7.         Preliminary estimates for the first OPCW Budget

7.1       The Group took note of the Chairman's Paper on the Formulation of the OPCW's Budget and discussed the implications for the formulation of the OPCW Budget of different approaches to the following issues:

(a)        the general structure of the Organisation;

(b)        the staffing (number and levels) of the Organisation;

(c)        the number of ordinary and extraordinary meetings of the main bodies of the OPCW which are to take place, or which could be convened, during the first year;

(d)        the other subsidiary bodies which could be constituted, and the estimated number of meetings they would hold during the first year;

(e)        the staff policy to be applied by the Organisation;

(f)        the translation and interpretation policy to be applied by the Organisation;

(g)        the administrative and other costs and the verification costs of the Organisation;

(h)        the budget cycle to be applied by the Organisation, the currency or currencies in which the Budget will be elaborated, and the inflation assumptions which will be included therein, as well as identification of the items which could be affected thereby; and

(i)         the content and nature of the Organisation's Programme of Work.

7.2       The Group had a preliminary exchange of views on the topics identified in subparagraph 7.1 above, and placed particular emphasis on those items with budgetary implications.  The Group decided to continue the discussions on the formulation of the OPCW Budget during its next meeting.

8.         Recommendations

8.1       The Group recommended that Working Group A refer the following recommendations to the Commission for consideration and approval at its Ninth Session:

(a)        that the new item "Reusable Boots" be included in the equipment list contained in the Annex to PC-VIII/A/WP.7 adopted by the Commission at its Eighth Session;

(b)        that the funding required for the procurement of the above-mentioned item in Part II of the 1995 Budget (Dfl. 22,800) be taken from the amount allocated for the procurement of Occupational Health Equipment (Dfl. 384,180).

8.2       The Group forwarded the following recommendations to Working Group A for consideration and approval:

(a)        that the draft OPCW Budget follow, in principle, the basic structure derived from the format already adopted in the Commission's 1995 Budget;

(b)        that, for the first two years of the OPCW, the budget cycle should be on an annual basis, and that after an initial period of at least two annual budgets, the OPCW could consider a move to a biennial budget cycle with annual financial reporting;

(c)        that it request the Secretariat to contact those intergovernmental organisations that operate split currency assessment budgets and, after taking evidence from other alternative sources, the Secretariat should report back to the Finance Group on the practical implications of such a system;

(d)        that the initial budget of the OPCW be a single currency, and that this single currency be the Dutch Guilder;

(e)        that the Secretariat be requested to provide the Finance Group with the report of the Executive Secretary on the findings of his examination of the External Auditor's observations on the Commission's 1993 accounts for review at the next meeting of the Finance Group;

(f)        that, in future, the possibility of the Executive Secretary making transfers of funds within any given programme should be limited to either a nominal amount or a percentage rate, whichever, in the view of Member States, would be preferable;

(g)        that the Expert Group give consideration to the view that all limitations with regard to transfers of funds should be included in the decisions taken to approve the Budget;

(h)        that the Secretariat be required to obtain the views of the Finance Group and the Expert Group on Programme of Work and Budget and subsequently to seek approval from the Commission in cases where a large programme in the budget has to be broken down into new objects of expenditure to improve budgetary control;

(i)         that the Secretariat be requested to prepare for consideration by the Finance Group a note on best practices in financial management as contained in the Joint Inspection Unit (JIU) reports JIU/REP/94/5 and JIU/REP/93/5;

(j)         that the Expert Group on Programme of Work and Budget consider, at an appropriate stage, the possibility of the application of a contingency margin to the OPCW Budget to meet liquidity problems;

(k)        that it endorse the principle that the amount of the Working Capital Fund for the future OPCW should not exceed one-twelfth of the overall level of the regular budget for any one year;

(l)         that it request the Secretariat to amend paragraph 18 of the draft administrative directive on investment policies and procedures in a manner which requires the Executive Secretary to report periodically to the Commission with the comments of the Finance Group on the status of investments;

(m)       that Working Group A request Working Group B to task the Expert Group on Training to return at its next scheduled meeting to the issue related to the implementation of the training budget and to report directly to the Expert Group on Programme of Work and Budget with a proposal on how the training budget should be spent; and

(n)        that the Executive Secretary be requested to prepare a paper outlining the practical ramifications of the implementation of several articles of the Convention with budgetary implications.

8.3       The Group also recommended that Working Group A schedule:

(a)        the fifth meeting of the Finance Group for 13 - 17 February 1995; and endorse the following proposed agenda for that meeting: