Financial report and audited financial statements for the year ended 31 December 2012

JAF19.10 AFRICAN PROGRAMME FOR ONCHOCERCIASIS CONTROL Financial Report and Audited Financial Statements for the year ended 3L December 201.2 /" \. riq FiD+ :'{ E r gr-.- -"& fl PROVISIONAT AGENDA ITEM 17 World Health Organizationwww.who.int/apoc O Copyright African Programme for Onchocerciasis Control (WiO/.APOC), 2013. All rights reserved. Publications of the WHO/APOC enjoy copyright protection in accordance with the Universal copyright Convention. Any use ofinformation in the \NHO/APOC Finan cial Report and Audited Financial Statementsfor the year ended 3l December 2012 should be accompanied by acknowledgement of WHO/APOC as the source. For rights of reproduction or translation in part or in total, application should be made to: Office of the APOC Director, WHO/APOC,BP 549 Ouagadougou, Bwkina Faso dirapoc@oncho.afro.who.int WHO/APOC welcomes such applications. The WHO African Programme for Onchocerciasis Control Financial Report and Audited Financial Statements for the year ended 31 December 2012 AFR!CAN PROGRAMME FOR ONCHOCERCIASIS CONTROL N o ol c ul o =l|l() ul o C, o ul oz !T G uJ lU - c olr o - ul =ut Fo g oz -tr oltt E o , o - t o o. ultr J =o2 -E 2 Table of contents Introduction Certification of the financial statements for the year ended 3l December 2Ol2 . Opinion of the External Auditor Statement I: Financial Position Statement II: Financial Performance Statement III: Changes in Net Assets/Equity. . Statement [V: Cash Flows Statement V: Comparison of Budget and Actual Amounts Notes to the Financial Statements 1. Basis ofpreparation and presentation . 2. Significant accounting policies 2.1. Cash and cash equivalents . .. . ...... 2.2. Accounts receivable. 2.3. Deposit 2.4. Property, plant and equipment... 2.5. Accounts payable and accrued liabilities 2.6. Employee benefits 2.7. Provision and contingent liabilities 2.8. Contingent assets . .. 2.9. Revenue. 2.10. Expenses 2.11. Fund accounting 2.12. Segment reporting 2.13. Statementof cashflows . .. . 2.14. Budget comparison to actuals 3. Note on the implementation of IPSAS and opening balance adjustments 3.1. Adjustments to net assets/equity 4 6 7 10 11 72 72 13 74 14 15 15 15 15 15 76 16 77 77 .77 .17 18 18 18 18 19 20 4. Supporting information to the statement of financial position 4.1. Cash and cash equivalents 4.2. Staffreceivables 4.3. lnter-enti$r receivable 4.4. Deposit 4.5. Property, plant and equipment 4.6. Land and Building 4.7. Accounts payable 4.8. Staff payables 4.9. Accrued staff benefits 4.9. Accrued liability 5. Supporting information to the Statement of Financial Performance 5.1. APOC Trust Fund contributions 5.2. Voluntary Contributions 5.3. Finance Revenue 5.4. Miscellaneous Income 5.5. Expenses 6. Utilization of Programme Budget 7. Administrative waivers, amounts written-off and ex-gratia payments 8. Related party and other senior management disclosures 9. Events after the reporting date 10. Contingent liabilities, commitments and contingent assets 11. Operating Leases Commitments Schedule I: Statement of Performance by lvlajor Funds Schedule II: Other Voluntary Funds Expenses 21 21 27 21 21 21 22 22 22 23 29 29 29 29 29 30 30 31 11 77 33 33 7) 34 35 (t. o G. Glll o =l{o ut o (, o ut o2u E lll uIF G oIT oF - ul - lrlt!fo 6 - 2 IL olll E oD o - l-E oo utE s o2 - lt o{} s J(} trF o fr s u ar l,Ll Utr u o aE 5 o 0r& z g cruq 3 ol oN Elll o =uto ul o (' o ul o2 ul E ut lll - E olt o 2 ut =ut Fo s o2 - l! olrl E of oz tr, o o. ulE Jg o2 -lr 4 Introduction The financial report of the World Health Organization-African Programme for Oncho- cerciasis Control (WHO/APOC) for the year 2072 is prepared by APOC Management for presentation to the 19th Sesslon of the loint Action Forum (JAF), the governing board of the Programme,ln accordance with the relevant regulations. In line with the continuing process of simplification in the presentation of the flnancial information provided by the Programme, the present report is divided into two parts. The first part presents the principal flnancial statements;the second part contains the notes to the accounts and additional supporting information related to the financial year. APOC's full implementation of IPSAS in 2012 further raises the standard of APOC's financial reporting.IPSAS requires increased transparency which provides a better understanding of APOC's financial performance and health. Enhanced financial information supports governance, the management of assets and liabillties, and facilitates decision making. Complying with IPSAS also necessitates an enhanced system of internal control to support the additional financial reportlng requirements. The most significant changes arising from the full implementation of IPSAS in the 2012 financial statements can be presented as follows: . For the first time, the full actuarial valuation for after service health insurance (ASHI) is recognized in APOC's accounts. This includes the estimated future cost of health insurance for employees and retired staff. The total liabllity at 31 December 2012 is estimated at US$ 10.3 million. This liability is unfunded and is reflected as a Iong-term accrued staffliability. A funding plan through increased contributions is ln place to fund the unfunded portion of the liabillty and this plan is expected to be fully funded by 2O4O.ln addition, the full actuarial valuation for other staff benefits such as accrued annual leave, compensation for death and disability and termina- tion benefits e.g. repatriation travel and grants are also recorded as a liability in the accounts, for a total liability of US$ 1.7 milllon, of which US$ 0.5 mlllion is unfunded. . Property, plant and equipment represent buildings,land, vehicles, fixtures and fittings, and equipment. Under IPSAS, these items are recognized as assets and subsequently amortized over their useful lives. However, due to the time required to obtain valuations and to establish residual useful lives, the full value of these assets and accumulated asset depreciation will only be reported after a transitional period of up to five years as is permitted under IPSAS. In order to prepare for this requirement, a full record of all property ownership arrangements is being accumulated. As at 31 December 2012, two asset classes (Land and Building) were included to comply with IPSAS requirements. . IPSAS requires the use of full accrual accounting so that all revenues and expenses are recognized in the financial statements in 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 201^2, an accrual of US$ 1.7 million has been made to record goods and services received and not yet paid. The implementation of IPSAS currentlyhas no impact onthe preparation of the budget which is still presented on cash basis. The budget also continues on a biennium basis whereas expense is reported on an annual basis. The Plan of Action and Budget (PAB) for year 2012 derives from the biennium PAB 2012- 2013 that is based on the Programme's Strategic Plan of Action and Budget 2008-2015, with an accompanying Addendum and the additional budget for intensification of APOC operations in the framework of the shifting from control to elimination of Onchocerciasis in Africa approved by the JAI respectively in 2007, 2008 and in 2011which outlines the Overall Programme Objective "To have established by 2075,a countryJed system capable of eliminating onchocerclasis as a public health problem in all African countries endemic for onchocerciasis - both those within the geographical area covered by APOC's mandate - and those in the ex-OCP (Onchocerciasis Control Programme in West Africa) area that are of concern. The principal aim is to safeguard the more than US$ 2.5 billion investment in onchocerciasls control by the countries, donor community and partners, and sustaln the gains made towards the elimination of the disease as a public health and socio-economic problem in Afrlca," as weil as the Seven Specific Objectives of the Programme: . To establish sustainable onchocerciasis control programmes in all African countries where they are needed; . To implement onchocerciasis control activities in conjunction with other health interventions (co-implementation); . To determine when and where ivermectin treatment can be stopped and to provide guidance to countries on preparing to stop ivermectin treatment; . To reduce the risk of transmission of onchocerciasis from former OCP countries whose epidemiological and entomological situation threatens neighbouring countries in which the disease has been brought under control; . To ensure that governments ultimately take full responsibility for onchocerciasis control; . To cease all APOC operations without jeopardizing the past achievements of OCP and APOC; . Nlainstreaming gender in APOC operations. To achieve these specific objectives, APOC aims to establish sustainable community- directed ivermectin treatment in the endemic areas of the countries concerned, reinforced by vector elimination in some selected and isolated foci. To thls end, the governance, management, operations and donor fund raising for APOC are closely monitored, guided and/or conducted by the Committee of Sponsoring Agencies. The World Health Organization (WHO) is the Executing Agency of the Programme while the World Bank is the Fiscal Agent. In the field of operational research, collaboration has been established with the UNICEF/UNDP/World Bank/\MHO Special Programme for Research and Training in Tropical Diseases (TDR), to the benefit of onchocerciasis control throughout Africa. N o 6t tr ut o =ut(, ur o g, o ut o2 UJ tr uI ut - tr olt o - ut - UI Fo s o - =lt o ut E oD o2 G oclllG s oz - lt 5 Certification of the financial statements for the year ended 31 December 2Ol2 Certification of the financial statements for the year ended 31 December 2012 The financial statements for the year ended 3 1 December 2012, together with the notes to the statements and supporting schedules, have been reviewed ans are approved. AJ &? ru Nicholas R. Jeffreys Comptroller l2 April 2013 Dr Jean-Baptiste Roungou Director, WHO/APOC 6t o 6a E uto - uto uI o (l o ut o - uI G lrt utIF Golr ol- -l! - lll k g, o2 - E o ul ts o3 o - Eo& .IE g o2 2 E o o- s J F o(.) a U' s$(r uJ(, f u LT' a E z.{ =IL{d 6 Opinion of the External Auditor Republic of the Philippines COMMISSION ON AUDIT Commonwealth Avenue, Quezon City, Philippines LETTBR OF TRANSMITTAL 8 May 2013 Dear SirMadam, I have the honour to present to the Nineteenth Session of the Joint Action Forum, the Extemal Auditor's report and opinion on the financial statements of the African Programme for Onchocerciasis Control (APOC) for the financial year ended 31 December 2012. I record my appreciation to the World Health Assembly for the honor and privilege to serve as extemal auditor of WHO and its non-consolidated entity - APOC. Yours sincerely, Pulido Tan Ch on Audit blic of the Philippines External Auditor The Chairperson of the Nineteenth Session of the Joint Action Forum African Programme for Onchocerciasis Control Ouagadougou, Burkina Faso ffi Gl o C{ E ul o =uto ut o G, olll ozu E ut ut -F E olt o 2 Irl - uttF a, 6z 2 IL ort ts a) o - E oAl!c s(, 2 - lt -0tr3 J0 F ,l g t) (") t, 0 tx ou ut 5 E o o( G I 7 ol oN E ulE =ulI ut o o) o ltt o - ut tr lu utT c olr o - ut =llt F<o s o - z E o ul E o = o - c oc ul G, g oz 2 r 8 Opinion of the External Auditor (continued) Republic odthe Philippines COMMISSION ON AUDIT Commonw'ealth Avenue. Quezon City. Philippines INDEPENDENT AUDITOR'S REPORT The Joint Action Forum African Programme for Onchocerciasis Control Report on the Financial Statements We have audited the accompanying financial statements of the African Programme for Onchocerciasis Control (APOC), which comprise the Statement of Financial Position as at 3l December 2012, and the Statement of Financial Performance. Statement of Changes in Net Assets/Equity, Statement of Cash Flows and Cgmparison of Budget and Actual Amounts tbr the year then ended and the Notes to the Financial Statements. Management's Responsibility for the Financial Statements Management is responsible tbr the preparation and fair presentation of these financial statements in accordance with the International Public Sector Accounting Standards (IPSAS). This responsibility includes: designing. implementing and maintaining internal control relevant to the preparation and l'air presentation of financial statements that are free from material misstatement, whether due to fraud or erron selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor's Responsibility Our responsibility is to express an opinion on these flnancial statements based on our audit. We conducted our audit in accordance with the International Standards on Auditing issued by the International Auditing and Assurance Standards Board. Those standards require that we comply with ethical requirements and plan and perlbrm the audit to obtain reasonable assurance whether the financial statements are free tiom material misstatement. An audit involves pertbrming procedures to, obtain audit evidence about the amounts and disclosures in the financial statements. -l-he'procedures selected depend on the auditor's judgmcnt, including the assessment of the risks of material misstatement ol the t'inancial statements, whether due to fraud or error. In making those risk assessments. the auditor considers internal control relevant to the entity's preparation and fair presentation of the l'inancial ir IIi t l I! i t t t t , statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of APOC as at 3l December 2012, and its financial performance, changes in net assets/equity, cash flow and comparison of budget and actual amounts, in accordance with IPSAS. Report on Other Legal and Regulatory Requirements Further, in our opinion, the transactions of APOC that have come to our notice or which we have tested as part of our audit have, in all significant respects, been in accordance with the WHO Financial Regulations. In accordance with Regulation XIV of the Financial Regulations, we have also issued a Long- lbrm Report on our audit of APOC. M. Pulido Tan ission on Audit of the Philippines External Auditor Quezon City, Philippines 8 May 2013 t : tt t t ; t i i i , t $ t , a i i ti ;: i L ' ; ,: :l 6l oN E ut o - ul(, u o (l o ut o2 ut E ul l! a G olt oF - ut =u Fo s o2 - IL o ut ts a , o - c, oA utc so - - E 6 * Js 30i) ce fr st) LJ G (J ou UJ E E t* tr s rtt4 I 10 Statement I: Financial Position As at 3t December zorz (in US dollars) assets Cash and cash equivalents Accounts receivable Staff receivables Other receivables I nterentity receivable Total curent assets Non-current assets Deposit Propery, plant and equipment Total non-curent assets TOTAT ASSETS Current liabilities Accounts payable Staff payables Accrued staff benefits Accrued liability Total current liabilities Non-current liabilities Accrued staff benefits - non-current Total non-curent laabilities TOTAL LIABILITIES Net assets/equlty APOCTrust Fund Voluntary funds Contributors - other TOTAL NET ASSETS/EQUITY 472,423 0 51,185 0 7,018,925 7,542,533 5,157 294,035 299,192 7,941,725 304,778 1 05,r 30 777,'.t76 1,704,860 2,891,944 11,184,364 't't,184,3il 14,O76,3O8 :' 3,s63,277 1,594,738 (11,392,598) (o23+s83) 250,213 1,024,602 29,946 48,674 3,2 t8,108 4,571,543 5,157 303,933 309,090 4880,633 283,6r 3 1't2,557 747,'t22 175,997 1,319,189 10,807,897 10,807,897 12,127,086 1,870,863 't,868,024 (10,98s,340) (7,246,4531 4.1 4.2 4.3 4.6 4.7 4.8 4.9 4.4 4.5 4.8 7,941,725 4880,633 Notes 1 January20l2(Restated) 31 December 2012 The statement of significant accounting policies and the accompanying notes form part of the financial statements. 6a o6l E tu o - ulo ut o o o ul o -lrt E lI ltt a EoIL oFz ul - l! k o oz 2 E o ul ts of o - FEoo utE so - - lt 6 o ls F- o 6 6 s() !.lJ o r oz o(I oL u, E E o a u, t{ 31 December 2012 Statement II: Financial Performance For the year ended 3t December zon (in US dollars) REVENUE Trust Fund contributions Voluntary contributions Finance revenue Miscellaneous income TOTAL REVENUE EXPENSE Staff and other personnel costs 5.1 5.2 5.3 5.4 21,580,836 184,648 204,006 75,173 22,O44,663 8,373,'t't4 4,952,899 2,986,696 2,686,857 1,151,262 872,067 9,898 21,032,793 Transfers and grants to counterparts General operating expenses Travel Equipment, vehicles and furniture Contractual services Depreciation TOTAL EXPENSE The statement of significant accounting policies a nd the accompanying notes form part of the financial statements. Comparative information for the previous year has not been provided as permitted in the first year of IPSAS adoption Notes 5.s o. o(tl Ggt E - u o ul o C, o lu o - ut E ut lI aF G olr 1r,Fzu =rt E a, 6z z lt a ut E o , o - E oo utE 3 oz 2 lt oo ;s F O{] : s$tr u! c x$ & E s I qI L 11 31 December 2012 2012 Surplus/ (Deficit) 1 January 2012 (Restated) Statement III: Changes in Net Assets/Equity For the year ended 3t December zotz (in US dollars) Funds: APOCTrust Fund Voluntary funds Contributors - other The statement of significant accounting policies and the accompanying notes form part of the fi nancial statements Statement IV: Cash Flows For the year ended 3t December zotz (in US dollars) Total Net Assets/Equity (6,234,583) 1,01 1,870 (7,246,4531 3,563,277 1,594,738 (11,392,s98) 1,692,4't4 (273,286) (407,258) 't,870,863 1,868,024 (10,985,340) 1,011,870 9,898 1,024,@2 (21,239) 48,674 (3,800,817) 21,165 (7,427) 406,521 1,528,963 (789,660) 222,21O 250,213 CASH FLOWS Surplus FROM OPERATING ACTIVITIES Depreciation Decrease in accounts receivable lncrease in staff receivables Decrease in other receivables Increase in lnter-entity receivable lncrease in accounts payable Decrease in staff payables lncrease in accrued staff benefits lncrease in accrued liabilities Net cash flows from operating activities Net lncrease in cash and equivalents Cash and cash equivalents at beginning of the year . ..rt: .: 472,423 31 December 2012 The statement of significant accounting policies and the accompanying notes form part of the financial statements. N o c{ E ut o - lrl(, ul o G, o uI o -l! E ur ul - G oltltFz ut - ul Fi(o s(, - z E o ul ts o , o - Fc oc ulG s(, z 2 E a: 0 o-g J F o o g o 3 o 6. ul o ox 70 u lu E o0 =u 12 Statement V: Comparison of Budget and Actual Amounts For the year ended 3t December zotz (in US dollars) Plan of Action and Budget (PAB) Percentage implemen- tation Specific objective BalanceExpense 4 To establish sustainable onchocer- ciasis control programmes in all African countries where they are needed 2 To implement onchocerciasis control activities in conjunction with other health interventions (co-implementation) 3 To determine when and where ivermectin treatment can be stopped and to provide guidance to countries on preparing to stop ivermectin treatment To reduce the risk of transmission of onchocerciasis from former OCP countries whose epide- miological and entomological situation threaten neighbouring countries in which the disease has been brought under control. 8,256,730 6300,077 1,956,653 760/o 2,408,731 2,074,965 333,766 860/o 5,286893 4,950,216 336,677 94o/o 849,208 749,671 99,537 88o/o 79o/o 5 6 7 8 To ensure that governments ultimately take full responsibility for onchocerciasis control. 1,334050 1,294,066 39,984 97o/o To cease all APOC operations without jeopardizing the past achievements of OCP and APOC. 1,221,155 990,556 230,s99 81o/o Mainstreaming gender in APOC operations. 352,308 188,386 163,922 53o/o Provide adequate human resources, materials and equipment at APOC Secretariat for efficient administration and management of the Programme 4,234,083 3,340,485 893,598 Programme budget Utilization 23,943,158 19,888,422 't,'t44,37'l 4,O54,736 Basis differences The statement of significant accounting policies and the accompanyi ng notes form part of the financial statements. Total Expenses (Statement ll) 21,032,793 No G. o3t E ut to - ut(, ut o Gl ou o2 tu E ut ut aF G oE 6F -rt E ul Elio s(,2{z lt o ut ts op o - E o a. lrlE !! oz - ocg Ja F fll & s E a c ou u =E{ u otrA Z .( E L 13 ',4 Notes to the Financial Statements (in US dollars) 1. Basis of preparation and presentation The Financial Statements of the World Health Organization-Afrlcan Programme for Onchocerciasis Control (WHO/APOC) have been prepared in accordance with Interna- tional Public Sector Accounting Standards (IPSAS) using the hlstorical cost convention. 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 APOC. This includes the preparation of financial statements on an annual basis. The adoption of the new accounting policies under IPSAS has resulted in changes to the assets and liabilities recognized in the Statement of Financlal Position. Accordingly, the last audited Statement of Financial Posltion as at 31 December 2011 and the resultlng 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 01 January 2012 (Restated). The net effect of the changes arlsing from the adjustments to the opening balance amounted to a decrease in net assets/equity of US$ 12,198,487. Comparative lnformation for the previous year has not been provided as permitted in the first year of IPSAS adoption. These financial statements have been prepared under the assumption that APOC is a going concern, will continue in operation, and will meet its mandate for the foreseeable future (IPSAS 1). Functional currency and translotion of foreign currencies The functional and reporting currency of APOC is the United States Dollar (US$). forelgn currencytransactions are translated into US$ at the prevailing Unlted Nations Operational Rates of Exchange (UNORE), which approximates the exchange rates prevailing at the dates of the transactions. The UNORE are set once a month, and revised mid-month if there are significant exchange rate fluctuations relating to individual currencies. Monetary assets and liabilities in currencies other than US$ are translated into US$ at the prevailing UNORE rate of the first day of the subsequent month. Resulting gains or losses are accounted for in the Statement of Financial Performance. Moteriality and the use of judgments and estimates Materiality is central to APOC's financial statements. APOC's accounting materiality review process provides a systematic approach to identify, analyze, evaluate, endorse and periodically review materiality decisions crossing a number of accounting areas. The financial statements include amounts based on judgments, estimates and assump- tions by management. Changes in estimates are reflected in the period in which they become known. N o G' Gu o - ul(, lu o g, o[lo - ut E u ut - E olt oFz ut - ult at 3(, - = lt ou E a , o - G oclllE g o - 2 IL S J F o 6 s o UJ o z o u- UI E E otr qI t; Financial stotements 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 Flows; . Comparison of Budget and Actual Amounts; and . Notes, comprising a summary of significant accountlng policies and other relevant informatlon. Use of transitionol provisions and early adoption of accounting policies As permitted on the initial adoption of IPSAS, transitional provisions have been applied in the following areas: . Comparatlve information has not been provided in the Statements of Financial Performance and Cash Flows (IPSAS 1); . Transitlonal 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). 2. Significant accounting policies 2.L. Cash and cash equivalents Cash and cash equivalents are held at nominal value and comprise of cash on hand and cash at banks. 2. 2. Ac c ounts re c eivable 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 twelve months of the reporting date, while non-current receivables are those that are due more than twelve months from the reporting date of the flnancial statements. 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 receivables is recognized when there is a doubt that the receivable may be impaired. Impairment losses are recognized in the Statement of Financlal Performance. 2.3. Deposit Deposits are classified as non-current assets as they are paid and held on account over the life of the contract. 2.4.Property, plant and equipment Property, plant & equipment (PP&E) with a value greater than US$ 5000 are recognized as non-current assets in the Statement of Financial Position. They are lnitially recognized N o6t E tuE =lrl(, u o !! o ut oa ut G lrl uEF E oE o z ut =utkFo 6 - 2 lt olI E o3 o - G oA utG s o2 = tt o o.g J l* {J g $: s & It, {.}0I o q gj E Eq c o (L ,{ o lr 15 N oN tr ut o =uto ul o !, o ul o =ut tr ut lllI tr olt o - ul =ut 3o s() - = E o ul E o , o - tr otr uttr 3 oz z li 16 at cost, unless acquired through a non-exchange transaction, in which case they are recognlzed at fair value at the date of acquisition. PP&E are stated at historical cost,less accumulated depreciation and any impairment losses. APOC considers all its PP&E to be non-cash generating assets. Depreciation is calculated on a straight-line basis over the asset's useful life except for land which is not subject to depreciation. PP&E is reviewed annually for impairment to ensure that the carrying amount is stil considered to be recoverable. The estimated useful lives for PP&E classes are as follows: Land Buildings - Permanent Bulldings - Mobile Fixtures and fittings Vehlcles and transport Office equipment Communicatlons equipment Audio visual equipment Computer equipment Network equipment Security equipment Otherequipment N/A 60 5 5 5 3 3 3 3 3 3 3 The transitional provision has been applied in the initial recognition of PP&E which were purchased or donated before 01lanuary 2O|Z.Except for land and building, all property, plant and equipment assets acquired prior to 01 January 2012 were expensed at the date of purchase and have not been recognlzed as assets in 2012. Land and building was previously capitalized and reported under UNSAS. The effect of the initial recognition of PP&E is shown as an adjustment to the opening balance of accumulated surplus or deficit. 2.5. Accounts payable and accrued liabilities Accounts payables are financial liabilities for goods or services that have been received by APOC, but not paid for. Accrued liabilities are financial liabilities for goods or services that have been received by APOC and which have not yet been paid for or invoiced. Accounts payable and accrued liabilities are recognized at cost, as the effect of discounting is considered immaterial. 2.6.Employee benefits APOC recognizes the following categories of employee benefits: . Short-term employee benefits which fali due wholly wlthin 12 months after the end of the accounting period in which employees render the related service; . Post-employmentbenefits; . Other long-term employee benefits;and . Terminationbenefits. Asset Class Estimated Useful Life APOC is a member organization participating in the United Nations Joint Staff Pension Fund (UNJSPF), which was established by the United Nations General Assembly to provide retirement, death, disability and related beneflts to employees. The Pension Fund is a funded, multi-employer defined benefit plan. As specified ln Article 3(b) of the Regula- tions 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 speclalized agencies. The plan exposes participating organizations to actuarial risks associated with the current and former employees of other organizations participating in the Fund, with the result that there is no consistent and rellable basis for allocating the obligation, plan assets, and costs to individual organizations participating in the plan. APOC and the UNISPF, in line with the other participating organizations in the Fund, are not in a position to identify APOC 's proportionate share of the defined beneflt obligation, the plan assets and the costs associated with the plan with sufficient reliability for accounting purposes. Hence APOC has treated this plan as if lt was a defined contribution plan in line with the requirements of IPSAS 25. APOC's contributions to the plan during the financial period are recognized as expenses in the statement of financial performance. 2.7. Provision and contingent liabilities Provisions are recognized for future liabilities and charges where APOC has a present legal or constructive obligation as a result of past events and it is probable that APOC 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 APOC. 2.S.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. 2.9.Revenue Revenue comprises gross inflows of economic benefits or service potential received and receivable by APOC during the year, which represents an increase in net assets. APOC recognizes revenue following the established criteria of IPSAS 23, "Revenue from Non- Exchange Transactions." Revenue mainly comprises voluntary contributions. Revenue from voluntary contributions rs recorded when a binding agreement is signed between APOC and the donor. APOC considers that whiie there are restrictions on the use of contributions, these restrictions do not meet the definition of a condition as described under IPSAS 23. 2.7O.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 liabillties that result in decreases in net assets/equity. APOC recognizes expenses at the point where goods have been received or services rendered (delivery principle) and not when cash or its equivalent is paid. o. o Gl E !nE - rt olll o !, o ut o - ul G ttl l!tF c oE oF -u - u E o, 52 z IL ou E a3 oz E ocrta 6z - lt o o s J o F $ U a &{(J i.u o o z G tr r x =(r u o ct o" z alt 17 18 2.11. Fund accounting Fund Accounting is a method of segregating resources into categories, (i.e. funds) to identify both the source and use of the funds. Establishment of such funds helps to ensure better reporting of revenue and expenses. APOC recognizes the following funds: . APOC Trust Fund - this fund summarizes revenue and expense funded from the World Bank trust fund. . Voluntarl Funds -this fund summarizes revenue and expense for all other voluntary contributions. . Contributors - other - this fund represents the movement in the asset and Iiability accounts of APOC resulting from accrued staff benefits, property, plant and equip- ment, depreciation and finance revenue/expenses. 2.12. Segment reporting APOC does not have any segment to report. 2.13. Statement oJ cash flows The Statement of Cash Flows (Statement IV) is prepared using the indirect method. 2.14. Budget comparison to actuals APOC's budget and accounting bases differ. Budgets within APOC are approved on a modified cash basis, rather than the full accrual basis of IPSAS. In addition, budgets are prepared on a biennial basis. 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 and entlty differences. Basis differences include the depreciation of assets, full recognition of provisions and other non-programme budget utilization. There may also be differences in formats and classification schemes adopted for presentation of financial statements and the budget. As required by IPSAS 24,the reconciliation of actual expenses to budget with the statement of financial performance is provided in Statement V. APOC's budget is adopted by the JAF on a biennial basis. Therefore there are no timing differences to report in the first year or second year of the biennium. ({ o Gl GlllE =ut(, l{ o o olrl o - ul G ul tuTF E o l& ttF -lll -[l 3o :< o2 - lt o ul ts o , a - FEotrlIE s o2 2 lt 6 S J F ()(J a $ o o o I ul E il a t! 3. Note on the implementation of IPSAS and opening balance adjustments The 2012 financial statements are the first financial statements prepared under the full accrual basis of accounting and which comply with the requirements of IPSAS. APOC'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 Assets, Liabilities, Reserves and Fund Balances which have been restated to incorporate adjustments made due to changes in accounting policies and other adjustments made at 01 January 2072 as a result of the implementation of IPSAS. Refer to Note 3.1 for additional details of the IPSAS related adjustments. Summary of IPSAS opening balance adjustments (in US dollars) Current assets Cash and cash equivalents Accounts receivable Staff receivables Other receivables lnter-entity receivables Total curent assets Non-current assets Deposits Land and buildings Total non-curent assets TOTAL ASSETS Current llabllltles Accounts payable Staff payables Accrued staff benefits Accrued liabilities Total curent liabilities Non-current tiabititles Accrued staff benefits Total non-curent liabilities TOTAT LIABILITIES ASSETS/EQU|rY :. APOCTrust Fund Voluntary funds Contributors - other TOTAL NET ASSETS/EQUITY 226,746 1,024,602 48,674 3,728,614 5,028,636 5,157 650,347 655,504 5,694,140 572,067 572,067 160,038 160,038 732,105 650,347 1,758,"t56 2,543,531 4,952,034 23,467 250,2't3 1,024,602 29,946 48,674 3,218,108 4,571,543 29,946 (s r 0,s06) (457,O93) 5,157 (346,4',t4) 303,933 (346,414) 309,090 (803,507) 4,880,633 (288,4s4) 283,613 112,557 112,557 747,122 747,122 175,897 175,897 747,122 1,319,189 10,647,859 10,647,859 11,394,981 10,807,897 10,807,897 12,127,086 1,870,863 1,868,024 (10,98s,340) 17,246,4531 1,220,516 109,868 (13,s28,871) (12,198,4871 NET 31 December 201 1 January 2012 (Restated) TOTAL LtABtLtTtES AND NET ASSETS/EQUITY 5,684,140 (803,506) 4,880,633 Adjustmentsto L openingbalance l' Note 3.1 I 6t oN Glll o =lllolll o Gt o ut o - ul E rt ut -F E ol! o 2 irl -II E o 6 - 2 IL ou ts o3 o - E oA ltrtr s(, - - lt 6 o o"3 J o IF o o {,} l, *$ lll o I(.) o It l, € E{ o o o.{I c[ w 19 3.1. Adjustments to net assets/equity In order to comply with IPSAS, adjustments were required for the preparation and presentation of opening balances as at 1 January 2072 from the balances reflected as at 31 December 2011 in the Statement of Financial Position. Net assets of APOC changed as at 1 January 2012 due to changes in accounting policies with the adoption of IPSAS. The changes totaled US$ 12,198,487 as summarized below: Adjustment to employee benefit liability (ASHI) Adjustment to employee benefit liability (terminal payments) Adjustment to employee benefit liability (fund for compensation) Adjustment to land and building - accumulated depreciation Adjustment to education grant advance Adjustment per bank reconcilation Total Adjustments (9,980,280) (1,0r6,94s) (397,756) (346,414) 29,946 (487,038) (12,198,4871 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 01 January 2012. The valuation representing the after- service health lnsurance for APOC's staff has been adjusted by US$ 9,980,280. The valuation for terminal payments has been adjusted by US$ 1.,016,945. The valuation for staff compensation funds is US$ 397,756. Adjustment to land and building: APOC has adopted the transitional provision for property, plant and equipment. The only asset class recognized as at 1 January 2072 is the land and building for APOC. Under UNSAS, land and buildings Headquarters and regional offices were included in the financial statements. An adjustment for accumu- Iated depreciation for the Headquarter land and building was also recognized as an adjustment to net assets/equity. Adjustment to staff receivables: An adjustment of US$ 29,946 was required to the opening net assets/equity to recognize the Education Grant advance. Adjustment per bank reconciliation: Following the reconciliation of the APOC bank account, the advance from WHO recorded under inter-entity account was expensed and therefore the opening net assets/equity was reduced. N o Gl E uto =utoII o (, o ul o2 ut G ul ul -F E oE .D 2 ul - lr| k o (,2 z E o ulF o5 o - c oo tuG (, 2 2 lt u c!g J0 trF s$t s u I o d. L ul !i x a. 4 9tr 4,952,O34, Opening balance netassets/equity- restated - 1 January2012 4. Supporting information to the statement of financial position 4.1. Cash and cash equivalents Cash and cash equivalents is comprised of cash, cash at banks and bank deposits. Cash and cash equivalents are held for the purpose of meeting the short-term cash require- ments of APOC, rather than for longer term investment purposes. .2.Staff receivables In accordance with APOC's Staff Rules and Regulations, staff members are entitled to certain advances including salary education, rental and travel advances. The education grant balance represents advances made to staff for the scholastic year 2072/13. 31 December 2012 1 .lanuary 2012 RestatedStaff receivables Salary and rental advance Travel advance recovery Other employee receivable Education grant advance 2 3,216 20,739 1,05 r 6,'t79 29,946 29,946 4. 3. Int er - entity r e c eiv able WHO hosts APOC through an admlnistrative service agreement. Funding for APOC as well as payroll and global payments are made by WHO on behalf of APOC. Balances are held centrally by WHO and invested on behalf of APOC in accordance with WHO rules and practices. 4.4.Deposit This amount represents a deposit for utilities. 4.5.Property, plant and equipment APOC has invoked the transition provision under IPSAS 17 which allows a period of up to 5 years to fully recognize property, plant and equipment (PP&E). As at 31 December 2012, APOC has recognized Land and Buildings. AII other assets were expensed at acquisition. As per APOC's policy, PP&E with a value Iess than US$ 5000 are immediately expensed. Total staff receivables 51,1 85 (\l o6l E utE -l!(, ut o G, olI o - ul G ul rtTF Eot! oFzlll - u k o 6 - - IL oln ts o , oz E oGlltG s(,2 = II 6 3 s F ag u 0 o e ar =tr o cc o{ G. l& 21 4.5.Land and Building The total value recognized net of accumulated depreciation is explained in the table below. 31 December 2012 1 January 201 2 RestatedLand and building 4.7. Accounts payable Accounts payable represent the total amount due to suppliers by major office as at 31 December 2012. These amounts relate to various short-term liabilities as detailed below. Land Buildings Accumulated Depreciation of buildings Payables to suppliers Non-Staff Meeti n g Partici pants Other Payables Salaries Held - net Bank Returns - Salaries Travel Deduction 56,495 593,852 (356,312) 299,423 1,111 4,244 37,182 20,783 47,165 56,495 593,8s2 (346,414) 55,681 23,764 33,112 273,013 10,600 283,613 a.8.Staff payables Staff payables represent the total amount outstandlng to staff as at 31 December 2012. Salaries payable consists of balances due to staff, pending the finalization of clearance certificate. Bank returns are balances due to staff for which the payment is pending the receipt of updated bank account information. Travel deduction represents amounts deducted from the employees'monthly salaries in relation to travel claims not submitted within 60 days of travel date, as per the internal travel regulation and rules. Total staffpayables 105,130 112,557 Accounts payable 31 December2012 1 January 201 2 Restated Staff payables 3t December2012 1 January 201 2 Restated 6. oN Gu o - lll() lu o gl o ul o2 lu E lrl lltE E olt oF -lll - ltt E o s o - <t2 E o ut ts o3 o - Eoo ulG s oz z E 0 L S J a( Fz o u t, o u.l o o o o g u u, d It {5 o- z c f ;4;ri 294,O35Total land and building Total accounts payable 3O4,778 4. 9. Ac crue d stalf b e nefits Accrued staff benefits include Terminal Payments (TP), Staff Health Insurance Liabilities (ASHI), and the Speclal Fund for Compensation (SFFC). The Terminal Payment fund is used for repatriation benefits and accrued annual leave. Staff Health Insurance liabilitles represent the after service health benefits provided to previous staff members. The Special Fund for Compensation is used to settle liabilities due to service incurred upon death or disability. Accrued staff benefits - Gurrent Terminal payments Special fund for compensation Total accrued staff benefits - current Acrrued staffbenefits - 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 480,396 395,475 10,308,493 11,184,364 1,246,130 406,917 10,308,493 765,734 't1,442 777,176 73s,887 11,235 747,122 441,096 386,521 9,980,280 10,8O7,897 1,176,983 397,756 9,980,280 11,961,54O I 1 ,555,019 Terminal paymentsfund This fund was established to finance the terminal emoluments of staff members, including repatrlation grants, accrued annual leave, repatriation travel and removai on repatriation. It is funded by a budgetary provislon set for 2012-2073 of salary and post adjustment. Liabilities arising from repatriation benefits and annual leave are determined by inde- pendent consulting actuaries. However, the accrued leave is calculated on a walk-away basis and, therefore, is not discounted. The latest actuarial study (as at 31 December 2012) estimated the full Terminal Payment IiabilitytobeUS$ 1,246,130 (short-termUS$765,734andlong-termUS$ 48O,396million). This calculation did not include costs for the end of service grant, and separation by mutual agreement on abolishment of posts. The obligation for accrued annual leave was US$ 653,797 which is included in short term liability. Special fund for compensation Inthe event of death or disablement, attributable to the performance of official duties, of an eligible staff member, the Special Fund for Compensation (SFFC) covers all reasonable medical, hospital, and directly related costs, as well as funeral expenses. In addition, the Fund will also provide compensation to the disabled staff member (for the duration of the disability) or the survrving family members. Accrued staff benefits 31 December2012 1 January2012 (restated) TOTAT ACCRUED STAFF BENEFITS 6t o6. &lllE - ut o uto g, o ut oz ut E ut uaF E oL IAF -l! - utl- Fo o - 2 l! o|rl E oI oz l-E oE utG s o2 - lt 6 o. s J0tFz o ag (.1 lll {.r 3 o s tt u, E lr o ct(L 9 crk{ 23 24 APOC accounts for the Special Fund for Compensation as a post-employment benefit. All gains and Iosses are immediately recognized upon adoption of the standard. Thereafter, galns and Iosses (unexpected changes in surplus or deficit) are recognized overtime via the Corridor Method. Under this method, amounts up to 10% of the DBO are not recognized in expense, so as to allow galns and losses the reasonable possibility of offsetting over time. Gains and losses over 10% of the DBO are amortized over the average remaining service of active staff expected to receive each benefit. For accounting purposes, the plan is considered unfunded (Liability is not reduced by plan assets). The total actuarial liability at 31 December 2012 is US$ 406,977. Staff health insurance fund APOC accounts for the After Servlce Health Insurance as a Post-Employment Benefit. AII gains and losses will be recognized upon adoption of IPSAS 25. Thereafter, gains and losses (unexpected changes ln 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 in expense, so as to allow gains and losses the reasonable possibility of offsetting over time. Gains and losses over 10% of the defined benefit obligatlon are amortized over the average remaining service of active staff expected to receive each benefit. The Defined Benefit Obligations (DBOs) as of 3l December 2012 were determined by professional actuaries, based on personnel data and past payment experience provided to staff. At 31 December 2Ol2 the unfunded defined benefit obligation amounted to US$ 10,308,493 for after-service health insurance. Further details on the Staff Health Insurance Fund can be found in the Staff Health Insurance Annual Report. 6. o 6a E uto - u(, ul o (, o ul o2 ul G lll ut -F G olr utF -lI - ul to -<oz - IL o ul E of o -(t FE o4 ulE ! o - z 6 s J o F o o s llJ o o z o I z 9 lr{I Actuarial Summary of Terminal Payments, After Service Health lnsurance and Special Fund for Compensation Reconciliation of defined benefit Defined benefit obligation as at 31 December 2011 Service cost lnterest cost Actual gross benefit payments for 201 2 Actual administrative expenses Actual contributions by participants Actuarial (gain)/loss Defined benefit obligation as at 31 December 2012 Reconclliatlonofptanassets','.,, I',',:,.rtr Assets as at 31 December 201'l Actual gross benefit payments for 201 2 Actual administrative expenses WHO contributions during 201 2 Participant contributions during 201 2 lncrease/decrease in 470.1 reserve Expected return on assets Asset gain/(loss) Assets as at 31 December 2012 Reconciliation of unfunded obligation status Defined benefit obligation Active lnactive Total defined benefit obligation Plan Assets Gross Plan Assets Offset forWHO 470.1 reserve Total plan assets Deficit/(surplus) Unrecognized gain/(loss) Current liability Non-current liability Expense for 201 2 Service cost lnterest cost Expected return on assets Recognition of (gain)/loss for 2Ol 3 WHO contributions Participant contributions 397,756 8,627 10,979 (10,445) 0 0 (1 29,3s 1 ) 277,566 0 (10,445) 0 't0,445 0 0 0 0 0 ...,1.,, . ., 33,25'l 244,315 277,566 0 0 0 277,566 129,351 10,308,493 406,917 s32,900 128,951 't3,627 (30,970) 0 0 (s2,17s) 592,333 .:'ri':'::r'l: 0 (30,970) 0 30,970 0 0 0 0 0 592,333 111,937 480,396 592,333 128,9s1 13,627 0 (52,175) 't13,604 0 15,932,057 315,430 740,536 (s2,0e9) (4,437) 47,785 (369,474) 16,609,798 5,95't,777 (242,493) (18,633) 223,876 447,751 394 308,107 't79,734 6,950,513 4,530,083 12,079,7't5 't6,609,798 (7,102,184) 251,671 (6,8s0,s13) 9,759,285 s49,208 0 10,308,493 10,308,493 3't5,430 740,536 (308,1 07) 362,218 1 15,601 11,442 395,475 406,917 8,627 't0,979 0 0 't't,6't2 0 592,3 0 33 0 0 0 592,333 0 Terminal Payments(otherthan accrued leave) After Service Health lnsurance Special Fund for Compensation Total expected contributions for 2013 1 13,604 477,819 11,612 Gl o ct E utE - lll(, ut o Cl olll o -lll E u ut - E ol& o,F - ut - ut Fo 6z 2 IL a ut E o :, o - l-E o4lllE so2 -lt o s €F a q 5 ut o I 2 o I ui E ={fi o. z 9 t!( 25 Actuarial Assumptions and Methods Each year APOC identifies and selects assumptions and methods that will be used by the actuaries in the year-end valuation to determine the expense and contributron requirements for APOC's terminal entitlement benefits. Actuarial assumptions are required to be disclosed in the financial statements in accordance with IPSAS 25. Terminal payments, after service health insurance, and special fund for compensation: 31 December20l2 N o6t clu6 =l|lo ut o (, o ut o - UJ t UJ t!T c olt o 2 lr,t =ul Fo s o2 = lt o ut E oI o - G o4lrlG s oz 2 r 26 Terminal payments: After service health insurance: Special fund for compensation: The discount rate used is 3%. 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 SlX Swiss Exchange yield curve as of 31 December 2012.The resulting discount rate is rounded to the nearest 0.1 9o. Last year, the discount rate was based on a weighted average of Bloomberg indices in the United States and Switzerland. Europe 2.606 (decrease from 3.17o in prior valuation), The Americas 4.190 (decrease from 4.7%in prior valuation), Other Countries 4.50lo (decrease from 4.7o/oin 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 SlX Swiss Exchange curve and the 3.79o/o rate from the iBoxx Euro Zone curve, with a two-thirds weight on the former. The resulting rate is rounded to the nearest 0.1olo. For the Americas and Other Countries, the rates use the same methodology as the 31 December 2012 PAHO valuation of the ASHI. Beginning with the 31 December 2012 valuation, PAHO adopted a yield curve approach using the Aon Hewitt AA Bond Universe Curve.Thus, the rates forThe Americas and Other Countries can differ due to different patterns of expected cash flows from those regions. The discount rate is 3.00/0. Based on the combined projected benefit payments for both plans and with weights of 75o/o on the Aon Hewitt AA Bond Universe yield curve and 25016 on the SIX Swiss Exchange yield curve as of 3l December20'l2.The resulting discount rate is rounded to the nearest 0.1026. Last year, the discount rate was based on a weighted average of Bloomberg indices in the United States and Switzerland. Terminal payments: After service health insurance: Special fund for compensation: The inflation rate used is2.2%. Based on a weighted average of inflation rates of 2.570 for United States and 1.3% for Switzerland with weights of 75o/o and 25010, respectively.The resulting inflation rate is rounded to the nearest 0.10l0. Eu rope I .60lo, The Ame ricas 2.5o/o, Other Cou ntri es 2.5oh The inflation rate used is2.2o/o. Based on a weighted average of inflation rates of 2.570 for United States and 1.30lo for Switzerland with weights of 75Voand25o/o, respectively.The resulting inflation rate is rounded to the nearest 0.1 7o. Measurement date Discount rate Annual general infl ation N oN L utE =uto ut o C, o ut o - UJ tr ul t!I tr oE o - ut =urF o g() - 2 lt o ul ts o) o2 c oAln IE 3 o2 - lt 27 tg Terminal payments, after service health insurance, and special fund for compensation: General inflation, plus 0.590 per year productivity increases, plus merit increases. Productivity and merit increases are set equal to those from the 3'l December 2011 valuation of the UNJSPF. Terminal payments (other than accrued leave): After service health insurance: Specialfund for compensation: Not applicable Based on the Regional Office of the European Union, Headquarters, lCC, IARC, UNAlDS, and UNITAID which are grouped as Europe. AM constitutes the Americas.The African Region, Eastern Mediterranean Region, APOC, South East Asia Region, and Western Pacific Region are grouped as Other Countries. Not applicable Terminal payments: After service health insurance: Special fund for compensation: Projected unit credit with service prorates, with an attribution period from the"entry on duty date"to separation. Not applicable Not applicable Terminal payments: After service health insurance: Special fund for comPensation: Projected unit credit with accrual rate proration. Not applicable Not applicable Terminal payments: After service health insurance: Specialfund for compensation: The liability is set equal to the walk-away liability as if all staff separated immediately. Not applicable Not applicable Terminal payments: After service health insurance: Specialfund for compensation: These benefits are considered termination benefits under IPSAS 25 and, therefore, are excluded from the valuation. Not applicable Not applicable fiffiSXitrr;ii$:$.ii:4:1i.1! i!;']i;l.i.r:r':,i.']:>!r'j;';,;j.r::a,ri:, r-, Lrai,.tr:.rrin. Annual salary scale Regional groupings for all purposes except claims costs * Repatriation travel and remova! on repatriation Repatriation gran! termination indemnity, and grant in case of death Accrued leave Abolition of post, end-of-service grant, and separation by mutual agreement 28 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. APOC's financial obligation to the UNISPF consists of its mandated contribution, at the rate established by the United Nations General Assembly (currently at7 .9%for participants and 15.8% for member organizations)togetherwith any share of actuarialdeficiency 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 provi- sion 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 which each paid during the three years preceding the valuation date. The latest actuarial valuation was performed as of 3l December 2071. The valuation revealed an actuarial deflcit of 1.87% (O.38% in the 2009 valuation) of pensionable remu- neration, implying that the theoretical contribution rate required to achieve balance as of 31 December 2011 was 25.57% of pensionable remuneratlon, compared to the actual contribution rate of 23.7%.The actuarial deficit was primarily attributable to the lower than expected investment experience in recent years. At 31 December 2011,the funded ratio of actuarial assets to actuarial liabilities, assuming no future pension adjustments ,was 730% (140% in the 2009 valuation). The funded ratio was 86% (97% inthe 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 of 31 December 2O71,for deficiency payments under Article 26 ofthe Regulations ofthe 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 of 31 December 2013. In July 2012, the Pension Board noted in its Report of the fifty-ninth session to the General Assembly 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%.ln December 2012, the General Assembly authorized the United Nations Joint Staff 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, unless the General Assembly has not decided on a corresponding increase in the mandatory age of separation. (il o GI E utE =ut(,It o o o uloz ul t tu ulI E oE o zu - lu h o o2 - E olll E a3 o2 E oG ulE s o - 2 lt $ og J o F o o *a o ul o(} oz o tc u tll = s * o rc Eg During 2012, contributions paid to UNJSPF amounted to US$ 1.32 million. Expected contributions due in 2013 are approximately US$ 1.34 million. The United Nations Board of Auditors carries out an annual audit of the UNISPF and reports to the UNJSPF Pension Board on the audit every year. The UNJSPF publishes quarterly reports on its investments and these can be viewed by visiting the UNJSPF atwww.unispf.org. 4.9.Accrued liability The accrued liability represents goods and services received at 31 December 2012 but not yet invoiced or paid. 5. Supporting information to the Statement of Financial Performance 5.1. APOC Trust Fund contributions APOCTrustFundiscomprisedof anamountof US$ 21,580,836releasedln2012basedon the Memorandum of Understanding (MOU) signed by the World Bank and WHO; and the "Final Communique" adopted by the Joint Action Forum (JAF) including the amounts approved for the given year. This "Final Communiqu6" is required to recognize an asset and the related income before cash is actually received. The Internatlonal Bank for Reconstruction and Development (World Bank) are Admin- istrators of the African Programme for Onchocerciasis (APOC)- Phase II Trust Fund. The activities of the trust fund are executed by WHO and funds are disbursed by IBRD as administrator of grant to \AIHO, which is responsible for the execution. As per the audited financial statements prepared by the World Bank an amount of US$ 17,205,535 is held bythe World Bank. The balance with IBRD represents amounts paid into the trust fund and managed by IBRD, but not yet disbursed to WHO. 5. 2. Voluntary Contr ibutions These contributions represent revenue recognized from voluntary contributors. As at 3l December 2072, all voluntary contributions had been received and there were no outstanding receivables. 5.3. Finance Revenue Finance revenue is comprised as follows: lnterest Realized Exchange Gain/(Loss) Unrealised Gain (Loss) Actuarial lncome 30,907 't54,815 (9,285) 27,569 31 December 2012Finance Revenue Tota! FinanceRevenue 204,006 6. o Gl E utE =lrl(, uta !, ol! o -lll E ut IlaF G olt 6 z ut - 1llh Fo 3oz z lt ou tsof o2 E o o, utE 6 - 2 lt a 6() ct, s J0 t- (} I s iu$ I z0 o t& E E (, o(! o. 9 lt 29 30 5.4. Miscellaneous Income Miscellaneous income is mainly comprised of reimbursements and discounts granted by the travel agent, income from the sale of assets inherited from ex-OCP and rental income. 5.5. Expenses Staff and other personnel costs: This amount is equal to the total cost of employing staff at all locations and includes charges for base salary post adjustment and any other types of entitlements (e.g. pensions and insurances) paid byAPOC. Staff costs also include the movement in the ASHI actuarial liability which is recognized in the Statement of Financial Performance. Transfers and grants to counterparts: This represents non exchange contracts signed with national counterparts (mainlyhealth ministries)to perform activities which are in Iine with APOC Programme budget. Funds are expensed at the point of time when the funds are transferred to the contractual partner and APOC has no on-going involvement. These expenditures are also referred to as "direct financial cooperation". General operating expenses: This amount represents general operatlons to support the programme; it includes utilities, telecommunication (fixed telephone, mobile phone, internet and global network expenses), and rents. Travel The cost of travel for APOC staff, non-staff participants in meetings, consultants and representatives of Member States paid by APOC is included in the total travel costs. Travel expenses include airfare, per diem and other travel-related costs. This does not include statutory travel for home leave and education grant whlch is accounted for under staff costs. Equipment, vehicles and furniture: As APOC opted for the transitional provision under IPSAS 17, the full cost of equipment, vehicles and furniture are expensed at the point of delivery. Contractual senrices: This represents expenses for service providers. The main components are for agreements for performance of work or consulting contracts given to individuals to perform activities on behalf of APOC. Medical research activities, costs for special service agreements and fellowships are also considered to be contractual services. Depreciation: 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 APOC's buildings. 6t o C{ c ul o =llloltt o o ol! o -u E lr! u aF 4 oIL o - ul -lI k u, (, - - l! olll E o3 oz l-E oc ulc g o - -lr o$ s) F o I og$ c( ul o O u 'I E (, a 9 u 5. Utilization of Programme Budget While APOC's financial statements cover all activities of APOC, budgets are approved only for the Trust Fund. There are no approved budgets for other funds. All Funds are administered in accordance with the Financial Regulations and Financial Rules. Funding for the APOC Trust Fund is made through the World Bank in Washington DC, which is the fiscal agent of the Programme. The total approved budget under PAB 2012- 2013 is US$ 47,176,158 with US$ 23,943,158 representing50.T5% allocated for year 2072 and US$ 23,233,000 representing49.25% for year 2013. As of the end of the year2012,an amount of US$ 19,888,422 represents the programme budget implementation, equivalent to 83.07% of the approved budget for the given year. The analysis of actual expenditure corresponding to the specific objectives shows the following trends: 1. To establish sustainable onchocerciasis control programmes in all African countries where they are needed: US$ 6,300,077 The implementation rate of the activities relating to the above mentioned objective was 76.30% of the approved budget for the year 2012. The balance out of the annual budget is USg 1,9 56,653 that is justified by the fact that all field CDTI activities planned in Angola, Tanzania, Cameroon, Chad, Ethiopia were not implemented and therefore, the entire DFC amounts were not released. Efforts to intensify activities in the mentioned countrles are scheduled for the subsequent year. In addition, a community-self monitorlng (CSM) exercise planned in Uganda was postponed. 2. To implement onchocerciasis control activities in conjunction with other health interventions (co-implementation): US$ 2,074,965 The implementation of the activities relatlng to the above mentioned objective represents 86.14% of the allocated amount as per the approved budget for the year. The balance outoftheannualbudgetisUS$ 333,T66thatisexplainedbythenon-releaseofthetotal approved budget for DRC projects co-implementing health interventions due to deiays in financial returns submission. 3. To determine when and where ivermectin treatment can be stopped and to provide guidance to countries on preparing to stop ivermectin treatment: US$ 4,950,216 The implementation of the activities relating to this objectlve represents 93.63% of the allocated amount as per the approved budget for the year. The unobligated balance amounting to US$ 336,677 is justified by the postponement of the implementatlon of activities in some countries, particularly in Nigeria due to security unrest. Activities related to capacitybuilding of nationals on epidemiological evaluation as wellthe epidemiological andtreatment coverage surveys in Nigeria were postponed. Most of equipment ordered are not yet delivered and the expenses wlll be met in the subsequent year. 31 oa o Gl E ul o - ut(, u o (, ou ozu c ut ula Eolt oFzill =tu EFo 6 - -tt o ut E at o - G oA trtB o - z lt 6 o g 0 F o{t Eirj o oI() Z o E ott UI E =tr(, oIt G 9 ccE N o6t IE utE - l!() lrl o C, o UJ o2 ul G ul UIE t, olt o 2llt =ut F<o sI - z lr o ut ts o3 o - E oclrlE s oz z E 32 4. To reduce the risk of transmission of onchocerciasis from former OCP countries whose epidemiological and entomological situation threatens neighbouring countries in which the disease has been brought under control: USS Z49,GZ1 The implementation of the activities relating to thls objective represents 88.28% of the allocated amount as per the approved budget for the year. The balance out of the annual budget is US$ 99,537 that is justified by the CDTI activities overlapping in 2013 in Cote d'lvoire due to late implementation of activities following the socio-political unrest in the country. The onchocerciasis programmes in Ghana and Guinea Bissau experimented delays in flnancial returns submission and the total funds approved were not released according to APOC Financial and administrative procedures. 5. To ensure that governments ultimately take full responsibility for onchocerciasis control: US$ 1,294,056 The implementation of the activlties relating to the above mentioned objective represents 97%.The balance out of the annual budget is US$ 39,984 justified bythe development of tools for the assessment of Government contributions that was not completed in year 2072. 5. To cease all APOC operations without jeopardizing the past achievements of OCP and APOC: USS 990,556 The implementation of the activities relating to this objective represents 81.12% of the allocated amount as per the approved budget for the year 2072.The balance out of the annual budget is US$ 230,599.The Ivermectin Response Nlarkers (lRM) studies planned for year 2012 delayed and they are overlapping in year 2013. The entomological surveil- lance support activities in OCP countries using DNA pool screening techniques is being implemented in collaboration with MDSC and the capacity building of nationals on dlsease surveillance and reporting in APOC countries is underway. AIso, related activi- ties in the framework of the programme extension beyond 2015 are underway and may continue the following year. 7. Mainstreaming gender in APOC operations: USS 188,386 The implementation of the activities relating to this objective represents 53.47% of the allocated amount as per the approved budget for the year. The balance out of the annual budget is US$ \63,922.The unobligated balance is due to the overlapping of the academic period between 2Ol1/2012 and2072/2013 and the cost related to the selected candldates for higher education - diplomas, short-term courses or NISc in epidemiology, entomology or programme management. The portion of the cost to be allocated to each year depends on the Universities and Institutions attended by the APOC sponsored candidates. The launching of gender strategic plan in APOC countries is also on-track taking into account the specificity of countries in this domain. 8. Provide APOC secretariat with adequate human resources, materials and equipment for efficient administration and management of the programme: USg 3,340,485 The implementation rate of the activities relatlng to the above mentioned objective was 78.90"/o of the approved budget for the year. The balance out of the annual budget is US$ 893,598 that ls justified by the gradual filling of approved posltions with regards to WHO regulations and processes. Some positions are yet to be filled and the adjustment of salaries for General staff (GS) occurred only during the last quarter of the year. Specific fundings have been allocated to various activities that were not funded by the APOC Trust Fund. The expenses for this category of activities amount to US$ 7,744,371 and are broken down as follows: $US 457,9 3 3 supported by the voluntary funds and $US 686,438 financed by the Contributors -others. 7. Administrative waivers, amounts written-off and ex- gratia payments APOC did not have any administrative waivers, write offs or ex-gratia payments during 2012. 8. Related party and other senior management disclosures The only key management personnel (KMP)for APOC is the Director. The aggregate remuneration paid to the key management personnel was US$ 254,345 which includes: net salaries and post adjustment (US$ 186,341), entitlements such as representation allowance and other allowances, assignment and other grants, rental subsidy, personal effect shipment costs (US$ 19,193) and employer pension and current health insurance contributions (US$ 48,811). 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 UNJSPF. During the year, no loans were granted to key management personnel which are not widely available to persons who are outside the group of key management. 9. Events after the reporting date APOC's reporting date is 31 December 2072. On the date of signing of these accounts by the External Auditor, there have been no material events, favorable or unfavorable, incurred between the balance sheet date and the date when the financial statements have been authorized for issue that would have impacted these statements. 10. Contingent liabilities, commitments and contingent assets As at 31 Dec 2012 APOC had no pendlng legal cases that could give rise to contingent Iiability. As at 31 December 2012, the land and building balance reported in the statement of financial positlon does not include title on deed 856 for which it was determined that APOC does not have a clear ownership (as per note 3.4 of the audited financial report for the period ending 31 December 2007). This issue is being handled by APOC management in consultation with the legal offlce of WHO. A positive outcome on this case might give rise to a flow of economic benefits in the future. For that reason and as per IPSAS 19, the tltle on deed 856 can be considered a contingent asset. 11. Operating leases Commitments APOC had no lease arrangements over the threshold for disclosure. 6t o6! E ut o =l!(, ut o o a ul o -lll E lll rt - E ol& t,F - ut =l! h o 5 - - IL olrl E oD o - E oo utE s o2 - lt s G c Js t-g (J q 3(, 5 z o otr I! E E cr GL 33 Schedule I: Statement of Performance by Major Funds For the year ended 3t December zotz (in US dollars) REVENUE Trust Fund contributions 5.1 Voluntarycontributions 5.2 Finance Revenue 5.3 Miscellaneous income 5.4 TOTAL REVENUE EXPENSE ' :, -. '..,:. ,.,r r ,,, Staffand other personnel costs Contractual services Transfers and grants to counterparts General operating expenses Travel Equipment, vehicles and furniture Depreciation and amortization TOTAL EXPENSE 2r,580,836 184,648 21,580,836 184,648 19,888,422 457,934 7,695,485 863,937 4,835,449 2,935,847 2,535,237 1,022,467 98o/o 98o/o 94o/o 89% Oo/o 9s%o 8,1 30 1'17,450 50,735 152,824 128,795 Oo/o 'lo/o 2o/o 2% 60/o 1'lo/o 0o/o zEo 204,006 75,173 279,179 677,629 0 0 114 (1,204) 0 9,898 686,437 21,580,836 184,648 2U,006 75,173 22,044,663 :i i. l,,t t',,'";'tr. t: 8,373,114 872,067 4,952,899 2,986,696 2,686,857 1,151,262 9,898 21,032,793 98% 1o/o 1Vo 0o/o 100% 40Vo 4o/o 24o/o 14Vo 13o/o 5o/o o% too% SURPLUS (DEFIC|T) FORYEAR 1,692,414 {273,2861 (4O7,25A1 1,Ol r,87O EXPENSE as o/o Staffand other personnel costs Contractual services Transfers and grants to counterparts General operating expenses Travel Equipment, vehicles and furniture Depreciation and amortization TOTAT EXPENSE as 7o 8o/o o% Oo/o 0% 0o/o o% 1007o 3Eo 1O0o/o 100% 100o/o 1000/o 1OOVo 100% 10006 100% AF()CTrust Fund 20r2- 2013 (US5) Voluntary Fund 2012- 201 3 (us5) Contributors other (us5) Total (us5) a9e oa o G. G ut o - ul oltt o o o ut oz ul G lll tuI Eolr o - ul =utto (, z 2 E o ul E o , oz FEoA ulG g o2 -E 5 a g Js l"* 0 t") I og o uJ o o :l() g o I lu E E cc o" 9 u Percent- ISchedule II: Other Voluntary Funds Expenses For the year ended 3t December zotz (in IJS dollars) Epidemiological and entomological activities in ex-OCP countries [Residual fund of ex-OCP - World Bank] 4 5 2 Public access to the unique biomonitoring database of the West Africa aquatic fauna collected during 29 years of OCP lThe JRS Biodiversity Foundationl 3 Logistic support (bycicles and mobile phones) to CDDs carrying out the distribution of lvermectin in the remote rural communities [Kitasato lnstitute] Logistic support to the Filariasis and otherTropical Diseases Recherch Center (CRFIMT) ilnstitut Bouisson Bertrand (lBB)I Development of a Simulium black fly trap for monitoring and control of Onchocerciasis transmission [University of South Floridal Simulium nuisance control in lnga [Soci6t6 Nationale d'Electricit6 (sNEL)I General operating cost, installation and maintenance of GPN equipment in APOC - [Miscellaneous income] Compliance to ivermectin treatment study in Ghana lMectizan Donation Programme (MDP)l NTD mapping in Equatorial Guinea - [George Washington University (GWU)I 171,267 8,131 39,956 &,514 39,906 42,772 36,465 43,979 1O,945 37o/o 2o/o 9o/o 'l4o/o 9o/o 9o/o 8Vo 'lOo/o 2Vo 6 7 8 9 457,934 lOoo/o Activities and other funding sources PercentageExpense Gl o(rl c, uro =tuo ul o (l ol! oz UJ e ur lllI tr oE o z ut =lu o s a - z lt ol! ts o , oz E o4llltr s o - 2 lt : 35 No Total Afrtcan Progra:mme for Onchxerciasis Control (APOC) World Health Or g aniz at ion B.P. 549 - Ouagadougou - BURKINA, FASO Tel: +225-5O 34 29 53 / 50 34 29 59 / 50 34 29 60 Fax: +2i16-5O t4 28 75 / 50 34 26 48 dir ap oc @ oncho.af rc.who.int rvrrrv.vhafntlapoc o o I o =I o o @ @ World HealthOrganizationAFRICAN PROGRAMME FORONCHOCERCIASIS CONTROL