Advisory Board on Administration and Finance (ABAF) 54th Session

Statement by the Deputy Director-General of the OPCW, Ms Odette Melono

6 June 2023

Dear Mr Chairperson, 

Distinguished Members of the ABAF, 

I would like to extend to all of you a very warm welcome to the Fifty-Fourth Session of the ABAF. 

Allow me to take this opportunity to thank you once again for your very important service to the OPCW.  This is the first meeting of ABAF since COVID restrictions have been lifted worldwide.  Though in-person meetings should become the norm again, the legacy of the pandemic has permitted us to have some degree of flexibility and I am pleased to welcome participants joining online for this Session once again in a “hybrid” format.

I am pleased to note the extension of Ms Hollie Mance’s mandate to a second term and to welcome two new members of the ABAF: Mr Hamed Alinejad and Mr Muhammad Wasif.  These changes were approved by the Executive Council in its 102nd session on the 16th of March this year.

I understand that Ms Qian Wang (note: Qian is pronounced “Chyan”) has completed her period of appointment to The Hague and I should like to thank her for her contributions to the OPCW and to the ABAF in particular.   I am pleased to welcome Ms Cong Wang who has, with the Chairperson’s approval, been proposed to attend as an observer in Ms Qian Wang’s place. 

A number of important items are on your agenda this week, including a review of the financial statements for the OPCW and for the OPCW Provident Fund for 2022, a discussion of the auditors findings and recommendations, the 2022 programme performance report, the status to date of the OPCW’s 2023 financial performance, and an update on the OPCW ChemTech Centre which was inaugurated on the 12th of May this year.  I understand that the ABAF will visit the Chem Tech Centre during the 55th Session of ABAF in July.  

As at the end of May 2023, the overall rate of cash inflows is promising compared to the year-to-date forecast. However, to avoid the need to draw from the Working Capital Fund as was required in 2022, it is important for State Parties to remit their assessed contribution for the year in a timely basis to ensure that the OPCW can sustain liquidity and to deliver the Organisation’s Programmes. The Convention requires payment within 30 days of notification of assessment and while I recognise that some capitals cannot achieve such a rapid response, I must emphasise the impact of uncertainty on our ability to fulfil OPCW’s mandate The Working Capital Fund is currently at its fully funded level of EUR 8.1 million. However, the Working Capital Fund can sustain operational requirements for only a short period of time. 

The COVID pandemic and its aftermath impacted programme performance in 2022, particularly regarding activities relying heavily on official travel or in-person meetings. This initially negatively impacted the budget implementation rate for the year. However, the extraordinary inflationary impacts of the post-pandemic period and other factors caused the overall budget implementation rate for the year to reach 97%.  

I am pleased to report that the certified OPCW 2022 financial statements were delivered to the External Auditor in the first week of April. The audit was completed during April by the Comptroller and Auditor General of India and the auditors provided their opinion – free of qualifications – on the 23rd of May, a week before the deadline defined by the Financial Rules and Regulations.

The auditors will join this meeting tomorrow to discuss their findings.  I am grateful to them for their hard work and for providing their opinions of the financial statements in good time.  

Although this ABAF Session will review past budget and financial performance, I must stress the extraordinary pressure that the Organisation has faced over this last 18 months.  The impact of inflation has affected all major lines of OPCW’s expenditure.  Staff cost increases mandated by the International Civil Service Commission, travel costs, utilities, rent and third-party service provision have all been affected by unforeseeable inflation that significantly exceeds the expectations in the 2022-2023 Biennium Budget.  You will see the impact of inflation in the reports on performance in 2022 and in the year to date.  However, it is at ABAF-55 – when you will review the draft biennium programme and budget proposal for 2024-2025 – that you will see the significant change in the Organisation’s funding requirements in order to be able to fulfil its mandate under the Convention.

We look forward once again to supporting ABAF in your important deliberations, as you prepare your advice on these and other key topics for the Organisation. Once again, welcome back to The Hague – both in-person and virtually for this ABAF meeting. Thank you again for the important contributions you make to the work of the OPCW. 

Turning the floor back to you, Mr Chairperson, I wish you fruitful deliberations, I am confident that Chris and his team will give you all the support you need.