 738 53% National professional 373 27% 368 26% Cash and bank balances as at end 2008 and 2007 are General Services Staff 1,906 100% 2,131 100% shown in the following table.. (The Secretariat bank Secretariat and Institutions 248 13% 243 11% balances include the Revolving and Contingency Field Operations 1,658 87% 1,888 89% Funds and Extra-budgetary Funds) Total Staff 3,266 3,524

4  FINANCIAL REPORT

OSCE - Bank and Cash Balances EUR ‘000 2008 2007 increased emphasis was directed on assessing the finan- Bank cial conditions of the approved banks where OSCE I. The Secretariat and Institutions places short term time deposit as well as the banks in The Secretariat 94,936 96.7% 81,292 94.4% the Institutions and Field Operations with the purpose Institutions 583 0.6% 1,123 1.3% of ensuring OSCE cash holdings were secure. Total Secr. & Institutions 95,519 97.3% 82,415 95.7%

II. Field Operations (by Region) South-Eastern Europe 828 0.8% 1,819 2.1% Eastern Europe 254 0.3% 289 0.3% Caucasus 445 0.5% 451 0.5% 5. Management Issues Central Asia 763 0.7% 502 0.6% Total Field Operations 2,290 2.3% 3,062 3.5%

Total Bank 97,810 99.6% 85,476 99.3% 5.1 Performance Based Programme Budgeting Total Cash 431 0.4% 606 0.7% In its Decision 18/06 of 5 December 2006, the Grand Total 98,241 100% 86,082 100% Ministerial Council has stated its commitment to fur- ther introduction and application of PBPB in the OSCE. In 2007 the Secretariat devoted significant The Secretariat - Bank Balances efforts to apply PBPB across all OSCE Funds in prepa- EUR ‘000 2008 2007 ration for the 2008 budget year, by providing extensive UB bank accounts 49,230 37,780 training and assistance to Programme Managers in XB bank accounts 40,816 38,622 Vienna and in the field. During 2008, in preparation Revolving 2,710 2,710 Contingency 2,180 2,180 for the 2009 budget year, additional efforts were undertaken to complete the process of PBPB intro- Total 94,936 81,292 duction through the formulation of Outcome-level Performance Indicators in all OSCE Funds. The primary objective guiding the Secretariat's Treasury is to ensure the efficient and cost-effective management of OSCE's financial resources. Cash is 5.2 Common Regulatory Management System managed centrally in order to safeguard funds, better An ACMF Working Group on Financial Regulations monitor cash flow and optimise investment income. was tasked with amending the Financial Regulations. Treasury is also responsible for developing and imple- A compilation of amendments was issued in 2007 menting instructions and procedures for the safe cus- (PC.ACMF/54/07). However, consensus has not yet tody of cash and bank balances at all Institutions and been reached and deliberations continue. Field Operations.

The geographic as well as currency composition of cash and bank balances is monitored closely for the purposes of risk management. Banks used by the OSCE across all locations of its Institutions and Field Operations are reviewed regularly to ensure that the Organization's funds are safeguarded with due care and prudence.

In line with Financial Regulation 5.02, short-term investments are made in the form of time-deposits of monies not needed for immediate requirement and all interest earned is credited as miscellaneous income to the Secretariat Fund.

During 2008 the Investment Committee continued to monitor cash management activities and to provide a forum where theses activities are discussed and approved. As a consequence of the financial crisis,

5 6 Annex A: OSCE Staffing Overview – Budgeted and Actual Staff Positions as at 31 December 2008 Fund Contracted Seconded National Prof. TOTAL PROF General Service GRAND TOTAL number of positions Budget Actual Budget Actual Budget Actual Budget Actual Budget Actual Budget Actual

The Secretariat 139 127 40 32 0 0 179 159 185 175 364 334 Office for Democratic Institutions and Human Rights 56 52 17 11 0 0 73 63 52 48 125 111 High Commissioner on National Minorities 14 14 6 5 0 0 20 19 8 8 28 27 Representative on Freedom of the Media 7 6 6 1 0 0 13 7 3 3 16 10 SECRETARIAT AND INSTITUTIONS 216 199 69 49 0 0 285 248 248 234 533 482 Mission in Kosovo 40 28 222 139 81 70 343 237 583 533 926 770 Tasks in Bosnia and Herzegovina 4 3 89 75 139 136 232 214 307 300 539 514 Office in Zagreb* 1 1 8 7 7 7 16 15 18 18 34 33 Mission to Serbia 2 2 46 42 21 18 69 62 107 105 176 167 Presence in Albania 1 1 26 21 14 14 41 36 61 59 102 95 Spillover Monitor Mission to Skopje 5 4 69 47 25 24 99 75 139 133 238 208 Mission to Montenegro 1 1 13 13 7 6 21 20 25 25 46 45 South-Eastern Europe 54 40 473 344 294 275 821 659 1,240 1,173 2,061 1,832 Mission to Moldova 1 0 12 12 5 5 18 17 30 29 48 46 Project Co-ordinator in the Ukraine 1 1 2 1 22 19 25 21 19 16 44 37 Office in Minsk 1 1 4 4 0 0 5 5 8 8 13 13 Representative to the Latvian - Russian JC on Military Pensioners 0 0 0 0 0 0 0 0 0 0 0 0 Eastern Europe 3 2 18 17 27 24 48 43 57 53 105 96

Mission to Georgia 8 7 58 44 20 18 86 69 117 108 203 177 Office in Yerevan 1 1 6 6 11 11 18 18 22 21 40 39 Office in Baku 1 1 11 11 3 3 15 15 17 17 32 32 High Level Planning Group 0 0 8 6 0 0 8 6 1 1 9 7 The Minsk Process 0 0 0 0 0 0 0 0 0 0 0 0 Personal Representative of the CiO on Conflict dealt with by the Minsk Conference 1 1 5 5 0 0 6 6 11 11 17 17 Caucasus 11 10 88 72 34 32 133 114 168 158 301 272

Centre in Astana 1 1 5 5 4 4 10 10 15 15 25 25 Centre in Ashgabad 1 1 5 4 1 1 7 6 17 17 24 23 Centre in Bishkek 1 1 15 12 4 4 20 17 66 64 86 81 Project Co-ordinator in Uzbekistan 0 0 3 3 3 2 6 5 12 12 18 17 Office in Tajikistan* 3 3 21 17 6 5 30 25 83 78 113 103 Central Asia 6 6 49 41 18 16 73 63 193 186 266 249 TOTAL FOR FUNDS RELATED TO OSCE FIELD OPERATIONS 74 58 628 474 373 347 1,075 879 1,658 1,570 2,733 2,449

TOTAL OSCE 2008 UNIFIED BUDGET 290 257 697 523 373 347 1,360 1,127 1,906 1,804 3,266 2,931 ANNEX A

* See notes of page 57 Chapter II – Budget and Expenditure Report Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers I. FUNDS RELATED TO SECRETARIAT AND INSTITUTIONS

The Secretariat

Secretary General and Central Services Executive Management 1,106 (42) 1,064 0 1,064 1,050 6 1,056 99 Security Management 411 (4) 407 0 407 396 2 398 98 External Co-operation 663 23 686 0 686 670 16 686 100 Legal Services 495 12 506 0 506 501 4 505 100 Press and Public Information 1,110 80 1,190 0 1,190 1,157 9 1,166 98 Gender Issues 276 (9) 268 0 268 257 5 262 98 TOTAL 4,061 59 4,120 0 4,120 4,030 43 4,073 99

Chairman-in-Office Short-Term Mission/Visits of CiO and PR of the CiO 300 6 306 0 306 305 0 305 100 Advisory Committee on Management and Finance (ACMF) 15 (7) 8 0 8 7 0 7 95 Panel of Adjudicators 40 (35) 5 0 5 4 0 4 85 Audit Committee 50 (37) 13 0 13 12 0 12 91 External Auditors 100 (12) 88 0 88 86 0 86 98 TOTAL 505 (85) 420 0 420 415 0 415 99

Internal Oversight Internal Oversight 1,291 (97) 1,194 0 1,194 1,097 73 1,170 98 TOTAL 1,291 (97) 1,194 0 1,194 1,097 73 1,170 98

Strategic Police Matters Strategic Police Matters Unit 918 (91) 827 0 827 800 5 805 97 TOTAL 918 (91) 827 0 827 800 5 805 97

Office of the Special Representative/Co-ordinator for Combating Trafficking Office of the Special Representative/Co-ordinator for Combating Trafficking in Human Beings 750 52 802 0 802 764 23 787 98 TOTAL 750 52 802 0 802 764 23 787 98

Action Against Terrorism Unit Action Against Terrorism 782 (45) 737 0 737 717 5 722 98 TOTAL 782 (45) 737 0 737 717 5 722 98

Activities Relating to the Economic and Environmental Aspects of Security Co-ordinator of OSCE Economic and Environmental Activities 1,410 (22) 1,388 0 1,388 1,345 20 1,365 98 Economic and Environmental Forum 473 (3) 470 0 470 457 1 458 97 TOTAL 1,883 (25) 1,858 0 1,858 1,801 22 1,823 98

Conflict Prevention CPC Direction and Management 379 31 410 0 410 404 0 404 99 Policy Support Service 851 26 877 0 877 863 14 877 100 Operations Service 1,017 (128) 889 0 889 865 12 877 99 Programming and Evaluation Support Unit 261 (21) 239 0 239 233 1 234 98 FSC Chairmanship 32 (3) 29 0 29 28 0 28 97 FSC Support 577 38 615 0 615 605 7 612 99 Communications Network 560 (108) 452 0 452 376 66 442 98 TOTAL 3,676 (165) 3,511 0 3,511 3,373 101 3,474 99 9 Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers

Human Resources Management HR Direction and Management 366 36 402 0 402 388 2 390 97 Personnel Management 973 (59) 914 0 914 852 46 898 98 Recruitment 681 (166) 515 0 515 502 2 504 98 Training Section 1,061 (25) 1,036 0 1,036 951 17 968 93 TOTAL 3,081 (213) 2,868 0 2,868 2,694 66 2,760 96

Department of Management and Finance DMF Direction and Management 5,145 (112) 5,032 0 5,032 4,258 563 4,821 96 Conference and Language Services 315 (32) 282 0 282 272 4 276 98 Financial Compliance, Systems and Support 431 (34) 398 0 398 377 12 389 98 Finance Service 1,175 (85) 1,090 0 1,090 1,069 1 1,070 98 Information and Communication Technology Services 2,731 (160) 2,571 0 2,571 2,044 481 2,525 98 Mission Support Services 1,391 3 1,394 0 1,394 1,282 112 1,394 100 Secretariat Common Operational Costs 3,114 (19) 3,095 0 3,095 1,993 1,015 3,008 97 Prague Office 368 0 368 0 368 359 4 363 98 TOTAL 14,671 (440) 14,231 0 14,231 11,654 2,192 13,847 97

TOTAL FOR THE SECRETARIAT 31,617 (1,049) 30,568 0 30,568 27,346 2,530 29,877 98

Office for Democratic Institutions and Human Rights Direction and Policy 1,293 86 1,379 0 1,379 1,360 16 1,376 100 Fund Administration Unit 1,480 133 1,614 0 1,614 1,579 33 1,612 100 Common Operational Costs 819 (20) 799 0 799 701 59 760 95 Human Dimension Meetings 762 (105) 657 0 657 652 0 652 99 Democratization 1,265 29 1,294 0 1,294 1,281 12 1,293 100 Human Rights 1,069 (77) 993 0 993 952 31 983 99 Elections 6,104 (130) 5,974 0 5,974 5,933 40 5,973 100 Tolerance and Non-Discrimination 1,180 (31) 1,149 0 1,149 1,125 24 1,149 100 Roma and Sinti Issues 433 (42) 391 0 391 371 18 389 100 TOTAL 14,405 (156) 14,250 0 14,250 13,953 234 14,187 100

High Commissioner on National Minorities Office of High Commissioner 1,543 (88) 1,456 0 1,456 1,456 0 1,456 100 Fund Administration Unit 338 11 348 0 348 347 1 348 100 Common Operational Costs 184 16 201 0 201 197 3 200 99 Conflict Prevention Activities 952 0 952 0 952 935 5 940 99 TOTAL 3,017 (61) 2,957 0 2,957 2,934 10 2,943 100

Representative on Freedom of the Media Office of Representative 589 (28) 561 0 561 557 2 559 100 Freedom of the Media 723 (45) 678 0 678 609 46 655 97 TOTAL 1,312 (73) 1,239 0 1,239 1,165 49 1,214 98 0 0 TOTAL FOR FUNDS RELATED TO THE SECRETARIAT AND INSTITUTIONS 50,351 (1,338) 49,013 0 49,013 45,399 2,822 48,222 98

10 Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers

II. FUNDS RELATED TO OSCE FIELD OPERATIONS

AUGMENTATIONS

Secretariat Augmentations Press and Public Information 265 (22) 243 0 243 238 0 238 98 Internal Oversight 279 (109) 170 0 170 164 0 164 97 Policy Support Service 394 8 402 0 402 401 0 401 100 Operations Service 161 (7) 154 0 154 152 0 152 99 Personnel Management 296 (6) 290 0 290 285 1 286 98 Recruitment 503 (80) 423 0 423 412 1 413 98 Financial Compliance, Systems and Support 179 (24) 156 0 156 152 0 152 98 Finance Service 672 (40) 632 0 632 618 2 620 98 Information and Communication Technology Services 1,316 (71) 1,245 0 1,245 1,172 57 1,229 99 Mission Support Service 1,023 0 1,023 0 1,023 1,008 7 1,015 99 TOTAL 5,087 (350) 4,737 0 4,737 4,602 68 4,670 99

ODIHR Augmentations ODIHR Democratization 254 (88) 166 0 166 154 8 162 98 TOTAL 254 (88) 166 0 166 154 8 162 98 TOTAL FOR AUGMENTATIONS 5,341 (438) 4,903 0 4,903 4,756 76 4,832 99

SOUTH-EASTERN EUROPE

Mission in Kosovo Office of Head of Mission 4,117 238 4,355 0 4,355 3,916 413 4,329 99 Fund Administration Unit 4,177 (87) 4,090 0 4,090 3,899 123 4,022 98 Common Operational Costs 5,878 (788) 5,090 0 5,090 4,076 859 4,935 97 Security and Public Safety 2,121 (613) 1,508 0 1,508 1,368 118 1,486 99 Assistance Programme 5,368 (1,035) 4,333 0 4,333 3,902 326 4,228 98 Monitoring Programme 8,399 (841) 7,558 0 7,558 7,352 190 7,542 100 TOTAL FOR THE MISSION 30,060 (3,126) 26,934 0 26,934 24,513 2,029 26,542 99

Tasks in Bosnia and Herzegovina Office of Head of Mission 1,713 (52) 1,661 0 1,661 1,655 5 1,660 100 Fund Administration Unit 1,982 34 2,016 0 2,016 1,817 181 1,998 99 Common Operational Costs 3,335 (137) 3,198 0 3,198 2,996 169 3,165 99 Security Co-operation 736 9 745 0 745 743 0 743 100 Human Rights and Rule of Law 2,648 (168) 2,480 0 2,480 2,467 6 2,473 100 Education 1,546 (18) 1,528 0 1,528 1,505 20 1,525 100 Democratization 3,014 (91) 2,923 0 2,923 2,891 17 2,908 99 TOTAL FOR THE MISSION 14,974 (422) 14,552 0 14,552 14,074 398 14,471 99

Regional Stabilization/Arms Control Implementation of Article IV 280 (85) 195 0 195 185 4 189 97 TOTAL REGIONAL STABILIZATION / ARMS CONTROL 280 (85) 195 0 195 185 4 189 97 GRAND TOTAL 15,255 (507) 14,747 0 14,747 14,260 401 14,661 99

11 Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers Office in Zagreb Office of Head of Mission 480 34 514 0 514 485 28 513 100 Fund Administration Unit 478 (2) 477 0 477 460 15 475 100 Common Operational Costs 711 (59) 653 0 653 615 28 643 99 War Crimes Monitoring 802 (138) 664 0 664 641 23 664 100 Housing Care Implementation 277 (40) 237 0 237 213 21 234 98 TOTAL 2,749 (204) 2,545 0 2,545 2,414 115 2,529 99

Mission to Serbia Office of Head of Mission 1,041 48 1,089 0 1,089 977 110 1,087 100 Fund Administration Unit 805 (40) 765 0 765 687 76 763 100 Common Operational Costs 1,564 (11) 1,554 0 1,554 1,386 142 1,528 98 Police Affairs 1,880 (83) 1,796 0 1,796 1,703 79 1,782 99 Economic and Environmental 281 (5) 275 0 275 245 29 274 99 Democratization 1,064 (3) 1,061 0 1,061 924 127 1,051 99 Media 427 11 438 0 438 397 39 436 100 Rule of Law and Human Rights 1,139 (14) 1,125 0 1,125 1,055 68 1,123 100 TOTAL 8,200 (98) 8,103 0 8,103 7,374 670 8,045 99

Presence in Albania Office of Head of Mission 914 (32) 882 0 882 844 34 878 100 Fund Administration Unit 426 14 440 0 440 377 62 439 100 Common Operational Costs 973 (79) 894 0 894 747 140 887 99 Security Co-operation 249 8 257 0 257 241 14 255 99 Governance in Economic and Environmental Issues 268 (16) 252 0 252 228 23 251 100 Democratization 380 (16) 365 0 365 321 38 359 99 Rule of Law and Human Rights 335 10 346 0 346 321 22 343 99 TOTAL 3,545 (110) 3,435 0 3,435 3,079 333 3,413 99

Spillover Monitor Mission to Skopje Office of Head of Mission 1,265 47 1,311 0 1,311 1,277 28 1,305 100 Fund Administration Unit 1,158 18 1,176 0 1,176 1,169 3 1,172 100 Common Operational Costs 1,619 (50) 1,569 0 1,569 1,412 134 1,546 99 Confidence Building 778 27 805 0 805 712 86 798 99 Police Development 1,905 (28) 1,877 0 1,877 1,805 58 1,863 99 Media Development 241 (8) 233 0 233 199 31 230 99 Rule of Law 1,585 (35) 1,550 0 1,550 1,343 184 1,527 99 Public Administration Support 528 (41) 487 0 487 349 131 480 99 TOTAL FOR THE MISSION 9,079 (71) 9,008 0 9,008 8,267 654 8,921 99

Mission to Montenegro Office of Head of Mission 346 (19) 327 0 327 326 0 326 100 Fund Administration Unit 235 (11) 224 0 224 223 0 223 100 Common Operational Costs 456 (15) 441 0 441 416 24 440 100 Police Affairs 428 (16) 412 0 412 403 7 410 99 Politico-Military Activities 39 (15) 24 0 24 24 0 24 98 Economic and Environmental 97 7 104 0 104 104 0 104 100 Democratization 346 0 346 0 346 336 0 336 97 Media 117 (3) 113 0 113 112 0 112 99 Rule of Law and Human Rights 245 (13) 232 0 232 229 2 231 100 TOTAL 2,310 (87) 2,223 0 2,223 2,172 34 2,205 99 TOTAL FOR SOUTH-EASTERN EUROPE 71,197 (4,202) 66,995 0 66,995 62,078 4,237 66,316 99 12 Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers

EASTERN EUROPE

Mission to Moldova Office of Head of Mission 346 (5) 341 0 341 289 51 340 100 Fund Administration Unit 171 9 180 0 180 178 2 180 100 Common Operational Costs 457 (7) 450 0 450 380 69 449 100 Conflict Prevention/Resolution 433 (24) 409 0 409 402 6 408 100 Human Rights Monitoring/Democratization 291 18 308 0 308 294 12 306 99 Anti-Trafficking/Gender 260 9 269 0 269 256 8 264 98 TOTAL 1,956 (0) 1,956 0 1,956 1,799 148 1,948 100

Project Co-ordinator in Ukraine Office of Head of Mission 157 (24) 133 0 133 129 0 129 97 Fund Administration Unit 270 (7) 263 0 263 250 9 259 98 Common Operational Costs 267 27 293 0 293 273 20 293 100 Democratization and Good Governance 288 (158) 130 0 130 122 0 122 95 Rule of Law and Human Rights 772 19 791 0 791 787 3 790 100 Economic, Environmental and Politico-Military Projects 855 (151) 705 0 705 686 0 686 97 TOTAL 2,608 (294) 2,314 0 2,314 2,246 33 2,280 98

Office in Minsk Office of Head of Mission 239 (5) 234 0 234 210 19 229 98 Fund Administration Unit 135 (8) 127 0 127 122 0 122 96 Common Operational Costs 188 (19) 169 0 169 159 8 167 99 Economic and Environmental Activities 198 (24) 174 0 174 163 3 166 95 Institution-Building, Rule of Law and Civil Society 203 (6) 197 0 197 194 0 194 98 TOTAL 962 (62) 900 0 900 848 30 877 97

Representative on the Latvian-Russian Joint Commission on Military Pensioners Office of Head of Mission 10 (2) 7 0 7 7 0 7 100 TOTAL 10 (2) 7 0 7 7 0 7 100

TOTAL FOR EASTERN EUROPE 5,536 (358) 5,178 0 5,178 4,900 211 5,112 99

CAUCASUS

Mission to Georgia Office of Head of Mission 2,232 (375) 1,857 0 1,857 1,801 32 1,833 99 Fund Administration Unit 1,126 (2) 1,124 0 1,124 1,112 4 1,116 99 Common Operational Costs 2,606 (400) 2,206 0 2,206 2,061 132 2,193 99 Political and Military Aspects of Security 1,924 (289) 1,635 0 1,635 1,502 129 1,631 100 and Police Activities Economic and Environmental Activities 467 (8) 459 0 459 435 9 444 97 Human Dimension Activities 1,396 (48) 1,348 0 1,348 1,259 44 1,303 97 TOTAL 9,751 (1,122) 8,629 0 8,629 8,170 350 8,521 99

13 Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers Office in Yerevan Office of Head of Mission 271 (15) 256 0 256 242 12 254 99 Fund Administration Unit 182 (7) 175 0 175 171 2 173 99 Common Operational Costs 341 26 366 0 366 322 38 360 98 Politico-Military Activities 473 (76) 397 0 397 390 6 396 100 Economic and Environmental Activities 432 9 441 0 441 429 5 434 99 Democratization 248 24 272 0 272 270 0 270 99 Human Rights 201 6 206 0 206 197 0 197 95 Good Governance 327 15 342 0 342 329 4 333 97 TOTAL 2,473 (19) 2,455 0 2,455 2,350 67 2,416 98

Office in Baku Office of Head of Mission 216 0 216 0 216 211 2 213 99 Fund Administration Unit 165 8 173 0 173 168 1 169 98 Common Operational Costs 386 0 386 0 386 360 15 375 97 Politico-Military Activities 654 0 654 0 654 646 1 647 99 Economic and Environmental Activities 367 (8) 359 0 359 320 36 356 99 Democratization 342 0 342 0 342 282 55 337 98 Rule of Law and Human Rights 370 0 370 0 370 355 8 363 98 TOTAL 2,499 0 2,499 0 2,499 2,343 117 2,459 98

High Level Planning Group Office of Head of Mission 192 0 192 0 192 150 40 190 99 TOTAL 192 0 192 0 192 150 40 190 99

The Minsk Process Office of Head of Mission 953 0 953 0 953 343 54 397 42 TOTAL 953 0 953 0 953 343 54 397 42

Personal Representative of the CIO on the Conflict Dealt with by the Minsk Conference Office of Head of Mission 567 (7) 560 0 560 502 57 559 100 Fund Administration Unit 178 6 184 0 184 183 0 183 99 Common Operational Costs 306 1 306 0 306 298 8 306 100 TOTAL 1,051 0 1,051 0 1,051 983 65 1,048 100

TOTAL FOR CAUCASUS 16,919 (1,140) 15,779 0 15,779 14,338 694 15,031 95

CENTRAL ASIA

Centre in Astana Office of Head of Mission 232 (10) 222 0 222 204 17 221 100 Fund Administration Unit 227 20 247 0 247 245 1 246 100 Common Operational Costs 391 (39) 351 0 351 317 20 337 96 Politico-Military Activities 407 15 422 0 422 415 2 417 99 Economic and Environmental Activities 400 9 408 0 408 380 21 401 98 Human Dimension Activities 412 (6) 406 0 406 374 3 377 93 TOTAL 2,068 (11) 2,056 0 2,056 1,936 63 1,999 97

14 Fund Main Programme Approved PC Budget Transfers Revised Disbursement ULO Expenditure Utiliz. Programme Budget Authorized Revision Fin. Reg. Budget after Rate % EUR '000 (PC.DEC/839) Transfers (PC.DEC/889) 3.02(b) Transfers Centre in Ashgabad Office of Head of Mission 253 (17) 236 0 236 233 0 233 99 Fund Administration Unit 137 5 141 0 141 140 0 140 99 Common Operational Costs 217 8 225 0 225 166 36 202 90 Conflict Prevention and Confidence and Security Building 261 (45) 216 0 216 200 2 202 93 Economic and Environmental Activities 214 (2) 212 0 212 212 0 212 100 Human Dimension Activities 257 (29) 229 0 229 227 1 228 100 TOTAL 1,338 (79) 1,259 0 1,259 1,178 39 1,217 97

Centre in Bishkek Office of Head of Mission 783 24 807 0 807 712 95 807 100 Fund Administration Unit 262 5 267 0 267 233 34 267 100 Common Operational Costs 698 (36) 662 0 662 643 18 661 100 Politico-Military Activities 654 12 666 0 666 652 14 666 100 Economic and Environmental Activities 783 28 811 0 811 739 72 811 100 Human Dimension Activities 811 44 855 0 855 760 94 854 100 Police Reform Programme 1,061 (76) 985 0 985 936 49 985 100 TOTAL 5,052 0 5,052 0 5,052 4,674 377 5,051 100

Project Co-ordinator in Uzbekistan Office of Head of Mission 190 (62) 128 0 128 123 2 125 98 Fund Administration Unit 74 (15) 59 0 59 55 0 55 94 Common Operational Costs 288 (65) 223 0 223 180 26 206 92 Politico-Military Activities 318 (26) 292 0 292 267 20 287 98 Economic and Environmental Activities 421 (20) 401 0 401 270 121 391 98 Human Dimension Activities 352 (14) 337 0 337 240 94 334 99 TOTAL 1,641 (203) 1,439 0 1,439 1,135 263 1,399 97

Office in Tajikistan Office of Head of Mission 746 16 762 0 762 725 33 758 99 Fund Administration Unit 327 (30) 297 0 297 293 3 296 100 Common Operational Costs 876 38 914 0 914 879 34 913 100 Fostering Political Dialogue and Security 347 22 370 0 370 254 96 350 95 SALW and CA, Mine Action, Anti-Terrorism 0 and Security-related activities 607 (22) 585 0 585 574 (14) 560 96 Addressing Environmental Issues - Capacity Building 364 35 399 0 399 320 79 399 100 Supporting Economic Development in Tajikistan 486 (52) 434 0 434 358 50 408 94 Promoting Democratization in Tajikistan 273 (8) 265 0 265 235 30 265 100 Fostering Democratization of Media in Tajikistan 389 (28) 361 0 361 279 82 361 100 Gender Awareness and Equality in Tajikistan 310 5 315 0 315 296 19 315 100 TOTAL 4,725 (23) 4,702 0 4,702 4,212 413 4,625 98

TOTAL FOR CENTRAL ASIA 14,824 (317) 14,507 0 14,507 13,135 1,155 14,291 99

TOTAL FOR FUNDS RELATED TO THE OSCE FIELD OPERATIONS 113,817 (6,455) 107,362 0 107,362 99,207 6,373 105,582 98

TOTAL OSCE UNIFIED BUDGET 164,168 (7,793) 156,375 0 156,375 144,605 9,196 153,804 98

15 Chapter III – Financial Statements  STATEMENT 1: OSCE Consolidated Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

TOTAL OSCE* EUR '000 Note 2008 2007 Assessed Contributions 2/5 156,375 163,588 Extra-budgetary Contributions 3 28,543 25,997 Miscellaneous Income 2/5 6,362 4,785 Currency Exchange Adjustments 2/4 1,164 (887) Savings on prior year ULO's 9 1,154 902 Other Adjustments 10 67 397 TOTAL INCOME 2/5 193,664 194,781

TOTAL EXPENDITURE 2/6 175,875 185,070

EXCESS OF INCOME OVER EXPENDITURE 17,790 9,711

Less credits to participating States/Transfers 2/7 (13,875) (3,967) Refund of unspent XB contributions to Donors (1,381) (1,084)

Fund Balance 1 January 62,439 57,779 Fund Balance at Period End 2/8 64,973 62,439

STATEMENT 2: OSCE Consolidated Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

TOTAL OSCE* EUR '000 Assets Note 2008 2007

Cash and Short-term Deposits Budgetary 2/3 57,425 47,461 Cash and Short-term Deposits Extra-budgetary 2/3 40,816 38,622 Assessed Contributions Receivable 4 6,785 6,417 Accounts Receivable 5 2,693 2,752 Prepaid Expenses and Advances 6 3,763 6,696 TOTAL ASSETS 111,482 101,947 Liabilities Accounts Payable 8 3,028 5,528 Reserve for unliquidated obligations 9 12,419 12,780 Funds held for third parties 11 6,138 6,119 Contributions Received in Advance 12 19,213 9,379 Other Current Liabilities 438 455 TOTAL LIABILITIES 41,236 34,262 Reserves and Fund Balances Unallocated surplus 2/7 382 356 Revolving Fund 2/2 2,710 2,710 Contingency Fund 2/2 2,180 2,180 Fund Balance 2/8 64,973 62,439 TOTAL RESERVES AND FUND BALANCE 70,246 67,686

TOTAL LIABILITIES, RESERVES AND FUND BALANCE 111,482 101,947

Note: Contingent Liabilities - see note 14 * Unified Budget,Wallnerstrasse and Extra-budgetary

19  STATEMENT 3: OSCE Consolidated Statement of Cash Flow for the Year Ending 31 December 2008

TOTAL OSCE* EUR '000

2008 2007

NET EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 17,790 9,711

(Increase) decrease in assessed contributions receivable (368) 184 (Increase) decrease in accounts receivable 59 (258) (Increase) decrease in prepaid expenditure and advances 2,933 (1,438) Increase (decrease) in contributions received in advance 9,833 (5,357) Increase (decrease) in reserve for unliquidated obligations (362) 298 Increase (decrease) in accounts payable (2,500) 1,148 Increase (decrease) in other current liabilities (17) 29 NET CASH FLOW FROM OPERATING ACTIVITIES 27,369 4,316

Increase (decrease) in Unallocated Surplus 26 (4) Increase (decrease) in funds held for third parties 19 1,278 Credits to participating States/Transfers (13,875) (3,967) Refund of unspent extrabudgetary contribution (1,381) (1,084) NET CASH FLOW FROM FINANCING ACTIVITIES (15,210) (3,776)

NET INCREASE (DECREASE) IN CASH 12,159 540 * Unified Budget, Wallnerstrasse and Extra-budgetary

20  STATEMENT 4: Summary of all OSCE Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Total Institutions Total Field Total Unified Budget Wallnerstr. Total Extra- Operations Budgetary Funds TOTAL OSCE

EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 49,013 48,484 107,362 115,104 156,375 163,588 0 0 0 0 156,375 163,588 Extrabudgetary Contributions 3 0 0 0 0 0 0 0 0 28,543 25,997 28,543 25,997 Miscellaneous Income 2/5 6,078 4,495 283 290 6,362 4,785 0 0 0 0 6,362 4,785 Currency Exchange Adjustments 2/4 (121) 145 446 (301) 326 (156) 0 0 838 (731) 1,164 (887) Savings on prior year ULO's 9 328 213 717 689 1,045 902 109 0 0 0 1,154 902 Other Adjustments 10 0 0 0 0 0 0 0 0 67 397 67 397

TOTAL INCOME 2/5 55,299 53,336 108,808 115,782 164,108 169,118 109 0 29,448 25,663 193,664 194,781

TOTAL EXPENDITURE 2/6 48,222 47,532 105,582 113,150 153,804 160,682 819 4,113 21,252 20,274 175,875 185,070

EXCESS OF INCOME OVER EXPENDITURE 7,077 5,804 3,226 2,632 10,304 8,436 (709) (4,113) 8,195 5,388 17,790 9,711

Transfer between Funds 0 0 0 0 0 0 0 0 0 0 0 0 Less credits to participating States/Transfers (7,263) (1,850) (6,612) (2,117) (13,875) (3,967) 0 0 0 0 (13,875) (3,967) Refund of unspent XB contributions to Donors 0 0 0 0 0 0 0 0 (1,381) (1,084) (1,381) (1,084)

Fund Balance 1 January 16,037 12,083 12,878 12,363 28,915 24,446 947 5,060 32,577 28,273 62,439 57,779 Fund Balance at Period End 2/8 15,852 16,037 9,493 12,878 25,344 28,915 237 947 39,392 32,577 64,973 62,439

21  STATEMENT 5: Summary of all OSCE Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

Total Institutions Total Field Total Unified Budget Wallnerstr. Total Extra- Operations Budgetary Funds TOTAL OSCE

EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Dep. Budgetary 2/3 54,724 43,876 2,701 3,584 57,425 47,461 0 0 0 0 57,425 47,461 Cash and Short-term Dep. Extra-budgetary 2/3 40,816 38,622 0 0 40,816 38,622 0 0 0 0 40,816 38,622 Assessed Contributions Receivable 4 3,377 3,013 3,408 3,405 6,785 6,417 0 0 0 0 6,785 6,417 Accounts Receivable 5 2,024 2,226 669 526 2,693 2,752 0 0 0 0 2,693 2,752 Prepaid Expenses and Advances 6 1,112 2,626 2,650 4,070 3,763 6,696 0 0 0 0 3,763 6,696 Due From Other Funds 120 942 9,159 28,720 9,279 29,662 237 1,093 42,756 35,956 52,272 66,711 TOTAL ASSETS 102,173 91,305 18,587 40,305 120,760 131,609 237 1,093 42,756 35,956 163,754 168,658

Accounts Payable 8 1,420 3,020 1,608 2,508 3,028 5,528 0 0 0 0 3,028 5,528 Reserve for unliquidated obligations 9 2,862 2,842 6,404 6,605 9,266 9,448 0 147 3,153 3,186 12,419 12,780 Funds held for third parties 11 6,114 6,101 24 17 6,138 6,119 0 0 0 0 6,138 6,119 Contributions Received in Advance 12 18,803 8,970 409 409 19,213 9,379 0 0 0 0 19,213 9,379 Due To Other Funds 51,784 49,043 488 17,668 52,272 66,711 0 0 0 0 52,272 66,711 Other Current Liabilities 66 44 161 218 227 262 0 0 212 192 438 455 TOTAL LIABILITIES 81,049 70,021 9,095 27,426 90,143 97,447 0 147 3,364 3,379 93,508 100,973

Unallocated surplus 2/7 382 356 0 0 382 356 0 0 0 0 382 356 Revolving Fund 2/2 2,710 2,710 0 0 2,710 2,710 0 0 0 0 2,710 2,710 Contingency Fund 2/2 2,180 2,180 0 0 2,180 2,180 0 0 0 0 2,180 2,180 Fund Balance 2/8 15,852 16,037 9,493 12,878 25,344 28,915 237 947 39,392 32,577 64,973 62,439

TOTAL RESERVES AND FUND BALANCE 21,124 21,284 9,493 12,878 30,617 34,162 237 947 39,392 32,577 70,246 67,686

TOTAL LIABILITIES, RESERVES AND FUND BALANCE 102,173 91,305 18,587 40,305 120,760 131,609 237 1,093 42,756 35,956 163,754 168,658

22  STATEMENT 6: Summary of all OSCE Statement of Cash Flow for the Year Ending 31 December 2008 Total Total Field Operations Total Unified Budget Wallnerstr. Total Extra- Institutions Budgetary Funds TOTAL OSCE EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 7,077 5,804 3,226 2,632 10,304 8,436 (709) (4,113) 8,195 5,388 17,790 9,711

(Increase) decrease in assessed contributions receivable (364) (46) (3) 230 (368) 184 0 0 0 0 (368) 184 (Increase) decrease in accounts receivable 202 (353) (143) (55) 59 (408) 0 0 0 150 59 (258) (Increase) decrease in prepaid expenditure and advances 1,514 (1,387) 1,419 (136) 2,933 (1,523) 0 0 0 85 2,933 (1,438) (Increase) decrease in inter-fund balances receivable 823 (594) 19,560 (769) 20,383 (1,364) 856 3,967 (6,800) (3,987) 14,439 (1,383) Increase (decrease) in contributions received in advance 9,833 (5,357) 0 0 9,833 (5,357) 0 0 0 0 9,833 (5,357) Increase (decrease) in reserve for unliquidated obligations 19 739 (201) (74) (182) 664 (147) 147 (33) (513) (362) 298 Increase (decrease) in accounts payable (1,601) 1,094 (899) 286 (2,500) 1,380 0 0 0 (232) (2,500) 1,148 Increase (decrease) in other current liabilities 22 (4) (58) 59 (36) 55 0 0 19 (26) (17) 29 Increase (decrease) in inter-fund balances payable 2,741 1,038 (17,180) 127 (14,439) 1,165 0 0 0 218 (14,439) 1,383 NET CASH FLOW FROM OPERATING ACTIVITIES 20,267 933 5,721 2,300 25,988 3,233 0 0 1,381 1,084 27,369 4,316

(Increase) Decrease in Unallocated Surplus 26 (4) 0 0 26 (4) 0 0 0 0 26 (4) Increase (decrease) in funds held for third parties 13 1,282 7 (3) 19 1,278 0 0 0 0 19 1,278 Credits to participating States/ Transfers (7,263) (1,850) (6,612) (2,117) (13,875) (3,967) 0 0 0 0 (13,875) (3,967) Refund of unspent Extra-budgetary contribution 0 0 0 0 0 0 0 0 (1,381) (1,084) (1,381) (1,084) Transfer between Funds 0 0 0 0 0 0 0 0 0 0 0 0 NET CASH FLOW FROM FINANCING ACTIVITIES (7,224) (572) (6,605) (2,120) (13,830) (2,692) 0 0 (1,381) (1,084) (15,210) (3,776)

NET INCREASE (DECREASE) IN CASH 13,042 361 (884) 180 12,159 540 0 0 0 0 12,159 540

23  STATEMENT 7: Summary of all OSCE Statement of Cash Surplus* for the Year Ending 31 December 2008

Total Institutions Total Field Operations Total Unified Budget

EUR '000 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 7,077 5,804 3,226 2,632 10,304 8,436 Add Contributions Receivable 1. Jan 3,013 2,967 3,405 3,635 6,417 6,602 Less Contributions Receivable at Period End (3,377) (3,013) (3,408) (3,405) (6,785) (6,417) CASH SURPLUS FOR THE YEAR 6,713 5,759 3,223 2,862 9,936 8,621

Cash Surplus 1. Jan 13,025 9,116 9,474 8,729 22,498 17,845 Less Credits to participating States/Transfers (7,263) (1,850) (6,612) (2,117) (13,875) (3,967) Cash Surplus at Period End 12,475 13,025 6,085 9,474 18,559 22,498

Add contributions receivable at Period End 3,377 3,013 3,408 3,405 6,785 6,417 Fund Balance at Period End 15,852 16,037 9,493 12,878 25,344 28,915

* See note 2/7

24  STATEMENT 8:OSCE Secretariat and Institutions, Statement of Income, Expenditure and Changes in Fund Balance

for the Year Ending 31 December 2008

The Secretariat Office for High Representative on Total Secretariat and Democratic Commissioner on Freedom of the Institutions Institutions and National Media Human Rights Minorities

EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 30,568 30,318 14,250 14,090 2,957 2,816 1,239 1,260 49,013 48,484 Miscellaneous Income 2/5 6,036 4,477 39 15 4 3 0 0 6,078 4,495 Currency Exchange Adjustments 2/4 (136) 187 14 (43) 1 0 0 0 (121) 145 Savings on prior year ULO's 9 246 160 75 34 0 2 8 17 328 213

TOTAL INCOME 2/5 36,713 35,143 14,377 14,096 2,962 2,820 1,247 1,277 55,299 53,336

TOTAL EXPENDITURE 2/6 29,877 29,948 14,187 13,604 2,943 2,751 1,214 1,230 48,222 47,532

EXCESS OF INCOME OVER EXPENDITURE 6,836 5,195 190 493 18 70 33 47 7,077 5,804

Less credits to participating States/Transfers 2/7 (5,936) (1,625) (1,010) (197) (254) (27) (63) (1) (7,263) (1,850)

Fund Balance 1 January 13,043 9,473 2,302 2,007 517 474 175 130 16,037 12,083 Fund Balance at Period End 13,943 13,043 1,483 2,302 281 517 145 175 15,852 16,037

25  STATEMENT 9: OSCE Secretariat and Institutions, Statement of Asset, Liabilities and Fund Balance as at 31 December 2008

The Secretariat Office for High Representative on Total Secretariat Democratic Commissioner on Freedom of the and Institutions Institutions and National Minorities Media Human Rights EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Deposit Budgetary 2/3 54,128 42,673 561 1,003 35 200 0 0 54,724 43,876 Cash and Short-term Deposit Extra-budgetary 2/3 40,816 38,622 0 0 0 0 0 0 40,816 38,622 Assessed Contributions Receivable 4 2,128 1,930 960 821 215 193 74 68 3,377 3,013 Accounts Receivable 5 1,937 2,123 69 86 18 16 0 0 2,024 2,226 Prepaid Expenses and Advances 6 429 1,523 502 782 181 322 0 0 1,112 2,626 Due From Other Funds 0 0 0 771 0 0 120 172 120 942 TOTAL ASSETS 99,438 86,870 2,091 3,462 450 732 194 240 102,173 91,305

Accounts Payable 8 1,263 2,597 66 386 90 37 0 (1) 1,420 3,020 Reserve for unliquidated obligations 9 2,569 2,193 234 568 10 15 49 65 2,862 2,842 Funds held for third parties 11 5,935 5,900 179 201 0 0 0 0 6,114 6,101 Contributions Received in Advance 12 18,803 8,970 0 0 0 0 0 0 18,803 8,970 Due To Other Funds 51,606 48,917 129 0 49 126 0 0 51,784 49,043 Other Current Liabilities 46 3 0 5 20 36 0 0 66 44 TOTAL LIABILITIES 80,223 68,581 608 1,160 169 215 49 65 81,049 70,021

Unallocated surplus 2/7 382 356 0 0 0 0 0 0 382 356 Revolving Fund 2/7 2,710 2,710 0 0 0 0 0 0 2,710 2,710 Contingency Fund 2/2 2,180 2,180 0 0 0 0 0 0 2,180 2,180 Fund Balance 13,943 13,043 1,483 2,302 281 517 145 175 15,852 16,037

TOTAL RESERVES AND FUND BALANCE 19,216 18,289 1,483 2,302 281 517 145 175 21,124 21,284

TOTAL LIABILITIES, RESERVES AND FUND BALANCE 99,438 86,870 2,091 3,462 450 732 194 240 102,173 91,305

26  STATEMENT 10: Secretariat and Institutions, Statement of Cash Flow for the Year Ending 31 December 2008

The Secretariat Office for Democratic High Commissioner on Representative on Total Secretariat and Institutions and Human National Minorities Freedom of the Media Institutions Rights

EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 6,836 5,195 190 493 18 70 33 47 7,077 5,804

(Increase) decrease in assessed contributions receivable (199) (20) (138) (21) (21) (1) (6) (4) (364) (46) (Increase) decrease in accounts receivable 186 (354) 17 4 (2) (4) 0 0 202 (353) (Increase) decrease in prepaid expenditure and advances 1,093 (1,362) 280 291 141 (316) 0 0 1,514 (1,387) (Increase) decrease in inter-fund balances receivable 0 0 771 (771) 0 242 52 (66) 823 (594) Increase (decrease) in contributions received in advance 9,833 (5,357) 0 0 0 0 0 0 9,833 (5,357) Increase (decrease) in reserve for unliquidated obligations 376 533 (334) 170 (6) 12 (17) 24 19 739 Increase (decrease) in accounts payable (1,335) 988 (320) 113 53 (6) 1 0 (1,601) 1,094 Increase (decrease) in other current liabilities 43 (9) (5) 5 (17) 0 0 0 22 (4) Increase (decrease) in inter-fund balances payable 2,689 841 129 71 (77) 126 0 0 2,741 1,038 NET CASH FLOW FROM OPERATING ACTIVITIES 19,524 454 589 354 90 123 63 1 20,267 933

(Increase) Decrease in Unallocated Surplus 26 (4) 0 0 0 0 0 0 26 (4) Increase (decrease) in funds held for third parties 35 1,373 (22) (91) 0 0 0 0 13 1,282 Credits to participating States/Transfers (5,936) (1,625) (1,010) (197) (254) (27) (63) (1) (7,263) (1,850) NET CASH FLOW FROM FINANCING ACTIVITIES (5,875) (256) (1,032) (288) (254) (27) (63) (1) (7,224) (572)

NET INCREASE (DECREASE) IN CASH 13,649 198 (442) 65 (165) 97 0 0 13,042 361

27  STATEMENT 11: Secretariat and Institutions, Statement of Cash Surplus* for the Year Ending 31 December 2008

The Secretariat Office for Democratic High Commissioner Representative on Total Secretariat Institutions on National Minorities Freedom of the Media and Institutions and Human Rights

EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 6,836 5,195 190 493 18 70 33 47 7,077 5,804 Add Contributions Receivable 1. Jan 1,930 1,909 821 800 193 193 68 65 3,013 2,967 Less Contributions Receivable at Period End (2,128) (1,930) (960) (821) (215) (193) (74) (68) (3,377) (3,013) CASH SURPLUS FOR THE YEAR 6,637 5,175 52 471 (3) 69 27 44 6,713 5,759

Cash Surplus 1. Jan 11,113 7,564 1,481 1,207 323 281 107 65 13,025 9,116 Less Credits to participating States / Transfers (5,936) (1,625) (1,010) (197) (254) (27) (63) (1) (7,263) (1,850) Cash Surplus at Period End 11,815 11,113 523 1,481 66 323 71 107 12,475 13,025

Add contributions receivable at Period End 2,128 1,930 960 821 215 193 74 68 3,377 3,013 Fund Balance at Period End 13,943 13,043 1,483 2,302 281 517 145 175 15,852 16,037

* See note 2/7

28  STATEMENT 12: Summary by Region OSCE Field Operations Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Augmentations* South-Eastern Europe Eastern Europe Caucasus Central Asia Total Regions Closed Funds GRAND TOTAL EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 4,903 n/a 66,995 82,565 5,178 5,036 15,779 15,266 14,507 12,237 107,362 115,104 0 0 107,362 115,104 Miscellaneous Income 0 n/a 173 217 13 29 55 35 43 8 283 290 0 0 283 290 Currency Exchange Adjustments 2/4 0 n/a 27 36 90 (200) 23 (57) 307 (80) 446 (301) 0 0 446 (301) Savings on prior year ULO's 9 0 n/a 492 410 35 33 88 168 101 77 717 689 0 0 717 689

TOTAL INCOME 2/5 4,903 n/a 67,686 83,228 5,316 4,899 15,945 15,412 14,958 12,242 108,808 115,781 0 0 108,808 115,782

TOTAL EXPENDITURE 2/6 4,832 n/a 66,316 81,482 5,112 4,934 15,031 14,800 14,291 11,933 105,582 113,150 0 0 105,582 113,150

EXCESS OF INCOME OVER EXPENDITURE 72 n/a 1,370 1,746 204 (35) 914 612 667 309 3,226 2,632 0 0 3,226 2,632

Transfers between Funds 0 n/a (346) 0 0 0 0 0 0 0 (346) 0 346 0 0 0 Less credits to participating States/Transfers 2/7 0 n/a (4,126) (553) (401) (289) (990) (528) (1,042) (724) (6,559) (2,094) (53) (23) (6,612) (2,117)

Fund Balance 1 January 0 n/a 8,033 6,840 554 878 2,373 2,289 1,682 2,096 12,641 12,103 237 260 12,878 12,363 Fund Balance at Period End 72 n/a 4,930 8,033 357 554 2,297 2,373 1,307 1,682 8,963 12,641 530 237 9,493 12,878

* See note 2/2 - The 2007 revised year-end budget for Augmentations was EUR 4,830, with total expenditures of EUR 4,492

29  STATEMENT 13: Summary by Region OSCE Field Operations Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

Augmentations* South-Eastern Eastern Europe Caucasus Central Asia Total Regions Closed Funds GRAND TOTAL Europe

EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Deposit Budgetary 2/3 0 n/a 924 2,059 339 344 574 595 864 586 2,701 3,584 0 0 2,701 3,584 Assessed Contributions Receivable 4 (1) n/a 1,911 2,052 159 165 662 721 415 323 3,145 3,262 263 142 3,408 3,405 Accounts Receivable 5 0 n/a 442 377 90 84 0 0 137 65 669 526 0 0 669 526 Prepaid Expenses and Advances 6 0 n/a 1,179 1,232 25 948 494 1,167 953 723 2,650 4,070 0 0 2,650 4,070 Due From Other Funds 149 n/a 5,643 25,008 246 416 2,215 1,963 570 1,180 8,824 28,567 336 153 9,159 28,720 TOTAL ASSETS 148 n/a 10,100 30,728 859 1,957 3,944 4,447 2,938 2,877 17,989 40,009 598 295 18,587 40,305

Accounts Payable 8 0 n/a 764 1,776 25 63 485 419 335 250 1,608 2,508 0 0 1,608 2,508 Reserve for unliquidated obligations 9 76 n/a 4,242 4,255 211 236 694 1,176 1,181 938 6,404 6,605 0 0 6,404 6,605 Funds held for third parties 11 0 n/a 23 17 0 0 0 0 0 0 24 17 0 0 24 17 Contributions Received in Advance 12 0 n/a 0 0 0 0 409 409 0 0 409 409 0 0 409 409 Due To Other Funds 0 n/a 0 16,441 259 1,100 55 69 105 0 420 17,610 68 58 488 17,668 Other current liabilities 0 n/a 140 207 7 3 4 1 10 8 161 218 0 0 161 218 TOTAL LIABILITIES 76 n/a 5,170 22,696 502 1,403 1,647 2,074 1,631 1,196 9,026 27,368 68 58 9,095 27,426

Fund Balance 72 n/a 4,930 8,033 357 554 2,297 2,373 1,307 1,682 8,963 12,641 530 237 9,493 12,878

TOTAL FUND BALANCE 72 n/a 4,930 8,033 357 554 2,297 2,373 1,307 1,682 8,963 12,641 530 237 9,493 12,878

TOTAL LIABILITIES AND FUND BALANCE 148 n/a 10,100 30,728 859 1,957 3,944 4,447 2,938 2,877 17,989 40,009 598 295 18,587 40,305

* See note 2/2

30  STATEMENT 14: Summary by Region OSCE Field Operations Statement of Cash Flow for the Year Ending 31 December 2008 Augmentations* South-Eastern Eastern Europe Caucasus Central Asia Total Regions Closed Funds GRAND TOTAL Europe

EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 72 n/a 1,370 1,746 204 (35) 914 612 667 309 3,226 2,632 0 0 3,226 2,632

(Increase) decrease in assessed contributions receivable 1 n/a 141 108 7 24 59 50 (92) 8 117 189 (120) 40 (3) 230 (Increase) decrease in accounts receivable 0 n/a (65) (47) (6) (10) 0 0 (71) 3 (143) (55) 0 0 (143) (55) (Increase) decrease in prepaid expenditure and advances 0 n/a 53 966 923 (807) 673 197 (230) (491) 1,419 (136) 0 0 1,419 (136) (Increase) decrease in inter-fund balances receivable (149) n/a 19,365 (797) 169 166 (251) (578) 609 453 19,743 (756) (183) (13) 19,560 (769) Increase (decrease) in reserve for unliquidated obligations 76 n/a (13) (693) (25) (80) (482) 236 243 463 (201) (74) 0 0 (201) (74) Increase (decrease) in accounts payable 0 n/a (1,012) 296 (38) 21 65 (20) 85 (11) (899) 286 0 0 (899) 286 Increase (decrease) in other current liabilities 0 n/a (67) 54 3 2 3 (3) 2 7 (58) 59 0 0 (58) 59 Increase (decrease) in inter-fund balances payable 0 n/a (16,441) (496) (841) 673 (13) (46) 105 0 (17,190) 131 10 (3) (17,180) 127 NET CASH FLOW FROM OPERATING ACTIVITIES 0 n/a 3,331 1,136 396 (47) 969 447 1,319 741 6,014 2,276 (293) 24 5,721 2,300

Increase (decrease) in funds held for third parties 0 n/a 7 (3) 0 0 0 0 0 0 7 (3) 0 0 7 (3) Credits to participating States 0 n/a (4,126) (553) (401) (288) (990) (528) (1,042) (724) (6,559) (2,093) (53) (24) (6,612) (2,117) Transfer between Funds 0 n/a (346) 0 0 0 0 0 0 0 (346) 0 346 0 0 0 NET CASH FLOW FROM FINANCING ACTIVITIES 0 n/a (4,465) (557) (401) (288) (990) (528) (1,042) (724) (6,898) (2,097) 293 (24) (6,605) (2,120)

NET INCREASE (DECREASE) IN CASH 0 n/a (1,135) 579 (5) (335) (21) (81) 278 17 (884) 180 0 0 (884) 180

* See note 2/2

31  STATEMENT 15: Summary by Region OSCE Field Operations Statement of Cash Surplus* for the Year Ending 31 December 2008 Augmentations** South-Eastern Eastern Europe Caucasus Central Total Closed Funds GRAND TOTAL Europe Asia Regions

EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 72 n/a 1,370 1,746 204 (36) 914 612 667 309 3,226 2,632 0 1 3,226 2,632 Add Contributions Receivable 1. Jan 0 n/a 2,052 2,160 165 188 721 771 323 331 3,262 3,459 142 184 3,405 3,635 Less Contributions Receivable at Period End 1 n/a (1,911) (2,052) (159) (165) (662) (721) (415) (323) (3,145) (3,269) (263) (142) (3,408) (3,405) CASH SURPLUS FOR THE YEAR 73 n/a 1,511 1,854 210 (13) 974 662 575 317 3,343 2,821 (120) 42 3,223 2,862

Cash Surplus 1. Jan 0 n/a 5,980 4,680 388 689 1,652 1,518 1,359 1,765 9,379 8,659 95 76 9,474 8,729 Less Credits to participating States/Transfers 0 n/a (4,126) (553) (401) (289) (990) (528) (1,042) (724) (6,559) (2,093) (53) (23) (6,612) (2,117) Cash Surplus at Period End 73 n/a 3,365 5,980 198 388 1,635 1,652 892 1,359 6,163 9,387 (78) 95 6,085 9,474

Add contributions receivable at Period End (1) n/a 1,911 2,052 159 165 662 721 415 323 3,145 3,269 263 142 3,408 3,405 Fund Balance at Period End 72 n/a 5,276 8,033 357 554 2,297 2,373 1,307 1,682 9,308 12,657 184 237 9,493 12,878

* See note 2/7 ** See note 2/2

32  STATEMENT 16: OSCE Field Operations South-Eastern Europe, Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Mission in Tasks in Bosnia Mission to Croatia Office in Mission to Presence in Spillover Missin to TOTAL FOR Kosovo and Herzegovina Zagreb Serbia Albania Monitor Montenegro SOUTH-EASTERN Mission to EUROPE Skopje EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 26,934 34,185 14,747 17,803 0 7,323 2,545 n/a 8,103 7,423 3,435 3,727 9,008 9,949 2,223 2,155 66,995 82,565 Miscellaneous Income 2/5 56 64 49 23 0 90 5 n/a 39 13 13 11 11 16 0 0 173 217 Currency Exchange Adjustments 2/4 1 1 0 0 (2) 11 12 n/a (4) 10 13 3 7 12 0 0 27 36 Savings on prior year ULO's 9 231 180 23 17 19 3 0 n/a 46 36 48 28 102 137 23 10 492 410

TOTAL INCOME 2/5 27,222 34,430 14,820 17,843 16 7,426 2,561 n/a 8,184 7,483 3,509 3,769 9,128 10,114 2,246 2,165 67,686 83,228

TOTAL EXPENDITURE 2/6 26,542 33,627 14,661 17,560 0 7,277 2,529 n/a 8,045 7,404 3,413 3,715 8,921 9,768 2,205 2,131 66,316 81,482

EXCESS OF INCOME OVER EXPENDITURE 680 803 159 283 16 149 32 n/a 139 78 96 54 206 346 41 33 1,370 1,746

Transfer between Funds 0 0 0 0 (346) 0 0 n/a 0 0 0 0 0 0 0 0 (346) 0 Less credits to participating States / Transfers 2/7 (1,754) 158 (834) 2 (357) (165) 0 n/a (268) (88) (192) (133) (663) (327) (58) 0 (4,126) (553)

Fund Balance 1 January 3,315 2,355 1,571 1,286 686 702 0 n/a 604 613 509 589 1,255 1,237 93 59 8,033 6,840 Fund Balance at Period End 2,240 3,315 896 1,571 0 686 32 n/a 474 604 413 509 798 1,255 76 93 4,930 8,033

33  STATEMENT 17: OSCE Field Operations South-Eastern Europe, Statement of Asset, Liabilities and Fund Balance as at 31 December 2008

Mission in Kosovo Tasks in Bosnia Mission to Office in Mission to Presence in Spillover Monitor Mission to TOTAL FOR SOUTH- and Herzegovina Croatia Zagreb Serbia Albania Mission to Skopje Montenegro EASTERN EUROPE

EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Deposit Budgetary 2/3 133 514 181 294 0 699 135 n/a 162 273 75 74 181 156 56 50 924 2,059 Assessed Contributions Receivable 4 559 727 440 390 0 165 2 n/a 327 269 235 240 329 255 19 5 1,911 2,052 Accounts Receivable 5 157 22 152 164 0 0 0 n/a 0 0 30 95 104 97 0 0 442 377 Prepaid Expenses and Advances 6 118 225 0 0 0 69 0 n/a 595 319 163 132 259 365 42 122 1,179 1,232 Due From Other Funds 3,865 20,937 563 1,460 0 496 24 n/a 142 393 296 437 749 1,228 4 56 5,643 25,008 TOTAL ASSETS 4,832 22,424 1,336 2,308 0 1,430 162 n/a 1,227 1,255 800 978 1,622 2,100 121 233 10,100 30,728

Accounts Payable 8 428 978 31 103 0 238 15 n/a 83 202 53 109 143 145 11 0 764 1,776 Reserve for unliquidated obligations 9 2,029 1,491 401 626 0 505 115 n/a 670 450 333 360 660 683 34 140 4,242 4,255 Funds held for third parties 11 0 0 6 8 0 0 0 n/a 0 0 0 0 17 9 0 0 23 17 Due To Other Funds 0 16,441 0 0 0 0 0 n/a 0 0 0 0 0 0 0 0 0 16,441 Other current liabilities 134 199 0 0 0 0 0 n/a 0 0 1 0 4 7 1 0 140 207 TOTAL LIABILITIES 2,592 19,110 440 737 0 743 130 n/a 753 652 386 469 824 844 45 140 5,170 22,696

Fund Balance 2,240 3,315 896 1,571 0 686 32 n/a 474 604 413 509 798 1,255 76 93 4,930 8,033

TOTAL FUND BALANCE 2,240 3,315 896 1,571 0 686 32 n/a 474 604 413 509 798 1,255 76 93 4,930 8,033

TOTAL LIABILITIES AND FUND BALANCE 4,832 22,424 1,336 2,308 0 1,430 162 n/a 1,227 1,255 800 978 1,622 2,100 121 233 10,100 30,728

34  STATEMENT 18: OSCE Field Operations South-Eastern Europe, Statement of Cash Flow for the Year Ending 31 December 2008

Mission in Kosovo Tasks in Mission to Office in Mission to Presence in Spillover Monitor Mission to TOTAL FOR Bosnia and Croatia Zagreb Serbia Albania Mission to Skopje Montenegro SOUTH-EASTERN Herzegovina EUROPE

EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

NET EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 680 803 159 283 16 149 32 n/a 139 78 96 54 206 346 41 33 1,370 1,746

(Increase) decrease in assessed contributions receivable 168 31 (50) 64 165 15 (2) n/a (58) (13) 6 23 (74) (9) (14) (4) 141 108 (Increase) decrease in accounts receivable (135) (22) 13 (17) 0 0 0 n/a 0 0 65 7 (7) (15) 0 0 (65) (47) (Increase) decrease in prepaid expenditure and advances 106 53 (1) 0 69 113 0 n/a (276) 987 (32) (110) 105 37 81 (113) 53 966 (Increase) decrease in inter-fund balances receivable 17,072 (132) 897 (61) 496 (297) (24) n/a 251 (393) 141 167 479 (26) 52 (56) 19,365 (797) Increase (decrease) in reserve for unliquidated obligations 538 (873) (225) (223) (505) 400 115 n/a 220 140 (27) (22) (23) (225) (106) 111 (13) (693) Increase (decrease) in accounts payable (550) 128 (72) 47 (238) 95 15 n/a (119) (66) (56) 64 (3) 29 11 (1) (1,012) 296 Increase (decrease) in other current liabilities (65) 61 0 (7) 0 0 0 n/a 0 (6) 0 0 (3) 6 1 0 (67) 54 Increase (decrease) in inter-fund balances payable (16,441) 0 0 10 0 0 0 n/a 0 (514) 0 0 0 11 0 (3) (16,441) (496) NET CASH FLOW FROM OPERATING ACTIVITIES 1,373 49 723 95 4 475 135 n/a 157 213 193 182 681 154 64 (33) 3,331 1,136

Increase (decrease) in funds held for third parties 0 0 (1) (2) 0 0 0 n/a 0 0 0 0 8 (1) 0 0 7 (3) Credits to participating States (1,754) 158 (834) 2 (357) (165) 0 n/a (268) (88) (192) (133) (663) (327) (58) 0 (4,126) (553) Transfer between Funds 0 0 0 0 (346) 0 0 n/a 0 0 0 0 0 0 0 0 (346) 0 NET CASH FLOW FROM FINANCING ACTIVITIES (1,754) 158 (835) 0 (703) (165) 0 n/a (268) (88) (192) (133) (655) (328) (58) 0 (4,465) (557)

NET INCREASE (DECREASE) IN CASH (381) 207 (113) 95 (699) 309 135 n/a (111) 126 1 49 25 (175) 7 (33) (1,135) 579

35  STATEMENT 19: OSCE Field Operations South-Eastern Europe, Statement of Cash Surplus* for the Year Ending 31 December 2008

Mission in Tasks in Bosnia Mission to Croatia Office in Mission to Serbia Presence in Spillover Mission to TOTAL FOR Kosovo and Herzegovina Zagreb Albania Monitor Mission Montenegro SOUTH-EASTERN to Skopje EUROPE EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 680 803 159 283 16 149 32 n/a 139 78 96 54 206 346 41 33 1,370 1,746 Add Contributions Receivable 1. Jan 727 758 390 454 165 180 0 n/a 269 257 240 263 255 246 5 2 2,052 2,160 Less Contributions Receivable at Period End (559) (727) (440) (390) 0 (165) (2) n/a (327) (269) (235) (240) (329) (255) (19) (5) (1,911) (2,052) CASH SURPLUS/(DEFICIT) FOR THE YEAR 848 834 110 347 182 164 30 n/a 81 66 102 77 133 337 27 30 1,511 1,854

Cash Surplus 1. Jan 2,588 1,597 1,181 831 521 522 0 n/a 334 356 269 325 1,000 990 87 58 5,980 4,680 Less Credits to participating States / Transfers (1,754) 158 (834) 2 (357) (165) 0 n/a (268) (88) (192) (133) (663) (327) (58) 0 (4,126) (553) Cash Surplus at Period End 1,681 2,588 457 1,181 346 521 30 n/a 147 334 179 269 470 1,000 56 87 3,365 5,980

Add contributions receivable at Period End 559 727 440 390 0 165 2 n/a 327 269 235 240 329 255 19 5 1,911 2,052 Fund Balance at Period End 2,240 3,315 896 1,571 346 686 32 n/a 474 604 413 509 798 1,255 76 93 5,276 8,033

*See note 2/7

36  STATEMENT 20: OSCE Field Operations Eastern Europe Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Mission to Project Co- Office in Minsk Rep.on the Latvian- TOTAL FOR Moldova ordinator in Russian Joint EASTERN EUROPE Ukraine Commission on Military Pensioners EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 1,956 1,869 2,314 2,384 900 780 7 4 5,178 5,036 Miscellaneous Income 2/5 6 23 7 6 0 0 0 0 13 29 Currency Exchange Adjustments 2/4 13 (4) 76 (192) 0 (4) 0 0 90 (200) Savings on prior year ULO's 9 20 4 3 11 12 18 0 0 35 33

TOTAL INCOME 2/5 1,996 1,892 2,400 2,209 912 794 7 4 5,316 4,899

TOTAL EXPENDITURE 2/6 1,948 1,854 2,280 2,318 877 759 7 3 5,112 4,934

EXCESS OF INCOME OVER EXPENDITURE 48 38 121 (109) 35 35 0 0 204 (35)

Less credits to participating States / transfers 2/7 (69) (77) (115) (45) (215) (164) (2) (3) (401) (289)

Fund Balance 1 January 167 206 73 227 311 439 3 5 554 878 Fund Balance at Period End 146 167 78 73 131 311 1 3 357 554

37  STATEMENT 21: OSCE Field Operations Eastern Europe Statement of Asset, Liabilities and Fund Balance as at 31 December 2008

Mission to Project Co-ordinator Office in Minsk Rep.on the Latvian- TOTAL FOR Moldova in Ukraine Russian Joint EASTERN EUROPE Commission on Military Pensioners EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Deposit Budgetary 2/3 38 14 275 281 26 49 0 0 339 344 Assessed Contributions Receivable 4 72 56 38 55 49 54 0 0 159 165 Accounts Receivable 5 33 36 51 48 6 0 0 0 90 84 Prepaid Expenses and Advances 6 8 69 17 878 0 0 0 0 25 948 Due From Other Funds 162 171 0 0 84 243 1 2 246 416 TOTAL ASSETS 313 347 380 1,262 165 346 1 3 859 1,957

Accounts Payable 8 19 51 3 11 3 0 0 0 25 63 Reserve for unliquidated obligations 9 148 127 33 77 30 32 0 0 211 236 Due To Other Funds 0 0 259 1,100 0 0 0 0 259 1,100 Other current liabilities 0 1 7 0 0 3 0 0 7 3 TOTAL LIABILITIES 167 179 302 1,189 34 35 0 0 502 1,403

Fund Balance 146 167 78 73 131 311 1 3 357 554

TOTAL FUND BALANCES 146 167 78 73 131 311 1 3 357 554

TOTAL LIABILITIES AND FUND BALANCE 313 347 380 1,262 165 346 1 3 859 1,957

38  STATEMENT 22: OSCE Field Operations Eastern Europe, Statement of Cash Flow for the Year Ending 31 December 2008

Mission to Project Co-ordinator Office in Minsk Rep.on the Latvian- TOTAL FOR Moldova in Ukraine Russian Joint EASTERN EUROPE Commission on Military Pensioners EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

NET EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 48 38 121 (109) 35 35 0 0 204 (35)

(Increase) decrease in assessed contributions receivable (16) 5 18 11 5 7 0 0 7 24 (Increase) decrease in accounts receivable 4 4 (4) (17) (6) 2 0 0 (6) (10) (Increase) decrease in prepaid expenditure and advances 61 19 862 (826) 0 0 0 0 923 (807) (Increase) decrease in inter-fund balances receivable 9 8 0 0 159 158 2 2 169 166 Increase (decrease) in reserve for unliquidated obligations 21 (18) (45) (17) (2) (44) 0 0 (25) (80) Increase (decrease) in accounts payable (33) 9 (8) 12 3 0 0 0 (38) 21 Increase (decrease) in Other Current Liabilities (1) (1) 7 0 (3) 3 0 0 3 2 Increase (decrease) in inter-fund balances payable 0 0 (841) 673 0 0 0 0 (841) 673 NET CASH FLOW FROM OPERATING ACTIVITIES 93 64 109 (273) 191 161 2 3 396 (47)

Credits to Participating States/Transfers (69) (77) (115) (45) (215) (164) (2) (3) (401) (288) NET CASH FLOW FROM FINANCING ACTIVITIES (69) (77) (115) (45) (215) (164) (2) (3) (401) (288)

NET INCREASE (DECREASE) IN CASH 24 (13) (6) (318) (23) (3) 0 0 (5) (335)

39  STATEMENT 23: OSCE Field Operations Eastern Europe, Statement of Cash Surplus* for the Year Ending 31 December 2008

Mission to Moldova Project Co-ordinator in Office in Minsk Rep.on the Latvian- TOTAL FOR Ukraine Russian Joint EASTERN EUROPE Commission on Military Pensioners EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 48 38 121 (109) 35 35 0 0 204 (36) Add Contributions Receivable 1. Jan 56 61 55 66 54 61 0 0 165 188 Less Contributions Receivable at Period End (72) (56) (38) (55) (49) (54) 0 0 (159) (165) CASH SURPLUS/(DEFICIT) FOR THE YEAR 31 43 138 (98) 40 42 0 0 210 (13)

Cash Surplus 1. Jan 111 146 18 161 257 378 2 4 388 689 Less credits to participating states / transfers (69) (77) (115) (45) (215) (164) (2) (3) (401) (289) Cash Surplus at Period End 74 111 41 18 82 257 1 2 198 388

Add contributions receivable at Period End 72 56 38 55 49 54 0 0 159 165 Fund Balance at Period End 146 167 78 73 131 311 1 3 357 554

*See note 2/7

40  STATEMENT 24: OSCE Field Operations Caucasus, Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Mission Office Office Funds Relating to TOTAL FOR to Georgia in Yerevan in Baku the Conflict Dealt CAUCASUS with by the OSCE Minsk Conference* EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 8,629 9,217 2,455 2,277 2,499 2,166 2,196 1,606 15,779 15,266 Miscellaneous Income 2/5 53 35 1 0 1 1 0 0 55 35 Currency Exchange Adjustments 2/4 (13) (23) 36 (12) 0 (17) 1 (5) 23 (57) Savings on prior year ULO's 9 59 150 13 3 12 12 4 2 88 168

TOTAL INCOME 2/5 8,729 9,379 2,504 2,269 2,511 2,161 2,201 1,603 15,945 15,412

TOTAL EXPENDITURE 2/6 8,521 8,925 2,416 2,223 2,459 2,090 1,636 1,561 15,031 14,800

EXCESS OF INCOME OVER EXPENDITURE 208 453 88 46 53 71 566 42 914 612

Less credits to participating States / Transfers 2/7 (651) (236) (77) (26) (158) (120) (104) (146) (990) (528)

Fund Balance 1 January 1,644 1,426 169 149 279 328 282 386 2,373 2,289 Fund Balance at Period End 1,200 1,644 180 169 174 279 743 282 2,297 2,373

* Note - Includes the following Funds: High Level Planning Group, The Minsk Process and Personal Representative of the CiO

41  STATEMENT 25: OSCE Field Operations Caucasus, Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

Mission Office Office Funds Relating to the TOTAL FOR to Georgia in Yerevan in Baku Conflict Dealt with by CAUCASUS the OSCE Minsk Conference* EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Deposit Budgetary 2/3 199 75 172 112 173 329 29 78 574 595 Assessed Contributions Receivable 4 399 510 66 45 75 52 121 115 662 721 Accounts Receivable 5 0 0 0 0 0 0 0 0 0 0 Prepaid Expenses and Advances 6 284 962 58 29 141 175 11 0 494 1,167 Due From Other Funds 1,037 1,141 27 137 0 106 1,150 579 2,215 1,963 TOTAL ASSETS 1,920 2,689 324 324 389 662 1,311 773 3,944 4,447

Accounts Payable 8 366 367 77 25 41 28 0 0 485 419 Reserve for unliquidated obligations 9 350 678 67 130 117 355 159 13 694 1,176 Contributions Received in Advance 12 0 0 0 0 0 0 409 409 409 409 Due To Other Funds 0 0 0 0 55 0 0 69 55 69 Other current liabilities 2 0 0 0 1 0 0 0 4 1 TOTAL LIABILITIES 719 1,045 144 155 215 383 568 491 1,647 2,074

Fund Balance 1,200 1,644 180 169 174 279 743 282 2,297 2,373

TOTAL FUND BALANCES 1,200 1,644 180 169 174 279 743 282 2,297 2,373

TOTAL LIABILITIES AND FUND BALANCE 1,920 2,689 324 324 389 662 1,311 773 3,944 4,447

* Note - Includes the following Funds: High Level Planning Group, The Minsk Process and Personal Representative of the CiO

42  STATEMENT 26: OSCE Field Operations Caucasus, Statement of Cash Flow for the Year Ending 31 December 2008

Mission Office Office Funds Relating to TOTAL FOR to Georgia in Yerevan in Baku the Conflict Dealt CAUCASUS with by the OSCE Minsk Conference* EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

NET EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 208 453 88 46 53 71 566 42 914 612

(Increase) decrease in assessed contributions receivable 111 29 (21) 1 (24) (1) (6) 21 59 50 (Increase) decrease in accounts receivable 0 0 0 0 0 0 0 0 0 0 (Increase) decrease in prepaid expenditure and advances 679 301 (29) 23 35 (127) (11) 0 673 197 (Increase) decrease in inter-fund balances receivable 104 (635) 109 (137) 106 140 (571) 54 (251) (578) Increase (decrease) in reserve for unliquidated obligations (328) (142) (63) 117 (238) 292 146 (31) (482) 236 Increase (decrease) in accounts payable 0 (69) 52 14 13 27 0 7 65 (20) Increase (decrease) in other current liabilities 2 (3) 0 0 1 0 0 0 3 (3) Increase (decrease) in inter-fund balances payable 0 0 0 (115) 55 0 (69) 69 (13) (46) NET CASH FLOW FROM OPERATING ACTIVITIES 775 (66) 137 (50) 2 402 55 161 969 447

Credits to participating States (651) (236) (77) (26) (158) (120) (104) (146) (990) (528) NET CASH FLOW FROM FINANCING ACTIVITIES (651) (236) (77) (26) (158) (120) (104) (146) (990) (528)

NET INCREASE (DECREASE) IN CASH 124 (302) 60 (76) (156) 282 (50) 15 (21) (81)

* Note - Includes the following Funds: High Level Planning Group, The Minsk Process and Personal Representative of the CiO

43  STATEMENT 27: OSCE Field Operations Caucasus, Statement of Cash Surplus* for the Year Ending 31 December 2008

Mission Office Office Funds Relating to TOTAL FOR to Georgia in Yerevan in Baku the Conflict Dealt CAUCASUS with by the OSCE Minsk Conference** EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 208 453 88 46 53 71 566 42 914 612 Add Contributions Receivable 1. Jan 510 539 45 46 52 50 115 136 721 771 Less Contributions Receivable at Period End (399) (510) (66) (45) (75) (52) (121) (115) (662) (721) CASH SURPLUS FOR THE YEAR 318 483 67 47 29 70 559 62 974 662

Cash Surplus 1. Jan 1,134 887 124 103 227 278 167 250 1,652 1,518 Less Credits to participating States / Transfers (651) (236) (77) (26) (158) (120) (104) (146) (990) (528) Cash Surplus at Period End 801 1,134 114 124 99 227 622 167 1,635 1,652

Add contributions receivable at Period End 399 510 66 45 75 52 121 115 662 721 Fund Balance at Period End 1,200 1,644 180 169 174 279 743 282 2,297 2,373

*See note 2/7 ** Note - Includes the following Funds: High Level Planning Group, The Minsk Process and Personal Representative of the CiO

44  STATEMENT 28: OSCE Field Operations Central Asia, Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Centre Centre Centre Project Co-ordinator Office in TOTAL FOR in Astana in Ashgabad in Bishkek in Uzbekistan Tajikistan/Centre in CENTRAL ASIA EUR '000 Dushanbe 07

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Assessed Contributions 2/5 2,056 1,967 1,259 1,086 5,052 4,057 1,439 1,386 4,702 3,741 14,507 12,237 Miscellaneous Income 2/5 17 0 5 0 5 4 4 4 12 0 43 8 Currency Exchange Adjustments 2/4 29 (5) 6 (1) 70 (18) 4 (17) 197 (39) 307 (80) Savings on prior year ULO's 9 21 7 10 6 25 48 27 14 18 3 101 77

TOTAL INCOME 2/5 2,124 1,969 1,280 1,091 5,152 4,091 1,474 1,387 4,929 3,704 14,958 12,242

TOTAL EXPENDITURE 2/6 1,999 1,903 1,217 1,060 5,051 3,968 1,399 1,349 4,625 3,653 14,291 11,933

EXCESS OF INCOME OVER EXPENDITURE 124 66 64 31 101 123 75 38 303 51 667 309

Less credits to participating States / Transfers 2/7 (138) (136) (168) (265) (140) (236) (197) (78) (398) (8) (1,042) (724)

Fund Balance 1 January 249 319 235 470 325 437 282 322 592 548 1,682 2,096 Fund Balance at Period End 235 249 130 235 285 325 160 282 496 592 1,307 1,682

45  STATEMENT 29: OSCE Field Operations Central Asia, Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

Centre Centre Centre Project Co-ordinator Office in TOTAL FOR in Astana in Ashgabad in Bishkek in Uzbekistan Tajikistan/Centre in CENTRAL ASIA EUR '000 Dushanbe 07

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Cash and Short-term Deposit Budgetary 2/3 72 84 54 50 329 89 112 46 297 317 864 586 Assessed Contributions Receivable 4 64 45 35 35 116 64 30 45 171 134 415 323 Accounts Receivable 5 0 0 0 0 111 65 0 0 25 0 137 65 Prepaid Expenses and Advances 6 50 35 0 9 271 315 78 170 554 194 953 723 Due From Other Funds 129 175 84 209 0 228 235 257 122 310 570 1,180 TOTAL ASSETS 314 339 172 303 827 762 456 518 1,170 956 2,938 2,877

Accounts Payable 8 14 41 1 28 59 92 32 34 228 54 335 250 Reserve for unliquidated obligations 9 63 49 39 40 377 345 263 196 438 309 1,181 938 Funds held for third parties 11 0 0 0 0 0 0 0 0 0 0 0 0 Due To Other Funds 0 0 0 0 105 0 0 0 0 0 105 0 Other current liabilities 1 0 1 0 0 0 1 6 7 1 10 8 TOTAL LIABILITIES 79 90 42 68 542 437 295 236 673 364 1,631 1,196

Fund Balance 235 249 130 235 285 325 160 282 496 592 1,307 1,682

TOTAL FUND BALANCE 235 249 130 235 285 325 160 282 496 592 1,307 1,682

TOTAL LIABILITIES AND FUND BALANCE 314 339 172 303 827 762 456 518 1,170 956 2,938 2,877

46  STATEMENT 30: OSCE Field Operations Central Asia, Statement of Cash Flow for the Year Ending 31 December 2008

Centre Centre Centre Project Co- Office in TOTAL FOR in Astana in Ashgabad in Bishkek ordinator in Tajikistan/Centre in CENTRAL ASIA EUR '000 Uzbekistan Dushanbe 07

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 124 66 64 31 101 123 75 38 303 51 667 309

(Increase) decrease in assessed contributions receivable (18) (1) 0 1 (52) (2) 15 2 (36) 8 (92) 8 (Increase) decrease in accounts receivable 0 0 0 0 (46) 3 0 0 (25) 0 (71) 3 (Increase) decrease in prepaid expenditure and advances (15) (13) 9 (9) 44 (147) 92 (145) (360) (177) (230) (491) (Increase) decrease in inter-fund balances receivable 46 107 126 189 228 293 22 13 188 (150) 609 453 Increase (decrease) in reserve for unliquidated obligations 14 14 (1) (1) 33 59 67 153 129 238 243 463 Increase (decrease) in accounts payable (26) (17) (27) 6 (33) (55) (2) 12 174 44 85 (11) Increase (decrease) in other current liabilities 1 0 1 0 0 0 (6) 6 5 0 2 7 Increase (decrease) in inter-fund balances payable 0 0 0 0 105 0 0 0 0 0 105 0 NET CASH FLOW FROM OPERATING ACTIVITIES 126 156 172 217 380 274 263 79 378 14 1,319 741

Credits to participating States (138) (136) (168) (265) (140) (236) (197) (78) (398) (8) (1,042) (724) NET CASH FLOW FROM FINANCING ACTIVITIES (138) (136) (168) (265) (140) (236) (197) (78) (398) (8) (1,042) (724)

NET INCREASE (DECREASE) IN CASH (12) 20 4 (48) 239 39 67 1 (20) 6 278 17

47  STATEMENT 31: OSCE Field Operations Central Asia, Statement of Cash Surplus* for the Year Ending 31 December 2008

Centre Centre Centre Project Co- Office in TOTAL FOR in Astana in Ashgabad in Bishkek ordinator in Tajikistan/Centre CENTRAL ASIA EUR '000 Uzbekistan in Dushanbe 07

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS OF INCOME OVER EXPENDITURE 124 66 64 31 101 123 75 38 303 51 667 309 Add Contributions Receivable 1. Jan 45 44 35 36 64 61 45 47 134 142 323 331 Less Contributions Receivable at Period End (64) (45) (35) (35) (116) (64) (30) (45) (171) (134) (415) (323) CASH SURPLUS FOR THE YEAR 106 65 63 32 49 121 90 40 267 59 575 317

Cash Surplus 1. Jan 204 275 200 434 261 376 237 275 457 406 1,359 1,765 Less Credits to participating States / Transfers (138) (136) (168) (265) (140) (236) (197) (78) (398) (8) (1,042) (724) Cash Surplus at Period End 171 204 95 200 169 261 131 237 326 457 892 1,359

Add contributions receivable at Period End 64 45 35 35 116 64 30 45 171 134 415 323 Fund Balance at Period End 235 249 130 235 285 325 160 282 496 592 1,307 1,682

*See note 2/7

48  STATEMENT 32: Extra-budgetary Part 1 Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Funds to support Fund to foster the Fund for activities Fund for activities Fund relating to the OSCE action for peace, integration of recently relating to Economic related to the Removal Stability Pact for South democracy and admitted participating and Environmental and Destruction of Eastern Europe stability in BiH States Aspect of Security Russian Ammunition and Armaments from Moldova EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Extrabudgetary Contributions 3 814 636 0 0 1,218 2,491 0 0 0 0 Miscellaneous Income 2/5 0 0 0 0 0 0 0 0 0 0 Currency Exchange Adjustments 2/4 0 0 0 0 0 0 838 (731) 0 0 Savings on prior year ULO's 9 0 0 0 0 0 0 0 0 0 0 Other Adjustments 10 50 (195) 0 (4) (208) (366) 0 (7) 0 0

TOTAL INCOME 2/5 864 442 0 (4) 1,009 2,126 838 (738) 0 0

TOTAL EXPENDITURE 2/6 941 686 0 0 808 2,006 57 46 0 0

EXCESS OF INCOME OVER EXPENDITURE (77) (244) 0 (4) 201 119 782 (784) 0 0

Refund of unspent XB contributions to Donors (5) 0 0 0 (4) (5) 0 (94) 0 0

Fund Balance 1 January 1,056 1,301 31 35 1,118 1,004 6,526 7,404 15 15 Fund Balance at Period End 974 1,056 31 31 1,316 1,118 7,308 6,526 15 15

49  STATEMENT 33: Extra-budgetary Part 1 Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

Funds to support Fund to foster the Fund for activities Fund for activities Fund relating to the OSCE action for integration of recently relating to Economic related to the Removal Stability Pact for South peace, democracy admitted participating and Environmental and Destruction of Eastern Europe and stability in BiH States Aspect of Security Russian Ammunition and Armaments from Moldova EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Accounts Receivable 5 0 0 0 0 0 0 0 0 0 0 Prepaid Expenses and Advances 6 0 0 0 0 0 0 0 0 0 0 Due From Other Funds 976 1,057 31 31 1,569 2,454 7,310 6,526 15 15 TOTAL ASSETS 976 1,057 31 31 1,569 2,454 7,310 6,526 15 15

Accounts Payable 8 0 0 0 0 0 0 0 0 0 0 Reserve for unliquidated obligations 9 2 1 0 0 253 1,336 2 0 0 0 Due To Other Funds 0 0 0 0 0 0 0 0 0 0 Other current liabilities 0 0 0 0 0 0 0 0 0 0 TOTAL LIABILITIES 2 1 0 0 253 1,336 2 0 0 0

Fund Balance 974 1,056 31 31 1,316 1,118 7,308 6,526 15 15

TOTAL FUND BALANCE 974 1,056 31 31 1,316 1,118 7,308 6,526 15 15

TOTAL LIABILITIES AND FUND BALANCE 976 1,057 31 31 1,569 2,454 7,310 6,526 15 15

50  STATEMENT 34: Extra-budgetary Part 1 Statement of Cash Flow for the Year Ending 31 December 2008

Funds to support Fund to foster the Fund for activities Fund for activities Fund relating to the OSCE action for integration of recently relating to Economic related to the Stability Pact for peace, democracy admitted participating and Environmental Removal and South Eastern and stability in BiH States Aspect of Security Destruction of Europe Russian Ammunition and EUR '000 Armaments from

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007 EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE (77) (244) 0 (4) 201 119 782 (784) 0 0

(Increase) decrease in accounts receivable 0 147 0 0 0 0 0 0 0 0 (Increase) decrease in prepaid expenditure and advances 0 85 0 0 0 0 0 0 0 0 (Increase) decrease in inter-fund balances receivable 80 85 0 4 885 (1,423) (784) 878 0 0 Increase (decrease) in reserve for unliquidated obligations 1 (60) 0 0 (1,083) 1,309 2 0 0 0 Increase (decrease) in accounts payable 0 (13) 0 0 0 0 0 0 0 0 Increase (decrease) in inter-fund balances payable 0 0 0 0 0 0 0 0 0 0 NET CASH FLOW FROM OPERATING ACTIVITIES 5 0 0 0 4 5 0 94 0 0

Refund of unspent extrabudgetary contribution (5) 0 0 0 (4) (5) 0 (94) 0 0 NET CASH FLOW FROM FINANCING ACTIVITIES (5) 0 0 0 (4) (5) 0 (94) 0 0

NET INCREASE (DECREASE) IN CASH 0 0 0 0 0 0 0 0 0 0

51  STATEMENT 35: Extra-budgetary Part 2 Statement of Income, Expenditure and Changes in Fund Balance for the Year Ending 31 December 2008

Fund for Activities Bishkek Conference The Partnership Other Activities and Total related to the Fund Special Projects Extra-Budgetary Reduction of Military Funds Forces and Equipment from Georgia EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Extrabudgetary Contributions 3 30 75 0 0 538 0 25,943 22,794 28,543 25,997 Miscellaneous Income 2/5 0 0 0 0 0 0 0 0 0 0 Currency Exchange Adjustments 2/4 0 0 0 0 0 0 0 0 838 (731) Savings on prior year ULO's 9 0 0 0 0 0 0 0 0 0 0 Other Adjustments 10 0 66 (14) 0 14 0 225 902 67 397

TOTAL INCOME 2/5 30 141 (14) 0 552 0 26,168 23,696 29,448 25,663

TOTAL EXPENDITURE 2/6 18 226 0 0 60 0 19,369 17,310 21,252 20,274

EXCESS OF INCOME OVER EXPENDITURE 12 (85) (14) 0 492 0 6,799 6,386 8,195 5,388

Refund of unspent XB contributions to Donors 0 0 0 0 0 0 (1,372) (984) (1,381) (1,084)

Fund Balance 1 January 675 761 26 26 0 0 23,130 17,727 32,577 28,273 Fund Balance at Period End 687 675 12 26 492 0 28,557 23,130 39,392 32,577

52  STATEMENT 36: Extra-budgetary Part 2 Statement of Assets, Liabilities and Fund Balance as at 31 December 2008

Fund for Activities Bishkek Conference The Partnership Other Activities and Total related to the Reduction Fund Special Projects Extra-Budgetary of Military Forces and Funds Equipment from Georgia

EUR '000

Note 2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

Accounts Receivable 5 0 0 0 0 0 0 0 0 0 0 Prepaid Expenses and Advances 6 0 0 0 0 0 0 0 0 0 0 Due From Other Funds 687 678 12 26 492 0 31,664 25,169 42,756 35,956 TOTAL ASSETS 687 678 12 26 492 0 31,664 25,169 42,756 35,956

Accounts Payable 8 0 0 0 0 0 0 0 0 0 0 Reserve for unliquidated obligations 9 0 3 0 0 0 0 2,896 1,847 3,153 3,186 Due To Other Funds 0 0 0 0 0 0 0 0 0 0 Other current liabilities 0 0 0 0 0 0 212 192 212 192 TOTAL LIABILITIES 0 3 0 0 0 0 3,108 2,040 3,364 3,379

Fund Balance 687 675 12 26 492 0 28,557 23,130 39,392 32,577

TOTAL FUND BALANCE 687 675 12 26 492 0 28,557 23,130 39,392 32,577

TOTAL LIABILITIES AND FUND BALANCE 687 678 12 26 492 0 31,664 25,169 42,756 35,956

53  STATEMENT 37: Extra-budgetary Part 2 Statement of Cash Flow for the Year Ending 31 December 2008

Fund for Activities related to Bishkek Conference The Partnership Other Activities and Total the Reduction of Military Fund Special Projects Extra-Budgetary Forces and Equipment from Funds Georgia

EUR '000

2008 2007 2008 2007 2008 2007 2008 2007 2008 2007

EXCESS (SHORTFALL) OF INCOME OVER EXPENDITURE 12 (85) (14) 0 492 0 6,799 6,386 8,195 5,388

(Increase) decrease in accounts receivable 0 0 0 0 0 0 0 2 0 150 (Increase) decrease in prepaid expenditure and advances 0 0 0 0 0 0 0 0 0 85 (Increase) decrease in inter-fund balances receivable (9) 135 14 0 (492) 0 (6,495) (3,665) (6,800) (3,987) Increase (decrease) in reserve for unliquidated obligations (3) (49) 0 0 0 0 1,049 (1,713) (33) (513) Increase (decrease) in accounts payable 0 0 0 0 0 0 0 (219) 0 (232) Increase (decrease) in other current liabilities 0 0 0 0 0 0 19 (26) 19 (26) Increase (decrease) in inter-fund balances payable 0 0 0 0 0 0 0 218 0 218 NET CASH FLOW FROM OPERATING ACTIVITIES 0 0 0 0 0 0 1,372 984 1,381 1,084

Refund of unspent extrabudgetary contribution 0 0 0 0 0 0 (1,372) (984) (1,381) (1,084) NET CASH FLOW FROM FINANCING ACTIVITIES 0 0 0 0 0 0 (1,372) (984) (1,381) (1,084)

NET INCREASE (DECREASE) IN CASH 0 0 0 0 0 0 0 0 0 0

54  Chapter IV - Notes to the Financial Statements

55  NOTES

Notes to the Financial Statements Note 1 - Mandate • Mission to Serbia • Presence in Albania The OSCE, recognized as a regional arrangement under the • Spillover Monitor Mission to Skopje United Nations’ Charter, is a primary instrument for early • Mission to Montenegro warning, conflict prevention, crisis management and post- Eastern Europe conflict rehabilitation in its area. Its approach to security is • Mission to Moldova unique in being both comprehensive and co-operative: • Project Co-ordinator in Ukraine comprehensive in that it deals with three dimensions of security • Office in Minsk - the politico-military, the economic and environmental and the • Representative to the Latvian-Russian JC on Military human. It therefore addresses a wide range of security-related Pensioners concerns, including arms control, confidence-and security- Caucasus building measures, human rights, national minorities, democra- • Mission to Georgia2 tization, policing strategies, counter-terrorism, anti-trafficking • Office in Yerevan measures and economic and environmental activities. It is • Office in Baku co-operative in that all 56 States enjoy equal status. Decisions are • High Level Planning Group taken by consensus and are politically but not legally binding. • The Minsk Process • Personal Representative of the CIO Central Asia Note 2 - Significant Accounting Policies • Centre in Astana • Centre in Ashgabad 2/1 Basis of presentation • Centre in Bishkek The financial statements of the Organization are presented in • Project Co-ordinator in Uzbekistan thousands of Euro and are prepared in accordance with the • Office in Tajikistan3 Financial Regulations, the United Nations System Accounting Standards, and stated accounting policies. Missions and Field Operations whose mandate has expired for one financial year are grouped under “Closed Field Operations 2/2 Fund Accounting Funds”. The OSCE operates a system of fund accounting and the result- This includes the following Funds: ing financial statements present the financial results of • Kosovo, Sandjak and Vojvodina budgetary Funds approved under PC.DEC/839 dated 7 March • Mission to Estonia 2008 and subsequent budget revisions, the Wallnerstrasse Fund • Expert Mission to Ukraine and Extra-budgetary Funds. • Mission to Latvia • Representative to the Joint Committee on the Skundra For purposes of the presentation and approval of the 2008 Radar Station Unified Budget, Funds were grouped under (i) Funds related to • Sanctions Assistance Missions the Secretariat and Institutions and (ii) Funds related to Field • Action Against Terrorism Fund Operations, with the latter, in turn, being grouped into regions. • Assistance Group to Chechnya This presentation is also followed in this Financial Report and • Representative to the Estonian Commission on Military Financial Statements. Pensioners • Mission to Croatia The following Funds were operated during the year: c) The Augmentations Fund a) Standard Scale of Contributions for 2008-2009 The Augmentations Fund was established on a provisional (PC.DEC/850 dated 15 May 2008) basis under PC.DEC/827 of December 2007 and is financed on the basis of the Field Operations Scale. The 2008 Revised I. FUNDS RELATED TO THE SECRETARIAT AND Budget amounted to EUR 4.9 milion compared to EUR 4.8. INSTITUTIONS In 2007 and prior, Augmentations were included in the activ- • The Secretariat ities of the Field Operations located in South-Eastern Europe. • Office for Democratic Institutions and Human Rights (ODIHR) d) Revolving and Contingency Funds • High Commissioner on National Minorities (HCNM) • The Revolving Fund, amounting to EUR 2.71 million was • Representative on Freedom of the Media (RFoM) established by the Permanent Council (PC.DEC/133, 27 June 1996) to meet the short-term cash requirements of b) Field Operations Scale of Contributions for duly authorised OSCE activities that could result from the 2008-2009 period between the billing and payment of assessed (PC.DEC/850 dated 15 May 2008) contributions. • The Contingency Fund, amounting to EUR 2.18 million was II. FUNDS RELATED TO OSCE FIELD OPERATIONS established by the Permanent Council (PC.DEC/182, 17 July 1997) to allow OSCE to act immediately after the adoption • Augmentations [see point c) ] of a Permanent Council decision on a new activity and to South-Eastern Europe cover the corresponding financial requirements prior to the • Mission in Kosovo approval of the relevant supplementary budget. • Tasks in Bosnia and Herzegovina • Office in Zagreb1

1 Under PC.DEC/836 of 21 December 2007 the OSCE Mission to Croatia was 2 The mandate of the Mission to Georgia expired on 31 December 2008 and closed and the OSCE Office in Zagreb was established. activities for the administrative closure of the Mission to Georgia commenced on 1 January 2009. Also, by the end of 30 June 2009, the twenty Military Monitoring Officers (PC.DEC/861 and 883) will have ceased their activities, unless extended by a further Decision of the Permanent Council.

3 The Centre in Dushanbe was renamed as OSCE Office in Tajikistan (PC.DEC/852 of 19 June 2008). 57 Neither the Revolving Fund nor the Contingency Fund were 2/6 Expenditure utilized during the 2008 Financial Year. Expenditure is accounted for on an accrual and modified accru- al basis. The cost of services is recorded on an accrual basis as The Statement of Cash Flows for the Revolving and expenditure of the current financial year, based on physical Contingency Funds for the year ending 31 December 2008, delivery. The cost of supplies and equipment is recorded on a expressed in thousands of Euro, is as follows: modified accrual basis as expenditure in the current financial year based on the existence of a legally enforceable contract. Budgetary expenditure amounted to EUR 153.8 million, Revolving Contingency extra-budgetary expenditure amounted to EUR 21.3 million EUR ‘000 Fund Fund and expenditure on the Wallnerstrasse Fund amounted to EUR Balance 1 January 2008 2,710 2,180 0.8 million for a total of EUR 175.9 million. Cash Outflow - - Cash Inflow - - 2/7 Cash Surplus or Deficit Balance 31 December 2008 2,710 2,180 At the end of each financial year, the cash surplus or deficit for e) Wallnerstrasse Fund the Funds financed through assessed contributions is The Wallnerstrasse Fund was established under PC.DEC/709 in determined by calculating the excess of income received over December 2005 for the financing of the OSCE’s share of the expenditure or the excess of expenditure over income received, costs related to the renovation and refurbishment of the desig- as the case may be. The cash surplus of all Funds financed nated premises, as well as those related to the required adjust- through assessed contributions is credited against contributions ments to this building and security arrangements. 2008 expen- of the participating States in accordance with the scale(s) of dis- diture was EUR 819 thousand and the fund balance was EUR tribution for the year to which the surplus relates, during the 237 thousand. The Wallnerstrasse Fund will be closed in 2009 year following the year in which the accounts are accepted by and the fund balance taken to miscellaneous income. the Permanent Council. The allocation to a participating State of its share of the cash surplus is deferred in cases where the f) Extra-budgetary Funds (see Note 3) State is in arrears for the year to which the surplus relates and until such time as these arrears are paid in full (Financial 2/3 Cash Regulation 7.07). The accumulated undistributed cash Cash is managed centrally to ensure the safekeeping of funds surplus, which amounted to EUR 382 thousand as at and to reduce exchange rate and interest rate exposure 31 December 2008, is presented as an unallocated surplus in the (Provisional Financial/Administrative Instruction Five on Statement of Assets, Liabilities and Fund balances. Income and Cash Management). Cash, bank balances and short- term investments as at 31 December 2008 amounted to The formula used to calculate the cash surplus / deficit, as in EUR 98.2 million. EUR 57.4 million of this amount is in previous years, is as follows: respect of budgetary funds (including Revolving and Contingency Funds) and EUR 40.8 million is in respect of EUR '000 Statement 4 - Total UB extra-budgetary funds. After the final adjustments were made Assessed Contributions 156,375 and the accounts closed, the actual net amount due from the + Miscellaneous Income 6,362 Secretariat to all Extra-budgetary Funds amounted to +/- Foreign Exchange gain 326 EUR 42.8 million. A detailed schedule of Bank and Cash + Savings on prior year Unliquidated Obligations 1,045 Balances is reflected in Appendix I. In accordance with = Total Income 164,108 Financial Regulation 5.02, short-term investments were made – Total Expenditure (153,804) during the year in the form of time deposits of funds not need- Statement 7 - Total UB ed for immediate requirements. The balance of investments for = Excess of Income over Expenditure 10,304 + Assessed Contributions receivable the year ending 31 December 2008 and the respective interest on 1 January 2008 6,417 rates are reflected in Appendix II. – Assessed Contributions receivable on 31 December 2008 (6,785) 2/4 Transactions involving Foreign Currencies = Cash Surplus for the year 2008 9,936 Transactions in foreign currencies are recorded in Euro at the + Cash Surplus 1 January 2008 22,499 UN Monthly Operational Rates of Exchange in effect on the – Distribution of cash surplus (13,875) = Cash Surplus as at 31 December 2008 18,560 date of the transactions. At the end of the financial year assets + Assessed Contributions receivable and liabilities are valued at the rates applicable as at on 31 December 2008 6,785 31 December. Gains and losses arising from transactions and = Fund Balance as at 31 December 2008 25,345 translation are recorded as currency exchange adjustments and amounted to a gain of EUR 1,164 thousand in 2008. This was mainly due to the apreciation of the US Dollar against the Euro. Therefore the declared cash surplus for 2008 amounts to The major part of the unrealised gain in the amount of EUR 9,936 thousand. This is comprised of the excess of EUR 838 thousand is recorded against the Fund for Activities income over expenditure of EUR 10,304 thousand less the related to the Removal and Destruction of Russian increase of Assessed Contributions Receivable of EUR 368 Ammunition and Armaments from Moldova. In compliance thousand. with Provisional Financial/Administrative Instruction Five on Income and Cash Management, large exchange rate gains or 2/8 Fund Balance losses incurred under extra-budgetary programmes/projects The total Fund Balance at 31 December 2008 contains five ele- have been credited or charged to the respective extra-budgetary ments: the cash surplus payable to participating States in 2009 programmes/projects. and 2010, the reserve for assessed contributions receivable, the Wallnerstrasse Fund and balances relating to 2/5 Budget and Income Extra-budgetary projects funded by donors, as detailed in the Income from assessed contributions from participating States table on the following page. is recorded on an accrual basis. Accrued income for the financial year ending 31 December 2008 amounted to EUR Million EUR 156.4 million, which is equal to the OSCE 2008 Year-end 2007 Cash surplus payable 2009 8.6 Unified Budget Revision (PC.DEC/889, 2 April 2009). Total 2008 Cash surplus payable 2010 9.9 miscellaneous income, which is mainly bank interest, amount- Reserve for Assessed Contributions receivable 6.8 ed to EUR 6.4 million in 2008. Wallnerstrasse Fund 0.3 Total Extra-budgetary Fund Balance 39.4 Total Fund Balance 65.0 58  NOTES

2/9 Contributions In-Kind Contributions in-kind in the form of salaries for seconded staff, 4/2 Uncollected Assessed Contributions rental of premises and equipment are not recorded in the If a participating State has not paid all its assessed contributions accounts of the Organization. For 2008 the estimated value of and dues for special financing for the preceding financial year by in kind contributions is approximately EUR 56.5 million 1 April of the current financial year, the Secretary General (EUR 57,9 million in 2007). requests that participating State to pay its arrears within 60 days. If payment is not made in full during that period, the Secretary 2/10 Presentation General requests an explanation of the reasons for non-payment The figures in the accounts are presented rounded to the near- from the participating State concerned. The Secretary General est Euro thousand. This may result in totals that are different by informs the Advisory Committee on Management and Finance EUR 1-2,000. of the steps taken as well as other initiatives undertaken and consults the Chairman-in-Office. If the amount of arrears of a participating State equals or exceeds the amount of the contri- Note 3 - Extra-budgetary Contributions butions due for the preceding two full years the Chairman-in- Office refers the issue to the Permanent Council. The Income from Extra-budgetary contributions is recorded on a Permanent Council shall take concrete measures to ensure early cash basis. Extra-budgetary contributions pledged in 2008 payment by the participating State concerned (Ref. Financial amounted to EUR 28.8 million, of which EUR 20.5 million Regulation 4.09). was received in 2008 and EUR 8.3 million was outstanding as at 31 December 2008. Extra-budgetary contributions received Assessed contributions receivable from participating States in 2008 in respect of pledges made in previous years amounted whose arrears equalled or exceeded the amount of contributions to EUR 8.0 million. Total extra-budgetary contributions due for the preceding two full years amounted to EUR 6.3 mil- received in 2008 amounted to EUR 28.5 million (see Note 10 lion as at 31 December 2008 (EUR 6.4 million in 2007). “Other Adjustments”). Details on assessed contributions receivable for the year 2008 as Extra-budgetary Funds established by the Permanent Council follows: are as follows: • The Fund to foster the integration of recently admitted participating States (PC.DEC/23, 2 March 1995); EUR ‘000 • The Fund to support OSCE Action for Peace, Democracy 2006 and Participating State prior 2007 2008 Balance and Stability in Bosnia and Herzegovina (PC.DEC/101, Armenia 399 47 46 492 11 January 1996); Georgia 402 47 46 495 • The Fund for Activities Related to Economic Aspects of Kyrgyzstan 909 47 46 1,002 Security (PC.DEC/150, 19 December 1996); Moldova 580 47 46 673 • The Fund relating to the Stability Pact for South Eastern Tajikistan 426 47 46 519 Europe (PC.DEC/306, 1 July 1999); Turkmenistan 364 47 46 458 • The Fund for Activities Related to the Removal and Uzbekistan 2,234 227 225 2,687 Destruction of Russian Ammunition and Armaments from Total 5,314 511 501 6,326 Moldova (PC.DEC/329, 9 December 1999); • The Fund for Activities related to the reduction of Military Forces and equipment from Georgia (293rd Reinforced In 2008 these participating States paid a combined total of Meeting of the Permanent Council on Georgia, 17 July approximately EUR 468 thousand towards prior years' out- 2000); standing contributions as follows: • The Bishkek International Conference on Enhancing Security and Stability in Central Asia: Strengthening EUR ‘000 Comprehensive Efforts to Counter Terrorism (PC.DEC/440, 11 October 2001). Participating State Amount paid in • The Partnership Fund (PC.DEC/812, 30 November 2008 2007)3. Armenia 130 Georgia 124 Extra-budgetary contributions that do not fall under Funds Kyrgyzstan 42 established by the Permanent Council are classified, under Tajikistan 35 “Other Activities and Special Projects”. Turkmenistan 137 Expenditure of Extra-budgetary resources amounted to Total 468 EUR 21.3 million for the year ended 31 December 2008 (EUR 20.3 million in 2007). Payments of assessed contributions by participating States are credited to that State’s assessments in the order in which those assessments are made (Financial Regulation 4.06). Note 4 - Assessed Contributions

4/1 Assessed Contributions Receivable Note 5 - Accounts Receivable Assessed Contributions Receivable as at 31 December 2008 amounted to a total of EUR 6.8 million (EUR 6.4 million in Accounts receivable amounted to EUR 2.7 million as at 2007). An aged schedule of Assessed Contributions Receivable 31 December 2008 (EUR 2.8 million in 2007). This amount is as at 31 December 2008 is reflected in Appendix III. comprised primarily of VAT reimbursements receivable, amounts receivable from participating States and rent reimbursable from In January 2009 Malta and United States paid in full the amount the Austrian government. owed as at 31 December 2008.

3 Under PC.DEC/812 of 30 November 2007 The Partnership Fund was estab- lished to foster deeper relation with the Mediterranean and Asian Partners for Co-operation. 59  Historical Net Book Percentage Note 6 - Prepaid Expenditure and Advances Acquisition Value as at based on Cost 31 Dec.2008 Net book Prepaid Expenditure and Advances amounted to EUR 3.8 mil- EUR ‘000 Value lion as at 31 December 2008 (EUR 6.7 million in 2007). This I. Funds Related to the Secretariat and Institutions amount is comprised primarily of advances to suppliers and The Secretariat 5,242 1,336 10.5% ODIHR 1,503 338 2.6% implementing partners and advances to staff for salaries and trav- HCNM 166 61 0.5% el. RFoM 52 13 0.1% II. Funds Related to the OSCE Field Operations South-Eastern Europe Note 7 - Material Assets Mission in Kosovo 17,929 2,621 20.4% Task in Bosnia and Herzegovina 5,639 1,465 11.5% The policies and procedures for the management of material Office in Zagreb 772 53 0.4% assets are set out in the Provisional Financial/Administrative Mission to Serbia 2,234 504 3.9% Instruction Seven on Asset Management for Goods and Presence in Albania 1,328 428 3.4% Services. Spillover Monitor Mission in Skopje 3,692 596 4.7% Mission to Montenegro 538 78 0.6% Eastern Europe Definition Mission to Moldova 677 163 1.3% Material assets are defined as: Project Co-ordinator in Ukraine 428 213 1.7% Office in Minsk 210 61 0.5% • Tangible assets with a minimum cost of EUR 1,000 and a Caucasus useful life of minimum of two (2) years or Mission to Georgia 6,870 2,792 21.8% • Attractive assets with a cost below EUR 1,000, but which Office in Yerevan 366 140 1.1% bear a special importance due to their nature or area of use, Office in Baku 349 152 1.2% Funds Relating to the Conflict Dealt such as mobile phones, GPS units and handheld radios. with by the Minsk Conference 385 114 0.9% Central Asia Accounting Policy Centre in Astana 367 163 1.3% The cost of a material asset comprises its purchase price, non- Centre in Ashgabad 271 79 0.6% refundable import duties and purchase taxes, initial delivery and Centre in Bishkek 1,437 792 6.2% handling costs, installation fees, and any direct costs of bringing Project Co-ordinator in Uzbekistan 381 128 1.0% the material asset to working condition for its intended use. Office in Tajikistan 1,490 487 3.8% Total 52,328 12,777 100.0% The purchase cost of material assets is charged to expenditure on purchase and therefore, is not reflected as an asset on the bal- ance sheet.The OSCE maintains separate material asset records, Useful life is the period of time over which an asset is expect- including the historical acquisition cost, accumulated deprecia- ed to provide service potential to the Organization. tion and net book value. Income from the disposal of surplus Depreciation is calculated using the straight-line method so as assets is normally recorded as miscellaneous income and simul- to depreciate the initial cost over the estimated useful life. The taneously the historical acquisition cost and depreciation are categories of material assets and the range of useful life for each removed from the material asset records. Data from this module are as per the following table. is used as the basis of this disclosure note to the financial state- ments. Historical Category Useful Life - Acquisition of Material Asset Range of Years Cost EUR’000 % The historical acquisition cost of material assets as at 31 Information Technology 2 to 7 19,842 37.9% December 2008 is EUR 52.3 million, the accumulated depre- (incl. communications) ciation is EUR 39.6 million and the net book value is Vehicles and Safety EUR 12.8 million. The movement in material assets during the Equipment 3 to 10 16,618 31.9% year is summarised in the following table. Office Equipment 3 to 8 2,353 4.5% Power Generation 5 2,344 4.5% Security Equipment 3 to 8 1,648 3.1% EUR ‘000 Total Total Building & Construction 3 to 7 1,848 3.5% Historical acquisition cost 2008 2007 Conditioning Systems 2 to 10 1,238 2.4% Balance at 1 January 56,763 60,329 Additions 8,338 7,305 Printing, Audio & Visual Disposals (12,777) (10,873) Equipment 3 to 8 1,322 2.5% Cost Adjustments 4,1 0.1 Electrical Systems 3 to 10 1,352 2.6% Balance at 31 December 52,328 56,763 Furniture & Furnishings 5 to 10 929 1.8% Domestic Appliances 2 to 7 773 1.5% Accumulated depreciation Materials Handling & Balance at 1 January (45,464) (48,450) Storage 2 to 10 537 1.0% Depreciation charge for year (5,572) (5,826) Disposals 11,484 8,812 Industrial Processing Machinery 4 to 7 175 0.3% Balance at 31 December (39,551) (45,464) Tools and General 3 to 5 121 0.2% Net book value as at 31 December 12,777 11,299 Other Equipment 3 to 8 1,229 2.3% Total 52,328 100.0%

This includes the Historical Acquisition Cost of ExB assets The historical acquisition cost of material assets retired in 2008 as at 31 December 2008 amounting to EUR 1,120 thou- is EUR 12,777 thousand with a net book value of material sand. The Net Book Value of Extra-budgetary assets as at 31 assets retired in 2008 of EUR 1,293 thousand. December 2008 amounted to EUR 796 thousand. Taking into account proceeds from sale and insurance claims the net loss on material assets retired in 2008 is EUR 169 thou- The following table shows the distribution of material assets sand as shown in the following tables. by Fund.

60  NOTES

Gain/Loss on Material Assets retired in 2008 Note 10 - Other Adjustments EUR’ 000 Total Historical Acquisition Cost of Retired Assets 12,777 Other adjustments are the reclassification from funds held for Net Book Value of Retired Assets (1, 292) third parties to extra-budgetary contributions and amounted to a Deduct Proceeds of Sale (including reimbursed amount credit of EUR 67 thousand in 2008 (EUR 397 thousand in from employees, less removal costs) 1,006 2007). Deduct Proceeds received from the Insurance company 117 (Gain) /Loss 169 Note 11 - Funds Held for Third Parties The loss on retirement of material assets of EUR 169 thousand includes the net book value of extra-budgetary assets donated to Funds held for third parties amounted to EUR 6.1 million as at projects of EUR 335 thousand. Proceeds received from the prof- 31 December 2008 (EUR 6.1 million in 2007). This amount it sharing scheme with the insurance company amounted to consists primarily of funds received from participating States in EUR 200 thousand in 2008. advance of paying salaries to seconded staff on their behalf.

Note 8 - Accounts Payable Note 12 - Contributions Received in Advance Accounts Payable amounted to EUR 3.0 million as at 31 December 2008 (EUR 5.5 million in 2007). This amount is Assessed contributions received in advance amounted to comprised of goods and services for which invoices were EUR 19.2 million as at 31 December 2008 (EUR 9.4 million received but not paid, as well as amounts owed to staff. in 2007). This is mainly due to (a) the distribution of the 2006 cash surplus of a net amount of EUR 11.0 million, which was credited to the participating States in accordance with the Note 9 - Unliquidated Obligations Financial Regulations and (b) the OSCE 2008 Year-end Unified Budget Revision which amounted to a reduction of EUR 7.8 Unliquidated obligations charged to expenditure as at million. 31 December 2008 amounted to EUR 12.4 million (EUR 12.8 million in 2007). Savings on prior year unliquidated obligations at 31 December 2008 amounted to 1.2 million. Note 13 - Cash and Other Losses Savings on prior year Unliquidated Obligations Cash and other losses for the year ended 31 December 2008 Expenditure amounted to a total of EUR 11,011. 2007 in 2008 (Savings) Fund Name Reserve for against 2007 on Cash and Other Losses for 2008 ULOs Reserve 2007 ULOs EUR ‘000 Fund Description EUR I. Funds Related to the Secretariat and Institutions Mission to Serbia Uncollectible Receivable 4,416 The Secretariat 2,193 1,948 (246) Spillover Monitor Mission to Skopje Uncollectible Receivable 2,452 Wallnerstrasse 147 38 (109) Mission to Georgia Cash Loss 2,601 ODIHR 568 493 (75) Mission to Georgia Uncollectible Receivable 1,542 HCNM 15 15 (0) Total Cash and Other Losses 11,011 RFoM 65 57 (8) II. Funds Related to the OSCE Field Operations South-Eastern Europe Mission in Kosovo 1,491 1,260 (231) Loss and Theft Report for 2008 - Material Assets Tasks in Bosnia and (Net Book Value) Herzegovina 626 603 (23) Mission to Croatia 505 487 (19 The net book value of lost and stolen material assets in 2008 Mission in Serbia 450 404 (46) amounted to EUR 222,931. Presence in Albania 360 312 (48) Grand Spillover Monitor Mission EUR Loss Theft Total to Skopje 683 581 (102) The Secretariat 721 938 1,659 Mission to Montenegro 140 117 (23) Mission to Kosovo 1,613 0 1,613 Eastern Europe 2 0 2 Tasks in Bosnia and Herzegovina Mission to Moldova 127 106 (20) 465 123 587 Mission to Serbia Project Coordinator in Ukraine 77 75 (3) Presence in Albania 113 0 113 Office in Minsk 32 20 (12) Spillover Monitor Mission to Skopje 22 0 22 Repr. to the Latvian-Russian Mission to Moldova 160 0 160 JC on Military Pensioners 0 0 0 Caucasus Project Co-ordinator in Ukraine 487 96 583 Mission to Georgia 678 619 (59) Mission to Georgia 217,527 0 217,527 Office in Yerevan 130 117 (13) Office in Baku 259 0 259 Office in Baku 355 343 (12) Centre in Astana 0 120 120 High Level Planning Group 6 4 (1) Centre in Ashgabad 72 0 72 The Minsk Process 1 1 0 Office in Bishkek 0 86 86 Personal Repr. of the CiO 6 3 (3) Project Co-ordinator in Uzbekistan 50 0 50 Central Asia Office in Tajikistan 77 0 77 Centre in Astana 49 28 (21) Total Net Book Value 221,568 1,363 222,931 Centre in Ashgabad 40 30 (10) Centre in Bishkek 345 320 (25) The loss of assets from the Mission to Georgia of EUR 217,527 Project Co-ordinator in Uzbekistan 196 169 (27) mainly occured after the outbreak of hostilities in the Caucasus Centre in Dushanbe 309 290 (18) that started in August 2008. Tot. Extra-budgetary Funds 3,186 3,186 - Grand Total 12,780 11,626 (1,154)

61 Note 14 - Contingent Liabilities Statements of Generali Guernsey on an annual basis to review the financial position of the company. The latest available finan- Negotiations regarding rent claims for premises occupied by cial statements were in respect of the year ended 31 December the OSCE Mission in Kosovo have not progressed and there 2007 and were audited by PricewaterhouseCoopers CI LLP, remains numerous uncertainties that prevent the OSCE to esti- Chartered Accountants, who gave an unqualified opinion on mate an amount, if any, of a contingent liability. the financial statements.

Note 15 - Ex-Gratia Payments The Provident Fund Summary Statement for the year ending 31 December 2008 is shown in Annex 1. During 2008 ex-gratia payments totalling EUR 12,317 were approved by the Secretary General.

Note 16 - Contractual Obligations and Separation Benefits

The total contractual obligations under the Unified Budget extending beyond 31 December 2008 amount to approximate- ly EUR 9.3 million and the contractual obligations payable if notice was given on 31 December 2008 amount to approxi- mately EUR 1.1 million. Separation payments under the Unified Budget that would have been due to staff if they had separated on 31 December 2008 is estimated at approximately EUR 25.2 million. This amount is made up of termination indemnity, accrued annual leave, notice period, repatriation grant, travel and removal costs.

Note 17 - Post Balance Sheet Event

The Budget and Assessed Contributions in respect of 2008 were adjusted (reduced) by EUR 7.8 million to EUR 156.4 million as a result of PC.DEC/889, dated 2 April 2009, on the OSCE 2008 Year-end Unified Budget Revision.

Note 18 - Provident Fund

The Provident Fund is a defined contribution plan. The employer contributions of 15% and employee contributions of 7.5% of salary plus post adjustment (if applicable) are fixed. Employees may make additional voluntary contributions of up to 15%. The amounts collected are paid into a number of funds, held with Generali Worldwide Insurance Company Limited, Guernsey, Channel Islands (Generali Guernsey), on behalf of the employee. The assets are held by Generali Guernsey 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 2008 was EUR 57.7 million.

The Provident Fund is administered by Generali Guernsey in accordance with the contract. The OSCE obtains the Financial

62 63 Provident Fund Summary Statement for the year ending 31 December 2008

DEPOSIT ADMINISTRATION FUNDS INTERNATIONAL EQUITY FUNDS EUROPEAN EQUITY FUND

Units EUR Units USD Units EUR Units USD Units EUR TOTAL ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 EUR’000

Opening Balance 1 Jan 2008 39,803 45,363 8,144 9,212 45 1,299 35 1,481 38 504 Contributions/Premium Allocation 10,519 12,171 946 1,088 4 102 6 195 29 276 Unit Adjustments 0.1 0.1 28.8 32.8 - - - - - - Surrenders (6,968) (8,022) (1,610) (1,853 (15) (357) (9) (304) (6) (59) Withdrawals (1,227) (1,417) (286) (330) (1) (31) (1) (41) (1) (15) Switch Out (0) (0) - - (1) (21) - - (3) (33) Switch In 46 54 - - - - - - - - Fees (Administration Fee and Establishment Charge) - - - - - - - - - - Total movements during year 2,371 2,786 (921) (1,061) (12) (307) (4) (150) 18 169 Guaranteed Interest on Opening Balance 1,246 322 - - - Guaranteed Interest on units accumulated during year (10) (17) - - - Deposit Administration Units (additional interest) 87 102 82 96 - - -

Closing Balance 31 December 2008 42,261 49,488 7,305 8,552 32 31 57 Market Value as at 31 December 2008 590 792 409 Exchange Rate 1.2953 1.2953

Closing Balance 31 December 2008 in EUR '000 49,488 6,602 590 611 409 57,700 ANNEX I - PROVIDENT FUND APPENDIX I

Appendix I - Bank and Cash Balances as at 31 December 2008 EUR ‘000 Financial Institution Currency Interest rate Balance

Bank Austria, Vienna - Current Account EUR 0.80% 22 Bank Austria, Vienna - Revolving and Contingency Funds EUR 2.25% 0 Bank Austria, Vienna - Current Account USD 0.25% 123 International Moscow Bank, Moscow - Current Account USD 0.00% 4 Bank Austria, Vienna - Fixed Deposit EUR See Appendix II 20,000 Anglo Irish Bank, Vienna - Fixed Deposit EUR See Appendix II 11,000 Intesa Sanpaolo - Fixed Deposit EUR See Appendix II 14,000 SEB - Fixed Deposit EUR See Appendix II 4,000 Anglo Irish Bank, Vienna - Revolving and Contingency Funds Fixed Deposit EUR 3.30% 4,890 Bank Austria, Vienna - Overnight Account EUR 2.25% 8 Ceskoslovenska Obchodni Banka, Prague EUR 0.30% 2 Ceskoslovenska Obchodni Banka, Prague CZK 0.01% 70

Sub Total: Secretariat Budgetary Bank Accounts 54,120

Bank Austria, Vienna - Current Account EUR 0.80% 17 Bank Austria, Vienna - Fixed Deposit EUR See Appendix II 11,900 Anglo Irish Bank, Vienna - Fixed Deposit EUR See Appendix II 11,500 Intesa Sanpaolo - Fixed Deposit EUR See Appendix II 4,300 SEB - Fixed Deposit EUR See Appendix II 7,000 Bank Austria, Vienna - Current Account USD 0.25% 0 Bank Austria, Vienna - Fixed Deposit USD See Appendix II 1,544 SEB - Fixed Deposit USD See Appendix II 4,555

Sub Total: Extra Budgetary Bank Accounts 40,816

Total : Secretariat Bank Accounts 94,936

Raiffeisen Bank, Warsaw - ODIHR EUR 0.10% 512 Raiffeisen Bank, Warsaw - ODIHR USD 0.10% 28 Raiffeisen Bank, Warsaw - ODIHR PLN 0.10% 8 ING Bank, The Hague - HCNM EUR 2.79% 35

Total: Institutions Bank Accounts 583

Raiffeisen Bank Sh.a., Tirana EUR 0.50% 43 Raiffeisen Bank Sh.a., Tirana USD 0.30% 0 Raiffeisen Bank Sh.a., Tirana ALL 1.50% 22 Raiffeisen Bank dd Bosna i Hercegovina, Sarajevo EUR 0.00% 125 Raiffeisen Bank dd Bosna i Hercegovina, Sarajevo BAM 0.00% 29 Zagrebacka banka d.d., Zagreb EUR 0.25% 46 Zagrebacka banka d.d., Zagreb USD 0.15% 0 Zagrebacka banka d.d., Zagreb HRK 0.50% 73 Raiffeisen Bank Kosovo J.S.C., Pristina EUR 2.50% 51 ProCredit Bank Kosovo, Pristina EUR 1.00% 55 Komercijalna Banka A.D. Beograd, Belgrade EUR 2.00% 135 Komercijalna Banka A.D. Beograd, Belgrade RSD 0.00% 23 Komercijalna Banka A.D. Budva, Podgorica EUR 0.00% 53 ProCredit Bank, Skopje EUR 0.00% 138 ProCredit Bank, Skopje MKD 0.00% 34

Sub Total: South-Eastern Europe Bank Accounts 828

Priorbank JSC, Minsk EUR 0.00% 13 Priorbank JSC, Minsk USD 0.00% 8 Priorbank JSC, Minsk BYR 0.00% 1 Closed joint-stock company OTP Bank, Kiev-Mykhailivsky EUR 0.50% 121 Closed joint-stock company OTP Bank, Kiev-Mykhailivsky USD 0.50% 47 Closed joint-stock company OTP Bank, Kiev-Mykhailivsky UAH 1.00% 48 Universalbank S.A., Moldova EUR 0.00% 16 Universalbank S.A., Moldova USD 0.00% 0 Universalbank S.A., Moldova MDL 0.00% 0

Sub Total: Eastern Europe Bank Accounts 254

Bank of Georgia J.S.C., Tbilisi EUR 2.00% 81 Bank of Georgia J.S.C., Tbilisi USD 2.00% 6 Bank of Georgia J.S.C., Tbilisi GEL 3.00% 25 The International Bank of Azerbaijan, Baku EUR 0.00% 155 The International Bank of Azerbaijan, Baku USD 0.00% 8 The International Bank of Azerbaijan, Baku AZN 0.00% 3 HSBC Bank Armenia cjsc, Yerevan EUR 0.00% 88 HSBC Bank Armenia cjsc, Yerevan USD 0.00% 1 HSBC Bank Armenia cjsc, Yerevan AMD 0.00% 78

Sub Total: South Caucasus Bank Accounts 445

64  APPENDIX I

Appendix I - Bank and Cash Balances as at 31 December 2008 (continued) EUR ‘000 Financial Institution Currency Interest rate Balance

ABN - AMRO Bank Kazakhstan, Almaty EUR 0.00% 23 ABN - AMRO Bank Kazakhstan, Almaty USD 0.00% 1 ABN - AMRO Bank Kazakhstan, Almaty KZT 0.00% 3 ABN - AMRO Bank Kazakhstan, Astana EUR 0.00% 24 ABN - AMRO Bank Kazakhstan, Astana USD 0.00% 0 ABN - AMRO Bank Kazakhstan, Astana KZT 0.00% 3 Turkmen - Turkish Joint-Stock Commercial Bank, Ashgabat EUR 0.00% 24 Turkmen - Turkish Joint-Stock Commercial Bank, Ashgabat USD 0.00% 19 Turkmen - Turkish Joint-Stock Commercial Bank, Ashgabat TMM 0.00% 0 Demir Kyrgyz International Bank CJSC, Bishkek EUR 0.00% 267 Demir Kyrgyz International Bank CJSC, Bishkek USD 0.00% 12 Demir Kyrgyz International Bank CJSC, Bishkek KGS 0.00% 7 Demir Kyrgyz International Bank CJSC, Osh EUR 0.00% 14 Demir Kyrgyz International Bank CJSC, Osh USD 0.00% 2 Demir Kyrgyz International Bank CJSC, Osh KGS 0.00% 7 National Bank of Foreign Econ.Act., Tashkent EUR 0.00% 86 National Bank of Foreign Econ.Act., Tashkent USD 0.00% 11 National Bank of Foreign Econ.Act., Tashkent UZS 0.00% 5 TojikSodirotBonk, Dushanbe EUR 0.00% 133 TojikSodirotBonk, Dushanbe USD 0.00% 73 TojikSodirotBonk, Dushanbe TJS 0.00% 49

Sub Total: Central Asia Bank Accounts 763

Total: Field Operations Bank Accounts 2,290

Total Bank Accounts 97,810 Total Cash 431

Grand Total 98,241

65 APPENDIX II Appendix II - Short-term Investments and Interest Rates for the year ending 31 December 2008

Amount Interest Rate From To EUR '000 % p.A.

Unified Budget

19-Sep-08 19-Mar-09 1,500 5.21 25-Sep-08 26-Jan-09 2,500 5.16 26-Sep-08 27-Jan-09 1,500 5.25 03-Dec-08 05-Jan-09 1,500 3.79 10-Dec-08 12-Jan-09 4,000 3.34 10-Dec-08 12-Jan-09 4,000 2.80 10-Dec-08 12-Jan-09 3,000 3.30 11-Dec-08 12-Jan-09 14,000 2.86 11-Dec-08 12-Jan-09 1,000 3.25 12-Dec-08 02-Jan-09 3,000 2.94 12-Dec-08 12-Jan-09 2,500 3.20 15-Dec-08 15-Jan-09 2,500 3.19 18-Dec-08 19-Jan-09 3,000 3.09 22-Dec-08 22-Jan-09 1,500 3.24 29-Dec-08 29-Jan-09 3,500 3.09 Total Unified Budget 49,000

Revolving / Contingency Fund 09-Dec-08 09-Jan-09 4,890 3.30 Total Revolving/Contingency Fund 4,890

Extra-budgetary

05-Sep-08 05-Mar-09 4,000 5.05 10-Sep-08 10-Mar-09 2,000 5.15 12-Sep-08 12-Feb-09 3,000 5.10 11-Dec-08 12-Jan-09 7,000 3.25 12-Dec-08 12-Jan-09 3,000 2.75 15-Dec-08 15-Jan-09 4,500 3.15 23-Dec-08 23-Jan-09 1,000 3.24 29-Dec-08 29-Jan-09 3,500 3.09 30-Dec-08 30-Jan-09 1,300 2.43 30-Dec-08 30-Jan-09 4,500 3.04 31-Dec-08 02-Feb-09 900 3.04 Total Extra-budgetary 34,700

TOTAL EUR Investments 88,590

Amount Interest Rate From To USD '000 % p.A.

Extra-budgetary

26-Sep-08 26-Mar-09 4,400 3.84 12-Dec-08 12-Jan-09 500 1.74 12-Dec-08 12-Jan-09 1,500 1.45 15-Dec-08 15-Jan-09 500 1.74 18-Dec-08 20-Jan-09 600 1.49 29-Dec-08 29-Jan-09 400 0.99 Total USD Investments 7,900

TOTAL USD Investments in EUR 6,099

GRAND TOTAL Investments 94,689

66  APPENDIX III

Appendix III - Assessed Contributions Receivable as at 31 December 2008 EUR ‘000 2006 Participating State and prior 2007 2008 Balance

Albania 0 0 0 0 Andorra 0 0 0 0 Armenia 398,708 47,263 45,979 491,950 Austria 0 0 0 0 Azerbaijan 0 0 0 0 Belarus 0 0 0 0 Belgium 0 0 0 0 Bosnia-Herzegovina 0 0 0 0 Bulgaria 0 0 0 0 Canada 0 0 0 0 Croatia 0 0 0 0 Cyprus 0 0 0 0 Czech Republic 0 0 0 0 Denmark 0 0 0 0 Estonia 0 0 0 0 the Former Yugoslav Republic of Macedonia 0 0 0 0 Finland 0 0 0 0 France 0 0 0 0 Georgia 401,560 47,263 45,979 494,802 Germany 0 0 0 0 Greece 0 0 0 0 Holy See 0 0 0 0 Hungary 0 0 0 0 Iceland 0 0 0 0 Ireland 0 0 0 0 Italy 0 0 0 0 Kazakhstan 0 0 0 0 Kyrgystan 908,863 47,263 45,979 1,002,105 Latvia 0 0 0 0 Liechtenstein 0 0 0 0 Lithuania 0 0 0 0 Luxembourg 0 0 0 0 Malta 0 0 26,022 26,022 Moldova 579,986 47,263 45,979 673,228 Monaco 0 0 0 0 Montenegro 0 0 0 0 Netherlands 0 0 0 0 Norway 0 0 0 0 Poland 0 0 0 0 Portugal 0 0 0 0 Romania 0 0 0 0 Russian Federation 0 0 0 0 San Marino 0 0 0 0 Serbia 0 0 0 0 Slovak Republic 0 0 0 0 Slovenia 0 0 0 0 Spain 0 0 0 0 Sweden 0 0 0 0 Switzerland 0 0 0 0 Tajikistan 426,042 47,263 45,979 519,284 Turkey 0 0 0 0 Turkmenistan 364,342 47,263 45,979 457,584 Ukraine 0 0 0 0 United Kingdom 0 0 0 0 United States 0 0 433,430 433,430 Uzbekistan 2,234,083 227,246 225,228 2,686,557

Total 5,313,584 510,824 960,554 6,784,962

67 The Organization for Security and Co-operation in Europe works for stability, prosperity and democracy in 56 States through political dialogue about shared values and through practical work that makes a lasting difference.