INTERNATIONAL TELECOMMUNICATION UNION
Ad hoc Group of Council for the
Financial Plan (Resolution 1197)
GENEVA —
Document 4-E
30 July 2002
(29-31 JULY 2002)
Draft Report by the Chairman of the Ad hoc Group
of Council for the Financial Plan
1.
Council –02 established, by its Resolution 1197 (Document C02/85), the Ad Hoc Group for
the Financial Plan 2004-2007 with the following terms of reference :
“1. to identify, with the assistance of the Secretary General and the Directors of the
Bureaux, options for achieving a balance between income and expenditure based among
other considerations the implementation of efficiency measures ;
2. to report the results of its work to the Special Session of the Council preceding the
Conference, with a view toward facilitating the preparation of the Financial Plan for 20042007, which includes the definitive classes of contribution by Member States for that
period.”
2.
The Group met from 29 to 31 July 2002 under the Chairmanship of Bruce Gracie (Canada).
The following participants attended the meeting (See list of participants in Annex 1).
3.
It took note of the Financial rules and regulations of the Union as applicable to the financial
planning process, i.e. CS Article 28, CV Articles 33 and 34, Decision 5 and the Financial
Regulations as revised by Council 2002.
4.
It also noted the actual income and expenditure for the period 2000-2001 and the approved
budget 2002-2003 as a basis for future planning (Documents C02/13 and C01/103).
5.
The Draft Financial Plan for the period 2004-2007 submitted to Council 02 (Document
C02/34) and the proposed basis for the draft Financial Plan (Document C02/DT/12) were taken into
consideration and it was generally felt that as many details as possible would have to be provided
for the Plenipotentiary Conference.
6.
Document 3 of the Ad Hoc Group reflecting comments made by the Telecommunication
Standardization Advisory Body (TSAG) along with a contribution from TSB Director was
discussed and the Group concluded that all these issues would be addressed to the Plenipotentiary
Conference (See Annex 2). It was pointed out that paragraphs 3, 4 and 6 were linked to
Recommendations 13 and 14 of the Working Group on ITU Reform.
7.
The Report by the Chairman of the Ad Hoc Group on Cost Recovery on Satellite Network
Filings, set up by Council 02 (Decision 510) was considered (Document 1). It recommended that
the basic methodology be maintained and presented a number of options for expanding the set of
activities subject to cost recovery.
D:\282225988.DOC
30.05.16
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Draft Financial Plan 2004-2007
8.
The Draft Financial Plan 2004-2007, as set out in Document 2 of the Ad hoc Group was
then presented and examined in detail. It was pointed out that the basic assumptions of the draft
plan were the provisional amount of the contributory unit set by the Council at CHF 315 000, that a
range of options was to be identified in order to balance income and expenditure, and that the actual
income and expenditure for the period 2000-2001 (recosted at 1 January 2002 rates) and the budget
figures for 2002-2003 would be used as a basis of comparison. It was also noted that the capital
expenditure funds had to be clearly identified and separated from the programme income and
expenditure.
9.
The difference between a 4-year financial plan and a 2-year budget was noted at the outset,
the output of the financial planning exercise being a decision by the Plenipotentiary Conference on
the limits of expenditure and an indication of financial priorities in support of the Strategic Plan,
whereas the budget would need to contain information in considerable more detail as the basis of
the operational plans of the Sectors and the General Secretariat.
10.
It was also noted that different organizations in the United Nations family utilize different
definitions of zero nominal growth, and that it normally provides for cost increases and for changes
in the employment conditions in the UN system.
11.
The Ad hoc group commented on the difficulty of establishing priorities in the absence of a
plan based on activities. Several delegates expressed the wish to move away from purely financial
budgeting towards results-based budgeting, including centralized services as activities in their own
right. It was noted that in future the strategic plan and the financial plan should be further developed
to evolve in this direction.
12.
The concept of unfunded mandated activities or UMACs was introduced to identify
activities which had been mandated by different Conferences and essential support activities but
which could not be accommodated within the limits of income decided by the Council. It was
concluded that UMACs would constitute one useful form of option available to Council in order to
authorize the implementation of these activities provided that savings are achieved or additional
income was generated and that other options would be provided.
13.
Delegates expressed the need for much more detailed information than was provided in the
document. In order to give a better basis for the figures given and the relationship with the previous
budget, more detailed information was provided in Document 2 Rev.1.
14.
Several delegates raised the question of the methodology applied for cost allocation in
relation to cost recovery. Also a more precise definition of the terms employed was requested. A
small glossary of financial terms was made available and will be available at the Plenipotentiary
Conference. Interested delegates were given detailed explanations and a demonstration of the tools
used to implement cost allocation, which is detailed in Annex B of Council document C98/15.
General Secretariat
15.
Regarding the Building Maintenance Fund and the ICT Capital Fund, details of the
investment expenditure foreseen were requested. The question was raised in particular which
building maintenance expenditure would be required to satisfy the minimum needs of safety and
value preservation and how to finance these repairs. The information will be provided for the
special Council session.
Radiocommunication Sector
16.
It was noted that on the Regional Radiocommunication Conference, further details would
be provided by the Director of the BR to the Plenipotentiary Conference, including on the
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preparatory work. However some details will depend on decisions taken during the first session of
the Conference.
Standardization Sector
17.
The Director of the TSB underlined the fact that the resource requirements did not really
increase for the Sector, but represented merely a continuation of the 2002-2003 funding level. The
need for an effective promotion campaign for the ITU-T activities was emphasized by a number of
delegations who questioned the presentation of this activity as a UMAC. It was argued that this
activity is essential to increase the interest in the ITU-T and to encourage new Sector memberships.
Telecommunication Development Sector
18.
Regarding the Regional Telecommunication Development Conferences, it was noted that
while the Istanbul WTDC had kept the option open, a preference had been expressed for the holding
of regional preparatory meetings in preparation of the next WTDC.
19.
It was felt that a clear explanation would need to be given for the UMACs to a total of CHF
5 million for the full implementation of the Istanbul Action Plan. It was felt that the methodology
outlined by the Director of the BDT at the WTDC in Istanbul for prioritizing activities should be
included in the explanations provided for this item.
Income
20.
The proposed withdrawal of CHF 6 million from the Reserve Account was criticized by a
number of delegates who felt that other means should be found to balance income with expenditure.
A number of suggestions were made for reducing expenditure, including the options proposed in
Annex 2 of Council document C02/34. The possibility of a global cut was discussed, and it was
noted that many administrations use this as a means to effectively reduce expenditure. The
disadvantages of a global cut were also noted, in particular the arbitrary character of the savings
obtained which can be harmful to effective activity implementation.
21.
The Ad hoc Group discussed the options for cost recovery on TELECOM activities and
concluded that in the basic draft financial plan the current practice, i.e. 60% cost recovery would be
retained while an increase toward full cost recovery would be presented as an option. It was noted
that in Council full cost recovery had been linked with full cost recovery for satellite network filing
activities.
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22.
In order to clarify the relationship between the Exhibition Working Capital Fund and the
Telecom Surplus fund, the following diagram was presented which outlines the way in which
excess income from ITU TELECOM events is used to fund telecommunication development projects.
How the ITU Telecom Surplus Fund works
Excess income
5 million CHF/year
Exhibition
Working Capital
Fund
ITU TELECOM
Event budgets
TELECOM Surplus
Fund
Event deficit
Approved projects
Event
income
Event
expenditure
Other considerations
23.
Regarding future salary increases, the Ad hoc Group took note of the recent conclusions of
the ICSC and of the uncertainties still surrounding their application, and decided to keep the
resulting possible cost increase as a separate consideration, to be dealt with by a flexibility in the
budgeting mechanism similar to the one provided in Decision 5 of Minneapolis. It was noted that
this increase should not be treated as an option similar to the UMACs, because the actual effect of a
salary increase could only be determined once the full extent of the foreseen activities was known.
24.
Regarding the uncertainties of income under cost recovery, the Ad hoc Group emphasized
the need to provide options to deal effectively with such uncertainties, including the use of the
Reserve Account, which could (as suggested by a delegate) be replenished by requesting each
activity in the Union to produce temporarily a specified level of savings.
25.
As other income options were discussed, it was noted that Resolution 90 had not resulted in
a modified definition of the contributory unit for Sector Members, and that an increased ratio of 1:4
would constitute a possible option.
26.
The possibility to balance income and expenditure by withdrawing a certain amount from
the Exhibition Working Capital Fund was also discussed. The Ad hoc Group concluded that this
alternative should be included in the list of options to be presented.
Conclusion
27.
In conclusion, the Ad hoc group adopted the present report and instructed the Chairman to
forward it, with a revised version of Document 2 containing a draft financial plan and a series of
options to the special session of Council on 22 September in Marrakech. An executive summary
would be prepared, which would be proposed to constitute Annex A of the Strategic Plan as
requested by Council.
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Annex 1
LIST OF PARTICIPANTS
GERMANY (FEDERAL REPUBLIC OF)
M. VOSS Peter
Deputy Head of Division
International Policy of Telecommunications &
Posts
Federal Ministry of Economics & Technology
76, Villemombler Strasse
D-53123 BONN
Tél: +49 228 6152949
Fax: +49 228 6152964
Email: voss@bmwi.bund.de
CANADA
M. GRACIE Bruce A.
Councillor/Chair, ITU Council Finance
Committee
Industry Canada
Room 1688-D
300, Slater Street
OTTAWA Ontario K1A 0C8
Tél: +1 613 9904254
Fax: +1 613 9984530
Email: gracie.bruce@ic.gc.ca
SPAIN
M. SANZ GADEA Luis
Jefe, Area de Relaciones con la Unión
Europea
Secretaría de Estado de Telecomunicaciones y
para la Sociedad de la Información
Plaza de Cibeles, S/N
28071 MADRID
Tél: +34 91 3462274
Fax: +34 91 3461520
Email: luis.sanz@setsi.mcyt.es
UNITED STATES OF AMERICA
M. BRENNAN Thomas
Multilateral Affairs Officer
Bureau of International Organization Affairs
Department of State
Room 5333
WASHINGTON DC 20520
Tél: +1 202 6471526
Fax: +1 202 6478902
Email: brennantj@state.gov
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M. SCHROEDER Norbert
Program Manager
Department of Commerce
14th and Constitution Avenue NW
Room 4621
WASHINGTON DC 20230
Tél: +1 202 4826207
Fax: +1 202 5016198
Email: nschroeder@ntia.doc.gov
Ms TOWNSWICK Mary
Economic Officer
Permanent Mission of the United States
11, route de Prégny
CH-1292 CHAMBESY
Tél: +41 22 7494647
Fax: +41 22 7494883
FRANCE
Mme BEAU Marie-Odile
Chargée de mission
Ministère de l'Economie, des Finances et de
l'Industrie - DIGITIP/STSI
12, rue Villiot
Le Bervil
F-75572 PARIS Cedex 12
Tél: +33 1 53449464
Fax: +33 1 53449002
Email: marie-odile.beau@industrie.gouv.fr
M. TAILLEFER Gilles
Agence nationale des fréquences (ANFR)
78, avenue du Général de Gaulle
BP 400
F-94704 MAISONS-ALFORT Cedex
Tél: +33 1 45187704
Fax: +33 1 45187313
Email: taillefer@anfr.fr
ITALY
M. BIGI Fabio
Représentant spécial
Ministero delle Comunicazioni
201, viale America
I-00144 ROMA
Tél: +39 06 54442413
Fax: +39 06 5942405
Email: fabio.bigi@ties.itu.int
M. FAZIO Mauro
Director, Statistical Office
Segretariato Generale
Ministero delle Comunicazioni
201, viale America
I-00144 ROMA
Tél: +39 06 54447803
Fax: +39 06 54221004
Email: mgmfazio@tin.it
-7Mme MICHELANGELI Anna Stefania
Director, International Relations Office
Ministero delle Comunicazioni
Segretariato Generale - Ufficio IV
201, viale America
I-00144 ROMA
Tél: +39 06 54442413
Fax: +39 06 54442300
Email: michelangeli@comunicazioni.it
JAPAN
Ms KOSHIISHI Miwa
Official
International Organizations Office
Ministry of Public Management, Home
Affairs, Posts and Telecommunications
2-1-2, Kasumigaseki
Chiyoda-ku
TOKYO 100-8926
Tél: +81 3 52535922
Fax: +81 3 52535925
Email: m.koshiishi@soumu.go.jp
M. TAMADA Yasuhito
First Secretary
Suisse
Permanent Mission of Japan
3, chemin des Fins
CH-1211 GENEVE 19
Tél: +41 22 7173111
Fax: +41 22 7173720
Email: yasuhito.tamada@ties.itu.int
MOROCCO
M. TAZI RIFFI Abdelkhalek
Expert
Secrétariat d’Etat auprès du Premier Ministre
chargé de la poste et des technologies de
l’information (SEPTI)
Boulevard Moulay El Hassan
10000 RABAT
Tél: +41 22 7553853
Fax: +41 22 7553905
Email: abdelkhalek@bluewin.ch
MEXICO
M. ADAME Lucio
Asesor
Comisión Federal de Telecomunicaciones
(COFETEL)
44, Bosque de Radiatas
Colonia Bosques de las Lomas
05120 MEXICO DF
Tél: +52 2614203/ +52 5606614
Fax: +52 2264055
-8Mlle SOTO Sindy
Dirección General de Política de
Telecomunicaciones
03020 MÉXICO, D.F.
Tél: +52 55 56694253
Fax: +52 55 56824620
Email: ssoto@sct.gob.mx
NETHERLANDS
M. BOS Fokko
Project Manager/Senior Adivsor
Directorate General for Telecommunications
and Posts
PO Box 20903
2500 EX THE HAGUE
Tél: +31 61 5025873
Fax: +31 70 3516505
Email: fokko.bos@dgtp.minvenw.nl
UNITED KINGDOM OF GREAT BRITAIN AND
NORTHERN IRELAND M.JOHNSON Malcolm
Deputy Director
Spectrum Policy Executive
DTI/Radiocommunications Agency
Wyndham House
189, Marsh Wall
LONDON E14 9SX
Tél: +44 207 2110020
Fax: +44 207 2110021
Email: malcolm.johnson@itu.ch
M. LUCAS Wyn R.
Consultant to UK D.T.I.
DTI/Radiocommunications Agency
33 Greenmeads
Woking
SURREY
Tél: +44 1483 769002
Fax: +44 1483 769002
Email: wyn.lucas@btinternet.com
SWITZERLAND (CONFEDERATION OF)
M. GRANDJEAN Michel
Spécialiste des finances
Office fédéral de la communication (OFCOM)
44, rue de l'Avenir
CH-2503 BIENNE
Tél: +41 32 3275504
Fax: +41 32 3275533
Email: michel.grandjean@bakom.admin.ch
Number of participants: 21
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INTERNATIONAL TELECOMMUNICATION UNION
Ad hoc Group of Council for the
Financial Plan (Resolution 1197)
GENEVA —
Document 3-E
25 July 2002
(29-31 JULY 2002)
Annex 2
CONTRIBUTION FROM TSB DIRECTOR
TO THE CHAIRMAN OF THE AD HOC GROUP OF COUNCIL
FOR THE FINANCIAL PLAN 2004-2007
Following Resolution 1197 of the 2002 session of Council, and the draft terms of reference of the
ad hoc group of Council for the Financial Plan 2004-2007, the Director of the Telecommunication
Standardization Bureau would like to bring the following elements to your attention.
1. At its June 2002 session, the Telecommunication Standardization Advisory Body (TSAG)
offered, on the basis of Council considerations relevant to the draft Financial Plan 2004-2007
pertaining to ITU-T, the following advice to the TSB Director for initial presentation to the Council
Ad-hoc Group on Finance, and for possible review at PP02:
a. There is a need of increased Public Relations requirements in order to make the
worldwide community more aware of the studies performed by the Sector
b. There are increased financial contributions from Sector Members compared with the
planned ones in present years, also considering, within the context of the relevant
Recommendations of the Working Group on ITU Reform, their wishes to have their
contributions directly given to the Sector activities. The ITU Financial Plan and the
budget for Sectors should bring a clear message to encourage the support from the
Sector Members.
c. Increased coordination requirements and cooperation with other SDOs and regional
organizations
d. The fact that the savings made in the 2000-2001 budget period due to non-recurrent
events, such as staff retirements and efficiency measures already achieved, were
exceptional and this should be taken into account. Therefore, ITU-T should be
supported with proper financial resources to meet its challenging goals.
e. The sector budget should cover all the costs of the Sector (including the reallocated
costs of the General Secretariat).
2. It is to be noted that the draft ITU-T Financial Plan proposals for 2004-2007 contain no
additional request compared with the approved biennial budgets for 2000-2001 and 2002-2003,
despite increased workload, new challenging goals and the fact that ITU-T Sector Members
financial contributions to the Sector are higher than in the past.
3. Bearing that in mind, it appears to TSB Director that a kind of linkage between the level of
Sector Member contributions and the level of Sector activities would be desirable. It would help to
motivate financial support from the Sector Members and cost-saving efficiency by ITU-T Sector.
- 10 -
4. A kind of mechanism might also be considered to take into account the Sector balance of budget
over expenditure through biennia, a sort of Sector Reserve Account, which would bring higher
flexibility to the Sector.
5. As far as income is concerned, TSB Director submits to your consideration the possibility of the
creation of a new kind of Associate category open to Universities. Financial contribution would be
set at around USD 3,000, for all ITU-T Study Groups (to be discussed), bearing in mind that
universities might wish to maintain their connection with ITU through electronic means, not in
paper or by post, which should be considered as one reason, amongst others, to grant them a
favorable membership fee. Advantage would be the direct engagement of universities in ITU and
increased income and sales of publications, in addition to a wider visibility of the ITU and its
Sectors activities in the academic sphere.
6. It should be noted that the request to have Sector Member contributions to stay with the Sector
cannot be arranged with the current central-controlled financial system. However, a completely
different financial system to replace the current one is not feasible, neither advisable. It is therefore
proposed to study this issue with a high priority.