Financial Report and Audited Financial Statements for the year ended 31 December 2012

A66/29* SIXTY-SIXTH WORLD HEALTH ASSEMBLY Provisional agenda item 21.1 15 April 2013

Financial Report and Audited Financial Statements for the year ended 31 December 2012

7.89 12% $$$$$$$$$$$$$$$$$$$$$$$$ 1534651.156 1.2 $$$$$$$$$$$$$$$$$$$$$$$$ 14858850.488 5.69 2% $$$$$$$$$$$$$$$$$$$$$$$$ 4685.5456 2.36 45% $$$$$$$$$$$$$$$$$$$$$$$$ 4654654.65465 5.89 0.2% $$$$$$$$$$$$$$$$$$$$$$$$ 154654.11 7.26 5% $$$$$$$$$$$$$$$$$$$$$$$$ 321654.54616 5.6 1% $$$$$$$$$$$$$$$$$$$$$$$$ 5646987.65465 1.2 12% $$$$$$$$$$$$$$$$$$$$$$$$ 654654.654 2.3 23% $$$$$$$$$$$$$$$$$$$$$$$$ 1494519.48598 5.98 2% $$$$$$$$$$$$$$$$$$$$$$$$ 48949.56 7.23 6% $$$$$$$$$$$$$$$$$$$$$$$$ 4156654. 6.25 1.3% $$$$$$$$$$$$$$$$$$$$$$$$

* Information on voluntary contributions by fund and by contributor for the year ended 31 December 2012 is contained in the Annex (document A66/29 Add.1).

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Table of contents   Director‐General’s report ........................................................................................................................................ 2  Certification of the financial statements for the year ended 31 December 2012................................................. 14  Letter of transmittal .............................................................................................................................................. 15  Opinion of the External Auditor ............................................................................................................................  16  Statement I. Statement of Financial Position ........................................................................................................  18  Statement II. Statement of Financial Performance ...............................................................................................  19  Statement III. Statement of Changes in Net Assets/Equity ...................................................................................  20  Statement IV. Statement of Cash Flow  ..................................................................................................................  21  Statement V. Statement of Comparison of Budget and Actual Amounts ............................................................. 22  Notes to the financial statements .........................................................................................................................  23  1.  2.  3.  4.  5.  6.  7.  8.  9.  10.  11.  12.  Basis of preparation and presentation ...........................................................................................  23  Significant accounting policies ........................................................................................................  25  Note on the implementation of IPSAS and opening balance adjustments ..................................... 34  Supporting information to the Statement of Financial Position ..................................................... 37  Supporting information to the Statement of Financial Performance ............................................. 56  Supporting information to the Statement of Net Assets/Equity .................................................... 59  ....................................................................................  62  Comparison of budget and actual amounts  Segment reporting ..........................................................................................................................  63  Administrative waivers, amounts written‐off and ex‐gratia payments .......................................... 65  Related party and other senior management disclosures  ............................................................... 65  Events after the reporting date .......................................................................................................  66  Contingent liabilities, commitments and contingent assets ........................................................... 66 

Schedule I. Statement of Financial Performance by major funds ......................................................................... 67  Schedule II. General Fund expenses ......................................................................................................................  68  Schedule III. Programme budget utilization 2012‒2013 ‒ assessed contributions ............................................... 69  Schedule IV. Programme budget utilization 2012‒2013 – voluntary contributions ............................................. 70  Schedule V. Expenses by major office ‒ General Fund only ..................................................................................  71 

                   

 

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Director-General’s report INTRODUCTION 1. In accordance with Article 34 of the Constitution and Financial Regulation XIII of the World Health Organization, I have the honour to present the Financial Report for the year ended 31 December 2012. The financial statements, accounting policies and notes to the financial statements have been prepared in compliance with International Public Sector Accounting Standards (IPSAS) and WHO’s Financial Regulations and Financial Rules. The statutory components of the Financial Report have been audited by the Organization’s External Auditor, the Republic of the Philippines Commission on Audit, whose opinion is included in the Financial Report. 2. I am very pleased to announce that 2012 is the first year in which the Organization’s financial statements have been prepared under the IPSAS basis of accounting. This is a significant achievement and brings greater transparency, accountability and a higher standard of financial reporting. I have added a section in this report to outline the main changes brought about by IPSAS implementation and its advantages for WHO. 3. The implementation of IPSAS in turn has been facilitated by the implementation of the Global Management System, which has greatly improved the accuracy and timeliness of data presented in this report. In addition, managers across the Organization have access to a consistent set of data, which tracks implementation against the programme budget. 4. The year 2012 was a period of financial consolidation for WHO. Total revenue was US$ 2294 million and total expenses were US$ 2080 million, resulting in a surplus of US$ 214 million. Overall the Organization is on track to meet its programme budget revenue and expense targets. A review of the levels and trends of both revenue and expenses is included in the following sections of the report. However, within this improved overall financial situation, there are still some budget centres that are underfunded as a result of mismatches between planned spending and actual resources received. This situation is one of the central issues being addressed through the WHO financing reforms that are underway. 5. The financial statements cover the total effective budget under all sources of funds (assessed and voluntary contributions) of US$ 3959 million as noted by the Sixty-fourth World Health Assembly in May 2011 in resolution WHA64.3. Although the Organization has adopted an annual financial reporting period as stipulated in the revised Financial Regulation XIII, the budgetary period remains a biennium (Financial Regulation II). Therefore, for the purposes of actual versus budget comparisons, the biennium’s budget must be compared to annual expenses. Further analysis of the use of funds is available in document A66/5 “Implementation of the Programme budget 2012–2013: interim report”, which describes the implementation of the Programme budget 2012–2013 and the results achieved. 6. In addition to the General Fund which includes the programme budget, there are two other fund groups summarized in the financial statements: “Member States – other”, and the Fiduciary Fund. The “Member States – other” fund group includes the Common Fund (reflecting changes in asset and liability accounts), the Enterprise Fund (mainly procurement activities on behalf of Member States and the Revolving Sales Fund), and the Special Purpose Fund (such as the Real Estate and Security Funds maintained for the purpose of financing longer-term costs).The Fiduciary Fund is used where the Organization is managing revenue and expenses on behalf of other entities consolidated within WHO’s financial statements. Details of the revenue and expenses for each of these three main fund groups can be found in Schedule I of this report. The figures shown in this introduction elaborate both programme budget and non-programme budget components. In addition, the Organization provides services to six other entities: The Trust Fund for the Joint United Nations Programme on HIV/AIDS (UNAIDS), the International Drug Purchase Facility (UNITAID), the International Agency for Research on Cancer (IARC), the International Computing Centre (ICC), the African Programme for Onchocerciasis Control (APOC) and the staff health insurance (SHI). Separate financial statements are prepared for each entity, and these are subject to separate external audit review.

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7. Highlights of the assets, liabilities and net assets/equity of the Organization are provided, together with information on cash flow, liquidity and investment management in order to provide a complete picture of WHO’s financial position as at 31 December 2012. Finally, I have highlighted certain financial risks facing the Organization and the measures in place to manage these risks.

INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS 8. The Organization’s full implementation of IPSAS in 2012 further raises the standard of WHO’s financial reporting. Financial reporting is a critical element of governance and of sound management, the improvement of which are both important parts of the WHO reform process. The implementation of IPSAS requires increased transparency, which allows for better understanding of the Organization’s financial performance and health. Enhanced financial information supports governance, and the management of assets and liabilities, and facilitates decision-making. Compliance with IPSAS has also necessitated the introduction of an enhanced system of internal control in order to support the additional financial reporting requirements. 9. I would like to highlight the following significant changes arising from the full implementation of IPSAS in the 2012 financial statements. 10. For the first time, the full actuarial valuation for after-service health insurance has been recognized in our accounts. This includes the estimated future cost of health insurance for employees and retired staff. The total liability as at 31 December 2012 was estimated at US$ 1329 million, of which US$ 506 million is funded and US$ 823 million is unfunded. The unfunded balance is reflected as a long-term accrued staff liability. A funding plan based on increased contributions is in place to fund the unfunded portion of the liability, however, based on actuarial projections, WHO will only achieve full funding by 2042. In addition, the full actuarial valuation for other staff benefits such accrued annual leave, compensation for death and disability, and termination benefits such as repatriation travel and grants are also recorded as a liability in the accounts, resulting in a total liability of US$ 160 million. 11. Inventories are now recorded as assets in the Organization’s financial statements. Inventories consist of medicines and vaccines, humanitarian supplies and publications and are recorded as assets until they are sold, distributed or until their useful life has expired. As at 31 December 2012, the Organization had conducted a physical verification of all stock on hand and had included some 80 locations with inventory valued at a total of US$ 67 million. By recording inventories, the Organization is better able to review the extent and location of inventories held, leading to enhanced stewardship and management of logistics. 12. Under IPSAS, “property, plant and equipment” including buildings, land, vehicles, fixtures and fittings, and equipment, are recognized as assets and amortized over their useful lives. However, due to the time it takes to obtain valuations and to establish residual useful lives, the full value of these assets and accumulated asset depreciation will only be reported after the transitional period of up to five years that is permitted under IPSAS. In order to prepare for this requirement, a full record of all property ownership arrangements is being collected for all WHO locations. Excluding the Region of the Americas/PAHO, the Organization currently operates from 313 premises around the world. Although 29 of these locations are owned, the remainder are either rented or have been granted by a Member State.

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13. IPSAS requires the use of accrual accounting so that all revenue and expenses are recognized in the financial statements for the period to which they relate. For voluntary contributions, the revenue is recorded when the agreement is signed and not when the cash was received (this procedure has been implemented since 2008). Expenses are recognized when the goods and services are received and not when the commitments or the payments have been made. As at 31 December 2012, an accrual of US$ 18 million has been made to record goods received and not yet paid for. 14. Another important change is the policy for estimating the allowance for “doubtful accounts receivable”. In the past, for assessed contributions, a full allowance was made for any amounts that were not paid at the end of the year. This brought the assessed contribution revenue to a cash basis of accounting (i.e., only the revenue for the amounts paid was recognized). Based on previous payment experience and IPSAS requirements, this allowance has been revised to recognize an allowance only for those amounts that may be in doubt. In agreement with the External Auditor it was decided that this constitutes any amounts outstanding for more than two years or any rescheduled amounts. This opening adjustment has resulted in a US$ 63 million one-time increase in the fund balance of “Member States‒ regular budget”. 15. The implementation of IPSAS currently has no impact on the preparation of the programme budget, which is still presented on a cash basis. As this basis differs from the accrual accounting basis applied to the financial statements, comparison with the figures used for the programme budget and the actual results require greater explanation. In addition, it should be noted that the programme budget continues to operate on a two-yearly basis, whereas expenses are reported on an annual basis.

FINANCIAL HIGHLIGHTS Summary 16. Total revenue from all sources for 2012 was US$ 2294 million and total expenses for 2012 were US$ 2080 million, resulting in a surplus of US$ 214 million. Table 1 below provides financial highlights in 2012 compared with 2011. In line with IPSAS requirements for the first year of adoption, 2011 comparative figures are not restated or presented in the financial statements however, restated figures are presented in this introduction in order to provide a perspective on the overall trends. Table 1. Financial highlights – all funds, 2012 and 2011 (US$ million) Programme budget  Assessed contributions  Voluntary contributions  In‐kind and in‐service contributions  Total contributions per programme budget  Non‐programme budget revenue  Reimbursable procurement  Increase in allowance for doubtful accounts receivable  In‐kind and in‐service contributions  Finance revenue  Total revenue (all sources)  Total expenses  Net surplus/(deficit)    Total 2012  475  1 539  56  2 070     112   62  (3)  10  43  2 294     2 080     214    (109)    2 515  100   41  (33)  7  53  2 406  Total 2011  472  1 424  342  2 238 

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17. As shown in Table 1 above, total contributions for the programme budget in 2012 were US$ 2070 million (in 2011, US$ 2238 million) including US$ 475 million from Member States’ assessed contributions, and US$ 1539 million from voluntary contributions. In-kind and in-service contributions are reported separately (US$ 56 million for the programme budget and US$ 10 million for the non-programme budget for 2012). Non-programme budget revenue recorded for the Special Purpose Fund, Enterprise Fund, and Fiduciary Fund is mainly from voluntary contributions under partnerships outside the programme budget, such as the Stop TB Global Drug Facility Fund and the Roll Back Malaria Partnership Fund. 18. Total expenses in 2012 were US$ 2080 million which is a significantly lower level than the US$ 2515 million for 2011 reported above. However, if in-kind and in-service expenses are excluded, the 2011 figure is US$ 2166 million. Expenses in the second year of the biennium are generally higher than the first year of the biennium, once funding is assured and implementation has been planned. A further important reason for lower expenses is the cost-saving measures that were introduced in 2011 in response to the financial uncertainties faced by the Organization over the last two years. 19. Statement V – the Statement of Comparison of Budget and Actual Amounts provides information by strategic objective. Further analysis of the use of funds under the Programme budget 2012–2013 is provided in document A66/5, which provides an interim report on implementation and the results achieved. A summary showing the source of funding for the Programme budget 2012–2013 compared with the use of funding in 2012 is provided in Table 2. Table 2. Comparison of Programme budget 2012–2013 with actual use of funds in 2012 (US$ million) Programme  budget   2012–2013  Source of funding:  Assessed contributions  Highly flexible funding – voluntary contributions – core  Medium flexible funding – voluntary contributions – core  Specified funding – voluntary contributions – specified  Total voluntary contributions  Total financing for the programme budget  In‐kind and in‐service contributions  Total revenue  Use of funding:  Programme budget 2012–2013 expenses – in cash  Programme budget 2012–2013 expenses – in‐kind and in‐service  Total     Previous bienniums workplans – expenses in 2012–2013  Tax equalization and other non‐programme budget utilization  Total expenses  Net surplus – programme budget  3 959  1 694  44  1 738  125  22  1 885  185  43%  944  400  400  2 215  3 015  3 959  475  116  14  1 409  1 539  2 014  56  2 070  50%  29%  4%  64%  51%  51%  2012   actual use of  funds  Percentage   (target is 50%  for 1 year) 

20. It should be noted that although the total revenue and total expenses were in line with expectations, within that, the level of flexible funding was lower than originally planned and the level of specified funding was higher than planned. The total programme budget expenses for 2012 were US$ 1885 million and the net surplus under the General Fund was US$ 185 million.

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NET ASSETS/EQUITY 21. Statement III, the Statement of Changes in Net Assets/Equity provides information on the fund balances for all funds as at 31 December 2012, the movement during 2012 and the restated opening balances as at 1 January 2012. The amount of total net assets/equity (carry forward) as at 31 December 2012 was US$ 1159 million. The break down is shown in Table 3. Table 3. Summary of net assets/equity in 2012 (US$ million) 31 December   2012  General Fund  Total Member States – regular budget  Total voluntary funds  Total ‐ General Fund  Total Member States – other  Total Fiduciary Fund  Total net assets/equity  84  1 642  1 726  ( 715)  148  1 159  18   161   179   28   30   237  66  1 481  1 547  (743)  118  922  Surplus/(deficit)  2012  1 January 2012   (restated) 

22. The restated opening net assets/equity balance under “Member States - regular budget” increased to a level of US$ 66 million due to the change in the allowance for “doubtful accounts receivable” (see paragraph 14 above). The further increase during 2012 is due to slightly lower programme implementation in the first year of the biennium. 23. The net assets/equity under the voluntary funds increased from US$ 1481 million to US$ 1642 million by the end of 2012. These funds represent contribution agreements recorded and not yet spent. An amount of approximately US$ 110 million within this balance is encumbered and will be used for the settlement of commitments made in 2012 for which expenses will be recorded in 2013. The remainder of this balance is planned to support work in 2013 and beyond. The increase is mainly due to the agreements recorded in the first year of the biennium, the implementation of which will take place in the second year. 24. The negative balance in the net assets/equity of US$ 715 million for the group of funds under “Member States – other”, arises primarily from the future unfunded liabilities for after-service health insurance (see paragraph 10 above).

REVENUE 25. Total revenue for 2012 was US$ 2294 million (in 2011, US$ 2406 million) – see Table 1 above. Voluntary contributions are summarized in Table 4 below for 2012 and 2011. Table 4. Voluntary contributions revenue in 2012 and 2011 (US$ million) 2012  Voluntary contributions – core  Voluntary contributions – specified  Voluntary contributions – Fiduciary Fund  Total voluntary contributions  130  1 409  97  1 636  2011  125  1 299  80  1 504  Percentage  104%  108%  121%  109% 

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26. Out of the total volunta ary contribut tions for 201 12 of US$ 16 636 million, US$ 1539 million m were e for th he programm me budget. The T remainin ng amount was w received for the Fiduc ciary Fund. Overall, the e volun ntary contrib butions com mbined for 2 2012 were slightly hig gher than th he combine ed voluntary y contr ributions for 2011. 27. Figure 1 below illust trates the r relative prop portions of the various s sources of o voluntary y contr ributions in 2012. 2 Memb ber States co ontinued to be b the larges st source of voluntary co ontributions, , contr ributing to 51% of the to otal non-asse essed (volun ntary) budget t. Revenue f from the Un nited Nations s and in ntergovernm mental organi izations was 23%, founda ations 20%, and nongov vernmental organizations o s and o other institut tions represe ented 5%. P Private sector r donations of 1% accou unted for th he remaining g volun ntary contrib butions to th he Organizat tion. The relative r perc centages are similar to the t previous s bienn nium with a slight decrea ase in Memb ber State con ntributions an nd slight inc creases from foundations s and th he United Na ations organi izations. Figur re 1. Source es of voluntar ry contributi tions in 2012 Private sect tor   (1%)  Nongovern nmental and ot her  instit tutions (5%) Fo oundations   (20%) 

Member States   M (51%) 

United N Nations and  intergov vernmental  organ nizations   (2 23%)   

28. Many of th he voluntary y contributio ons were hig ghly earmark ked and relat te to individ dual projects s with differing rep porting requi irements wit thin the fram mework of th he planned re esults of the e programme e budge et. Full det tails of all th he voluntary y contribution ns recorded in 2012 are e contained in i document t A66/2 29 Add.1. 29. The total of contributio ons by Memb ber States (vo oluntary contributions an nd assessed contributions c s) was U US$ 1304 million m (repr resenting 62 % of total voluntary v an nd assessed contribution ns). The 10 0 larges st contributo ors among the Member S States are sho own below. They T contrib buted a comb bined total of f US$ 1005 million n, or 77% of f the total co ontributions from f Membe er States and d 48% of the e total of the e volun ntary and ass sessed contrib butions.

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Figure 2 2. Top 10 Me ember State contributor rs for 2012, combining c as ssessed and v voluntary contribu utions (US$ million) m 400 0 350 0 300 0 US$ million  250 0 200 0 150 0 100 0 50 0 France United States of America Netherlands Canada Japan Germany Australia 0 Assessed contributions Voluntary contributions c

United Kingdom of Great Britain and Northern Ireland

Norway

EXPEN NSES 30. To otal expenses for 2012 were US S$ 2080 million. m To otal expense es incurred for the impleme entation of th he programm me budget w were US$ 188 85 million (in 2011, US$ $ 2346 millio on). The exclusion of in-kind and in-service expenses s under the General G Fund d of US$ 44 4 million for 2012 (in 2011, US$ 342 milli ion) resulted d in net expe enses of US$ $ 1841 milli ion for 2012 2 (in 2011, US$ U 2004 million). . The analys sis of expenses that follow ws is for the programme budget only y and exclude es in-kind and in-se ervice expen nses. Further r details of e expenses by cost categor ry, major off fices, and by y strategic objective e, are provid ded in Schedu ules I to IV o of this report. 31. Th he share of overall o expen nses by majo or office is shown s below w in Figure 3 3. In comparison with 2011 the ere has been a decrease in n headquarter rs’ share, from m 36% to 34%, and a pro oportionate in ncrease in the regio ons’ share, which w has gro own from 64% % to 66%. Total expens ses decreased d in each maj ajor office compare ed to 2011 with w the excep ption of the E Eastern Mediterranean Region, where e increases in n medical supplies and contract tual services produced a n net increase of 5%. In all offices, non n-staff expen nse levels are often n lower in th he first year of a bienniu um due to th he planning required r for p projects cov vering the full bien nnium. In ad ddition, the cost-saving c m measures tha at were introd duced in 201 11 in respon nse to the financial l uncertaintie es faced by th he Organizat tion over the e last two yea ars have redu uced expense es.

Sweden

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Figur re 3. Progra amme budget expenses b by major office (excluding g in-kind an nd in-service) ) in 2011 and 2 2012 (US$ million) m 800 713 700 621 600 US$ million  500 400 300 200 100 0 Headqu uarters Afr rica 73 4% 61 3% stern  Eas Medite erranean 36% 34% 518 507 2011 2012

26% 28% 274 4 287 14% % 16% 108 8 101 5% 5%

0 180

148

139 9

116

9% % 8% th‐East Sout A Asia 

7% % 6% estern We Pa acific

The Am mericas

Eur rope

Note: F For better comparison, 2011 figures have been res stated to reflect the reclassification of special serviice agreements and fellowship  costs fr rom staff and oth her personnel cos sts to contractuall services. 

32. Summary information by cost cat tegory is shown below in Figure 4 comparing programme e et expenses in budge i 2012 with h those for 20 011. Figur re 4. Progra amme budget expenses b by category (e excluding in-kind and in n-service) in 2011 2 and 2012 (US$ million n) 1200 1000 US$ million  800 600 400 200 78 8  77 0 Staff and  Supp plies and  Cont tractual ther ot materials  ser rvices person nnel costs  Trans sfers and gra ants to  coun nterparts  34 45 977 7 887 2011 2012

301 21 18 214 47 145 14 20 01 189 37 3 28 Travel Ge eneral  ope erating  exp penses  Equipment, vehicles and fur rniture

w the larg gest category y of expenses and represented 48% % of the tot tal expenses s 33. Salaries were rred under th he programm me budget in n 2012. This represente ed the total cost of employing staff, , incur includ ding charges s for base salary, post a adjustment and a any othe er types of e entitlements paid by the e Organ nization (e.g g. pensions an nd insurance es). Costs fo or special ser rvice agreem ments are refl lected within n contr ractual servic ces. 34. Compared to 2011, to otal salary c costs have decreased d by 9%. This is a result of the staff f reduc ctions (937) that took place during g 2011 and d early 2012 2. The lar rgest decreases were at t headq quarters and in the Africa an Region.

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35. Co ontractual se ervices were e the second d highest cat tegory of ex xpenses (16% %) and represent the costs of contracts giv ven to exper rts and servic ce providers who support ted the Orga anization in achieving a ned objectiv ves. The ma ain compone ents were fo or agreemen nts for perfo ormance of work or its plann consultin ng and speci ial service co ontracts that were given to individua als to perform m activities on o behalf ities are also of the O Organization. Medical research activi o included in n contractua al services. There T has been an overall decr rease of 13% % in contract tual service costs with decreases d acr ross all majo or offices n the South-E East Asia Re egion, where e the increase e is due to re e-categorizat tion of specia al service except in contracto ors from sal lary to the contractual se ervices categ gory (this re e-categorizati tion also exp plains the decrease e in recorded d salary cost in i that region n). 36. Th he total of expenses e inc curred for s special servic ce contracts (‘SSAs’) in n 2012 was US$ 40 million w with the larg gest amounts for the Afri ican, Eastern n Mediterranean and Sou uth-East Asia a regions. This is accounted for f by the employment e of approxim mately 3200 0 additional personnel for f WHO mmes in these e regions, ma any deployed d in the Glob bal Polio Erad dication Initi iative. program ses, and wer 37. Tr ransfers and grants to co ounterparts re epresented 12% of the ov verall expens re highest in the Af frican and Eastern Medit terranean reg gions. These e costs were for contracts s signed with h national counterp parts (mainly y health ministries) to per rform activiti ies that are in n line with th he programm me budget. The use of funds was s recorded at t the time of transfer of the t funds to the t contractu ual partner. 38. Tr ravel constitu uted 8% of the t Organiza ation’s total expenses, be eing US$ 14 45 million in 2012 (in 2011, US$ 147 milli ion) under th he General F Fund. This is the second successive y year of reduc ced travel expenses s. Closer ana alysis shows the amount spent on staf ff travel to ha ave been furt rther diminish hed: staff travel by y the end of 2012 constituted 43% o of the total tr ravel cost, down from 48 8% in 2011, with the balance being costs s that related d to travel by participa ants in meet tings and ad dvisors (dele egates of Member r States and non-Secreta ariat personn nel). Travel expenses e inc clude airfare e, per diem and a other travel-re elated costs. The cost of travel is sho own by major office in Fi igure 5. Figure 5 5. Programm me budget tr ravel expense es by major office o in 2011 and 2012 ( (US$ million n) 70  60  US$ million  50  40  30  20  10  3 0  He eadquarters Africa 4 Eastern Mediterrane ean Europe e South‐ East Asia a  Wes stern Pac cific 31 37 60 58 2011 2012

15

13

11

15 10 0

11

12

11

The Americas s

39. Th he increase in i travel exp penses for th he African Re egion arose from the hig gher staff tra avel costs and the r re-categoriza ation of trave el expenses o of special ser rvice contract holders. 40. M Medical suppl lies and mate erials related d primarily to t medical su upplies purch hased and di istributed by the O Organization for programm me impleme entation as well w medical literature l and d accounted for just 4% of total e expenses for 2012. The category of g eneral opera ating expense es (10% of to otal expenses s) reflects WHO ru unning costs s, including utilities and d other offic ce costs, ma ainly at loc cal level. Eq quipment, vehicles and furniture represent only 2% of f WHO total l expenses and a are signi ificantly low wer in the biennium m 2012–2013 3 than in prev vious bienniu ums.

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ASSETS Liquidity and investment management 41. Total cash and cash equivalents at the end of the period were US$ 1184 million with a further US$ 1636 million held in investments. The investments are primarily short-term measures taken in order to ensure that cash is available for programmatic needs. Some funds for longer-term liabilities have been invested in securities, in accordance with the recommendations of the Advisory Investment Committee. The total cash and cash equivalents balance available for the Organization’s programmatic activities was US$ 1830 million. US$ 990 million was cash held in the Organization’s accounts on behalf of other entities – the African Programme for Onchocerciasis Control, The Trust Fund for the Joint United Nations Programme on HIV/AIDS, the International Drug Purchase Facility, the International Computing Centre and the staff health insurance. Accounts receivable 42. The balance of “accounts receivable” includes amounts due from Member States for assessed contributions and from Member States and other contributors for voluntary contributions. The total receivable for assessed contributions, including rescheduled payments, amounted to US$ 104 million including US$ 39 million for rescheduled arrears; this is a further improvement over the previous year. The continued good collection rate has been a contributing factor to the reduction mentioned above in paragraph 14 in the allowance for doubtful accounts receivables. Further information on the collection of assessed contributions for 2012 is provided in document A66/30. 43. For voluntary contributions, the total receivable amount was similar to the end of 2011, at US$ 852 million, of which US$ 210 million is due in future years. The recording of these future amounts – which is required under IPSAS – has made prospective revenue more visible, which has assisted in the Organization’s overall revenue planning and further clarified WHO’s overall financial situation. As these future, deferred revenue amounts become due for payment, the amounts are transferred to current period revenue and made available for incurring expenses. Full details of all voluntary contributions including amounts receivable, by contributor, are provided in document A66/29 Add.1. Other assets 44. Inventories have been recognized for the first time under IPSAS (see paragraph 11 above).

LIABILITIES Staff liabilities 45. Based on the latest actuarial projections, the total required to settle current liabilities for staff entitlements was US$ 72 million. A further US$ 912 million has been estimated for future staff liabilities. These liabilities cover the expected costs for accrued annual leave, accrued repatriation grant and travel, the cost of future removal of a staff member upon separation, and the current and future health care scheme costs. 46. The health care scheme provides medical reimbursements for serving and retired staff members, and their dependents, subject to strict rules and limits. The actuarial valuation of the future liability for the Organization was estimated at US$ 823 million at the end of 2012. This valuation was based on estimates of future health care costs and the projections of retired staff, as well as a range of socioeconomic assumptions. The staff health insurance scheme covers other entities, namely PAHO, UNAIDS, UNITAID, APOC, IARC and ICC. Their share of the future staff liability is reflected in their respective financial statements. The assets of the Staff Health Insurance Fund are reflected in its own financial statements, which, in accordance with IPSAS, are now subject to a full, separate,

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independent audit. In order to establish a long-term provision in order to ensure full financing of this liability, changes to the staff health insurance contribution rates were approved in 2011, affecting both the Organization and the scheme participants, and covering all entities.

FINANCIAL RISKS 47. The Organization must manage a number of financial risks. These are now regularly reviewed by the Independent Expert Oversight Advisory Committee and are described further below. Investment risks 48. The Organization is exposed to financial risks including credit risk, interest rate risk, foreign exchange risk and investment price risk. WHO uses derivative financial instruments to hedge some of its risk exposures. In accordance with the Financial Regulations, funds not required for immediate use may be invested. All investments are carried out within the framework of investment policies approved by the Director-General. Some portfolios are managed by external managers appointed by the Organization to manage funds in accordance with a defined mandate. The Advisory Investment Committee regularly reviews the investment policies and the investment performance and risk for each investment portfolio. This Committee comprises of external investment specialists and can make recommendations to the Director-General. 49. Investments are placed with a wide range of financial counterparties, whose credit risk is minimized by applying minimum credit quality requirements and maximum investment exposure limits, both by the counterparty and by groups of related counterparties. These terms are set out in agreed investment mandates. Foreign exchange currency risk 50. The Organization receives contributions and makes payments in currencies other than the United States dollar and it is exposed to foreign exchange currency risk arising from fluctuations in currency exchange rates. Translation into United States dollars of transactions expressed in other currencies is done at the prevailing United Nations Operational Rates of Exchange at the date of transaction. Assets and liabilities that are denominated in foreign currencies are translated at the United Nations Operational Rates of Exchange that prevail at the end of each month. Forward foreign exchange contracts are transacted in order to hedge foreign currency exposures and to manage shortterm cash flows. Realized and unrealized gains and losses resulting from the settlement and revaluation of foreign currency transactions are recognized in the Statement of Financial Performance. 51. Hedging foreign exchange exposures on future payroll costs. The United States dollar value of non-dollar expenses in 2013 has been protected from the impact of movements in foreign exchange rates through the transaction of forward currency contracts during 2012. Full details of all hedging contracts are contained in Note 4.2. Staff financing risks 52. Although this report shows an improvement to the overall financial situation of the Organization, some budget centres continue to have difficulty in ensuring sufficient stability in the financing of salary costs. In 2012, 59% of staff salaries were financed from voluntary funds, most of which were specified funds. There are limited possibilities for shifting funds between budget centres in order to ensure consistency in salary financing across the Organization. This risk is subject to close monitoring through review of staff work plans and the matching of these plans to sources of funds.

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Risks s of non-receipt of fund ds (“doubtfu ul accounts receivable”) r 53. As noted in n paragraph 42 above, th he Organization has larg ge amounts re receivable that are due to o be pr rovided by contributors and a Member r States, and which are commitments s made to provide funds. . This amount inclu udes the assessed contrib butions that were not rec ceived as at 31 Decembe er 2012. The e Organ nization reco ognizes reve enue at the ti ime of signa ature of agre eements, or a approval of the assessed d contr ributions. Th his allows project p comm mitments to o be made and expense es to be in ncurred. The e Organ nization has a very good d record of c collecting all amounts du ue but some e risk exists. To mitigate e this r risk, monthly y reporting is i carried ou ut on all proj jects which have h expens ses incurred in excess of f cash received, an nd regular checks c are m made of the status of amounts rece eivable. In a few cases, , wances are made m against revenue, suc ch that an ex xpense canno ot be incurre ed unless the e funds have e allow been received. The value of such allowa ances for assessed contr ributions has s been reduc ced with the e introd duction of IP PSAS, due to o an accounti ing change as a noted abov ve, resulting in a one-time increase to o the o opening fund d balance of US$ 63 mil llion. A tota al of US $44 4 million wa as provided for assessed d contr ributions and d US$ 11 million for volu untary contrib butions as at 31 Decembe er 2012. Risks s associated with long-term liabiliti ies 54. The Organ nization oper rates on a tw wo-year budg get cycle. Th hree quarter rs of its reve enue is from m volun ntary funds – a situation which m may not be e sustainable e in the lon ng term. However, the e Organ nization has long- term financial f com mmitments in n respect of future staff liabilities, gi iven that the e major rity of staf ff have long g-term appo ointments, with w associated future e entitlements. The most t signif ficant of thes se is the futu ure cost of sta aff health be enefits that ar re provided f for staff and dependents, , includ ding into ret tirement for those staff w who remain eligible. e Given that almo ost two thirds s of staff are e paid f from volunta ary funds, there is a risk that insufficient funds ar re being set a aside against t these shortterm funds for th he long-term liabilities th hat must be met. To mitigate this ris sk the Organ nization now w comm missions an annual a actuar rial assessme ent for all fu uture staff lia abilities. As a result of th hese reports, , adjus stments have e been made e recently to funding rates. Further regular r repor rting of thes se long-term m liabil lities and fu unding plan ns will be p provided to the Indepe endent Expe ert Oversigh ht Advisory y Comm mittee.

CON NCLUSION N 55. This has be een a year of f financial co onsolidation for the Orga anization: m measures take en in 2011 to o reduc ce expenses have improv ved the finan ncial situatio on. This was critical in v view of the uncertainties u s that p prevailed (an nd continue to o prevail) ov ver the level of o voluntary contribution ns to WHO. The T ongoing g work k on WHO reform will help h to addre ess the struc ctural financing risks wh hich remain, notably the e lack o of predictabi ility and the level l of spec cification of funding. f

Dr D Margaret Chan Director-Gen D neral Geneva, G 8 March 2013

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cation of th he financial l statement ts for the ye ear ended 31 3 Decembe er 2012 Certific Accordin ng to Financ cial Regulatio on XIII ‒ Ac ccounts and Financial Statements, ac ccounts for th he World Health O Organization n have been established and maintai ined in acco ordance with h Internation nal Public Sector A Accounting Standards. S Th he financial s statements fo or the year en nded 31 Dec cember 2012, , together with the notes to the statements and a supportin ng schedules s, have been reviewed r and d are approv ved.

Nicho olas R. Jeffreys Comptroller

Dr Mar rgaret Chan Directo or-General

8 Ma arch 2013

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Letter of transmittal

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Opinion of the External Auditor

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Financial statements World Health Organization Statement I. Statement of Financial Position As at 31 December 2012 (In US dollars) ASSETS  Current assets  Cash and cash equivalents   Short‐term investments  Accounts receivable – net current  Staff receivables  Inventories  Prepayments  Other current assets  Total current assets  Non‐current assets  Accounts receivable – net non‐current  Long‐term investments  Deposits  Property, plant and equipment – net  Total non‐current assets  TOTAL ASSETS  LIABILITIES  Current liabilities  Contributions received in advance  Accounts payable  Staff payable  Accrued staff benefits – current  Deferred revenue  Financial liabilities  Other current liabilities  Inter‐entity liabilities  Total current liabilities  Non‐current liabilities  Long‐term borrowings  Accrued staff benefits – non‐current  Deferred revenue – non‐current  Total non‐current liabilities  TOTAL LIABILITIES  NET ASSETS/EQUITY  Member States – regular budget  Voluntary funds  Member States – other  Fiduciary Fund  TOTAL NET ASSETS/EQUITY  TOTAL LIABILITIES AND NET ASSETS/EQUITY  Notes  4.1  4.2  4.3  4.4  4.5  4.6  4.7  31 December 2012  1 184 358 416  1 369 531 140  695 054 637  12 263 937  67 458 323  1 299 838  12 191 472  3 342 157 763  1 January 2012  (restated)    643 516 528  2 253 303 807  729 229 217  16 710 890  64 149 230  1 567 910  22 864 545  3 731 342 127 

4.3  4.2  4.6  4.8 

210 277 136  266 323 581  309 148  41 180 878  518 090 743  3 860 248 506 

224 896 094  34 833 438  362 303  42 297 077  302 388 912  4 033 731 039 

4.10  4.11  4.12  4.13  4.14  4.2  4.15  4.16 

86 329 879  24 983 899  4 366 015  71 735 099  317 034 710  21 403 427  41 442 241  989 810 138  1 557 105 408 

100 728 551  32 287 143  7 143 440  74 187 562  457 640 785  331 076 923  46 080 782  933 396 863  1 982 542 049 

4.17  4.13  4.14 

21 912 231  911 532 131  210 277 136  1 143 721 498  2 700 826 906 

22 725 204  880 900 388  224 896 093  1 128 521 685  3 111 063 734 

84 121 732  1 642 008 469  (715 185 725)  148 477 124  1 159 421 600  3 860 248 506 

66 449 981  1 481 067 258  (743 026 383)  118 176 449  922 667 305  4 033 731 039 

The statement of significant accounting policies and the accompanying notes form part of the financial statements. 

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World Health Organization Statement II. Statement of Financial Performance For the year ended 31 December 2012 (In US dollars) Notes  REVENUE  Member States’ assessed contributions  Increase in allowance for doubtful accounts receivable  Voluntary contributions  Voluntary contributions in‐kind and in‐service  Reimbursable procurement  Other operating revenue  Finance revenue  Total revenue  EXPENSES  Staff and other personnel costs  Medical supplies and materials  Contractual services  Transfers and grants to counterparts  Travel  General operating expenses  Equipment, vehicles and furniture  Depreciation and amortization  Finance costs  Total expenses  TOTAL SURPLUS FOR THE YEAR                    Comparative information for the previous year has not been provided, as permitted in the first year of IPSAS adoption.   The statement of significant accounting policies and the accompanying notes form part of the financial statements.   5.1  474 609 150 (3 321 404) 1 636 552 815 66 468 439 62 459 972 13 981 777 43 116 045 2 293 866 794 5.2  912 439 371 199 567 941 324 645 528 215 889 802 152 770 486 235 654 979 32 025 524 1 116 199 5 853 575 2 079 963 405 213 903 389 31 December 2012 

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World Health Organization Statement III. Statement of Changes in Net Assets/Equity For the year ended 31 December 2012 (In US dollars)   Notes 31 December 2012 Surplus/(deficit)  2012 Other  adjustments      55 218 265 10 321 511 (12 418 044) 31 000 000 84 121 732 245 768 622 987 723 666 13 243 217 27 080 952 59 154 438 141 604 324 – 150 126 831 17 306 419 1 642 008 469 1 726 130 201 107 679 711 3 975 937 2 325 809 912 829 1 371 915 991 469 9 577 959 6.3 19 095 600 4 436 270 (124 453) 16 520 (5 711 535) (88 003 508) 28 836 922 30 769 533 1 224 441 (822 983 185) (832 443 395) (715 185 725) – 5 321 738 90 734 009 7 333 914 5 203 897 10 523 409 466 717 26 540 711 2 352 729 148 477 124 1 159 421 600 35 550 072 (13 533 880) (4 344 441) – 17 671 751 (8 905 396) 216 619 128 3 642 901 10 225 134 (983 767) (59 237 691) 329 717 38 942 850 (39 691 665) 160 941 211 178 612 962 24 109 207 (569 326) (395 820) 343 695 (462 017) 991 469 (91 999) 975 020 (214 185) (241 459) (33 426) 424 538 6 385 316 (3 712 262) 8 025 375 420 518 (31 056 891) (19 027 456) 4 989 752 (12 249) 5 251 334 (12 642 454) 4 023 768 (3 600 721) 8 321 304 66 253 26 540 711 2 352 729 30 300 675 213 903 389 19 668 193 23 855 391 (8 073 603) 31 000 000 66 449 981 254 674 018 771 104 538 9 600 316 16 855 818 60 138 205 200 842 015 (329 717) 111 183 981 56 998 084 1 481 067 258 1 547 517 239 60 719 598 4 545 263 2 721 629 569 134 1 833 932 – 9 669 958 18 120 580 4 650 455 117 006 49 946 (6 136 073) (94 388 824) 32 549 184 22 744 158 803 923 (791 926 294) (813 415 939) (743 026 383) 12 249 70 404 103 376 463 3 310 146 8 804 618 2 202 105 400 464 – – 118 176 449 922 667 305 1 January 2012 (restated) General Fund  Member States – regular budget 6.1 Member States’ Assessed Contributions Fund  Member States’ Non‐Assessed Income Fund  Tax Equalization Fund  Working Capital Fund  Total Member States – regular budget  Voluntary funds  Voluntary Contributions Core Fund  Voluntary Contributions Specified Fund  1 TDR Trust Fund   2 HRP Trust Fund   Stop TB Fund  Special Programmes and Collaborative Arrangements Fund Other Partnership Fund  Special Account for Servicing Costs Fund  6.2 Outbreak and Crisis Response Fund  Total voluntary funds  Total General Fund  Member States – other  Common Fund  Enterprise Fund  Revolving Sales Fund  Concessions Fund  Insurance Policies Fund  Office/Garage Rental Fund  Global Conference and Training Centre – Tunis Fund  Total Enterprise Fund  Special Purpose Fund  Real Estate Fund  Security Fund  Information Technology Fund  Revolving Fund for Teaching and Laboratory Equipment Special Fund for Compensation  Terminal Payments Fund  Non‐Payroll Staff Entitlements Fund  Post Occupancy Charge Fund  Internal Service Cost Recovery Fund  After‐Service Health Insurance Fund  Total Special Purpose Fund  Total Member States – other  3.1

– 

–  –  22 850 906 

   

 –

–  22 850 906 

Fiduciary Fund  Other Fiduciary Fund  WHO Framework Convention on Tobacco Control  Stop TB Partnership Global Drug Facility Fund  Roll Back Malaria Partnership Fund  Health Metrics Network Fund  Partnership for Maternal, Newborn and Child Health Fund United Nations System Standing Committee on Nutrition Fund Alliance for Health Policy and System Research Fund  Global Health Workforce Alliance Fund  Total Fiduciary Fund  TOTAL NET ASSETS/EQUITY 

–  22 850 906 

The statement of significant accounting policies and the accompanying notes form part of the financial statements.  Trust Fund for the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases. Trust Fund for the UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research Training in Human Reproduction. 2 1

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World Health Organization Statement IV. Statement of Cash Flow For the year ended 31 December 2012 (In US dollars) 31 December 2012  CASH FLOWS FROM OPERATING ACTIVITIES  TOTAL SURPLUS FOR THE YEAR  Depreciation and amortization  (Increase)/decrease in accounts receivable – net current   (Increase)/decrease in staff receivables  (Increase)/decrease in inventories  (Increase)/decrease in prepayments  (Increase)/decrease in other current assets  (Increase)/decrease in accounts receivable – net non‐current  (Increase)/decrease in deposits  Increase/(decrease) in contributions received in advance  Increase/(decrease) in accounts payable  Increase/(decrease) in staff payables  Increase/(decrease) in accrued staff benefits – current  Increase/(decrease) in deferred revenue  Increase/(decrease) in other current liabilities  Increase/(decrease) in inter‐entity liabilities  Increase/(decrease) in accrued staff benefits – non‐current  Increase/(decrease) in deferred revenue – non‐current  Net cash flows from operating activities      CASH FLOWS FROM INVESTING ACTIVITIES     (Increase)/decrease in short‐term investments    (Increase)/decrease in long‐term investments    Increase/(decrease) in financial liabilities    Reversal of opening adjustment for unrealized foreign exchange loss  Net cash flows from investing activities      CASH FLOWS FROM FINANCING ACTIVITIES   Increase/(decrease) in long‐term borrowings  Net cash flows from financing activities      Net increase/(decrease) in cash and cash equivalents      Cash and cash equivalents at beginning of the year      Cash and cash equivalents at end of the year    213 903 389  1 116 199  34 174 580  4 446 953  (3 309 093)  268 072  10 673 073  14 618 958  53 155  (14 398 672)  (7 303 244)  (2 777 425)  (2 452 463)  (140 606 075)  (4 638 541)  56 413 275  30 631 743  (14 618 957)  176 194 927    883 772 667  (231 490 143)  (309 673 496)  22 850 906  365 459 934    (812 973)  (812 973)    540 841 888    643 516 528    1 184 358 416 

The statement of significant accounting policies and the accompanying notes form part of the financial statements. 

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World Health Organization Statement V. Statement of Comparison of Budget and Actual Amounts For the year ended 31 December 2012 (In US dollars)   Programme  budget   2012–2013  1  2  3  4  5  6  7  8  9  Communicable diseases  HIV/AIDS, tuberculosis and malaria  Chronic noncommunicable conditions  Child, adolescent, maternal, sexual and  reproductive health, and ageing  Emergencies and disasters  Risk factors for health Social and economic determinants of health Healthier environment Nutrition, food safety and food security  1 278 130 000  540 298 000  113 763 000  218 306 000  382 028 000  122 255 000  42 789 000  86 825 000  54 898 000  348 093 000  137 283 000  257 570 000  376 741 000  3 958 979 000     In‐kind/in‐service expenses Tax Equalization Fund expenses  Other non‐programme budget utilization  Common Fund activities  Total Basis differences          125 153 581 125 153 581  1 885 016 028 Programme budget expenses for prior periods  Total timing differences    Total expenses per the General Fund and Common Fund   Entity differences  Expenses under Enterprise Fund, Special Purpose Fund and Fiduciary Fund Total entity differences    Total expenses per the Statement of Financial Performance (Statement II)   2 079 963 405 194 947 377      194 947 377 Timing differences  44 681 506  14 533 591  6 601 885  365 102 66 182 084       Programme  budget  utilization 2012 613 991 614  181 715 241  47 436 719  97 649 248  144 162 770  44 783 635  16 845 245  38 854 688  27 154 565  134 847 454  61 909 929  124 325 654  160 003 601 1 693 680 363  Remaining  balance  664 138 386   358 582 759   66 326 281   120 656 752   237 865 230   77 471 365   25 943 755   47 970 312   27 743 435   213 245 546   75 373 071   133 244 346   216 737 399   2 265 298 637   Percentage  implementation    48% 34% 42% 45% 38% 37% 39% 45% 49% 39% 45% 48% 42% 43%

Strategic objectives 

10  Health systems and services  11  Medical products and technologies  12  WHO leadership, governance, and partnerships 13  Enabling and support functions  Total     Basis differences 

The statement of significant accounting policies and the accompanying notes form part of the financial statements. 

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Notes to the financial statements 1. Basis of preparation and presentation

The financial statements of the World Health Organization have been prepared in accordance with International Public Sector Accounting Standards (IPSAS). The financial statements have been prepared using the historical cost convention with the exception of investments and loans, which are recorded at fair value or at amortized cost. Where IPSAS does not address a specific matter, the appropriate International Financial Reporting Standards (IFRS) have been applied. This is the first set of financial statements to be prepared in accordance with IPSAS. The adoption of IPSAS has required changes to the accounting policies previously followed by the Organization. This includes the preparation of financial statements on an annual basis. The new accounting policies under IPSAS have resulted in changes to the assets and liabilities recognized in the Statement of Financial Position. Accordingly, the last audited Statement of Financial Position dated 31 December 2011 and the resulting changes are reported in the Statement of Changes in Net Assets/Equity and Note 3.1. The revised 31 December 2011 Statement of Financial Position is described in these financial statements as the opening balance as at 1 January 2012 (restated). The net effect of the changes arising from the adoption of IPSAS in the Statement of Financial Position amounted to a decrease in net assets/equity of US$ 951 million. As permitted in the year of IPSAS adoption, comparative information for the previous year has not been provided. These financial statements have been prepared under the assumption that WHO is a going concern, will continue in operation, and will meet its mandate for the foreseeable future (IPSAS 1). Functional currency and translation of foreign currencies The functional and reporting currency of the Organization is the United States dollar. Foreign currency transactions are translated into United States dollars at the prevailing United Nations Operational Rates of Exchange, which approximates to the exchange rates at the date of the transactions. The Operational Rates of Exchange are set once a month, and revised mid-month if there are significant exchange rate fluctuations relating to individual currencies. Assets and liabilities in currencies other than United States dollars are translated into United States dollars at the prevailing Operational Rates of Exchange of the first day of the subsequent month. Resulting gains or losses are accounted for in the Statement of Financial Performance. The non-United States dollar denominated assets and liabilities in the investment portfolios are translated into United States dollars at the month-end closing rate used by the custodian. Materiality1 and the use of judgments and estimates Materiality is central to WHO’s financial statements. The Organization’s process for reviewing accounting materiality provides a systematic approach to the identification, analysis, evaluation, endorsement and periodic review of decisions taken involving the materiality of information, spanning a number of accounting areas. The financial statements include amounts based on judgments, estimates and assumptions by management. Changes in estimates are reflected in the period in which they become known. Omissions or misstatements of items are material if they could, individually or collectively, influence the decisions or assessments of users made on the basis of the financial statements. 1

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Financial statements In accordance with IPSAS 1, a complete set of financial statements have been prepared as follows:  Statement of Financial Position;  Statement of Financial Performance;  Statement of Changes in Net Assets/Equity;  Statement of Cash Flow;  Statement of Comparison of Budget and Actual Amounts; and  Notes to the financial statements, comprising a summary of significant accounting policies and

other relevant information. Use of transitional provisions and early adoption of accounting policies As permitted on the initial adoption of IPSAS, transitional provisions have been applied in the following areas:  Comparative information has not been provided in the Statement of Financial Performance and

Statement of Cash Flow (IPSAS 1);  Transitional provisions have been applied in the initial recognition of property, plant, and

equipment (IPSAS 17); and  Transitional provisions have been applied in the initial recognition of intangible assets (IPSAS 31).

The following Accounting Standards have been adopted prior to their required implementation dates of 1 January 2013:  IPSAS 28: Financial Instruments: Presentation;  IPSAS 29: Financial Instruments: Recognition and Measurement; and  IPSAS 30: Financial Instruments: Disclosures.

These standards replace IPSAS 15 (Financial Instruments: Disclosure and Presentation).

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2. 2.1

Significant accounting policies Cash and cash equivalents

Cash and cash equivalents are held at nominal value and comprise cash on hand, cash at banks, collateral deposits, commercial paper, money market funds and short-term bills and notes. All investments that have a maturity of three months or less from the date of acquisition are included as cash and cash equivalents. This includes cash and cash equivalents held in the portfolios managed by external investment managers. 2.2 Investments and financial instruments

Financial instruments are recognized when WHO becomes party to the contractual provisions of the instrument until such time as the rights to receive cash flows from those assets have expired or have been transferred and the Organization has transferred substantially all the risks and rewards of ownership. Investments can be classified as being: (i) financial assets or financial liabilities at fair value through surplus or deficit; (ii) held-to-maturity; (iii) available-for-sale; or (iv) bank deposits and other receivables. All purchases and sales of investments are recognized on the basis of their trade date. Financial assets or financial liabilities at fair value through surplus or deficit are financial instruments that meet either of the following conditions: (i) they are held-for-trading; or (ii) they are designated by the entity upon initial recognition as at fair value through surplus or deficit. Financial instruments in this category are measured at fair value and any gains or losses arising from changes in the fair value are accounted for through surplus or deficit and included within the Statement of Financial Performance in the period in which they arise. All derivative instruments, such as swaps, currency forward contracts or options are classified as held-for-trading except for designated and effective hedging instruments as defined under IPSAS 29. Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity dates that WHO has both the intention and the ability to hold the investment to maturity. Held-to-maturity investments are stated at amortized cost using the effective interest rate method, with interest revenue being recognized on an effective yield basis in the Statement of Financial Performance. Available-for-sale investments are classified as being available-for-sale where WHO has not designated them either as held-for-trading or as held-to-maturity. Available-for-sale items are stated at fair value (including transaction costs that are directly attributable to the acquisition of the financial asset) with value changes recognized in net assets/equity. Impairment charges and interest calculated using the effective interest rate method are recognized in the Statement of Financial Performance. As at 31 December 2012, no available-for-sale financial assets were held by the Organization. Bank deposits and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Accrued revenue related to interest, dividends and pending cash to be received from investments are included herein. Bank deposits and other receivables are stated at amortized cost calculated using the effective interest rate method, less any impairments. Interest revenue is recognized on the effective interest rate basis with the exception of short-term receivables for which the recognition of interest would be immaterial. Other financial liabilities include payables and accruals relating to investments and are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method with the exception of short-term liabilities for which the recognition of interest would be immaterial.

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2.3

Accounts receivable

Accounts receivable are non-derivative financial assets with fixed or determinable payments that are not traded in an active market. Current receivables are for amounts due within 12 months of the reporting date, while non-current receivables are those that are due more than 12 months from the reporting date of the financial statements. Voluntary accounts receivable are recognized based on a binding agreement between WHO and the contributor. Assessed accounts receivable are recognized annually, at the beginning of the year as per the assessments approved by the Health Assembly. Accounts receivable are recorded at their estimated net realizable value and not discounted as the effect of discounting is considered immaterial. An allowance for doubtful accounts receivable is recognized when there is a risk that the receivable may be impaired. Changes in the allowance for doubtful accounts receivable are recognized in the Statement of Financial Performance. 2.4 Inventories

WHO recognizes medicines, vaccines, humanitarian supplies, and publications as part of its inventory. Inventories for medicines, vaccines and humanitarian supplies are valued taking the lower amount of (i) cost or (ii) net realizable value, using a weighted average basis. Inventories for publications are valued at net cost of sales. Where inventories have been acquired through a non-exchange transaction (i.e. inventories were donated as an in-kind contribution), the value of inventory is determined by reference to the donated goods’ fair value at the date of acquisition. When inventories are sold, exchanged or distributed, their carrying amount is recognized as an expense. 2.5 Prepayments and deposits

Prepayments relate to amounts paid to suppliers for goods or services not yet received. Deposits relate to amounts paid as security for the leasing of office space. Deposits and prepayments are recorded at cost. Deposits are classified as non-current assets as they are paid and held on account with the lessor over the life of the lease. 2.6 Property, plant and equipment

Property, plant and equipment with a value greater than US$ 5000 are recognized as non-current assets in the Statement of Financial Position. Property, plant and equipment are initially recognized at cost unless acquired through a non-exchange transaction, in which case they are recognized at fair value at the date of acquisition. Property, plant and equipment are stated at historical cost, less accumulated depreciation and any impairment losses. WHO considers all assets of this type to be non-cash generating. Depreciation is calculated on a straight-line basis over the asset’s useful life except for land, which is not subject to depreciation. Property, plant and equipment are reviewed annually for impairment to ensure that the carrying amount is still considered to be recoverable. The estimated useful lives of the asset classes that make up property, plant and equipment are provided in the table below.

A66/29 Page 27 Asset class  Land  Buildings ‐ permanent  Buildings ‐ mobile  Fixtures and fittings  Vehicles and transport  Office equipment  Communications equipment  Audiovisual equipment  Computer equipment  Network equipment  Security equipment  Other equipment  Estimated useful life (in years)  N/A  60  5  5  5  3  3  3  3  3  3  3 

A transitional provision has been applied in the initial recognition of property, plant and equipment that were purchased or donated before 1 January 2012. Land and building assets will be recognized by location commencing on 1 January 2012 up to the end of the transitional period. Other assets in the form of property, plant and equipment acquired prior to 1 January 2012 were expensed at the date of purchase and have not been recognized as assets in 2012. The effect of the initial recognition of property, plant and equipment is shown as an adjustment to the opening balance of accumulated surplus or deficit. 2.7 Intangible assets

Intangible assets which are above the pre-established threshold of US$ 100 000 are stated at historical cost less accumulated amortization and any impairment losses. Amortization is determined over the estimated useful life of the assets using the straight-line method of amortization. The estimated useful lives of intangible asset classes are as follows: Asset class  Software acquired externally  Software internally developed  Licences and rights  Copyrights  Estimated useful life (in years)  1–3  1–3  2–6  3–10 

WHO’s intangible assets are assumed to have a residual value of zero as intangible assets are not sold or transferred at the end of their useful life. Intangible assets are reviewed annually for impairment. In accordance with the transitional provision under IPSAS 31, the requirements of IPSAS 31 have been applied on a prospective basis. No adjustments will be made to WHO’s financial records for items previously expensed that meet the definition of an intangible asset. 2.8 Leases

A lease is an agreement whereby the lessor conveys to the lessee (the Organization), in return for a payment or series of payments, the right to use an asset for an agreed period of time. Every lease is reviewed to determine whether it constitutes a financial or operating lease. Necessary accounting entries and disclosures are made accordingly. Where the WHO is the lessor, lease revenue from operating leases is recognized as revenue on a straight-line basis over the lease term. All costs associated with the asset incurred in earning the lease revenue, including depreciation, are recognized as an expense.  

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2.9

Contributions received in advance

Contributions received in advance arise from legally binding agreements between WHO and its contributors ‒ including governments, international organizations and private and public institutions ‒ whereby contributions are received in advance of the amounts concerned falling due to the Organization. 2.10 Accounts payable and accrued liabilities Accounts payable are financial liabilities for goods or services that have been received by WHO but not paid for. Accrued liabilities are financial liabilities for goods or services that have been received by WHO and which have neither been paid for nor invoiced to WHO. Accounts payable and accrued liabilities are recognized at cost as the effect of discounting is considered immaterial. 2.11 Employee benefits WHO recognizes the following categories of employee benefits:  short-term employee benefits that fall due wholly within 12 months following the end of the

accounting period in which employees render the related service  post-employment benefits  other long-term employee benefits  termination benefits

WHO is a member organization participating in the United Nations Joint Staff Pension Fund, which was established by the United Nations General Assembly to provide retirement, death, disability and related benefits to employees. The Pension Fund is a funded, multi-employer defined benefit plan. As specified by Article 3(b) of the Regulations of the Fund, membership in the Fund shall be open to the specialized agencies and to any other international, intergovernmental organization which participates in the common system of salaries, allowances and other conditions of service of the United Nations and the specialized agencies. The plan exposes participating organizations to actuarial risks associated with the current and former employees of other organizations participating in the Pension Fund, with the result that there is no consistent and reliable basis for allocating the obligation, plan assets, and costs to individual organizations participating in the plan. The Organization and the Pension Fund, in line with the other participating organizations in the Fund, are not in a position to identify the Organization’s proportionate share of the defined benefit obligation, the plan assets and the costs associated with the plan with sufficient reliability for accounting purposes. For this reason, WHO has treated this plan as if it were a defined contribution plan in line with the requirements of IPSAS 25. The Organization’s contributions to the plan during the financial period are recognized as expenses in the Statement of Financial Performance. 2.12 Provisions and contingent liabilities Provisions are recognized for future liabilities and charges where WHO has a present legal or constructive obligation as a result of past events and it is probable that the Organization will be required to settle the obligation. Other commitments, which do not meet the recognition criteria for liabilities, are disclosed in the notes to the financial statements as contingent liabilities when their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which are not wholly within the control of WHO.

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2.13 Contingent assets Contingent assets will be disclosed when an event gives rise to a probable inflow of economic benefits or service potential and there is sufficient information to assess the probability of the inflow of economic benefits or service potential. 2.14 Deferred revenue Deferred revenue derives from legally binding agreements between WHO and its contributors, including governments, international organizations and private and public institutions. Deferred revenue is recognized when:  a contractual agreement is confirmed in writing by both the Organization and the contributor;

and  the funds are earmarked and due in a future period.

Deferred revenue also includes any advances from exchange transactions. Deferred revenue is presented as non-current if the revenue is due one year or more after the reporting date. 2.15 Revenue Revenue comprises gross inflows of economic benefits or service potential received and receivable by WHO during the year, which represents an increase in net assets/equity. The Organization recognizes revenue following the established criteria of IPSAS 9 (Revenue from Exchange Transactions) and IPSAS 23 (Revenue from Non-Exchange Transactions). The main sources of revenue for WHO include but are not limited to: Non-exchange revenue  Member States’ assessed contributions. Revenue from contributions from Member States and

Associate Members is recorded annually at the beginning of the year as per the assessments approved by the Health Assembly.  Voluntary contributions. Revenue from voluntary contributions is recorded when a binding

agreement is signed between WHO and the contributor. The Organization considers that while there are restrictions on the use of contributions, these restrictions do not constitute conditions on transferred assets as defined under IPSAS 23.  Contributions in-kind and in-service. Contributions in-kind and in-service received by WHO

are recorded upon receipt from the contributor at an amount equal to their fair market value as determined at the time of acquisition. Donated property, plant and equipment are recognized as an asset with a corresponding entry to revenue. Other in-kind or in-service contributions are recognized as revenue with a corresponding entry to expense. Exchange revenue  Reimbursable procurement, concessions, and revolving sales. Revenue from reimbursable

procurement on behalf of Member States or from the sale of goods or services are recorded on an accrual basis at the fair value of the consideration received or receivable when it is probable that the future economic benefits and/or service potential will flow to WHO and those benefits can be measured reliably.

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2.16 Expenses Expenses are decreases in economic benefits or service potential during the reporting period in the form of outflows, consumption of assets, or incurrences of liabilities that result in decreases in net assets/equity. WHO recognizes expenses at the point where goods have been received or services rendered (delivery principle) and not when cash or its equivalent is paid. 2.17 Fund accounting Fund accounting is a method of segregating resources into categories (i.e. funds) to identify both the source and the use of the funds. Establishing such funds helps to ensure better reporting of revenue and expenses. The General Fund, the Special Purpose Fund, the Enterprise Fund and the Fiduciary Fund serve to ensure the proper segregation of revenue and expenses. Any transfers between funds that would result in duplication of revenue and/or expenses are eliminated during consolidation. Intrafund transfers such as programme support costs within the General Fund are also eliminated. General Fund The accounts contained under this fund support the implementation of the programme budget. The General Fund contains the following accounts:  Member States’ Assessed Contributions Fund. This fund consolidates revenues and expenses

arising from assessed contributions from Member States.  Member States’ Non-Assessed Income Fund. This fund (formerly referred to as the

Miscellaneous Income Fund) consolidates all sources of revenue attributable to Member States other than current period assessed contributions. The Fund earns revenue from interest and other miscellaneous revenue.  Tax Equalization Fund. In accordance with resolution WHA21.10, under which the Tax

Equalization Fund was established, the assessed contributions of all Member States are reduced by the revenue generated by the staff assessment plan. In determining the reduction of assessed contributions to be applied to the Member States concerned, the Tax Equalization Fund is credited with the revenue from the staff assessment plan, the credits being recorded in the name of individual Member States, in proportion to their assessments for the biennium. For those Member States that levy income tax on emoluments received from the Organization by their nationals or others liable to such taxes, the credit from the staff assessment plan is charged with the estimated amount to be levied by those Member States. Those amounts which have been charged are, in turn, used by the Organization to reimburse income tax paid by the staff concerned as per resolution WHA21.10.  Working Capital Fund. The fund was established to implement the programme budget for any

arrears in the receipt of assessed contributions. In accordance with Financial Regulation VII, pending the receipts of assessed contributions, implementation of the regular budget may be financed from the Working Capital Fund and thereafter by internal borrowing against available cash reserves of WHO, excluding trust funds. Amounts borrowed are repaid from the collection of arrears of assessed contributions and are credited first against any internal borrowing outstanding and then against any borrowing outstanding from the Working Capital Fund. 

Voluntary funds (core, specified and partnerships). This fund consolidates revenues and expenses arising from voluntary contributions and includes the special account for servicing costs.

Member States – other Member States ‒ other contains the following accounts:  Common Fund. This fund reflects the movement in the asset and liability accounts of the

Organization resulting from changes in items such as inventory, depreciation and unrealized exchange gains and losses.

A66/29 Page 31  Enterprise Fund. This fund contains accounts that generate self-sustaining revenue. The

revenue and expenses under this fund are not included in the reporting of the programme budget. The Enterprise Fund contains the following accounts:  Revolving Sales Fund1  Concessions Fund  Insurance Policies Fund  Office/Garage Rental Fund  Reimbursable Procurement Fund  Global Conference and Training - Tunis Fund  Special Purpose Fund. The accounts contained under this fund represent transfers from the

General Fund or appropriations by the Health Assembly. The revenue and expenses under this fund are not included in the reporting of the programme budget. The Special Purpose Fund contains the following accounts:  Real Estate Fund  Security Fund  Information Technology Fund  Revolving Fund for Teaching and Laboratory Equipment  Special Fund for Compensation  Terminal Payments Fund  Non-Payroll Staff Entitlements Fund  Post Occupancy Charge Fund  Internal Service Cost Recovery Fund  After-Service Health Insurance Fund Fiduciary Fund This fund accounts for assets that are held by WHO in a trustee or agent capacity for others and cannot be used to support the Organization’s own programmes. The Fund includes partnerships that are administered by the Organization and whose budgets are not approved by the Health Assembly. Similarly, financial activities related to financing WHO’s long-term liabilities are managed through this fund. The Fund is not available for operations and does not contribute to the Programme budget 2012–2013. The Fiduciary Fund contains the following accounts:  Other Fiduciary Fund  WHO Framework Convention on Tobacco Control  Stop TB Partnership Global Drug Facility Fund  Roll Back Malaria Partnership Fund  Health Metrics Network Fund  Partnership for Maternal, Newborn and Child Health Fund  United Nations System Standing Committee on Nutrition Fund  Alliance for Health Policy and System Research Fund  Global Health Workforce Alliance Fund In accordance with Health Assembly resolutions WHA22.8 and WHA55.9, this Fund is credited with proceeds from the sale of publications, international certificates of vaccination, films, videos, DVDs and other information material. The related costs of production and printing are charged to the Fund. 1

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2.18 Segment reporting As required under IPSAS, WHO reports on segments based on its regional structure. Revenue, expenses, assets and liabilities are reported for each major office (region). The use of major offices is in line with the way that Member States and management make decisions over the allocation of resources to the Organization. The Organization’s programme budget is presented by major office which supports using major offices as the segments. Furthermore the accountability for results and management of assets and liabilities lies with the heads of each regional office. 2.19 Statement of Cash Flow The Statement of Cash Flow (Statement IV) is prepared using the indirect method. 2.20 Budget comparison WHO’s budget and accounting bases differ. Budgets within the Organization are approved on a modified cash basis rather than the full accrual basis of IPSAS. In addition, budgets are prepared on a biennial basis. Whereas WHO’s financial statements cover all activities of the Organization, budgets are approved only for the General Fund. There are no approved budgets for other funds. All funds are administered in accordance with the Financial Regulations and Financial Rules. As required under IPSAS 24, the actual amounts presented on a comparable basis to the budget shall, where the financial statements and the budget are not prepared on a comparable basis, be reconciled to the actual amounts presented in the financial statements, identifying separately any basis, timing, presentation and entity differences. There may also be differences in formats and classification schemes adopted for the presentation of financial statements and the budget. The Health Assembly approved the Programme budget 2012‒2013 through resolution WHA64.3. WHO’s Statement V: Comparison of Budget and Actual Amounts compares the final budget to actual amounts calculated on the same basis as the corresponding budgetary amounts. As the bases used to prepare the budget and financial statements differ, Note 7 provides a reconciliation between the actual amounts presented in Statement V to the actual amounts presented in Statement IV. 2.21 Consolidated and non-consolidated entities Non-consolidated entities WHO provides administrative services to a number of entities. Each of these entities produces a full set of financial statements that are subject to a separate audit. The following six entities have their own governing bodies and are not controlled by the Health Assembly:  Trust Fund for the Joint United Nations programme on HIV/AIDS (UNAIDS)  International Drug Purchase Facility (UNITAID)  International Agency for Research on Cancer (IARC)  International Computing Centre (ICC)  African Programme for Onchocerciasis Control (APOC)1  Staff health insurance (SHI)

1

Includes residual values for the former Onchocerciasis Control Programme.

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Consolidated entities WHO administers or participates in a large number of global health partnerships, and maintains some special programmes and collaborative arrangements. These contribute to the achievement of the Organization’s objectives and as such were reflected in the Programme budget 2012–2013, under the Special programmes and collaborative arrangements segment of the budget. The activities implemented by the Organization have been consolidated under the General Fund. The activities covered under the Special programmes and collaborative arrangements segment of the budget, following a revision made at the beginning of 2012, are as follows:  Codex Alimentarius Commission  European Observatory on Health Systems and Policies  Collaboration with partners in the GAVI Alliance  Global Polio Eradication Initiative  Health and Nutrition Tracking Service  Intergovernmental Forum on Chemical Safety  UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical

Diseases (TDR)  UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research

Training in Human Reproduction (HRP)  HIV Vaccine Initiative (including the African AIDS Vaccine Programme)  Vaccine research partnerships  Partnership for the control of neglected tropical diseases  WHO/UN Programme on Prequalification of Medicines  WHO-FAO-OIE agreement on the management of avian influenza and other emerging diseases  WHO Centre for Health Development (Kobe)  World Alliance for Patient Safety  Stop TB Partnership, including Green Light Committee and Global Laboratory Initiative

In addition, the following partnerships are not included within the programme budget. They are therefore consolidated but are outside the programme budget and the General Fund.  WHO Framework Convention on Tobacco Control  Stop TB Partnership Global Drug Facility  Roll Back Malaria Partnership secretariat  Health Metrics Network  Partnership for Maternal, Newborn and Child Health  United Nations System Standing Committee on Nutrition  Alliance for Health Policy and Systems Research  Global Health Workforce Alliance

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3.

Note on the implementation of IPSAS and opening balance adjustments

The financial statements for the 2012 financial period are the first financial statements that comply with the requirements of IPSAS. WHO’s financial statements for the prior biennium were prepared to conform to the United Nations System Accounting Standards (UNSAS) and were presented on a modified cash basis. The opening balances represent the 2011 audited Statement of Financial Position, which has been restated to incorporate adjustments made due to changes in accounting policies and other adjustments made as at 1 January 2012 as a result of the implementation of IPSAS. Implementation of IPSAS and opening balance adjustments (US dollars) 31 December 2011 ending balance  Staff health  insurance as  separate entity  1 January 2012  opening balance  IPSAS adjustments   Note 3.1  1 January 2012  (restated) 

    ASSETS  Current assets  Cash and cash equivalents  Short‐term investments  Accounts receivable – net current  Staff receivables  Inventories  Prepayments  Interest receivable  Other current assets  Total current assets  Non‐current assets  Accounts receivable – net non‐current  Long‐term investments  Deposits  Property, plant and equipment – net  Total non‐current assets  TOTAL ASSETS  LIABILITIES  Current liabilities  Contributions received in advance  Accounts payable  Staff payables  Accrued staff benefits – current  Deferred revenue  Allowance for doubtful accounts  receivable  Financial liabilities  Other current liabilities  Inter‐entity liabilities  Total current liabilities  Non‐current liabilities  Long‐term borrowings  Accrued staff benefits – non‐current  Deferred revenue – non‐current  Staff health insurance  Total non‐current liabilities  TOTAL LIABILITIES  NET ASSETS/EQUITY  Member States – regular budget  Member States equity in capital assets  Voluntary funds  Member States – other  Fiduciary Fund  TOTAL NET ASSETS/EQUITY  TOTAL LIABILITIES AND NET  ASSETS/EQUITY 

Mapping changes 

248 295 135  2 713 833 801  747 812 022  9 805 637  –  1 567 910  2 017 729  –  3 723 332 234  265 332 191  –  362 303  97 950 420  363 644 914  4 086 977 148 

–  (339 806 469)  (199 459)  (298 840)  –  –  –  –  (340 304 768)  –  –  –  –  –  (340 304 768) 

248 295 135  2 374 027 332  747 612 563  9 506 797  –  1 567 910  2 017 729  –  3 383 027 466  265 332 191  –  362 303  97 950 420  363 644 914  3 746 672 380 

–  2 017 728  (119 923 819)  –  –  –  (2 017 729)  22 864 545  (97 059 275)  –  –  –  –  –  (97 059 275) 

395 221 393  (122 741 253)  101 540 473  7 204 093  64 149 230  –  –  –  445 373 936  (40 436 097)  34 833 438  –  (55 653 343)  (61 256 002)  384 117 934 

643 516 528  2 253 303 807  729 229 217  16 710 890  64 149 230  1 567 910  –  22 864 545  3 731 342 127  224 896 094  34 833 438  362 303  42 297 077  302 388 912  4 033 731 039 

100 728 551  32 287 143  –  –  321 397 775  119 923 818  –  36 538 900  746 723 081  1 357 599 268  21 007 421  81 875 366  224 896 093  527 818 250  855 597 130  2 213 196 398  3 847 123  76 792 400  1 482 565 740  192 399 036  118 176 449  1 873 780 748  4 086 977 146 

–  –  5 468  –  –  –  –  187 508 013  –  187 513 481  –  –  –  (527 818 250)  (527 818 250)  (340 304 769)  –  –  –  –  –  –  (340 304 769) 

100 728 551  32 287 143  5 468  –  321 397 775  119 923 818  –  224 046 913  746 723 081  1 545 112 749  21 007 421  81 875 366  224 896 093  –  327 778 880  1 872 891 629  3 847 123  76 792 400  1 482 565 740  192 399 036  118 176 449  1 873 780 748  3 746 672 377 

–  –  7 137 972  25 345 090  –  (119 923 818)  –  (177 966 131)  187 586 221  (77 820 666)  –  (19 238 606)  –  –  (19 238 606)  (97 059 272)  –  (76 792 400)  –  76 792 400  –  –  (97 059 272) 

–  –  –  48 842 472  136 243 010  –  331 076 923  –  (912 439)  515 249 966  1 717 783  818 263 628  –  –  819 981 411  1 335 231 377  62 602 858  –  (1 498 482)  (1 012 217 819)  –  (951 113 443)  384 117 934 

100 728 551  32 287 143  7 143 440  74 187 562  457 640 785  –  331 076 923  46 080 782  933 396 863  1 982 542 049  22 725 204  880 900 388  224 896 093  –  1 128 521 685  3 111 063 734  66 449 981  –  1 481 067 258  (743 026 383)  118 176 449  922 667 305  4 033 731 039 

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3.1

Adjustments to net assets/equity

In order to comply with IPSAS, the preparation and presentation of opening balances as at 1 January 2012 required adjustments to be made to the balances reflected as at 31 December 2011 in the Statement of Financial Position. The net assets/equity of WHO changed as at 1 January 2012 due to changes in accounting policies with the adoption of IPSAS and due to the treatment of staff health insurance as a separate entity. The changes as a result of IPSAS implementation totalled US$ (951) million as shown below:   Opening balance net assets/equity  Recognition of inventory  Adjustment to land and building  Adjustment to land and building ‐ accumulated depreciation for headquarters  Adjustment to foreign exchange, swaps and hedging (unrealized exchange loss)  Recognition of employee benefit liability (after‐service staff health insurance)  Recognition of employee benefit liability (terminal payments)  Adjustment to employee benefit accrual   Adjustment to long‐term borrowings  Adjustment to other accounts receivable  Adjustment to allowance for doubtful accounts receivable  Adjustment to reimbursable procurement deferred revenue  Total adjustments to net assets/equity  Opening balance net assets/equity (restated)  1 January 2012  1 873 780 748  64 149 230  (29 978 438)  (25 674 905)  (22 850 906)  (791 926 294)  (94 388 824)  26 413 111  (1 717 783)  (1 498 482)  62 602 858  (136 243 010)  (951 113 443)  922 667 305 

Recognition of inventory. In order to comply with IPSAS, inventory is recognized in the Statement of Financial Position for the first time as at 1 January 2012. Inventory was not recognized under UNSAS. Adjustment to land and building. WHO has adopted the transitional provision for property, plant, and equipment. The only asset class recognized as at 1 January 2012 is land and buildings for headquarters. Under UNSAS, land and buildings for headquarters and regional offices were included in the financial statements. An adjustment for accumulated depreciation for headquarters buildings was recognized as an adjustment to net assets/equity. Adjustment to foreign exchange, swaps and hedging (unrealized exchange loss). Unrealized foreign exchange gains and losses for hedging foreign exchange exposures are now disclosed separately as either financial assets or liabilities at fair value through surplus or deficit (held-fortrading). Under UNSAS, any unrealized foreign exchange gains and losses for hedging were disclosed in the notes to the financial statements and were recognized in the financial statements in the accounting period in which they crystallized. As this amount is realized in 2012, the original transaction is reversed in order to avoid recognizing the amount twice. Recognition of employee benefit liability. Liabilities relating to post-employment benefits as per actuarial valuations have been recognized in the financial statements based on their valuation as at 1 January 2012. The valuation for terminal payments has been adjusted by US$ 94.4 million. The valuation representing the after-service health insurance for the Organization’s staff has been adjusted by US$ 792 million. Employee benefit liabilities have been classified as either “current” or “non-current”. Adjustment to employee benefit accrual. Existing balances for employee benefit accruals (relating, for example, to education grant and home leave) are not recognized in net assets/equity.

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Adjustment to long-term borrowings. In December 2003, the Swiss Confederation provided an interest-free loan for the construction of a shared building in Geneva for the UNAIDS secretariat and WHO. The joint loan of CHF 59.8 million, of which the Organization’s share is CHF 29.9 million, is repayable over a 50-year period with effect from the first year of the completion of the building. The loan was adjusted by US$ 1.7 million to reflect the amortized cost of the loan using the effective interest rate of 1.23% (Swiss franc Libor rate for 30 years). Adjustment to other accounts receivable. An adjustment of US$ 1.5 million was required to opening net assets/equity in order to reverse a receivable from a contributor that was incorrectly recorded in the conversion to the Global Management System. Adjustment to allowance for doubtful accounts receivable. To comply with IPSAS, an adjustment of US$ 63 million was recorded to reflect the reduction of the allowance for assessed contributions at the beginning of the year. Adjustment to reimbursable procurement deferred revenue. An adjustment of US$ 136 million was required to the opening balance of net assets/equity in order to reclassify as deferred revenue, revenue that had been recognized for reimbursable procurement in 2011.

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4. 4.1

Supporting information to the Statement of Financial Position Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash at banks, investments in money market funds, collateral deposits, bank deposits, and short-term highly liquid investments with original maturity dates of three months or less from the date of acquisition. Cash and cash equivalents are held for the purpose of meeting the short-term cash requirements of the Organization, rather than for longer-term investment purposes. They are held on behalf of the Organization, including the General Fund, the Special Purpose Fund, the Enterprise Fund, the Fiduciary Fund and non-WHO entities administered by the Organization. The figures include cash and cash equivalents held in the portfolios managed by investment managers. 1 January 2012  (restated)  152 312 290  47 685 369  37 489 496  1 163 710  6 614 239  3 030 031  248 295 135  395 221 393  395 221 393  643 516 528 

Major office  Headquarters  Africa  Eastern Mediterranean  Europe  South‐East Asia  Western Pacific  Cash at banks, investment accounts, in transit and on hand  Headquarters  Cash and cash equivalents held by investment portfolios  Total cash and cash equivalents 

31 December 2012  171 023 455  29 126 359  23 389 879  1 531 029  7 799 091  5 596 234  238 466 047  945 892 369  945 892 369  1 184 358 416 

4.2

Investments and financial instruments

Details of the accounting policies for investments and financial instruments are described in Note 2.2. WHO’s principal investment objectives in descending order of priority are:  the preservation of capital;  the maintenance of sufficient liquidity to meet the payment of liabilities on time; and  the optimization of investment returns.

The Organization’s investment policy reflects the nature of its funds which may either be held shortterm pending implementation of programmes, or held longer term to meet its long-term liabilities. WHO’s investments include funds managed for other entities. An analysis of the investments of the Organization is provided in the following table.

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Investments and financial instruments (US dollars)   Internally managed funds Held‐to‐ maturity  portfolio  191 881 Externally managed funds Foreign  exchange  hedging  contracts  –    – 187 635 212 – 798 994 188 434 206 250 167 759 – 237 958 816 – 665 026 238 623 842 251 793 543 126 800 275 368 466 – 924 875 276 420 141 284 501 532 10 635 394 870 420 661 – 124 893 184 1 005 949 239 1 089 690 117 13 182 337  –  –  –  13 182 337  13 182 337      – – – – – – – – – – – – – – – – –    –  –      – 30 30 30 250 167 729 – 278 278 278 251 793 265 66 856 644 67 500 67 500 284 434 032 10 445 752 8 114 027 18 559 779 18 559 779 1 071 130 338 2 843 648  –  2 843 648  2 843 648  10 338 689  13 289 400  8 114 027  21 403 427  21 403 427  2 560 343 663  35 844 887  230 478 694  266 323 581  266 323 581  23 817 731  870 420 661  48 575 780  426 716 968  1 369 531 140  2 315 423 509  Total   managed   funds   and   contracts  945 892 369 

Current assets  Cash and cash equivalents Short‐term investments  Financial assets at fair value through surplus  or deficit – held‐for‐trading  Financial assets at fair value through surplus  or deficit – upon initial recognition  Financial assets at amortized cost Bank deposits and other receivables  Total short‐term investments Total current assets  Non‐current assets  Long‐term investments Financial assets at fair value through surplus  or deficit – upon initial recognition  Financial assets at amortized cost Total long‐term investments Total non‐current assets Current liabilities  Financial liabilities  Financial liabilities at fair value through  surplus or deficit ‐ held‐for‐trading    Payables and accruals Total financial liabilities Total current liabilities Total investments – net   

Cash and time  deposits  860 131 461

Long‐term  portfolio  1 828 149

Total  862 151 491

Short‐term  portfolio A  756 233   

Short‐term  portfolio B  61 733 553

Short‐term  portfolio C  13 169 701

Short‐term  portfolio D  8 081 391

Total  83 740 878

–  –  – 301 167 273 301 167 273 1 161 298 734

–  –  48 575 780 219 690 48 795 470 48 987 351

–  –  – 436 821 436 821 2 264 970

– – 48 575 780 301 823 784 350 399 564 1 212 551 055

10 508 594  169 458 167  –  122 504 289  302 471 050  303 227 283     

–  – – –

–  230 478 694 230 478 694 230 478 694

35 844 887  – 35 844 887 35 844 887

35 844 887 230 478 694 266 323 581 266 323 581

–  –  –  –     

–  – – – 1 161 298 734 

–  – – – 279 466 045 

–  – – – 38 109 857 

– – – – 1 478 874 636

10 378 896  8 113 075  18 491 971  18 491 971  284 735 312   

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Short-term investments Short-term investments relating to funds held pending the implementation of programmes are invested in cash and high-quality short-term government, agency, corporate bonds and time deposits as defined in the approved investment policy. Investments included within “financial assets at fair value through surplus or deficit” include fixed income securities and derivatives instruments held to cover projected liabilities and any unexpected cash requirements. The investments in the “held-to-maturity” portfolio with a duration of less than one year are classified as current assets in the category “financial assets at amortized cost”. Other receivables include accrued revenue on investments and receivables from investments that were sold but settled after 2012.   Financial assets at fair value through surplus or deficit ‒ held‐for‐trading    Financial assets at fair value through surplus or deficit ‒ upon initial recognition  Financial assets at amortized cost  Bank deposits and other receivables  Total short‐term investments      31 December 2012  23 817 731  870 420 661  48 575 780  426 716 968  1 369 531 140    1 January 2012  (restated)  6 185 144  660 129 398  198 548 932  1 388 440 333  2 253 303 807 

Long-term investments Long-term investments are placed for the Terminal Payments Fund as defined in the approved investment policy and are invested in high-quality, medium-dated and long-dated, government, agency and corporate bonds. Investments maturing greater than one year and held in the “held-to-maturity” portfolio are included as “financial assets at amortized cost”.   31 December 2012  Financial assets at fair value through surplus or deficit ‒ upon initial recognition  Financial assets at amortized cost  Total long‐term investments      35 844 887  230 478 694  266 323 581    1 January 2012  (restated)  34 833 438  –  34 833 438 

Financial liabilities Financial liabilities disclosed under “financial liabilities at fair value through surplus or deficit ‒ heldfor-trading” include derivative transactions such as foreign exchange forward contracts and interest rate swaps. Financial liabilities disclosed under “payables and accruals” relate to other financial liabilities from investments. In late December 2011, three new short-term externally managed fixed income investment portfolio mandates were implemented involving US$ 660 million in funds invested, and at the time of the 2011 closure, the external managers were in the process of acquiring the new securities under these new investment mandates. The nature of the market cycle, in which a period elapses between the acquisition and sale of securities and the moment of their settlement, means that many of the securities acquired under these new mandates had not yet been paid for as at 31 December 2011. Unsettled security purchases of this type caused the restated figures for financial assets and financial liabilities as at 1 January 2012 to be temporarily inflated by US$ 297 million in unsettled security sales and purchases. This arose due to the timing of the implementation of the new investment portfolios which straddled the end of 2011. There were no significant portfolio rebalancing activities at the end of 2012.

A66/29 Page 40   31 December 2012  Financial liabilities at fair value through surplus or deficit ‒ held‐for‐trading    Payables and accruals  Total financial liabilities  13 289 400  8 114 027  21 403 427  1 January 2012  (restated)  30 025 025  301 051 898  331 076 923 

The fair value hierarchy The fair value hierarchy represents the categorization of market pricing to indicate the relative ease with which the value of investments held by WHO can be realized. The majority of the financial instruments held by WHO have quoted prices in active markets and are classified as Level 1. Derivative instruments that are “over-the-counter” are classified as Level 2 because their fair value is observable ‒ either directly as a price, or indirectly after being derived from prices. The instruments shown under the Level 2 fair value measurement category consist of the foreign currency hedging forward contracts and the derivative contracts in the externally managed portfolios. Level 3 valuations include financial instruments for which the fair value is not based on observable market data. As at 31 December 2012, WHO held no financial instruments that would be classified as Level 3.   Short‐term investments  Financial assets at fair value through surplus or deficit ‒ held‐for‐trading   Financial assets at fair value through surplus or deficit ‒ upon initial recognition Long‐term investments  Financial assets at fair value through surplus or deficit ‒ upon initial recognition Financial liabilities  Financial liabilities at fair value through surplus or deficit ‒ held‐for‐trading   Total    – 906 265 548 35 844 887 – 870 420 661 Level 1 Level 2   23 817 731  –    –    (13 289 400)  10 528 331    – (13 289 400) – 916 793 879 – 35 844 887 – 23 817 731 – 870 420 661 Level 3  Total

Risk management WHO is exposed to financial risks including credit risk, interest rate risk, foreign exchange risk and investment price risk. Derivative financial instruments are used to hedge some of its risk exposures. In accordance with WHO’s Financial Regulations, funds not required for immediate use may be invested. All investments are carried out within the framework of the investment policy approved by the Director-General. Some portfolios are managed by external managers appointed by the Organization to manage funds in accordance with a defined mandate. The Advisory Investment Committee reviews regularly the investment policies, the investment performance and the investment risk for each investment portfolio. This Committee is composed of external investment specialists who can make investment recommendations to the Director-General. Nature of financial instruments Investments are categorized as follows:  Investments with short-term maturities. These investments are invested in cash and high-

quality short-dated government, agency, and corporate bonds as defined in the approved investment policy.  Investments with long-term maturities. These investments comprise funds managed for the

Terminal Payments Fund as defined in the approved investment policy. These investments are invested in high-quality medium-dated and long-dated, government, agency, and corporate bonds.

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Credit risk WHO’s investments are widely diversified in order to limit its credit risk exposure to any individual investment counterparty. Investments are placed with a wide range of counterparties using minimum credit quality limits and maximum exposure limits by counterparty (and by groups of related counterparties) established in investment mandates. These limits are applied both to the portfolios managed internally by the Organization’s Treasury Unit, and also to the portfolios managed by external investment managers. The Treasury Unit monitors the total exposure to counterparties across all internally and externally managed portfolios to ensure that total counterparty exposures across portfolios are tracked and managed. The credit risk and liquidity risk for cash and cash equivalents are minimized by investing only in major financial institutions that have received strong investment grade credit ratings from primary credit rating agencies. The Treasury Unit regularly reviews the credit ratings of the approved financial counterparties and takes prompt action whenever a credit rating is downgraded. The investments with long-term credit ratings are summarized as follows: Minimum rating category  AAA  AA+  AA  AA‐  A+  A  A‐  BBB+  BBB    Total asset value  US dollars  370 058 080  275 620 223  19 453 094  240 071 460  46 401 508  34 980 830  40 299 767  652 309  5 446 996  1 032 984 267 

Interest rate risk WHO is exposed to interest rate risk through its short-term and long-term fixed income investments. The investment duration is a measure of sensitivity to changes in market interest rates, and the effective average duration of the Organization’s investments as at 31 December 2012 was 0.3 years for the short-term investments and 2.6 years for the long-term investments. Fixed income derivative instruments may be used by external investment managers to manage interest rate risk under strict investment guidelines. These interest rate instruments are used for portfolio duration management and for strategic interest rate positioning. Foreign exchange currency risk WHO receives contributions and makes payments in currencies other than the United States dollar and it is exposed to foreign exchange currency risk arising from fluctuations in currency exchange rates. Exchange rate gains and losses on the purchase and sale of currencies, revaluation of cash book balances, and all other exchange differences are adjusted against the funds and accounts eligible to receive interest under the interest apportionment programme. The translation of transactions expressed in other currencies into the United States dollar is performed at the United Nations Operational Rates of Exchange prevailing at the date of transaction. Assets and liabilities that are denominated in foreign currencies are translated at the Operational Rates of Exchange prevailing at the end of each month. Forward foreign exchange contracts are transacted to hedge foreign currency exposures and to manage short-term cash flows. Realized and unrealized gains and losses resulting from the settlement and revaluation of foreign currency transactions are recognized in the Statement of Financial Performance.

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Hedging foreign exchange exposures on future payroll costs. The United States dollar value of non-dollar expenses in 2013 has been protected from the impact of movements in foreign exchange rates through the transaction of forward currency contracts during 2012. As at 31 December 2012 these forward foreign currency exchange hedging contracts by currency are summarized as follows: Currency forward bought  Swiss francs  Egyptian pounds  Euros  Indian rupees  Malaysian ringgits  Philippine pesos  Total  318 000 000  102 000 000  82 800 000  876 000 000  27 960 000  704 400 000  Net amount sold   (US dollars)  342 280 783  14 375 537  107 058 845  15 452 087  9 200 208  16 603 918  504 971 378  Net unrealized gain/(loss)  (US dollars)  6 507 931  523 694  2 305 417  27 503  120 637  651 369  10 136 551 

There was a net unrealized gain on these contracts of US$ 10.1 million as at 31 December 2012 (unrealized loss of US$ 21.4 million as at 1 January 2012). Realized gains or losses on these contracts will be recorded on maturity of the contracts and applied during 2013. Hedging foreign exchange exposures on receivables and payables. Currency exchange risk arises as a result of differences in the exchange rates at which foreign currency receivables or payables are recorded, and the exchange rates at which the cash receipt or payment is subsequently recorded. A monthly programme of currency hedging is in place to protect against this foreign currency risk. On an ongoing monthly basis the exposures in respect of awards, accounts receivable and accounts payable are netted by currency and each significant net foreign currency exposure is bought or sold forward using a forward foreign exchange contract equal and opposite to the net currency exposure. These exposures are re-balanced at each month-end to coincide with the setting of the monthly United Nations Operational Rates of Exchange. Through this process the exchange gains or losses realized on the forward foreign currency contracts match the corresponding unrealized exchange losses and gains on the movements in net accounts receivable and accounts payable. As at 31 December 2012 the total forward foreign currency exchange hedging contracts by currency were as follows: Currency forward sold  Euros  Australian dollars  Canadian dollars  Danish kroner  Pounds sterling  Norwegian kroner  Swedish kronor  Total  104 600 000  27 700 000  116 500 000  40 000 000  104 900 000  11 500 000  157 950 000  Currency forward bought  (US dollars)  138 854 122  28 655 124  117 333 419  7 121 594  169 509 848  2 066 369  24 347 247  487 887 723  Net unrealized gain/(loss)  (US dollars)  804 179  (70 634)  387 658  43 798  (1 003 171)  328  66 259  228 417 

There was a net unrealized gain on these contracts of US$ 0.2 million as at 31 December 2012 (unrealized net loss of US$ 2.4 million as at 1 January 2012). Realized gains or losses on these contracts will be recorded on the maturity of the contracts and applied during 2013. Forward foreign exchange contracts to manage operational cash flows. Forward foreign exchange contracts are also used to manage short-term cash flows of foreign currency balances to minimize foreign currency transaction risk. At 31 December 2012 the total amount sold was CHF 2.1 million against Australian dollars, Canadian dollars, Norwegian kroner and Swedish kronor. The maturity dates of these forward foreign exchange contracts are January 2013. Net unrealized losses on these

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contracts amounted to US$ 26 277 as at 31 December 2012 (unrealized net gains of US$ 20 142 as at 1 January 2012). Sensitivity of forward foreign exchange contracts to movements in the relative value of the United States dollar. A 1% appreciation in the relative value of the United States dollar against the above forward foreign exchange hedging contracts would result in an increase in the net unrealized gain of US$ 10.7 million. A 1% depreciation in the relative value of the United States dollar would result in a decrease in the net unrealized gain of US$ 10.5 million. Forward foreign exchange contracts and other derivative financial instruments held within the externally managed investment portfolios. In accordance with the investment guidelines set up for each externally managed portfolio, the external investment managers use forward foreign exchange contracts, futures contracts and interest rate swap contracts to manage the currency and interest rate risk of groups of securities within each portfolio. The net values of these instruments as at 31 December 2012 as evaluated by the Organization’s investment custodian are recorded by portfolio under “financial assets/liabilities at fair value – held-for-trading” and are summarized below. There were no outstanding futures contracts. Net sold amount  Australian dollars  Euros  Pounds sterling  Japanese yen  Total  3 064 000 14 877 000 4 135 000 19 980 000 (US dollar  equivalent)  3 179 207  20 707 997  6 721 301  2 310 886  32 919 391  Total  31 510 879  Net purchased amount  Chinese yuan renminbi  US dollars  36 749 768 25 766 053 (US dollar  equivalent)  5 744 826  25 766 053 

A 1% appreciation in the relative value of the United States dollar against the above-mentioned forward foreign exchange hedging contracts would result in a decrease in the unrealized gain of US$ 0.7 million. A 1% depreciation in the relative value of the United States dollar would result in an increase in the unrealized gain of US$ 0.7 million. Forward foreign exchange contract for currency risk hedging within the held-to-maturity portfolio. The currency exchange risk of a Japanese Government Treasury Bill investment denominated in Japanese yen is fully hedged until maturity by the transaction of a forward foreign exchange contract to sell Japanese yen and buy United States dollars. The Treasury Bill is valued at amortized cost in United States dollars including the currency hedging instrument in accordance with hedge accounting. 4.3 Accounts receivable ‒ net

As at 31 December 2012, total accounts receivable‒net amounted to US$ 905 million (US$ 954 million as at 1 January 2012 (restated)). The receivable balance includes outstanding amounts for both assessed and voluntary contributions. Amounts receivable are split between current and non-current based on when the amounts become due.

A66/29 Page 44 1 January 2012  (restated)    64 235 237  6 739 828   672 279 217  784 330  289 686  3 418 159  (18 517 240)  729 229 217    34 757 280  210 277 136  (34 757 280)  210 277 136  905 331 773    38 803 720  224 896 094  (38 803 720)  224 896 094  954 125 311   

31 December 2012  Accounts receivable – net current                       Member States’ assessed contributions receivable – current  biennium  Member States’ assessed contributions receivable – previous  biennium  Voluntary contributions receivable   Reimbursable procurement receivable  Revolving sales receivable  Other receivables  Allowance for doubtful accounts receivable    65 246 279  4 136 501  641 850 953  1 092 985  388 748  2 691 663  (20 352 492)  695 054 637 

Total accounts receivable – net current  Accounts receivable – net non‐current           Outstanding rescheduled assessments receivable   Voluntary contributions receivable   Allowance for doubtful accounts receivable 

Total accounts receivable – net non‐current  Total accounts receivable – net       

The total allowance for doubtful accounts receivable is US$ 55.1 million (US$ 57.3 million at 1 January 2012 (restated)). This is composed of an allowance of US$ 44.1 million for assessed contributions and US$ 11.0 million for voluntary contributions. The allowance for assessed contributions receivable includes any Member State with amounts receivable from prior years, all rescheduled amounts receivable and any current amounts receivable from Member States in arrears. The allowance for voluntary contributions receivable is based on a detailed review of all amounts receivable more than one year overdue and on a review of amounts less than one year overdue where there is evidence that the amount is unlikely to be received. In 2012, the Health Assembly adopted resolution WHA65.12, in which it approved the write-off of the unpaid arrears from the former Yugoslavia from 1991 to 2000 amounting to US$ 5.5 million. 1 January 2012  (restated)  109 778 784  ‐  (62 602 858)  47 175 926  ‐  10 145 034  10 145 034  57 320 960    18 517 240  38 803 720  57 320 960     

31 December 2012    Opening balance ‒ assessed contributions    Write‐off of unpaid arrears from the former Yugoslavia    Increase/(decrease) in allowance for doubtful accounts receivable    Ending balance ‒ assessed contributions    Opening balance ‒ voluntary contributions     Increase in allowance for doubtful accounts receivable    Ending balance ‒ voluntary contributions    Total allowance for doubtful accounts receivable    Allowance for doubtful accounts receivable             Allowance ‒ current  Allowance ‒ non‐current  47 175 926  (5 532 592)  2 429 324  44 072 658  10 145 034  892 080  11 037 114  55 109 772    20 352 492  34 757 280  55 109 772 

  Total allowance for doubtful accounts receivable 

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4.4

Staff receivables

In accordance with WHO’s Staff Rules and Regulations, staff members are entitled to certain advances including those for salary, education, rent and travel. The total balance of staff receivables amounted to US$ 12.3 million at 31 December 2012. The education grant balance represents advances made to staff for the scholastic year 2012‒2013.   Salary advances  Education grant advances  Rental advances  Travel receivables  Other staff receivables  Total staff receivables    31 December 2012  2 465 979  6 706 172  1 906 945  1 013 709  171 132  12 263 937    1 January 2012  (restated)  5 141 268  7 267 736  1 454 684  2 264 846  582 356  16 710 890   

4.5

Inventories

The total value of inventory was US$ 67.5 million as at 31 December 2012. The following table shows the movement of inventory items (medicines, vaccines, humanitarian supplies and publications) during the year. 1 January 2012  Medicines, vaccines and  humanitarian supplies  Publications  Total inventory  53 310 203  10 839 027  64 149 230  Net additions  46 860 703  15 115 837  61 976 540  Net   shipments  42 628 358  9 724 128  52 352 486    Net disposals and  write‐offs  5 077 428  1 237 533  6 314 961  31 December  2012  52 465 120  14 993 203  67 458 323 

Medicines, vaccines and humanitarian supplies were valued using the weighted average cost method and were validated by a physical stock count in December 2012. Publications were validated by a physical stock count in December 2012 and balances were valued at net cost of sales. Total expenses relating to inventories during the period (net shipments, net disposals and write-offs) amounted to US$ 58.7 million. 4.6 Prepayments and deposits

The total value of prepayments was US$ 1.3 million (US$ 1.6 million as at 1 January 2012). These represent payments to suppliers in advance of the receipt of goods or services. It is common practice for technical service contractors to request payments in advance to support project work. When goods or services are delivered, prepayments are applied to the appropriate expense account. The figure of US$ 0.3 million in respect of deposits represents amounts given to landlords as a security to rent office space.

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4.7

Other current assets

Other current assets refer to receivables from PAHO in the amount of US$ 12.2 million (US$ 22.9 million as at 1 January 2012). The receivables concerned are primarily in respect of the programmes funded and executed by the Organization on behalf of PAHO. 4.8 Property, plant and equipment – net

WHO has invoked the transition provision under IPSAS 17, which allows a period of up to five years before requiring full recognition of property, plant and equipment. As at 31 December 2012, the Organization had recognized land and buildings at headquarters only. All other assets were expensed at acquisition. The total value of land and buildings recognized in property, plant and equipment net of accumulated depreciation is US$ 41.2 million. 1 January 2012  (restated)    Land  Buildings  Accumulated depreciation ‒ buildings  Total property, plant and equipment – net      1 000 095  66 971 887  (26 791 104)  41 180 878    1 000 095  66 971 887  (25 674 905)  42 297 077 

31 December 2012 

When accumulated depreciation of property, plant and equipment is recognized for the first time, the calculation is made for the entire year, irrespective of the date on which the asset was placed in service. In order to ensure appropriate control and stewardship over property, plant and equipment, existing assets have been recorded in the asset register in the system except for the African Region, which continues to maintain the asset register offline. In 2012, WHO purchased property, plant and equipment (with a threshold value greater than US$ 5000) worth US$ 1.7 million (with the exception of the African Region). The property, plant and equipment concerned have not been recognized in WHO’s financial statements in the current year since the transitional provision mentioned above has been invoked. Details of the property, plant and equipment not recognized are as follows:   Fixtures and fittings  Vehicles and transport  Office equipment  Communications equipment  Computer equipment  Network equipment  Other equipment  Total property, plant and equipment – excluding land and buildings  Total  25 166  645 794  17 172  9 017  108 955  678 981  182 637  1 667 722 

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4.9

Intangible assets

WHO has no intangible assets to report. 4.10 Contributions received in advance The amount for contributions received in advance mainly concerns payments received from Member States in 2012 for their 2013 assessed contributions. The balance for advance payments for voluntary contributions reflects funds received for agreements starting in 2013. Unapplied and unidentified receipts are amounts received in 2012 but not yet matched to awards as at 31 December 2012. 31 December 2012     Assessed contribution advances   Advances for voluntary contributions   Unapplied and unidentified receipts   Other advances   Total contributions received in advance           60 363 091  19 327 188  6 622 339  17 261  86 329 879     1 January 2012  (restated)     70 276 957  26 740 312  2 329 995  1 381 287   100 728 551 

4.11 Accounts payable Accounts payable represents the total amount due to suppliers by major office as at 31 December 2012. Major office  Headquarters  Africa  Eastern Mediterranean  Europe  South‐East Asia  Western Pacific  Total accounts payable    31 December 2012  8 267 051  5 491 858  6 713 885  1 103 480  1 605 293  1 802 332  24 983 899    1 January 2012  (restated)  11 260 434  5 210 396  7 585 127  1 276 513  2 938 249  4 016 424  32 287 143   

4.12 Staff payable The balance of staff payable represents the total amount outstanding to staff as at 31 December 2012. Salaries payable consist of balances due to staff pending the finalization of clearance certificates. Bank returns are balances due to staff for which the payment is pending the receipt of updated bank account information. 31 December 2012  Salaries payable  Bank returns  Travel claims payable  Total staff payable    1 807 549  1 494 157  1 064 309  4 366 015    1 January 2012  (restated)     1 082 773  5 051 019  1 009 648  7 143 440   

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4.13 Accrued staff benefits Accrued staff benefits include terminal payments, after-service health insurance and liabilities due to service-incurred death or disability (Special Fund for Compensation).   Accrued staff benefits – current  Terminal payments  Special Fund for Compensation  Total accrued staff benefits – current  Accrued staff benefits – non‐current  Terminal payments  Special Fund for Compensation  After‐service health insurance  Total accrued staff benefits – non‐current  Accrued staff benefits  Terminal payments  Special Fund for Compensation  After‐service health insurance  Total accrued staff benefits  147 153 305  13 130 740  822 983 185  983 267 230                    75 798 885  12 750 061  822 983 185  911 532 131  71 354 420  380 679  71 735 099  31 December 2012  1 January 2012  (restated)     73 820 059  367 503  74 187 562        77 099 041  11 875 053  791 926 294   880 900 388        150 919 100  12 242 556  791 926 294  955 087 950 

Terminal payments The Terminal Payments Fund was established to finance the terminal emoluments of staff members, including repatriation grants, accrued annual leave, repatriation travel and removal on repatriation. It is funded by a salary and post adjustment budgetary provision set for 2012‒2013. Liabilities arising from repatriation benefits and annual leave are determined by independent consulting actuaries. However, the accrued leave is calculated on a walk-away basis ‒ that is, as if all staff separated immediately ‒ and, therefore, is not discounted. The latest actuarial study (as at 31 December 2012) estimated the full terminal payment liability to be US$ 147.2 million (short-term US$ 71.4 million and long-term US$ 75.8 million). This calculation did not include costs for the end of service grant and separation by mutual agreement on abolishment of posts. The defined benefit obligation amounted to US$ 85.3 million for terminal entitlements, and US$ 61.8 million for annual leave which is included in the terminal payments current balance. As per the actuarial study, a net reduction of US$ 3.7 million is recognized in the Statement of Financial Performance (total liability was US$ 147.2 million in 2012 and US$ 150.9 million in 2011). After-service health insurance WHO participates in a health insurance scheme. The scheme is managed as a separate entity, Staff Health Insurance, which has its own governance. It provides for the reimbursement of expenses for medically recognized health care incurred by staff members, recognized dependants and retired staff. It is financed from the contributions made by the participants and the Organization. The Organization accounts for after-service health insurance as a post-employment benefit. All gains and losses were recognized upon the adoption of IPSAS 25. Thereafter, gains and losses (unexpected changes in surplus or deficit) will be recognized over time via the corridor method. Under this method, amounts up to 10% of the defined benefit obligation are not recognized, so as to allow gains and losses

A66/29 Page 49

the reasonable possibility of offsetting one another over time. Gains and losses over 10% of the defined benefit obligation are amortized over the average remaining service period of active staff expected to receive each benefit. The defined benefit obligation as at 31 December 2012 was determined by professional actuaries, based on personnel data and past payment experience provided by WHO. As at 31 December 2012 the unfunded defined benefit obligation amounted to US$ 823 million for after-service health insurance. Further details on after-service health insurance can be found in the annual report on after-service staff health insurance. As per the actuarial study, an additional accrual of US$ 31 million is charged to staff costs (total liability was US$ 823 million in 2012 and US$ 792 million in 2011). No actuarial gain or loss was recognized in the financial statements as the gain or loss was less than 10% of the defined benefit obligation. Special Fund for Compensation In the event of a death or disablement attributable to the performance of official duties of an eligible staff member, the Special Fund for Compensation covers all reasonable medical, hospital, and other directly related costs, as well as funeral expenses. In addition, the Fund will provide compensation to the disabled staff member (for the duration of the disability) or the surviving family members. WHO accounts for the Special Fund for Compensation as a post-employment benefit. All gains and losses were immediately recognized upon adoption of IPSAS 25. Thereafter, gains and losses (unexpected changes in surplus or deficit) are recognized over time via the corridor method. Under this method, amounts up to 10% of the defined benefit obligation are not recognized, so as to allow gains and losses the reasonable possibility of offsetting one another over time. Gains and losses over 10% of the defined benefit obligation are amortized over the average remaining service of active staff expected to receive each benefit. For accounting purposes, the plan is considered unfunded (the liability is not reduced by plan assets). As per the actuarial study, an additional accrual of US$ 0.9 million (total liability was US$ 13.1 million in 2012 and US$ 12.2 million in 2011) has been recognized by nature of expenses in the Statement of Financial Performance. No actuarial gain or loss was recognized in the financial statements as the net cumulative gain or loss was less than 10% of the defined benefit obligation.

A66/29 Page 50

Actuarial summary of terminal payments, after-service health insurance, and the Special Fund for Compensation (US dollars) Terminal payments  (other than accrued  After‐service health  leave)  insurance  Reconciliation of defined benefit obligation  Defined benefit obligation as at 31 December 2011  Service cost  Interest cost  Actual gross benefit payments for 2012  Actual administrative expenses Actual contributions by participants  Actuarial (gain)/loss  Defined benefit obligation as at 31 December 2012        Reconciliation of plan assets  Assets as at 31 December 2011  Actual gross benefit payments for 2012  Actual administrative expenses WHO contributions during 2012 Participant contributions during 2012  Increase/decrease in WHO SHI Rule 470.1 liability  Expected return on assets  Asset gain/(loss)  Assets as at 31 December 2012      Reconciliation of unfunded obligation status  Defined benefit obligation     Active     Inactive  Total defined benefit obligation  Plan assets     Gross plan assets     Offset for WHO SHI Rule 470.1 liability  Total plan assets  Deficit/(surplus)  Unrecognized gain/(loss)  Net liability/(asset) recognized in the Statement of Financial Position Current liability  Non‐current liability  Net liability/(asset) recognized in the Statement of Financial Position   Expenses for 2012  Service cost  Interest cost  Expected return on assets  Recognition of (gain)/loss  Total expenses recognized in the Statement of Financial Performance       Expected contributions for 2013 WHO contributions  Participant contributions  Total expected contributions for 2013      86 866 729 10 889 143 2 294 579 (7 392 901) – – (7 350 743) 85 306 807 1 235 922 134  56 381 886  46 773 057  (28 238 400)  (2 093 479)  7 571 356  48 466 636  1 364 783 190      – (7 392 901) – 7 392 901 – – – – – 443 995 840  (52 964 753)  (3 762 523)  54 794 007  27 977 520  29 554  23 263 725  12 963 830  506 297 200  – (341 674) – 341 674 – – – – – Special Fund for  Compensation  12 242 556 892 247 337 611 (341 674) – – (1 474 442) 11 656 298

85 306 807 – 85 306 807 – – – 85 306 807  –  85 306 807 9 507 922 75 798 885 85 306 807

688 127 344  676 655 846  1 364 783 190    (525 194 995)  18 897 795  (506 297 200)  858 485 990  (35 502 805)  822 983 185  –  822 983 185  822 983 185 

4 063 327 7 592 971 11 656 298 – – – 11 656 298  1 474 442  13 130 740 380 679 12 750 061 13 130 740

10 889 143 2 294 579 – (7 350 743) 5 832 979

56 381 886  46 773 057  (23 263 725)  –  79 891 218 

892 247 337 611 – – 1 229 858

9 649 486 – 9 649 486

41 809 366  12 565 352  54 374 718 

386 346 – 386 346

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After-service health insurance medical sensitivity analysis 2012 service cost plus interest cost                    Current medical inflation assumption minus 1%  Current medical inflation assumption   Current medical inflation assumption plus 1%  Current medical inflation assumption minus 1%  Current medical inflation assumption   Current medical inflation assumption plus 1%     72 356 000  103 154 943  145 098 000  1 034 845 000  1 364 783 189  1 796 063 000 

31 December 2012 defined benefit obligation 

Actuarial methods and assumptions Each year the Organization identifies and selects assumptions and methods that will be used by the actuaries in the year-end valuation to determine the expense and contribution requirements for the Organization’s employee benefits. Actuarial assumptions are required to be disclosed in the financial statements in accordance with IPSAS 25. In addition, each actuarial assumption is required to be disclosed in absolute terms. Measurement date  All plans:  Discount rate  Terminal payments (other than  accrued leave):  The discount rate used is 3.0%. Based on the combined projected benefit payments  for  both  plans  and  with  weights  of  75%  on  the  Aon  Hewitt  AA  Bond  Universe  yield  curve  and  25%  on  the  SIX  Swiss  Exchange  yield  curve  as  at  31  December  2012.  The  resulting  discount  rate  is  rounded  to  the  nearest  0.1%.  Last  year,  the  discount  rate  was  based  on  a  weighted  average  of  Bloomberg  indices  in  the  United  States  and  Switzerland.  Europe, 2.6% (decrease from 3.1% in prior valuation); the Americas, 4.1% (decrease  from  4.7%  in  prior  valuation);  Other  Countries,  4.5%  (decrease  from  4.7%  in  prior  valuation).    For  Europe,  beginning  with  the  31  December  2010  valuation,  WHO  adopted  a  yield  curve  approach  to  reflect  the  pattern  of  expected  cash  flows  from  the  European  major  office.  The  rate  is  a  weighted  average  of  the  2.05%  rate  from  the  SIX  Swiss  Exchange  yield  curve  and  the  3.79%  rate  from  the  iBoxx  Euro  Zone  curve,  with  a  two‐thirds  weight  on  the  former.  The  resulting  rate  is  rounded  to  the  nearest 0.10%.    For  the  Americas  and  Other  Countries,  the  rates  use  the  same  methodology  as  the  31 December 2012 PAHO valuation of the after‐service health insurance. Beginning  with  the  31  December  2012  valuation,  PAHO  adopted  a  yield  curve  approach  using  the  Aon  Hewitt  AA  Bond  Universe  Curve.  Thus,  the  rates  for  the  Americas  and  Other  Countries  can  differ  due  to  different  patterns  of  expected  cash  flows  from  those regions.  The  discount  rate  is  3.0%.  Based  on  the  combined  projected  benefit  payments  for  both  plans  and  with  weights  of  75%  on  the  Aon  Hewitt  AA  Bond  Universe  yield  curve  and  25%  on  the  SIX  Swiss  Exchange  yield  curve  as  at  31  December  2012.  The  resulting  discount  rate  is  rounded  to  the  nearest  0.1%.  Last  year,  the  discount  rate  was  based  on  a  weighted  average  of  Bloomberg  indices  in  the  United  States  and  Switzerland.  31 December 2012 

After‐service health insurance: 

Special Fund for Compensation: 

A66/29 Page 52 Annual general inflation  Terminal payments (other than  accrued leave):  After‐service health insurance:  Special Fund for Compensation:  The  inflation  rate  used  is  2.2%.  Based  on  a  weighted  average  of  inflation  rates  of  2.5%  for  United  States  and  1.3%  for  Switzerland  with  weights  of  75%  and  25%,  respectively. The resulting inflation rate is rounded to the nearest 0.1%.  Europe 1.6%, the Americas 2.5%, Other Countries 2.5%   The  inflation  rate  used  is  2.2%.  Based  on  a  weighted  average  of  inflation  rates  of  2.5%  for  the  United  States  and  1.3%  for  Switzerland  with  weights  of  75%  and  25%,  respectively. The resulting inflation rate is rounded to the nearest 0.1%. 

Annual salary scale  All plans:  General  inflation,  plus  0.5%  per  year  productivity  increases,  plus  merit  increases.  Productivity and merit increases are set equal to those from the 31 December 2011  valuation of the United Nations Joint Staff Pension Fund. 

Regional groupings for all purposes except claims costs  Terminal payments (other than  accrued leave):  After‐service health insurance:  Not applicable  Based  on:  the  Regional  Office  for  Europe,  headquarters,  International  Computing  Centre,  IARC,  UNAIDS,  and  the  International  Drug  Purchasing  Facility  (UNITAID),  which  are  grouped  as  Europe;  the  Regional  Office  for  the  Americas  for  the  Region  of  the  Americas;  and  the  African  Region,  the  Eastern  Mediterranean  Region,  the  African  Programme  for  Onchocerciasis  (APOC),  the  South‐East  Asia  Region,  and  the  Western Pacific Region, which are grouped as Other Countries.  Not applicable 

Special Fund for Compensation: 

Repatriation travel and removal on repatriation  Terminal payments (other than  accrued leave):  After‐service health insurance:  Special Fund for Compensation:  Calculated  using  the  projected  unit  credit  method  with  service  prorated,  and  an  attribution period from the “entry on duty date” to separation.  Not applicable  Not applicable 

Repatriation grant, termination indemnity, and grant in case of death  Terminal payments (other than  accrued leave):  After‐service health insurance:  Special Fund for Compensation:  Accrued leave  Terminal payments (other than  accrued leave):  After‐service health insurance:  Special Fund for Compensation:  The liability is set equal to the walk‐away liability ‒ that is, as if all staff separated  immediately.  Not applicable  Not applicable  Using the projected unit credit method with accrual rate proration.  Not applicable  Not applicable 

Abolition of post, end‐of‐service grant, and separation by mutual agreement  Terminal payments (other than  accrued leave):  After‐service health insurance:  Special Fund for Compensation:  These benefits are considered termination benefits under IPSAS 25 and, therefore,  are excluded from the valuation.  Not applicable  Not applicable 

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United Nations Joint Staff Pension Fund The Pension Fund’s Regulations state that the Pension Board shall have an actuarial valuation made of the Fund at least once every three years by the Consulting Actuary. The practice of the Pension Board has been to carry out an actuarial valuation every two years using the Open Group Aggregate Method. The primary purpose of the actuarial valuation is to determine whether the current and estimated future assets of the Pension Fund will be sufficient to meet its liabilities. WHO’s financial obligation to the United Nations Joint Staff Pension Fund consists of its mandated contribution, at the rate established by the United Nations General Assembly (currently 7.9% for participants and 15.8% for member organizations) together with any share of any actuarial deficiency payments under Article 26 of the Regulations of the Pension Fund. Such deficiency payments are only payable if and when the United Nations General Assembly has invoked the provision of Article 26, following determination that there is a requirement for deficiency payments based on an assessment of the actuarial sufficiency of the Pension Fund as of the valuation date. Each member organization shall contribute to this deficiency an amount proportionate to the total contributions that each paid during the three years preceding the valuation date. The latest actuarial valuation was performed as at 31 December 2011. The valuation revealed an actuarial deficit of 1.87% (0.38% in the 2009 valuation) of pensionable remuneration, implying that the theoretical contribution rate required to achieve balance as at 31 December 2011 was 25.57% of pensionable remuneration, compared with the actual contribution rate of 23.7%. The actuarial deficit was primarily attributable to the lower-than-expected investment experience in recent years. As at 31 December 2011, the funded ratio of actuarial assets to actuarial liabilities, assuming no future pension adjustments, was 130% (140% in the 2009 valuation). The funded ratio was 86% (91% in the 2009 valuation) when the current system of pension adjustments was taken into account. After assessing the actuarial sufficiency of the Fund, the Consulting Actuary concluded that there was no requirement, as at 31 December 2011, for deficiency payments under Article 26 of the Regulations of the Fund as the actuarial value of assets exceeded the actuarial value of all accrued liabilities under the Fund. In addition, the market value of assets also exceeded the actuarial value of all accrued liabilities as of the valuation date. At the time of this report, the General Assembly has not invoked the provision of Article 26. The pensionable remuneration will be reviewed at the time of the next actuarial valuation as at 31 December 2013. In the report of the United Nations Joint Staff Pension Board on its fifty-ninth session (3‒11 July 2012), submitted for consideration by the United Nations General Assembly,1 the Pension Board noted that an increase in the normal age of retirement for new participants of the Fund to 65 is expected to significantly reduce the deficit and would potentially cover half of the current deficit of 1.87%. In December 2012, in resolution 67/240, the General Assembly authorized the Pension Board to increase the normal retirement age to 65 for new participants of the Fund, with effect not later than from 1 January 2014, subject to a decision of the General Assembly on a corresponding increase in the mandatory age of separation. During 2012, contributions paid to the United Nations Joint Staff Pension Fund amounted to US$ 206 million (US$ 232 million in 2011). Expected contributions due in 2013 are US$ 216 million. The United Nations Board of Auditors carries out an annual audit of the Pension Fund and reports to the Pension Board on the audit every year. The Pension Fund publishes quarterly reports on its investments and these are made public online.2

1 2

Official records of the General Assembly, sixty-seventh session, supplement no.9 (document A/67/9). Available at http://www.unjspf.org/UNJSPF_Web/ (accessed 22 March 2013).

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4.14 Deferred revenue Deferred revenue on voluntary contributions represents multi-year agreements signed in 2012 but for which the revenue recognition has been deferred to future financial periods. The balance on voluntary contributions is split into current and non-current deferred revenue, depending upon when the funds are available to the Organization to spend. Deferred revenue on reimbursable procurement relates to cash received where supplies or services have not been delivered to requesting parties at year end. As reimbursable procurement is an exchange transaction, revenue is recorded on an accrual basis and any revenue received in advance of delivery is recorded as deferred revenue. The entire amount of deferred revenue for reimbursable procurement is current. 31 December 2012  Voluntary contributions  Reimbursable procurement  Total deferred revenue – current  Voluntary contributions  Total deferred revenue – non‐current  Total deferred revenue  239 161 415  77 873 295  317 034 710  210 277 136  210 277 136  527 311 846  1 January 2012  (restated)  321 397 775  136 243 010  457 640 785  224 896 093  224 896 093  682 536 878 

4.15 Other current liabilities The total balance for other current liabilities as at 31 December 2012 was US$ 41.4 million. These amounts relate to various short-term liabilities as detailed below. Refunds payable relate to the balance of funds due to contributors after programme implementation. 31 December 2012  Accrual for un‐invoiced goods and services  Accrual for restructuring cost  Due to estates of deceased staff members  Refunds payable  Pension payable  Insurance payable  Foundations  Other liabilities  Total other current liabilities    17 726 261  3 901 890   273 148  5 111 282  2 487 305  3 761 018  3 567 774  4 613 563   41 442 241    1 January 2012  (restated)  16 183 798  12 671 129  273 148  – 

3 603 401  2 753 779  3 651 697  6 943 830  46 080 782   

The balance for foundations concerns funds that WHO holds in trust and for whose financial and administrative management the Organization is responsible. As at 31 December 2012, the foundations with funds in trust were as follows:  Down Syndrome Research Prize in the Eastern Mediterranean Region  Dr A.T. Shousha Foundation  Dr Comlan A.A. Quenum Prize  Ihsan Dogramaci Family Health Foundation  Jacques Parisot Foundation  Léon Bernard Foundation

A66/29 Page 55  Professor Francesco Pocchiari Fellowship Prize  State of Kuwait Prize for the Control of Cancer, Cardiovascular Diseases and Diabetes in the

Eastern Mediterranean Region  State of Kuwait Prize for Research in Health Promotion  United Arab Emirates Health Foundation

4.16 Inter-entity liabilities WHO hosts a number of entities through administrative service agreements. As cash for all entities is managed by the Organization, liabilities exist with these entities for funds held on their behalf. The total amounts due per entity are as follows: 31 December 2012  Staff health insurance (SHI)  International Computing Centre (ICC)  International Drug Purchase Facility (UNITAID)  African Programme for Onchocerciasis Control (APOC)  Trust Fund for the Joint United Nations Programme on HIV/AIDS (UNAIDS)  Total inter‐entity liabilities  207 903 045  16 561 280  553 805 387  7 018 925  204 521 501  989 810 138  1 January 2012  (restated)  187 586 220  11 942 469  488 757 828  4 748 447  240 361 899  933 396 863 

4.17 Long-term borrowings The Health Assembly, in resolutions WHA55.8 and WHA56.13, authorized the Director-General to proceed with the construction of a new building at headquarters for the Organization and UNAIDS at a cost estimated at CHF 66 million, of which WHO’s share was estimated at CHF 33 million. The Swiss Confederation agreed to provide an interest-free loan to the Organization and UNAIDS of CHF 59.8 million, of which WHO’s share is CHF 29.9 million. The Health Assembly also approved the use of the Real Estate Fund for the repayment over a 50-year period of the Organization’s share of the interest-free loan provided by the Swiss Confederation with effect from the first year of the completion of the building. The loan of US$ 21.9 million (US$ 22.7 million in 2011) is reflected at amortized cost using the effective interest rate of 1.16% (Swiss franc Libor rate for 30 years).

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5. 5.1

Supporting information to the Statement of Financial Performance Revenue

Member States’ assessed contributions In May 2011, the Sixty-fourth World Health Assembly adopted the appropriation resolution for the financial period 2012‒2013,1 in which it welcomed a total effective budget of US$ 3959 million. In the same resolution, the Health Assembly further resolved that the total assessment on Member States in respect of the financial period 2012–2013 would be US$ 949 million. US$ 475 million has been recognized as revenue for the year 2012 and assessed to Member States.2 US$ 10.2 million was transferred to the Tax Equalization Fund in 2012. In line with resolution WHA64.3, US$ 15 million was approved for transfer from the Member States’ Non-Assessed Income Fund (refer to Note 6.1). Increase in allowance for doubtful accounts receivable The allowance for doubtful accounts receivable represents accounts receivable where the collection is considered uncertain, both for voluntary and for assessed contributions. The increase in the allowance for doubtful accounts receivable of US$ 3.3 million represents an increase in the allowance for assessed accounts receivable of US$ 2.4 million and an increase in the allowance for voluntary accounts receivable of US$ 0.9 million (refer to Note 4.3). Voluntary contributions The total of voluntary contributions to WHO was US$ 1636 million in 2012. These contributions represent revenue recognized from governments, intergovernmental organizations, institutions, other United Nations organizations and bodies, as well as the private sector.3 The figure for total voluntary contributions reported of US$ 1636 million is after the deduction of (i) refunds to contributors ‒ these amount to US$ 17 million ‒ and (ii) reductions in revenue recognized in prior years due to evidence arising in the current year that amounts will no longer be collected ‒ these amount to US$ 13 million. Voluntary contributions in-kind and in-service WHO receives non-cash contributions from Member States and other contributors. In 2012, the Organization received in-kind and in-service contributions amounting to US$ 66.5 million.4   Voluntary contributions in‐kind  Voluntary contributions in‐service  Total voluntary contributions in‐kind and‐in service  31 December 2012  51 133 480  15 334 959  66 468 439 

Reimbursable procurement WHO procures medicines and vaccines on behalf of Member States and other United Nations agencies. The total revenue and expenses recognized for 2012 for reimbursable procurement was US$ 62.5 million. The funds received in advance for reimbursable procurement are recorded as deferred revenue. The revenue and expenses related to reimbursable procurement form part of the Enterprise Fund and are not reported against the programme budget.

1 2 3 4

Resolution WHA64.3. See document A66/30 for details of the status of collection of assessed contributions. See document A66/29 Add.1 for details by fund and by contributor. See document A66/29 Add.1, Schedule 5, for details of all in-kind and in-service contributions by contributor.

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Other operating revenue In 2012, WHO earned fees of US$ 14 million for hosting other entities such as UNAIDS, the International Drug Purchase Facility (UNITAID), the International Computing Centre (ICC) and the African Programme for Onchocerciasis Control (APOC). Other sources of earnings also included the sale of publications and royalties earned. Finance revenue Finance revenue includes the following: 31 December 2012  Investment revenue  Realized foreign exchange gains on transactions and bank balances  Net unrealized foreign exchange gains on hedging  Net unrealized foreign exchange gains on balance sheet revaluation  Actuarial revaluation gains on Terminal Payments Fund  Investment revenue and foreign exchange gains and losses apportioned to other entities  Total finance revenue  19 013 674  1 809 681  10 364 967  15 524 796  7 350 743  (10 947 816)  43 116 045 

5.2

Expenses

Staff and other personnel costs Staff and other personnel costs constitute the total cost of employing staff at all locations and include charges for base salary, post adjustment and any other types of entitlements (e.g. pensions and insurances) paid by the Organization. Staff costs also include the movement in the after-service health insurance actuarial liability which is recognized in the Statement of Financial Performance. Medical supplies and materials The majority of the balance for medical supplies and materials relates to medical supplies purchased and distributed by WHO for programme activities. Medical supplies and materials include in-kind expenses of US$ 31 million and reimbursable procurement related expenses of US$ 58 million. Contractual services The amount for contractual services represents expenses for service providers. The main components are sums for agreements for performance of work or consulting contracts given to individuals to perform activities on behalf of the Organization. Medical research activities, costs for special service agreements, fellowships and security expenses are also considered to be contractual services. Transfers and grants to counterparts Transfers and grants to counterparts relate to non-exchange contracts signed with national counterparts (mainly health ministries) to perform activities that are in line with the Organization’s Programme budget. Funds are expensed at the point of time when the funds are transferred to the contractual partner and WHO has no continuing involvement. These expenses are also referred to as “direct financial cooperation”. Travel The cost of travel for WHO staff, non-staff participants in meetings, consultants and representatives of Member States paid by the Organization is included in the balance for total travel costs. Travel expenses include airfare, per diem and other travel-related costs. This amount does not include statutory travel for home leave and education grant which is accounted for within staff costs.

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General operating expenses General operating expenses represent general operations to support country offices, regional offices and headquarters including utilities, telecommunications (fixed telephone, mobile phone, Internet and global network expenses) and rents. Equipment, vehicles and furniture As WHO opted for the transitional provision under IPSAS 17, the Organization expenses the full cost of equipment, vehicles and furniture at the point of delivery excluding the headquarters building. Depreciation and amortization Depreciation is the expense resulting from the systematic allocation of the depreciable amounts of property, plant and equipment over their useful lives. This relates principally to the Organization’s buildings. Amortization is the expense resulting from the systematic allocation of the amortizable amount of intangible assets over their useful lives. Finance costs Finance costs include the following: 31 December 2012  Bank charges and investment management fees  Net realized foreign exchange losses on balance sheet hedging  Actuarial interest cost related to valuation of Terminal Payments Fund  Total finance costs  2 242 258  979 127  2 632 190  5 853 575 

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6. 6.1

Supporting information to the Statement of Net Assets/Equity Member States - regular budget

This note provides details of financing and revenue of assessed contributions, along with the appropriations from the Member States’ Non-Assessed Income Fund for 2012. The status of the funds available highlights the net surplus/deficit of the Member States’ regular budget. Member States’  Assessed  Member States’  Contributions  Non‐Assessed  Tax Equalization  Working Capital  Fund  Income Fund  Fund  Fund  Balance as at 1 January 2012  Programmatic revenue and expenses  Member States’ assessed contributions  Appropriations  Tax equalization reimbursements  Effective programme budget  Programmatic expenses related to 2012–2013 Programmatic expenses related to 2010–2011 Tax reimbursements to staff members  Total surplus/(deficit)  Allowance for doubtful accounts receivable  Increase in allowance for doubtful accounts  receivable  Member States’ non‐assessed income  Interest  Miscellaneous revenue  Member States’ non‐assessed income – net  Balance as at 31 December 2012  19 668 193 474 609 150 15 000 000 (10 189 150) 479 420 000 (427 310 158) (14 130 446) – 37 979 396 23 855 391 – (15 000 000) – (15 000 000) – – – (15 000 000) (8 073 603)  – – 10 189 150  10 189 150  – – (14 533 591)  (4 344 441)  31 000 000  –  –  –  –  –  –  –  – 

Total  66 449 981 474 609 150 – – 474 609 150 (427 310 158) (14 130 446) (14 533 591) 18 634 955

(2 429 324)  – – – 55 218 265

–  452 931 1 013 189 1 466 120 10 321 511

–  – – – (12 418 044) 

–  –  –  –  31 000 000 

(2 429 324)  452 931 1 013 189 1 466 120 84 121 732

In resolution WHA64.3, the Health Assembly resolved to appropriate US$ 15 million to finance the regular budget for the financial period 2012‒2013. In addition, in resolution WHA64.3, the Health Assembly decided that the Working Capital Fund should be maintained at its existing level of US$ 31 million.

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6.2

Special Account for Servicing Costs Fund

This fund was established in order to support the costs of servicing activities financed from sources other than the assessed contribution budget (i.e. from voluntary contributions). The Fund is credited with revenue from the following sources:  under resolution WHA34.17, funds are received for programme support costs from voluntary

sources and are calculated by applying a fixed percentage rate to total expenses  administrative service agreements with other entities  interest earned on voluntary funds as described in document EB122/3   Balance as at 1 January 2012  Revenue  Programme support costs  Interest  Administrative service agreements with other entities  Repayment of advances (Note a)  Total revenue  Expenses  Global and interregional activities  Major office – Africa  Major office – Western Pacific  Major office – Europe  Major office – South‐East Asia  Major office – Americas  Major office – Eastern Mediterranean  Total expenses  Less:  Increase in allowance for doubtful accounts receivables  – voluntary contributions (Note b)  Other expenses (Note c)  Balance as at 31 December 2012  Total  111 183 981  111 347 786  6 872 997  4 814 538  2 154 433  125 189 754  36 220 150  18 524 026  3 611 480  8 398 337  4 986 292  3 460 154  7 398 613  82 599 052 

892 080  2 755 772  150 126 831 

Note  a.  In  2011,  advances  were  given  for  administrative  services  to  the  UNICEF/UNDP/World  Bank/WHO  Special  Programme  for  Research  and Training in Tropical Diseases and the WHO Framework Convention on Tobacco Control for a total of US$ 3.80 million (US$ 3.22 million  and  US$  0.54  million  respectively).    Half  the  advance  to  the  Special  Programme  was  repaid  in  2012  (US$  1.61  million);  in  addition,  the  advance to the WHO Framework Convention on Tobacco Control was repaid in 2012 (US$ 0.54) for a total of US$ 2.20 million.   Note b. The increase in the allowance for doubtful accounts receivable for voluntary contributions is US$ 0.9 million (from US$ 10.1 million  as  at  31  December  2011  to  US$  11.0  million  as  at  31  December  2012).   Refer  to  Note  4.3  for  details  of  the  balance  of  accounts  receivable  and the allowance.    Note  c. At the end of 2011, a balance of US$ 5.8 million was credited to the Special Account for Servicing Costs Fund and is included in the  opening  fund  balance  for  2012.   An  amount  of  US$  2.8  million  was  required  to  cover  expenses  from  this  balance  and  is  reported  in  the  Statement of Financial Performance.  

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6.3

Real Estate Fund

This fund was established by the Health Assembly in resolution WHA23.14. The Fund is used to meet the cost of construction of buildings or extensions to existing buildings, the acquisition of land that may be required, and major repairs and alterations to WHO’s existing office buildings and residences leased to staff by the Organization. Specific Health Assembly authorization is required for acquisition of land and construction of buildings or building extensions. Total  Balance as at 1 January 2012  Revenue  Rents collected  Other revenue  In‐kind revenue  Total revenue  Expenses  In‐kind expenses  Major office – headquarters  Major office – Africa  Major office – Eastern Mediterranean  Major office – Europe  Total expenses  Balance as at 31 December 2012  18 120 580  11 761 021  198 754  7 752 917  19 712 692  7 752 917  8 229 995  1 306 540  1 486 211  (37 991)  18 737 672  19 095 600 

In-kind revenue and expenses represents contributions from Member States for donated office space.

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7.

Comparison of budget and actual amounts

In May 2011, the Health Assembly adopted resolution WHA64.3, the appropriation resolution for the financial period 2012–2013, in which it noted the total effective budget of US$ 3959 million. WHO’s budget is adopted on a biennial basis by the Health Assembly. There have been no revisions made to the Programme budget 2012–2013. As the Organization’s methodology is based on a results-based framework the approved programme budget is measured on expenses incurred during the programme budget period. WHO’s budget and financial statements are prepared using different accounting bases. The Statement of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/Equity, and Statement of Cash Flow are prepared on a full accrual basis, whereas the budget is established on a modified cash basis (i.e. actual expense is used to measure the budget utilization). As per the requirements of IPSAS 24, the actual amounts presented on a comparable basis to the budget shall, where the financial statements and the budget are not prepared on a comparable basis, be reconciled to the actual amounts presented in the financial statements, identifying separately any basis, timing, presentation and entity differences. The General Fund, as per Note 2.17, represents the programme budget results, except for the Tax Equalization Fund expense, other non-programme budget utilization and all in-kind/in-service expenses which are not included in the programme budget results. Explanations of material differences between the final budget and the actual amounts are available in document A66/5,which describes the implementation of the Programme budget 2012–2013 and the results achieved. As required by IPSAS 24, a reconciliation is provided on a comparable basis between the actual amounts as presented in Statement V and the actual amounts in the financial accounts identifying separately any basis, timing, entity and presentation differences. Basis differences occur when the components of the approved programme budget are used for activities other than the implementation of technical programmes such as the Tax Equalization Fund expense, inkind/in-service expenses, other non-programme budget utilization and other common fund activities. Timing differences represent the inclusion in WHO’s financial accounts programme budget expenses in other financial periods. Entity differences represent the inclusion in WHO’s financial accounts of the Member States – other and the Fiduciary Fund which do not form part of the Organization’s programme budget. Presentation differences are summarized under the headings “Operating”, “Investing” and “Financing”, consistent with Statement IV: Statement of Cash Flow. The amount reflected for presentation differences under the heading operating reflects cash flows from operations and also revenue that is not included in the programme budget or in Statement V. A reconciliation between the actual amounts on a comparable basis in the Statement of Comparison of Budget and Actual Amounts (Statement V) and the actual amounts in the Statement of Cash Flow (Statement IV) for the year 2012 is presented below. Operating Actual amount on a comparable basis (Statement V) Basis differences  Timing differences  Entity differences  Presentation differences  Actual amount in the Statement of Cash Flow (Statement IV) (1 693 680 363) 66 182 084 125 153 581 194 947 377 1 483 592 248 176 194 927 365 459 934 365 459 934 (812 973)  (812 973)  Investing Financing  Total (1 693 680 363) 66 182 084 125 153 581 194 947 377 1 848 239 209 540 841 888

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8. 8.1

Segment reporting Statement of Financial Position by segments As at 31 December 2012 (In US dollars) HQ AFRO AMRO EMRO  EURO SEARO WPRO Total 

ASSETS  Current assets  Cash and cash equivalents Short‐term investments Accounts receivable – net current Staff receivables  Inventories  Prepayments  Other current assets  Total current assets  Non‐current assets  Accounts receivable – net non‐current Long‐term investments Deposits  Property, plant and equipment – net Total non‐current assets  TOTAL ASSETS  LIABILITIES  Current liabilities  Contributions received in advance Accounts payable  Staff payables  Accrued staff benefits – current Deferred revenue  Financial liabilities  Other current liabilities Inter‐entity liabilities  Total current liabilities  Non‐current liabilities  Long‐term borrowings  Accrued staff benefits – non‐current Deferred revenue – non‐current Total non‐current liabilities TOTAL LIABILITIES  NET ASSETS/EQUITY  Member States – regular budget Voluntary funds  Member States – other Fiduciary Fund  TOTAL NET ASSETS/EQUITY TOTAL LIABILITIES AND NET ASSETS/EQUITY 

1 116 915 824 1 369 531 140 693 609 422 6 458 299 46 980 604 288 075 220 829 413 3 454 612 777 210 277 136 266 323 581 – 41 180 878 517 781 595 3 972 394 372

29 126 359 – 202 436 2 291 139 1 737 695 621 634 – 33 979 263 – – 7 061 – 7 061 33 986 324

– – 790 440 – – – (208 637 941) (207 847 501) – – – – – (207 847 501)

23 389 879 – 93 365 575 113 9 445 553 – – 33 503 910 – – – – – 33 503 910

1 531 029 – 261 312 276 767 – 13 556 – 2 082 664 – – 13 556 – 13 556 2 096 220

7 799 091 – 79 687 850 548 5 167 235 249 262 – 14 145 823 – – 208 809 – 208 809 14 354 632

5 596 234 – 17 975 1 812 071 4 127 236 127 311 – 11 680 827 – – 79 722 – 79 722 11 760 549

1 184 358 416  1 369 531 140  695 054 637  12 263 937  67 458 323  1 299 838  12 191 472  3 342 157 763  210 277 136  266 323 581  309 148  41 180 878  518 090 743  3 860 248 506 

86 260 283 8 267 051 2 053 609 33 898 313 317 034 710 21 403 427 (6 145 253 941) 989 810 138 (4 686 526 410) 21 912 231 531 450 309 210 277 136 763 639 676 (3 922 886 734) 1 585 632 246 6 293 590 325 (133 631 063) 149 689 598 7 895 281 106 3 972 394 372 

– 5 491 858 1 026 482 17 515 458 – – 2 597 904 184 – 2 621 937 982 – 143 279 652 – 143 279 652 2 765 217 634   (505 244 843) (2 054 718 639) (170 935 934) (331 894) (2 731 231 310) 33 986 324 

– – – – – – 153 282 363 – 153 282 363 – – – – 153 282 363   (198 103 144) (156 306 242) (6 564 944) (155 534) (361 129 864) (207 847 501) 

30 000 6 713 885 490 353 5 948 177 – – 1 391 998 471 – 1 405 180 886 – 52 304 658 – 52 304 658 1 457 485 544 (212 772 306) (1 052 384 059) (158 650 094) (175 175) (1 423 981 634) 33 503 910 

39 596 1 103 480 300 794 4 781 943 – – 519 804 214 – 526 030 027 – 67 402 316 – 67 402 316 593 432 343 (154 366 711) (353 097 607) (83 777 961) (93 844) (591 336 123) 2 096 220 

– 1 605 293 254 778 4 720 011 – – 886 858 517 – 893 438 599 – 62 794 570 – 62 794 570 956 233 169 (242 862 763) (623 092 360) (75 620 101) (303 313) (941 878 537) 14 354 632 

– 1 802 332 239 999 4 871 197 – – 636 848 433 – 643 761 961 – 54 300 626 – 54 300 626 698 062 587 (188 160 747) (411 982 949) (86 005 628) (152 714) (686 302 038) 11 760 549 

86 329 879  24 983 899  4 366 015  71 735 099  317 034 710  21 403 427  41 442 241  989 810 138  1 557 105 408  21 912 231  911 532 131  210 277 136  1 143 721 498  2 700 826 906  84 121 732  1 642 008 469  (715 185 725)  148 477 124  1 159 421 600  3 860 248 506 

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8.2

Statement of Financial Performance by segments For the year ended 31 December 2012 (In US dollars) HQ  AFRO    474 609 150  (3 321 404)  1 636 499 031  66 468 439  62 459 972  19 575 827  40 847 428  2 297 138 443  –  –  –  –  –  (2 048 012)  1 030 453  (1 017 559)    –  –  –  –  –  (2 523 719)  –  (2 523 719)  AMRO    –  –  –  –  –  118 424  (312 087)  (193 663)  EMRO    –  –  53 784  –  –  (982 044)  868 486  (59 774)  EURO     –  –  –  –  –  124 652  146 667  271 319  SEARO    –  –  –  –  –  (283 351)  535 098  251 747  WPRO    474 609 150  (3 321 404)  1 636 552 815  66 468 439  62 459 972  13 981 777  43 116 045  2 293 866 794  Total   

Revenue  Member States’ assessed contributions  Increase in allowance for doubtful accounts receivable  Voluntary contributions  Voluntary contributions in‐kind and in‐service  Reimbursable procurement  Other operating revenue  Finance revenue  Total revenue  Expenses  Staff and other personnel costs  Medical supplies and materials  Contractual services  Transfers and grants to counterparts  Travel    General operating expenses  Equipment, vehicles and furniture  Depreciation and amortization  Finance costs  Total expenses  TOTAL SURPLUS/(DEFICIT) FOR THE YEAR 

428 546 875  51 075 029  123 193 758  5 519 692  64 872 279  59 880 425  4 003 296  1 116 199  6 809 645  745 017 198  1 552 121 245 

198 982 466  20 746 170  36 681 993  102 569 581  38 165 935  117 058 512  10 252 336  –  665 966  525 122 959  (526 140 518) 

31 684 610  1 312 499  16 348 551  1 036 114  4 264 714  2 625 102  2 498 562  –  –  59 770 152  (62 293 871) 

73 429 444  88 411 209  57 109 511  77 813 236  13 515 490  29 659 314  7 787 485  –  (2 120 649)  345 605 040  (345 798 703) 

67 212 218  407 463  19 098 700  521 924  10 022 613  9 373 523  1 061 174  –  157 128  107 854 743  (107 914 517) 

52 527 982  31 175 446  47 205 777  15 027 864  11 396 652   9 953 751  2 714 294  –  (116 606)  169 885 160  (169 613 841) 

60 055 776  6 440 125  25 007 238  13 401 391  10 532 803  7 104 352  3 708 377  –  458 091  126 708 153  (126 456 406) 

912 439 371  199 567 941  324 645 528  215 889 802  152 770 486  235 654 979  32 025 524  1 116 199  5 853 575   2 079 963 405  213 903 389 

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9.

Administrative waivers, amounts written-off and ex-gratia payments

During 2012, three administrative waivers were approved. At the Regional Office for the South-East Asia, an amount of US$ 3550 relating to a direct financial cooperation granted in the biennium 2006‒ 2007 to the Municipal Corporation, Patna (Bihar State), India was deemed impossible to recover. Furthermore, at the Regional Office for South-East Asia, an amount of US$ 18 723 relating to two grants for a direct financial cooperation granted in the biennium 2008‒2009 to the Director of Health Services (Maharashtra State), India, was deemed impossible to recover. During 2012, a total of US$ 2250 was approved for write-off. This balance related to the bankruptcy of a bank in the Democratic Republic of the Congo. No ex-gratia payments were made in 2012.

10.

Related party and other senior management disclosures

Staff members considered to be “key management personnel” are the Director-General, regional directors and all other ungraded staff. The table below details the number of key management personnel who held these positions over the course of the year as well as the aggregate remuneration. Key management personnel  Number of individuals  Compensation and post adjustment  Entitlements  Pension and health plans  Total remuneration  Outstanding advances against entitlements  Outstanding loans (in addition to normal entitlements, if any)  19  4 549 493  605 607  1 144 135  6 299 235  170 796  – 

The aggregate remuneration paid to key management personnel includes: net salaries, post adjustment, entitlements such as representation allowance and other allowances, assignment and other grants, rental subsidy, personal effect shipment costs, and employer pension and current health insurance contributions. Key management personnel are also qualified for post-employment benefits at the same level as other employees. These benefits cannot be reliably quantified. Key management personnel are ordinary members of the United Nations Joint Staff Pension Fund. The Regional Director for the Americas is included among the key management personnel. However, as the Regional Director is receiving all entitlements and benefits from PAHO, those entitlements and benefits are disclosed in PAHO’s financial statements and not in the Organization’s financial statements. During the year, no loans were granted to key management personnel beyond those widely available to staff outside this grouping.

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11.

Events after the reporting date

WHO’s reporting date is 31 December 2012. On the date of the signing of these accounts, no material events, favourable or unfavourable, had been incurred between the balance sheet date and the date when the financial statements were authorized for issue that would have had an impact on the financial statements.

12.

Contingent liabilities, commitments and contingent assets

Contingent liabilities As at 31 December 2012, WHO had a number of pending legal cases. Most involve disputes that are not recorded because the likelihood of repayment has been determined to be remote. However, there are four cases involving contractual disputes which are to be considered contingent liabilities. The total potential cost to the Organization is estimated at US$ 95 000. Operating leases commitments WHO enters into operating lease arrangements for renting office space in various country offices. Future minimum lease rental payments for the following periods are:   Under 1 year  1–5 years  Beyond 5 years  Total property lease commitments  Total  3 319 313  5 183 137  3 838 114  12 340 564 

The Organization has no outstanding leases qualifying as finance leases at the reporting date. WHO leased office space to six tenants. Total revenue from the leasing activities was US$ 1.2 million in 2012. Current lease agreements are renewable on a yearly basis. Contingent assets In accordance with IPSAS 19, contingent assets will be disclosed for cases where an event will give rise to a probable inflow of economic benefits. As at 31 December 2012, there are no material contingent assets to disclose.

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Schedule I. Statement of Financial Performance by major funds For the year ended 31 December 2012 (In US dollars)   Member  States –  regular budget  Revenue  Member States’ assessed contributions  Increase in allowance for doubtful  accounts receivable  Voluntary contributions  Voluntary contributions in‐kind and in‐ service  Reimbursable procurement  Other operating revenue  Finance revenue  Total operating revenue  Expenses  Staff and other personnel costs  Medical supplies and materials  Contractual services  Transfers and grants to counterparts  Travel  General operating expenses  Equipment, vehicles and furniture  Depreciation and amortization  Finance costs  Total expenses  TOTAL SURPLUS/(DEFICIT) FOR THE YEAR  Fund balance – 1 January 2012 Reversal of IPSAS opening adjustment  (unrealized exchange gain)  Fund balance – 31 December 2012   376 925 451  2 582 925  25 877 392  10 775 490  14 193 397  20 924 129  4 695 411  –  –  524 440 866 102 616 357 275 153 896 203 284 230 130 495 695 23 647 288 – – – – – (265 487) – – – – 901 366 317 105 199 282 301 031 288 213 794 233 144 689 092 190 228 015 28 342 699 – – – (3 309 093) – – – – (656 421) 1 116 199 3 214 417 365 102 24 109 207 60 719 598 22 850 906 107 679 711 5 003 291 57 740 196 976 838 2 971 111 522 4 496 822 1 845 998 – – 70 177 638 132 331 343 786 363 11 852 553 147 572 2 131 345 39 620 846 2 462 895 – 2 638 987 191 971 904 25 215 712 39 151 193 11 582 444 4 906 423 5 875 099 7 985 422 30 356 – 171 94 746 820 162 550 346 (151 477 292) 94 368 659 24 411 835 5 056 966 8 117 966 52 103 090 3 682 828 1 116 199 5 853 575 – (797 595) (2 961 397) (36 572) (6 676 126) (3) – – 912 439 371 199 567 941 324 645 528 215 889 802 152 770 486 235 654 979 32 025 524 1 116 199 5 853 575 44% 10% 16% 10% 7% 11% 2% 0% 0% 100% 474 609 150  (2 429 324)  – (892 080) – – 474 609 150 (3 321 404) – – – – – (427 526) 24 901 835 24 474 309 – – – – 62 459 972 7 625 667 – 70 085 639 – – 170 277 7 752 917 – 155 429 301 9 591 953 172 944 448 – – 97 352 898 2 318 919 – 25 050 780 324 898 125 047 495 – – 97 523 175 10 071 836 62 459 972 34 818 686 – – 474 609 150 (3 321 404) 21% 0% 71% 3% 3% 1% 2% 100% General Fund  Voluntary  funds  Member States – other  Common  Fund  Enterprise  Fund  Special  Purpose Fund Fiduciary Fund   Fiduciary  Fund       

Eliminations

Subtotal 

Subtotal 

Eliminations

Total 

Percentage 

–  1 542 409 490 –  –  1 013 189  452 931  56 396 603 – 7 844 428

(3 019 363) 1 539 390 127 – – ‐ 56 396 603 – (21 992 012) 8 297 359

(360 487) 1 636 552 815 – – – 66 468 439 62 459 972 13 981 777 43 116 045

88 342 586 (111 347 787)

187 678 222 (151 704 433)

473 645 946  1 694 101 027 (114 367 150) 2 053 379 823

392 551 891 (152 064 920) 2 293 866 794

273 521 484 (104 217 598)

455 974 195  1 533 159 816 (104 483 085) 1 884 650 926 17 671 751  160 941 211 66 449 981  1 481 067 258   84 121 732  1 642 008 469 (9 884 065) 168 728 897 1 547 517 239

357 261 464 (161 948 985) 2 079 963 405 9 884 065 – 213 903 389 922 667 305

(91 999) (19 027 456) 9 669 958 (813 415 939)

30 300 675 35 290 427 118 176 449 (624 849 934) 22 850 906 148 477 124 (566 708 601)

(9 884 065) 1 716 246 136

9 577 959 (832 443 395)

22 850 906 9 884 065 1 159 421 600  

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Schedule II. General Fund expenses For the year ended 31 December 2012 (In US dollars) 2012–2013 Programme budget utilization Strategic objectives  1  Communicable diseases 2  HIV/AIDS, tuberculosis and malaria  3  Chronic noncommunicable conditions  4  Child, adolescent, maternal, sexual and reproductive  health, and ageing  5  Emergencies and disasters 6  Risk factors for health 7  Social and economic determinants of health  8  Healthier environment 9  Nutrition, food safety and food security  10  Health systems and services 11  Medical products and technologies  12  WHO leadership, governance, and partnerships  13  Enabling and support functions  Total  Basis differences  In‐kind/in‐service expenses Tax Equalization Fund expenses Other non‐programme budget utilization  Total basis differences Total expenses – General Fund            Assessed  contributions  38 498 161 20 276 392 18 507 378 22 571 334  6 917 441 14 113 623 9 173 408 16 127 580 9 831 370 59 532 725 12 820 818 101 335 638 97 603 282 427 309 150   Voluntary funds  575 493 453 161 438 849 28 929 341 75 077 914  137 245 329 30 670 012 7 671 837 22 727 108 17 323 195 75 314 729 49 089 111 22 990 016 62 400 319 1 266 371 213 Total from  2012–2013  613 991 614 181 715 241 47 436 719 97 649 248  144 162 770 44 783 635 16 845 245 38 854 688 27 154 565 134 847 454 61 909 929  124 325 654 160 003 601 1 693 680 363 Previous bienniums Assessed  contributions  733 712  1 029 796  641 939  601 404  128 306  558 711  256 912   641 121  257 894  2 728 472  513 582  1 015 246  5 023 351  14 130 446  Voluntary  funds  37 601 247 18 330 581 1 189 587 5 980 142 26 382 358 2 093 516 1 122 547 1 745 062 1 062 505 6 877 924 2 327 560 299 262 6 010 844 Total from  2012–2013  38 334 959 19 360 377 1 831 526  6 581 546  26 510 664 2 652 227 1 379 459 2 386 183 1 320 399 9 606 396 2 841 142 1 314 508 11 034 195 Assessed  contributions  39 231 873 21 306 188 19 149 318 23 172 739  7 045 747 14 672 333 9 430 320 16 768 700 10 089 264 62 261 197 13 334 400 102 350 884 102 626 633 441 439 596   General Fund total Voluntary funds 613 094 700 179 769 430 30 118 928 81 058 056  163 627 687 32 763 528 8 794 384 24 472 170 18 385 700 82 192 653 51 416 671 23 289 278 68 411 163 1 377 394 348   General Fund  total expenses  652 326 573  201 075 618  49 268 246  104 230 795  170 673 434  47 435 861  18 224 704  41 240 870  28 474 964  144 453 850  64 751 071  125 640 162  171 037 796  1 818 833 944    44 681 506  14 533 591  6 601 885  65 816 982  1 884 650 926   

111 023 135 125 153 581

The  balance  for  General  Fund  expenses  includes  US$  62  million  of  the  approved  programme  budget  allocation  of  US$  138  million  for  the  Post  Occupancy  Charge  Fund,  which  is  transferred  to  the  Special  Purpose Fund to finance additional enabling and support functions under strategic objective 13bis.  

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Schedule III. Programme budget utilization 2012‒2013 ‒ assessed contributions For the year ended 31 December 2012 (In US dollars) Programme budget  utilization  Contingency  Remaining balance withholding Note (a) Balance after  contingency  withholding  Percentage   implementation  excluding contingency  withholding 

Programme budget  Strategic objectives  1  Communicable diseases  2  HIV/AIDS, tuberculosis and malaria  3  Chronic noncommunicable conditions  4  Child, adolescent, maternal, sexual and  reproductive health, and ageing  5  Emergencies and disasters  6  Risk factors for health  7  Social and economic determinants of health  8  Healthier environment  9  Nutrition, food safety and food security  10  Health systems and services  11  Medical products and technologies  12  WHO leadership, governance, and partnerships  13  Enabling and support functions  Total      79 186 000  45 634 000  44 809 000  55 754 000  18 568 000  37 731 000  18 753 000  32 507 000  22 359 000  145 421 000  30 751 000  202 410 000  209 957 000  943 840 000   

38 498 161  20 276 392  18 507 378  22 571 334  6 917 441  14 113 623  9 173 408  16 127 580  9 831 370  59 532 725  12 820 818  101 335 638  97 603 282  427 309 150   

40 687 839  25 357 608  26 301 622  33 182 666  11 650 559  23 617 377  9 579 592  16 379 420  12 527 630  85 888 275  17 930 182  101 074 362  112 353 718  516 530 850   

3 169 000  1 844 000  1 820 000  2 348 000  736 000  1 584 000  767 000  1 314 000  894 000  5 987 000  1 234 000  3 354 000  3 264 000  28 315 000   

37 518 839  23 513 608  24 481 622  30 834 666  10 914 559  22 033 377  8 812 592  15 065 420  11 633 630  79 901 275  16 696 182  97 720 362  109 089 718  488 215 850   

49%  44%  41%  40%  37%  37%  49%  50%  44%  41%  42%  50%  46%  45%   

Note a. Contingency withholding represents a budget reduction for non‐payment of Member States’ assessed contributions. 

 

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Schedule IV. Programme budget utilization 2012‒2013 – voluntary contributions For the year ended 31 December 2012 (In US dollars) Programme budget Strategic objectives  1  Communicable diseases  2  HIV/AIDS, tuberculosis and malaria  3  Chronic noncommunicable conditions  4  Child, adolescent, maternal, sexual and reproductive health, and ageing   5  Emergencies and disasters  6  Risk factors for health  7  Social and economic determinants of health  8  Healthier environment  9  Nutrition, food safety and food security  10  Health systems and services  11  Medical products and technologies  12  WHO leadership, governance, and partnerships  13  Enabling and support functions  Total        1 198 944 000  494 664 000  68 954 000  162 552 000  363 460 000  84 524 000  24 036 000  54 318 000  32 539 000  202 672 000  106 532 000  55 160 000  166 784 000  3 015 139 000    Programme budget  utilization  Remaining balance   575 493 453  161 438 849  28 929 341  75 077 914  137 245 329  30 670 012  7 671 837  22 727 108  17 323 195  75 314 729  49 089 111  22 990 016  62 400 319  1 266 371 213      623 450 547  333 225 151  40 024 659  87 474 086  226 214 671  53 853 988  16 364 163  31 590 892  15 215 805  127 357 271  57 442 889  32 169 984  104 383 681  1 748 767 787    Percentage   implementation    48%  33%  42%  46%  38%  36%  32%  42%  53%  37%  46%  42%  37%  42%   

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Schedule V. Expenses by major office ‒ General Fund only For the year ended 31 December 2012 (In US dollars)   Expenses  Staff and other personnel costs  Medical supplies and materials  Contractual services  Transfers and grants to counterparts  Travel  General operating expenses  Equipment, vehicles and furniture  Total expenses    419 654 257   14 590 313   104 083 874   3 424 123   58 245 137   27 847 455   4 419 553   632 264 712   HQ    195 530 085   21 018 864   34 483 399   102 569 581   37 121 003   113 732 840   8 584 953   513 040 725   AFRO    34 273 954   1 311 874   15 801 829   1 036 114   4 173 900   2 046 643   2 498 562   61 142 876     22%  20%  11%  48%  26%  60%  30%  27%  4%  1%  5%  0%  3%  1%  9%  3%  8%  32%  19%  36%  9%  14%  26%  15%    38%  4%  7%  20%  7%  22%  2%  100%  56%  2%  26%  2%  7%  3%  4%  100%  25%  12%  20%  27%  5%  9%  3%  100%  65%  0%  19%  1%  10%  5%  1%  100%  AMRO    73 466 386   33 480 261   57 087 599   77 813 236   13 416 129   26 962 469   7 269 933   289 496 013     7%  0%  6%  0%  7%  3%  4%  5%    32%  18%  28%  9%  7%  5%  1%  100%  EMRO    65 139 657   405 800   18 725 859   521 924   10 012 496   4 902 974   1 059 720   100 768 430     6%  29%  15%  7%  8%  5%  9%  9%    50%  3%  20%  11%  9%  5%  2%  100%  EURO    53 037 062   30 426 074   46 415 296   15 027 864   11 196 660   9 101 608   2 413 073   167 617 637     7%  4%  8%  6%  7%  3%  7%  6%    48%  6%  16%  11%  8%  10%  2%  100%  SEARO    60 264 916   3 966 096   24 433 432   13 401 391   10 523 767   5 634 026   2 096 905   120 320 533     100%  100%  100%  100%  100%  100%  100%  100%  WPRO    901 366 317   105 199 282   301 031 288   213 794 233   144 689 092   190 228 015   28 342 699   1 884 650 926  Total 

Percentage of expenses by expense type across major office  Staff and other personnel costs  Medical supplies and materials  Contractual services  Transfers and grants to counterparts  Travel  General operating expenses  Equipment, vehicles and furniture  Total percentage  47%  14%  35%  2%  40%  15%  16%  34% 

Percentage of expenses by expense type within each major office  Staff and other personnel costs  Medical supplies and materials  Contractual services  Transfers and grants to counterparts  Travel   General operating expenses  Equipment, vehicles and furniture  Total percentage  66%  2%  16%  1%  9%  4%  1%  100% 

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