INTERNATIONAL TELECOMMUNICATION UNION
Ad hoc Group of Council for the
Financial Plan (Resolution 1197)
GENEVA —
Document 5-E
5 August 2002
(29-31 JULY 2002)
Draft Report by the Chairman of the Ad hoc Group
of Council for the Financial Plan (Resolution 1197) to Council
Introduction
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.
The Group noted that the Union is facing a financial crisis and will have great difficulties in
the future to balance income and expenditure. This crisis will affect the ongoing implementation of
activities during the next financial period. Difficult choices will have to be made at the
Plenipotentiary Conference, for which several options have been outlined to reduce expenditure and
to increase income.
4.
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.
5.
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).
6.
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.
7.
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
-2–
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.
8.
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 while adopting the results of the 2000-2001 time survey, and
presented a number of options for expanding the set of activities subject to cost recovery (See
Annex 3).
Draft Financial Plan 2004-2007
9.
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.
10.
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 definitive financial plan (see CS 161G) with the upper limit on the contributory limit 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.
11.
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.
12.
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.
13.
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 (based on priorities) provided that savings are
achieved or additional income was generated. The list should not be considered as either definitive
or exhaustive, and as many options as possible would have to be provided.
14.
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.
15.
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
provisional glossary of financial terms was made available and an up-to-date version will be
distributed later. The Group felt essential that there be a clear understanding of the cost allocation
bases. Interested delegates were given detailed explanations and a demonstration of the tools used
to implement cost allocation, following the general methodology detailed in Annex B of Council
document C98/15 revised in 1999 (Document C99/20), and following Decision 482 Modified
(Document C01/100).
-3–
General Secretariat
16.
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
17.
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
preparatory work. However some details will depend on decisions taken during the first session of
the Conference.
Standardization Sector
18.
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 2000-2003 budget 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
19.
Regarding the Regional Telecommunication Development Conferences, it was noted that
the Istanbul World Telecommunication Development Conference had kept the option open to hold
regional preparatory meetings instead, which would be a more cost-effective way of preparing for
the next WTDC.
20.
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. 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 and expenditure
21.
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.
22.
The Ad hoc Group discussed the options for cost recovery on TELECOM activities and took
note that, in the draft Financial Plan, 80% cost recovery had been applied while the current practice
(i.e. 60% cost recovery) and an increase to full cost recovery were presented as options. It was
noted that these options would not affect the yearly transfer of CHF 5 million to the TELECOM
Surplus Fund. It was also noted that at the 2002 Council session, full cost recovery had been linked
with full cost recovery for satellite network filing activities. Although several delegates supported
the option of full cost recovery, the delegations from the United States and Morocco reserved their
position.
-4–
23.
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
24.
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. If the General Assembly of the
UN would decide to apply fully the increase recommended by the ICSC, on the basis of the current
estimates ITU expenditure over 2004-2007 would increase by some CHF 40 million.
25.
The Ad hoc Group 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 decision did not depend on the ITU. Also, the actual
effect of a salary increase could only be determined once the full extent of the foreseen activities
was known.
26.
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.
27.
It was clear from the discussion that additional sources of revenue had to be sought. As
different options for increasing income were discussed, it was noted that Resolution 90 had not
resulted in a modified definition of the contributory unit for Sector Members.
28.
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. Furthermore, a discussion took
place on the possibility of withdrawing a certain amount from the Reserve for Debtors’ Account.
Conclusion
29.
In conclusion, the Ad hoc Group adopted the present report and requested the Chairman to
forward it, with a revised draft Financial Plan (See Annex 4) 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 Draft Strategic Plan as requested by Council (Document C02/33).
-5–
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: brennantj2@state.gov
-6–
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
-7–
Mme 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 (SEPTTI)
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
-8–
Mlle 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
M. Riehl Frédéric
Vice-Directeur, Chef des affaires internationales
Office fédéral de la communication (OFCOM)
44, rue de l'avenir
CH-2501 BIENNE
Suisse
Tél. +41 32 3275454
Fax +41 22 3275466
email: frederic.riehl@bakom.admin.ch
-9–
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
favourable 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.
- 11 –
INTERNATIONAL TELECOMMUNICATION UNION
Ad hoc Group of Council for the
Financial Plan (Resolution 1197)
GENEVA —
Document 1-E
25 July 2002
(29-31 JULY 2002)
ANNEX 3
Report by the Chairman of the Ad hoc Group on
Cost Recovery on Satellite Network Filings
1
Introduction
1.1
Council-02 established the ad-hoc Group on cost recovery on Satellite Network Filings, in
Council Decision 510, to consider the alternative basis for charging that does not depend on
numbers of pages and to determine the factors to be considered for the evaluation, as well as the
practical implications of applying cost attribution to activities associated with the processing of
satellite network filings towards the application of full cost recovery. The Group was tasked to
report on progress, and recommendations as appropriate, to the ad hoc Group of Council on the
financial plan and to the special session of Council to be convened just prior to PP-02.
1.2
Pursuant to its terms of reference, the ad-hoc Group has identified a number of options both
for expanding the set of activities that are subject to cost recovery and for revising the methodology
for establishing a fee schedule for satellite network filings. Agreement in principle was reached for
the inclusion of additional activities of the Radiocommunication Bureau Space Services Department
within the cost recovery framework. The recommendations relevant to the ad-hoc Group on the
Financial Plan are shown below. Details of the discussions are contained in the report to the special
session of Council.
2
Recommendations
2.1
Time Survey 2000 - 2001
The time survey used by the Radiocommunication Bureau for apportioning staff time to cost
recovery activities was developed in 1994, a criticism in the external auditor’s 2001 report on the
processing costs incurred by the ITU for satellite network filings. A more recent time survey was
completed in 2001 and the ad-hoc Group agreed to recommend that this should be used as the basis
for setting the Decision 482 charging schedule.
2.2
Extending Cost Recovery
The number of the Radiocommunication Bureau Space Services Department’s activities included in
cost recovery is specified in Resolution 88 (Minneapolis, 1998). Only work on the processing of
satellite network filings that results in the publication of a special section is included. The group
agreed in principle to recommend extending cost recovery to include other work associated with
processing satellite network filings and also other aspects of the Space Services Departments
activities, subject to clarification of the details of the reallocated costs. Inclusion of these new
activities will require modification of Resolution 88 (Minneapolis, 1998) at the Plenipotentiary
Conference.
- 12 –
3
Cost Recovery Funding Options
As both recommendations require approval by Council and/or PP-02 before they can be included
into the Radiocommunication Bureau’s budget four options for identifying those costs that are
subject to cost recovery are presented below. The detailed activities associated with the figures
shown below are contained in Annex 1. The financial estimates are based on the biennium.
It was considered that other options that could be included in the costs subject to cost recovery, like
software development, required further consideration before they could be implemented as this
could include developing a new charging methodology. A list of the Radiocommunication Bureau’s
Space Services Department’s activities that are considered to be unsuitable for cost recovery is also
provided in Section 5 of Annex 1.
Inclusion of additional reallocated costs associated with the General Secretariat (relating to the
Secretary General’s Office, Strategy and External Affairs Unit, Conference Department and
Common Services Department) were considered to require further study as it was unclear how
much of the activities were already covered by the contributory unit.
3.1
No Change
No change to activities covered and retention of the existing time survey (see § 1 of Annex 1).
No Change
Total BR Costs
Total General Secretariat Reallocated Costs
Total
3.2
Cost
(in CHF)
10 707 388
5 445 303
16 152 691
New Time Survey
No change to the activities covered by cost recovery and use the new time survey completed in
2001. The recommended option requires approval by Council (see § 2 of Annex 1).
New Time Survey
Total BR Costs
Total General Secretariat Reallocated Costs
Total
3.3
Cost
(in CHF)
12 388 205
6 300 092
18 688 297
Additional Satellite Network Filing Activities
New activities included in cost recovery associated with the processing of satellite network filings
including using the new time survey completed in 2001 (see § 3 of Annex 1). The recommended
option requires approval by PP-02 and revision of Resolution 88 (Minneapolis, 1998).
Additional Satellite Network Filing Activities
Total BR Costs
Total General Secretariat Reallocated Costs
Total
Cost
(in CHF)
18 346 205
8 133 971
26 480 176
- 13 –
3.4
Additional Ongoing Activities
Inclusion of additional ongoing activities associated with the Radiocommunication Bureau’s Space
Services Department’s work including using the new time survey completed in 2001 (see § 4 of
Annex 1). The recommended option requires approval by PP-02 and revision of Resolution 88
(Minneapolis, 1998).
Additional Ongoing Activities
Total BR Costs
Total General Secretariat Reallocated Costs
Total
Cost
(in CHF)
22 008 738
9 627 780
31 636 518
- 14 –
Annex 1
Detailed Breakdown of BR Space Departments Activities
1
No Change
BR Activities
currently included in cost recovery
Coordination requests and modifications to plans (Arts 11, 14
RR 1994 Art S9 Ap 30/S30, 30A/S30A and 30B/S30B plus Res
33 and 46),
Advance Publication (Art S9)
Cost recovery invoicing
Overall management of treatment process (partial)
Sub total SSD
Maintenance of the space related software (IAP Department)
Total BR Costs
General Secretariat Reallocated Costs
Personnel Department
Finance Department (Budget and Cost Analysis Unit, Accounting –
IFM Unit)
IS Department (Networking, non-mainframe equipment and
software acquisition)
Total GS Costs
Total BR & GS Costs
2
Former time
survey
7 445 918
3 261 470
10 707 388
1 714 961
804 028
2 926 314
5 445 303
16 152 691
Time Survey 2000 - 2001
BR Activities
currently included in cost recovery
Coordination requests and modifications to plans (Arts 11, 14
RR 1994 Art S9 Ap 30/S30, 30A/S30A and 30B/S30B plus Res
33 and 46),
Advance Publication (Art S9)
Cost recovery invoicing
Overall management of treatment process (partial)
Sub total SSD
Maintenance of the space related software (IAP Department)
Total BR Costs
General Secretariat Reallocated Costs
Personnel Department
Finance Department (Budget and Cost Analysis Unit, Accounting –
IFM Unit)
IS Department (Networking, non-mainframe equipment and
software acquisition)
Total GS Costs
Total BR & GS Costs
New
time survey
8 614 758
3 773 447
12 388 205
1 984 171
930 242
3 385 679
6 300 092
18 688 297
- 15 –
3
Additional Satellite Network Filing Activities
BR Activities
including items associated with the processing of satellite
network filings not currently covered by cost recovery
Coordination requests and modifications to plans (Arts 11, 14
RR 1994 Art S9 Ap 30/S30, 30A/S30A and 30B/S30B plus Res
33 and 46),
Advance Publication (Art S9)
Cost recovery invoicing
Overall management of treatment process (partial)
Notifications (and Ap 30B not covered by special sections)
Publication in the Space BRIFIC CDROM of special sections
including publications for coordination requests and advanced
publications
Sub total SSD
Maintenance of the space related software (IAP Department)
Total BR Costs
General Secretariat Reallocated Costs
Personnel Department
Finance Department (Budget and Cost Analysis Unit, Accounting –
IFM Unit)
IS Department (Networking, non-mainframe equipment and
software acquisition)
Total GS Costs
Total BR & GS Costs
4
New
time survey
14 572 758
3 773 447
18 346 205
2 513 239
1 332 280
4 288 452
8 133 971
26 480 176
Additional Ongoing Activities
All ongoing BR Activities
Coordination requests and modifications to plans (Arts 11, 14
RR 1994 Art S9 Ap 30/S30, 30A/S30A and 30B/S30B plus Res
33 and 46),
Advance Publication (Art S9)
Cost recovery invoicing
Overall management of treatment process (partial)
Notifications (and Ap 30B not covered by special sections)
Publication in the Space BRIFIC CDROM of special sections
including publications for coordination requests and advanced
publications
Changes to the date of bringing into use
Updates to Master Register
Provisional recordings under 11.47
Suspension of notices under 11.49
Preparation and publication of Space network list
Preparation and publication of Res46/D
Checking and publication of Due diligence information under
Res49
Checking of Expiry of networks under Res. 4 and extension of
New
time survey
- 16 –
All ongoing BR Activities
Period of Validity
Checking of networks under Res. 51
Suppression of networks
Assistance to administrations
Article S14 – review of a BR finding or decision
Article S20 – Service documents (IFL)
Development and maintenance of BR Space Web page
Support given to IAP Department for software development
Space Workshops
Sub total SSD
Maintenance of the space related software (IAP Department)
Total BR Costs
General Secretariat Reallocated Costs
Personnel Department
Finance Department (Budget and Cost Analysis Unit, Accounting –
IFM Unit)
IS Department (Networking, non-mainframe equipment and
software acquisition)
Total GS Costs
Total BR & GS Costs
5
New
time survey
17 683 137
4 325 601
22 008 738
2 974 797
1 576 956
5 076 027
9 627 780
31 636 518
Remaining Space Department Activities
BR Activities requiring further study
IAP Software development for SSD
Space Department Activities not suitable for cost recovery (including provisions that
represent one-off tasks that are difficult to recover costs)
Resolution 42 – interim systems
Resolution 53 – updating remarks column
Resolution 533 - implementing decisions of conference
Resolution 703 – calculation methods and interference criteria
Preparation for CPM and WRC related to space services
Implementation of instructions from WRCs
Preparation for and participation in Study Group and other ITU meetings
Background work for RRB related to space services
Preparation and conduct of BR Seminars
Review of findings
Harmful interference
ANNEX 4
INTERNATIONAL TELECOMMUNICATION UNION
Ad hoc Group of Council for the
Financial Plan
GENEVA —
Document 2-E (Rev.2)
1 August 2002
Original : English
(29-31 JULY 2002)
DRAFT FINANCIAL PLAN 2004-2007
I Introduction
1. The Plenipotentiary Conference establishes the basis for the budget in light of the policy and
strategic planning of the Union and the related financial limits for the period covering the two
subsequent biennial budget periods, taking into account the amount of the contributory unit provisionally
set by the Council on the basis of the draft financial plan.
2. In accordance with Article 28 of the Constitution and Article 33 of the Convention pertaining to the
finances of the Union, and the provisions of Decision 5 (Minneapolis, 1998) concerning the expenditure
of the Union for the period 2000 to 2003, the Secretary General submitted to Council 2002, the draft
financial plan for the period 2004-20071.
3. The Report was complemented by the Note by the Secretary-General2, outlining the proposed basis
for the draft financial plan, reflecting the definitions of the financial plan3 and the guidelines for the
preparation of the financial plan4 established by the Council.
4. Subsequently, at its fifteenth plenary meeting, by Resolution 1197, the Council decided to establish
the provisional amount of the contributory unit at the level of CHF 315 000 to serve as a basis for further
review and discussion. Resolution 1197 provided that: (a) the Plenipotentiary Conference will require
additional information in order to assess fully the situation regarding the finances of Union for the 2004 2007 period; (b) the identification of a range of options to balance income and expenditure for the
establishment of the Financial Plan will facilitate the decision-making by the Plenipotentiary
Conference; and (c) in order to undertake the identification of such options, an ad hoc group of Council,
comprised of financial specialists, shall be established, under the chairmanship of Mr. Bruce Gracie
(Canada) and will report to a special session of the Council to be held on 22 September in Marrakech.
____________________
1
Document C02/34, “Draft Financial Plan for the Period 2004-2007, Report by the Secretary-General”
2
Document C02/DT/12, “Proposed Basis for the Draft Financial Plan, Note by the Secretary-General”
3
Document C02/DT/7 (Rev.1), “The Financial Plan, Note by the Chairman of the Working Group of the Plenary on the draft Financial Plan”
4
Document C02/DT/10, “Guidelines for Preparation of the Financial Plan, Note by the Chairman of the Working Group of the Plenary on the
draft Financial Plan”
- 18 –
5. The present draft financial plan is based on strategic orientations, goals and programme priorities
spelled out in the draft strategic plan for the Union 2003-20075, which takes due account the relevant
resolutions and recommendations by the Council, and the results of Conferences and Assemblies of the
respective Sectors. In addition, the following key factors were taken into account for the preparation of
the draft financial plan:
Provisional contributory unit established at CHF 315 000 (C02 Resolution 1197);
 Assumption of increase in number of contributory units by 8 in light of the announcement made by
the United Kingdom to select a class of contribution at the 23 unit class level (C02 Resolution 1197);
 Cost estimates based on actual expenditure realized in 2000-2001 and the approved budget for 20022003 (C02/DT/10);
 Cost estimates expressed at rates prevailing at 1 January 2002 (C02/DT/10) with no provision for
price variations that will occur in the six years period between 1 January 2002 and 31 December
2007.
II Estimates of resources and income to maintain the level of the contributory unit
6. The draft financial plan for the period 2004-2007 is estimated at CHF 701 916 000 with an income
estimated at the amount as shown in the table below. The provisional amount of the contributory unit of
CHF 315 000 (zero nominal growth (ZNG) compared with 2000-2003 period) has been applied for the
calculation of the income. Table 1 shows the summary of the estimates. Resource requirements for the
programme activities and capital expenditures are shown separately for the sake of transparency.
Furthermore, the estimates assume a withdrawal from the Reserve Account of the amount of
CHF 6 million for the funding of programme expenditures, CHF 2 million for the Buildings Maintenance
Fund (BMF) and CHF 2 million for the Information and Communication Technologies (ICT) Fund.
Base for comparison
7. As requested by the Council, the sum of actual expenditure incurred in 2000-2001 (Column (a) in
Table 1) and the approved budget for 2002-2003 (Column (b) in Table 1) were used as a base for
comparison. Column (d) of the Table 1 above shows the figures in column (c), recosted6 at 1 January
2002 rates and price variations. Elements factored in for the recosting process are: the United Nations
operational exchange rate of Swiss Franc against the US dollar (1 US$ = CHF 1.68), the conditions of
service in the UN common system and the inflation factor reported by the “Office cantonal de la
statistique” of Geneva – all prevailing at 1.1.2002. The average recosting factor amounts to 2.55 per cent.
The new estimates for 2004-2007 is thus comparable with the 2000-2003 figures in real terms. Further
details are provided in paras 30-34.
Resource estimates to accommodate mandated programme of work vis-à-vis funding
8. The overall programme framework and programme goals and priorities applied in the present
financial plan are based on the Draft Strategic Plan for the Union 2003-2007. In accordance with Article
10, No.70 of the Constitution, the Council is responsible for preparing a report on the policy and
strategic planning recommended for the Union, together with their financial implications. In order to
comply both with this requirement and the decision by the Council establishing the annual provisional
contributory unit at CHF 315 000, the approach outlined below was followed for the preparation of the
financial plan:
____________________
5 Document C02/33 (Rev.1), “Draft Strategic Plan for the Union 2003-2007, Report by the Secretary-General”
6 The term “recosting” is utilized to express “price adjustments” based on actual or future movements in economic indicators, salary
costs determined by ICSC and other factors for the purpose of price equivalency.
- 19 –
Table 1. Expenditure estimates 2004-2007 under zero nominal growth in the contributory unit value
In thousands of Swiss francs
2000-2001
Actual
2002-2003
Budget
(a)
(b)
2000-2003
2004-2007
Estimates
at 1/1/02 rates New estimate
(c) = (a)+(b)
(d)
Variation over 2000-2003
(e)
(f)
(%)
PROGRAMME EXPENDITURE
1. General Secretariat
2. Radiocommunication Sector
3. Telecom Standardization Sector
4. Telecom Development Sector
331 332
174 022
67 408
25 386
64 516
342 007
178 603
68 708
28 813
65 883
673 340
352 625
136 117
54 200
130 398
690 503
361 617
139 587
55 575
133 724
701 916
350 944
157 231
58 512
135 229
11 413
(10 673)
17 643
2 937
1 505
1.7%
-3.0%
12.6%
5.3%
1.1%
TOTAL INCOME
331 332
342 007
673 340
n.a.
701 916
28 576
4.2%
273 232
36 746
9 618
271 731
58 036
9 000
544 963
94 782
18 618
570 712
111 587
13 600
25 749
16 805
(5 018)
4.7%
17.7%
-27.0%
11 737
3 240
14 977
6 017
(8 960)
-59.8%
433.7
315.0
429.9
315.0
8 700
4 750
-
8 700
4 750
8 700
4 750
4 000
2 000
(4 700)
(2 750)
-54.0%
-57.9%
3 950
-
3 950
3 950
2 000
(1 950)
-49.4%
8 700
-
8 700
8 700
4 000
(4 700)
-54.0%
1. Assessed Contributions (incl. Reg.Conferences)
2. Cost Recovery
3. Income from interest and other
4. Net withdrawal from Reserve Account for
programme expenditure
Funding shortfall/excess
Number of full Contributory Units
Value of the Annual Contributory Unit
Capital expenditure funds
1. Buldings Maintenance Fund
2. Information and Communication Technologies
Funds
Withdrawal from the Reserve Account
440.7
315.0
-
Notes:
Column (a): Ref. Financial Statements at 31 December 2001 ; Capital expenditure funds refer to withdrawal from the Reserve Account only.
Column (b): Ref. Table 1 of C01 Res. 1174 and Res. 1168 (Budget 2002-2003 at 1.1.01 rates)
Column (d): Recosting was not applied neither for income estimates, nor for capital expenditure funds.
Column (f): Variation for Expenditure = (e) - (d); and for Income: (e) - (c )
(a) Estimate the resource requirements to implement in full the activities foreseen in the draft
strategic plan for the period 2004-2007, taking due account of the various programme
decisions and resolutions by the Plenipotentiary Conference, the Council and Sector
conferences and assemblies;
(b) Introduce efficiency and economy measures in order to maximize the use of resources (See
Annex A);
(c) Estimate the expected income outside the assessed contributions and determine the expected
total income;
(d) Balance out the resource requirements with the expected income, prioritizing the programmes,
and listing the activities that would be implemented subject to availability of funds (Unfunded
Mandated Activities, UMACs).
Withdrawal from the Reserve Account
9. The funding of the programme expenditure estimates of CHF 701.9 million, assumes a withdrawal
of CHF 6 million (or CHF 3 million per biennium) from the Reserve Account. This assumption was
necessary to balance out the limits of the assessed contributions provisionally set by the Council. In
addition, a further withdrawal from the Reserve Account in the amount of CHF 4 million (or CHF 2
million per biennium) is also assumed for the transfer of funds to BMF and ICT Fund. (See further
explanations under para. 28). With regard to BMF, the amount proposed is for essential works including
the repair / resealing of the roofing on the Varembé building (40 years old), and the replacement of
depreciated equipment (30 years old).
- 20 –
III Full programme activity implementation alternative
Programme expenditures
10. In contrast with the resource estimates under the zero nominal growth (ZNG) annual contributory
unit scenario, should the Plenipotentiary Conference decide to opt for the full implementation of the
programme activities of the Union for 2004-2007, the total resource requirement is estimated at CHF
714.2 million (See Table 2). This would entail an additional resource requirement of CHF 12.2 million
(referred as Unfunded Mandated Activities, UMACs). The implementation of the programme activities
depends significantly on infrastructure investments and maintenance foreseen under the BMF and ICT
programmes. Thus these two programmes are assessed in conjunction with the programme activity
resource requirement level.
Unfunded Mandated Activities (UMACs)
11. The concept of “unfunded mandated activities” is proposed in order to highlight a number of
activities within the overall programme of work mandated by the governing bodies of the Union for the
period 2004-2007, as well as those support activities which are deemed essential to implement the
mandated activities, but could not be accommodated within the limits of income level set by the Council.
These activities are included in this document in order to bring the situation to the attention of the
Member States. Should the Plenipotentiary Conference decide to request the Union to implement the
programme activities in full and thus increase the level of assessment, the contributory unit would be
increased as described in paragraph 29. Should the provisional contributory unit of CHF 315 000 be
maintained, the Plenipotentiary Conference may wish to endorse the concept of UMACs and its list (See
summary in Annex B), and by doing so, the Secretary General would be authorized to incur expenditure
on these activities provided that savings are achieved or additional income is generated.
Table 2. Programme expenditure estimates including UMACs
In thousands of Swiss francs
2000-2003
at 1/1/02 rates
Programme expenditures
1. General Secretariat
2. Radiocommunication Sector
3. Telecom Standardization Sector
4. Telecom Development Sector
690 503
361 617
139 587
55 575
133 724
2004-2007
Estimates
(ZNG CU)
701 916
350 944
157 231
58 512
135 229
Variation over 2000-2003
11 413
(10 673)
17 643
2 937
1 505
1.7%
-3.0%
12.6%
5.3%
1.1%
UMACs
12 234
1 582
2 752
2 900
5 000
2004-2007
Estimates
(Full
implementn.)
714 150
352 526
159 983
61 412
140 229
Variation over 2000-2003
23 647
(9 091)
20 395
5 837
6 505
3.4%
-2.5%
14.6%
10.5%
4.9%
12. In respect of the procurement and development of major IT systems and major buildings repairs and
maintenance works, a minimum of CHF 8 million is necessary for the Buildings Maintenance Fund7 and
CHF 9 million for the Information and Communications Technologies Capital Fund8 for the period
2004-2007. Assuming that CHF 4 million out of the total CHF 17 million could be withdrawn from the
Reserve Account, funding of additional CHF 13 million is necessary.
____________________
7
Document C2001/6 of 24 April 2001, “Major Repairs and Maintenance of the Buildings of the Union, Report by the Secretary-General”
8
Document C02/31 of 8 April 2002, “Information and Communications Technology Capital Fund, Report by the Secretary-General” (para. 4)
- 21 –
Table 3. BMF and ICT fund requirements including UMACs
In thousands of Swiss francs
2000-2003
Actual
Capital expenditure funds
1. Buldings Maintenance Fund
2. ICT Fund
2004-2007
Proposed for
withdrawal
from the
Reserve
Account
8 700
4 750
3 950
4 000
2 000
2 000
2004-2007
Variation over 2000-2003
(4 700)
(2 750)
(1 950)
-54.0%
-57.9%
-49.4%
UMACs
13 000
6 000
7 000
Estimates
(Full
implementn.)
Variation over 2000-2003
17 000
8 000
9 000
4 000
2 000
2 000
30.8%
33.3%
28.6%
IV Highlights by Sector
13. The present financial plan is a translation into financial resources, of the activities the Union
expects to undertake during the period 2004-2007, ultimately to achieve the six goals described in the
draft strategic plan. Main programme and resource changes envisaged in the financial plan period 20042007 are highlighted below.
General Secretariat
Table 4. Resource estimates by Section
Section
Plenipotentiary Conference
Policy Forum
WSIS
Council and Working Groups
SG's Office and departments
Publications
In thousands of Swiss Francs
Expenditure
Budget
Total
2000-2003
2000-2001
2002-2003
2000-2003
at 1.1.02
6
340
287
2 024
171 265
100
174 022
3 237
139
135
1 918
173 075
100
178 604
3 243
479
422
3 942
344 340
200
352 625
3 318
491
433
4 043
353 127
205
361 617
2004-2007
Estimates
(ZNG CU)
2 957
491
1 194
3 925
342 171
205
350 944
Variation
UMACs
( 361)
( 0)
761
( 118)
(10 956)
( 0)
(10 674)
280
1 302
1 582
14. Resource requirements for General Secretariat are estimated at CHF 350 944 000, representing a
reduction of CHF 10.7 million or 3 per cent in comparison with the 2000-2003 resource level. This
reduction is after taking into account the increase in WSIS resource requirements, and introducing
measures for economy and efficiency in its work programme. BMF and ICT Fund requirements are
described separately in para. 12 above. UMACs in the amount of CHF 1.6 million are proposed as
described below.
Section/Item
Plenipotentiary Conference and Council and Working Groups
Adjustment of conference service requirements based on past experience
(Plenipotentiary Conference and Council)
Variation in
thousands of
Swiss francs
(479)
WSIS
Increase of resource level of ITU direct contribution to WSIS funds in addition to
the amount already allocated for this purpose in 2000-2003 (for a total of CHF 1.2
million).
761
- 22 –
SG’s Office and Departments
Reduction of resources under this Section could be accomplished by (i) phasing
out of International Mobile Telecommunications (IMT-2000) activities (CHF 0.9
million; (ii) introducing efficiency/economy measures through redeployment of
staff and training in the IS department (CHF 3.1 million); (iii) introducing
efficiency measures for desk-top-publishing activities (CHF 1.3 million); and (iv)
introducing economy measures in other areas of the General Secretariat (CHF 1.9
million).
(7 230)
Furthermore, reducing the documents related costs (conference services and
reprography) owing to postponement of on RA and WRC in ITU-R, as well as
introduction of efficiency measures by the Sectors in the documentation lead to a
reduction of CHF 3.7 million.
(3 726)
Variation subtotal before UMACs
(10 674)
UMACs
An expanded security service at the Union’s premises deems to be necessary. This
would entail an increase of five security officers, estimated at CHF 1.3 million.
Furthermore, two additional two Working Groups (such as those for the Reform)
meetings, estimated at CHF 140 000 each (total of CHF 280 000), may be
necessary.
1 582
(9 092)
Variation total with UMACs
Radiocommunication Sector
Table 5. Resource estimates by Section
Section
World Radiocommunication Conferences
Radiocommunication Assemblies
Regional Radiocommunication Conferences
Radio Regulations Board
Radiocommunication Advisory Group
Study Group Meetings
Seminars
Bureau
Publications
In thousands of Swiss Francs
Expenditure
Budget
Total
2000-2003
2000-2001
2002-2003
2000-2003
at 1.1.02
2 760
296
0
1 016
150
3 176
474
55 771
3 765
67 408
2 758
347
918
805
248
4 419
587
54 822
3 806
68 708
5 518
643
918
1 821
398
7 595
1 061
110 593
7 571
136 116
5 658
659
939
1 868
408
7 786
1 088
113 418
7 764
139 587
2004-2007
Estimates
(ZNG CU)
3 096
528
11 991
3 010
581
8 772
1 104
120 474
7 675
157 231
Variation
(2 562)
( 131)
11 052
1 142
173
986
16
7 056
( 89)
17 643
UMACs
(%)
2 752
2 752
12.6%
15. The increase of CHF 17.6 million, or 12.6 per cent growth in comparison with the resource level for
2000-2003 is owing mainly to the preparation for and the convening of Regional Radiocommunication
Conferences, the direct costs of which are recovered from the contributions from the participating
Member States, as well as an increased resource requirement for the work on the satellite network filing
backlog as approved by the Council. This increase is expected to be offset from the respective cost
recovery income. In light of its level of cost recovery activities, the resource requirements of the
Radiocommunication Sector should be assessed with caution, taking into account the effect on the
income. The two activities mentioned above are expected to add some CHF 47.4 million income for the
Union in 2004-2007. UMAC in the amount of CHF 2.8 million is proposed as described below.
- 23 –
Section/Item
Variation in
thousands of
Swiss francs
World Radiocommunication Conference and Radiocommunication Assemblies
The postponement of a second World Radiocommunication Conference and
Radiocommunication Assembly in the period 2004-2007 to 2008, reduces the
resource requirements under these two sections by CHF 2.7 million. The
associated CPM would also be postponed, and the reduction of the related direct
costs is reflected under the category of Study Group Meetings.
(2 693)
Regional Radiocommunication Conference
The holding of a two-session Regional Radiocommunication Conference and
related meetings (informal meetings, intersessional and post conference meetings)
during 2004-2007 will entail an increase in the resource requirement of
CHF 11 million. These costs will be fully recovered from the income paid by the
participating Member States. (Note: related income is estimated at
CHF 15.4 million, and an expenditure in the amount of CHF 4.4 million is
expected to be incurred under General Secretariat.)
11 052
Radio Regulations Board
The increase of CHF 1.1 million under this Section from CHF 1.9 million in 20002003 to CHF 3 million is owing to (i) holding of 8 meetings per biennium (total of
16), as against 7 per biennium, planned for the period 2000-2003 (total of 14); (ii)
reinforcement of the support staff to offset the increased workload in the
organization of meetings; and (iii) an increase in the documentation volume to
meet the current and expected demand. The actual expenditure in 2004-2007 will
depend on the nature and composition of the RRB, which will be determined by
the 2002 Plenipotentiary Conference.
1 142
Radiocommunication Advisory Group, Study Group Meetings and Seminars
The increase of CHF 1.2 million is mainly due to (i) the holding of a two-week
Special Committee meeting annually (4 in total) as opposed to a 5-day meeting
biennially; (ii) Maintaining only one CPM with a duration of 2 weeks rather than
two in the period 2004-2007; (iii) increase in support staff due to increase in
workload.
1 175
Bureau and Publications
The maintenance of the level of staff approved by Council for 2002-2003 for the
work on satellite network filing backlog will result in an increase of CHF 7
million if compared with the 2000-2003 resource level. A reduction of
CHF 89 000 is envisaged in the publication costs.
6 967
Variation subtotal before UMAC
17 643
UMAC
Delays in the delivery of specialized software (e.g. the TerRaSys system for the
processing of terrestrial services notices and software for the Bureau and
administrations for the treatment of space services notices) are largely the result of
underfunding in these areas which are indicated as Category A in the draft ITU
Strategic Plan. Thus additional resource requirement is proposed under UMACs in
the amount of CHF 2.8 million to fund four P-3 posts in the area of space and
terrestrial environments (two posts respectively) in IAP.
Variation total with UMAC
2 752
20 395
- 24 –
Telecommunication Standardization Sector
Table 6. Resource estimates by Section
Section
World Telecom. Standardization Assembly
Telecommunication Standard.Advisory Group
Study Group Meetings
Seminars
Bureau
Publications
In thousands of Swiss Francs
Expenditure
Budget
Total
2000-2003
2000-2001
2002-2003
2000-2003
at 1.1.02
570
243
5 224
190
18 408
751
25 386
0
382
6 069
200
21 604
558
28 813
570
625
11 293
390
40 012
1 309
54 199
586
641
11 579
400
41 026
1 343
55 575
2004-2007
Estimates
(ZNG CU)
Variation
752
807
11 861
400
43 568
1 125
58 512
166
166
282
2 542
( 218)
2 937
UMACs
(%)
400
2 500
2 900
5.3%
16. Resource requirements of this sector are maintained at the level of the previous biennium budget.
However, there is an increase of CHF 2.9 million, or 5.3 per cent, in comparison with the 2000-2003
resource level. UMACs in the amount of CHF 2.9 million are proposed as described below. The
resource variations are justified as follows:
Section/Item
Variation in
thousands of
Swiss francs
World Telecommunication Standardization Assembly and Telecommunication
Standardization Advisory Group
Costs of these two sections are maintained at the level of the previous budget. The
difference of CHF 332 000 is mainly due the maintenance of use of interpretation
in the 6 languages at all TSAG meetings.
332
Study Group Meetings
The difference of CHF 282 000 in Study Group Meetings is required to fund the
meetings and workshops in the regions and to maintain the level already foreseen
in 2002-2003.
282
Bureau and Publications
The difference of CHF 2.5 million under Bureau is owing to the need to maintain
the staffing level established in the 2002-2003 biennium. The actual expenditures
in 2000-2001 were significantly lower than the budgeted amount, due to a delays
in recruitment. A reduction of CHF 218 000 is envisaged in the publication costs.
Variation subtotal before UMAC
2 323
2 937
UMACs
Promotion campaign to enhance ITU-T activities awareness (CHF 400 000)
Reinforcement of the staffing level of the Bureau necessary to face the new and
future ITU-T challenges (CHF 2.5 million)
Variation total with UMAC
2 900
5 837
- 25 –
Telecommunication Development Sector
Table 7. Resource estimates by Section
Section
World Telecom. Development Conferences
Regional Telecom. Development Conferences
Telecom. Development Advisory Group
Study Group Meetings
Telecom. Development Activities & Programmes
Bureau
Publications
In thousands of Swiss Francs
Expenditure
Budget
Total
2000-2003
2000-2001
2002-2003
2000-2003
at 1.1.02
682
856
507
1 561
16 177
44 671
62
64 516
1 443
0
353
1 360
17 125
45 505
96
65 883
2 125
856
860
2 921
33 302
90 176
158
130 399
2 177
880
882
2 996
34 150
92 476
162
133 723
2004-2007
Estimates
(ZNG CU)
1 555
2 138
1 168
3 298
31 373
95 502
195
135 229
Variation
UMACs
( 622)
1 258
286
302
(2 777)
3 026
33
1 506
5 000
5 000
17. Resource requirements of this sector represent an increase of CHF 1.5 million, or 1.1 per cent, in
comparison with the 2000-2003 level. UMAC in the amount of CHF 5 million is proposed as described
below. The resource variations are justified as follows:
Section/Item
Variation in
thousands of
Swiss francs
World Telecommunication Development Conferences and Regional
Telecommunication Development Conferences
Net increase under these two Sections of CHF 636 000 is due to the elimination of
the preparatory meetings for WTDC and reinstatement of five Regional
Telecommunication Development Conferences which will also serve as
preparatory meetings for WTDCs. These estimates are subject to modification
based on the final decisions to be taken by the 2002 Plenipotentiary Conference
concerning the preparatory work of the WTDC.
636
Telecommunication Development Advisory Groups and Study Groups
A total of CHF 588 000 increase is envisaged under these two Sections in order to
maintain the level of activities envisaged for 2002-2003.
588
Telecommunication Development Activities and Programmes
The decrease under development activities would defer some of the activities in
connection with the implementation of the Istanbul Action Plan (See also UMACs
below)
(2 777)
Bureau and Publications
Increase of CHF 3 million is mostly to maintain the current level of resources. This
includes a slight resource increase of CHF 33 000 under category Publications.
3 059
Variation subtotal before UMAC
1 506
UMAC
Approximately CHF 5 million is required in addition to the level presented above
under Telecommunication Development Activities in order to implement in full the
Istanbul Action Plan. This UMAC is proposed in the framework of ZNG
environment with reference to the resolutions to the WTDC 02 which mention that
they will be implemented within the available resources.
5 000
Variation total with UMAC
6 506
- 26 –
V Income Estimates
18. The resources for the Union to undertake the programme activities foreseen in this financial plan are
composed of: (a) the assessed contributions, based on contributory units paid by Member States, Sector
Members and Associates; (b) the contributions by the Member States for the Regional
Radiocommunication Conferences; (c) cost recovery activities, including project support costs; (d)
interest; (e) miscellaneous income; and (f) withdrawals from the Reserve Account.
Table 8.
Income Estimates
Income by source
A.
In thousands of Swiss Francs
Actual
2000-2001
Budget
2002-2003
Total
2000-2003
Estimates
2004-2007
Assessed contributions
273 231.7
271 731.2
544 962.9
570 712.1
A.1
A.2
225 362.0
47 638.7
15 741.2
27 322.8
4 574.7
231.0
-
225 343.1
45 407.3
15 120.0
26 019.0
4 268.3
63.0
917.9
450 705.1
93 045.9
30 861.2
53 341.8
8 843.0
294.0
917.9
459 900.0
93 901.5
32 004.0
53 298.0
8 599.5
1 512.0
15 398.6
36 746.0
4 747.8
26 577.3
5 420.8
1 533.6
117.0
509.1
2 686.4
163.6
411.2
58 036.2
9 000.0
26 400.0
22 636.2
1 718.0
300.2
900.0
3 676.0
16 042.1
-
94 782.2
13 747.8
52 977.3
28 057.1
3 251.6
417.2
1 409.1
6 362.4
16 205.6
411.2
111 587.2
10 000.0
51 850.0
49 737.2
3 480.0
600.0
1 410.0
12 163.2
32 084.0
C. Income from interest
7 119.2
6 000.0
13 119.2
9 600.0
D.
2 498.3
3 000.0
5 498.3
4 000.0
319 595.2
338 767.5
658 362.6
695 899.3
11 737.0
3 240.4
14 977.4
6 017.0
331 332.1
342 007.9
673 340.0
701 916.3
Members States' contributions
Sector Members' contributions
- Radiocommunication Sector
- Telecommunication Standardization Sector
- Telecommunication Development Sector
A.3 Associates
A.4 Members States'contributions to Regional
Conferences
B.
Cost recovery
B.1 Project support cost income
B.2 Sales of publications
B.3 Products and services under cost recovery
- UIFN
- UIPRN/UISCN and AESA
- GMPCS-MoUs
- TELECOM
- Satellite network filing
- Other cost recovery income
Other income
Subtotal
E. Net withdrawals from the ITU Reserve Account for
programme expenditures
Grand Total
Note: Item B3, Cost recovery income from Telecom - at the meeting of Ad hoc Group of Council for the Financial Plan on 31 July 2002,
the deleguate from Morocco expressed reservations concerning the assumptions applied for Telecom cost recovery.
Item E indicates the net withdrawal from the ITU Reserve Account for operational expenditures only (withdrawal minus excess),
excluding withdrawals for other purposes such as for debtor's accounts, BMF and ICT fund.
- 27 –
Assessed contributions including contributions to the Regional Radiocommunication
Conference (CHF 570.7 million)
19. The estimated income from assessed contributions is based on the number of units as notified to the
Union as of 1 January 2002 plus 8 units, as indicated in Resolution 1197 of the 2002 Council. This
amounts to an equivalent to 440.7 full units. The provisional contributory unit value of CHF 315 000 has
been applied to arrive at the income estimate under this item. The costs of the two sessions of the
Regional Radiocommunication Conference, and the associated work, are estimated to amount to
CHF 15.4 million. It is assumed that these costs will be met without any effect on the contributory unit,
in accordance with No. 159D of the Constitution.
Cost recovery activities (CHF 111.6 million)
Project support cost income (CHF 10 million)
20. The target for support cost income from technical cooperation projects is estimated at
CHF 10 million, or some CHF 3.7 million less than the estimates for the period 2000-2003. The level of
support cost income is based on an expected average annual project delivery of US$ 20 million.
Sales of publications (CHF 51.8 million)
21. The volume in sales of publications is not expected to increase in the future years. However,
subsequent to review of the current pricing and discount policy, it is deemed that the level of overall
income will remain slightly lower than that estimated for the period 2000-2003.
TELECOM (CHF 12.2 million)
22. Based on the activity level prevailing at 1.1.2002, the expected income to the Union from support of
the TELECOM activities has been estimated at CHF 12.2 million at 80% recovery, in contrast to 100%
recovery recommended by the Working Group on ITU Reform (recommendation 40). (See Annex C –
Options for income and footnote on Item B.3 in Table 8)
Satellite Network Filings (CHF 32.1 million)
23. Preliminary estimated income from the processing of Satellite Network Filings (CHF 32.1 million)
is based on the levels forecast for 2002-2003. The estimates may need to be revised in light of the report
of the Ad Hoc Group on Cost Recovery for Satellite Network Filings, which met at 23 – 25 July 2002.
GMPCS MoU, UIFN, UIPRN/UISCN and AESA (CHF 5.5 million)
24. Income from registrar activities (GMPCS MoU, UIFN, UIPRN/UISCN and AESA) is expected to
amount to CHF 5.5 million in 2004-2007.
Income from interest (CHF 9.6 million)
25. Based on the current level of cash balance, an annual interest gain is expected to be in the range of
CHF 2.4 million per annum. This totals CHF 9.6 million, compared with CHF 13.1 million estimated for
2000-2003.
Miscellaneous income (CHF 4 million)
26. Miscellaneous income includes income from rental of premises, sales of equipment, credit notes
from vendors and other miscellaneous items. The estimate for the period 2004-2007 is based on past
actual income.
Withdrawal from the Reserve Account (CHF 6 million)
27. In order to balance the 2004-2007 resource requirements for programme activities with an income
based on the provisional contributory unit value of CHF 315 000, a withdrawal of CHF 6 million from
the Reserve Account is necessary (Refer also to section “Other Considerations - Reserve Account”.
- 28 –
VI Other Considerations
Reserve Account
28. The balance of the Reserve Account as at 1.1.2002 amounts to CHF 17.6 million (including the
amount reserved for cost recovery activities in accordance with PP-98 Resolution 91). The present draft
financial plan assumes withdrawals of CHF 6 million from the Reserve Account for the programme
activities and CHF 4 million for BMF and ICT Fund. Taking into account that CHF 3.2 million
withdrawal has already been approved by the Council for the current biennium, the initial balance for the
biennium 2004-2005 is estimated to be CHF 14.4 million. Present projections indicate that the balance of
the Reserve Account would be lower than 10.5 million, or 3 per cent of the biennial estimates, as shown
in Table 9 below.
Table 9. Reserve Account
In thousands of Swiss Francs
(+) Initial balance
(-) Withdrawals for Prog. Activities
(-) Withdrawal for BMF and ICT fund
(=) End Balance
Percentage over programme expenditures
(-) 3% over the programme expenditures
(=) Difference
2002-2003
17 597.0
2004-2005
14 356.6
2006-2007
9 348.1
2004-2007
3 240.4
3 008.5
3 008.5
6 017.0
2 000.0
2 000.0
4 000.0
9 348.1
2.7%
10 528.7
(1 180.6)
4 339.6
1.2%
10 528.7
(6 189.1)
(6 189.1)
14 356.6
10 260.2
4 096.4
Implications on Contributory Unit for not withdrawing funds from the Reserve Account and/or
implementing UMACs
29. The table below demonstrates the financial implications on annual contributory units under different
alternatives described in this document. The scenario used as a base is to implement the activities in line
with the estimates shown in Table 1, at 1.1.2002 prices, bearing in mind that it assumes a withdrawal
from the Reserve Account in the amount of CHF 10 million for the 2004-2007 period. Variant 1A shows
the financial implications in case no withdrawal (CHF 10 million) is made from the Reserve Account.
Variant 1B shows the implications in case programme activity UMACs amounting to CHF 12.2 million
is implemented. This option should be considered together with variant 1C, which deals with the
buildings maintenance and ICT UMACs, in order to balance the resource increase with that required for
sustaining the infrastructure in those two areas. Variant 1C shows the implications for the
implementation of UMACs for buildings maintenance and ICT infrastructure.
Table 10. Effect on Contributory Unit (at 1.1.2002 rates)
Scenario Analysis
Scenario 1: Implemention of the programme as shown in Table 1
Variant 1A: No withdrawal of CHF 10.1 M from the Reserve Account for programme, BMS/ICT
Variant 1B: Implementation of UMACs for ICT fund
Variant 1C: Implementation of UMACs for BMF
Variant 1D: Implementation of UMACs proposed for programme activities
Additional resource
requirement Annual Contributory
(CHF000)
Unit (CHF)
10 017.0
7 000.0
6 000.0
12 234.3
315 000
+5 700
+3 989
+3 421
+6 958
- 29 –
Recosting the actual expenditures 2000-2001 and approved budget 2002-2003 at 1.1.2002 rates.
30. In conformity with the guidelines outlined by the Council (C02/DT/10) on the preparation of the
financial plan, the cost estimates for 2004-2007 have been based on the conditions of service prevailing
on 1 January 2002. In order to make these new estimates comparable with the expenditures and budgets
for the period 2000-2003, the latter were recosted at 1.1.2002. Bearing in mind that 2000-2001 actual
expenditures are at the price level of the respective year of implementation, and that 2002-2003 approved
budget is expressed at 1.1.2001 rates, the elements described in the paras. 31-33 below have been taken
into account for the recosting process.
31. The Swiss Franc exchange rate vis-à-vis the US dollar as at 1.1.2002 is CHF 1.68, compared with
CHF 1.64 on 1.1.2001. Approximately 20 per cent of the Union’s expenditure is based on US dollar,
mainly in respect of the contributions to the United Nations Joint Staff Pension Fund (UNJPF) for
professional and higher categories.
32. Actual salary costs incurred during 2000-2001 and salary costs budgeted for 2002-2003 were
recalculated applying the salary scales prevailing in the United Nations common system as at 1.1.2002
(Salary scales are issued by the International Civil Servant Commission, ICSC). Salary costs are
allocated under two expenditure Categories. Category 1 comprises base salaries; post adjustments (in the
case of professional and higher categories); dependency allowances; rental subsidies; non-resident
allowances; and language allowances. Category 2 includes installation and repatriation grants; education
grants and related costs; home leave; and the Union’s contributions to the UNJSPF and health and
accident insurance.
33. For categories of expenditures other than salary costs, the following annual rates (which are based on
official inflationary factors reported by the Geneva city Statistics Office) were applied: 2.5% for
contractual services; 2.5% for rental an maintenance (services); 2.1 % for rental and maintenance
(building); all other categories (travel on duty, material and supplies, acquisition, etc) an average rate of
0.83% has been applied.
34. The application of the above mentioned inflation rates and the increases due to application of the
salary scale prevailing at 1.1.2002, results in the overall adjustment of 2.55% for the period 2000-2003
(recosted) compared with the sum of 2000-2001 actual expenditures and 2002-2003 budget (expressed at
1.1.2001) rates.
Future price increase (exchange rate, inflation and salary increases) considerations
35. The price equivalency between 2000-2003 and 2004-2007 estimates enables the analysis of the real
growth. However, attention is drawn to the fact that price variation, which affects the purchasing power
of the Union, has not been taken into account in the present estimates. That is to indicate that the
anticipated cost increases due to price variation from 1.1.2002 through 31.12.2007 is not included in the
present financial plan.
36. In respect of the Professional category salaries, the International Civil Servant Commission (ICSC)
is presently reviewing (at its 55th session during 22 July – 9 August 2002) the possibility of adjusting the
UN net salaries for Professional and above categories in light of the differential observed in comparison
with the United States federal civil service salaries. Pending the Commission’s conclusions and final
approval by the United Nations General Assembly (December 2002), this may impact significantly the
salary costs of the Union (presently estimated at 5.7 per cent). Furthermore, conclusions of the recent
salary survey conducted in Geneva for the determination of the new salary scale for General Service
category staff, will impact on the finances of the Union, including that of the current biennium
(recommended increase of 4.33 per cent over 1995 scale and 1.45 per cent over scale before 1995, with a
weighted average of 1.93 per cent).
- 30 –
37. The effect of the cost increase for future years cannot be calculated accurately in the absence of final
decisions on salary scales and due to future economic and financial uncertainties. However, preliminary
assessments (based on information currently available) indicate that an amount of CHF 37.2 million
would be required to offset the cost increases for the period 2004-2007. This amount is estimated after
computing the salary and price increase effect in 2002-2003, which is estimated at CHF 6.6 million.
Salary increase for Professional and Above Categories:
5.7 per cent in 2003 as of June 2003 (See para. 36 above)
Increase of 90 per cent of the CPI, resulting from the adjustment on post adjustment is
assumed for the period 2004-2007 (annually).
Salary adjustment for GS Category:
1.9 per cent in 2002 (See para. 36 above)
Annual adjustment of 90 per cent of the CPI for the period 2003-2007 (method applied for
interim adjustments).
Projection of Consumer Price Index (CPI) movement:
Estimated at 0.8 per cent in 2002 (The Economist, July 2002)
1 per cent per annum for 2003-2007 based on past experience (Geneva).
38. Based on the above factors, the recosted amount of CHF 701.9 million in Table 1 is estimated at
CHF 739.1 million (without the effect of the exchange rate). Table 11 below shows the implications on
contributory units under various alternatives, including the effect on exchange rate variation, applying
the rate of US$1= CHF 1.48 (United Nations operational exchange rate prevailing at 1.8.2002).
Table 11. Effect on Contributory Unit (for expenditure estimates recosted at 04-07 rates)
Scenario Analysis
Additional resource
requirement Annual Contributory
(CHF000)
Unit (CHF)
Scenario 2: Implement the programme at CHF 701.9 M level (1.1.2002 prices), corresponding to CHF 739 119
at 04-07 rates as well as CHF 4.1M for BMF/ICT
Variant 2A: Effect of exchange rate (at US$1 = CHF 1.48) over Scenario 2
Variant 2B: UMACs for ICT
Variant 2C: UMACs for BMF
Variant 2D: UMACs on the overall programme activities
Variant 2E: Effect on exchange rate (at US$1 = CHF 1.48) over 2D
338 217
(16 712.3)
7 176.8
6 151.5
12 882.7
( 291.3)
- 9 481
+1 745
+1 163
+7 308
- 165
Options to balance the financial plan
38. A list of options recommended for consideration is attached as Annex C which indicates some
options for reducing the expenditure as well as options for income.
- 31 –
ANNEX A
Efficiency and economy measures
The present financial plan takes into account savings resulting from the efficiency and economy
measures introduced by re-engineering the internal processes and methods of work. Efficiency measures
will be further sought during the implementation period.
Item
No.
Efficiency and economy measures
1
Reduction in the volume and costs of documentation
Estimated savings
Revising the working methods for documentation production and
replacing printed materials by electronic documents led to increase in
productivity and reduction in printing costs.
Translation and typing
Reprography
2
3
CHF 2.4 million
CHF 1.3 million
Organizational changes and staff redeployment
Information services
CHF 2.5 million
Desk top publishing
CHF 1.4 million
Security service (1 post)
CHF 0.3 million
Other economy measures
Savings are expected to be made in Contractual services, Travel on
duty; Acquisition of furniture; and Public and internal service utilities,
in the General Secretariat.
Total
CHF 2.2 million
CHF 10.1 million
- 32 –
ANNEX B
List of Unfunded Mandated Activities (UMACs)9
Item
No.
Activity
Sector
Justification/Explanation
Estimated
resource
requirement
CHF 000
1
TSB
Promotion campaign to
enhance ITU-T
activities awareness
Council 2001 Resolution 1181
Council recommendation 4
Telecomm. Standardization Advisory Body
advice – June 2002 session
2
3
4
5
6
TSB
BDT
BR
GS
GS
Reinforcement of the
staffing level of the
Bureau
Necessary reinforcement of the TSB staff to face
new and future ITU-T challenges
2 500
Full implementation of
activities in connection
with the Istanbul Action
Plan
Strengthening of space
and terrestrial
environments areas in
IAP by two P-3 posts
respectively.
5 000
To avoid delays in the delivery of specialized
software (e.g. the TerRaSys system for the
processing of terrestrial services notices and
software for the Bureau and administrations for
the treatment of space services notices) which
are largely caused by lack of resources in these
areas (See Category A activities of the ITU-R,
described in the “Draft Strategic Plan for the
Union 2003-2007”).
Working Group of the
Council
Additional working group meetings – one per
biennium.
Security
The ITU needs to comply with the minimum
security standards UN-wide that have been
reviewed and partially upgraded since
September 2001. 6 posts are needed for 2 shifts
of security guards per building entrance is a
requirement for a reasonable degree of access
control. One post is being provided through
redeployment, leaving a funding shortfall for 5
posts.
Additional 5 security
officers to expand the
level of security at the
Union’s premises.
400
2 752
280
1 302
Subtotal
(Programme activities)
____________________
9
This list is neither final nor exhaustive.
12 234
- 33 –
7
8
ICT
BMF
Information and
Communication
Technology (ICT) Capital
Fund
Buildings Maintenance
Fund
The estimated resource requirement of CHF 7
million is in addition to the proposed CHF 2
million to be drawn from the Reserve Account.
A total of CHF 9 million in ICT investments is
necessary to maintain the reliability and
functionality of the ICT infrastructure, to
maintain and improve the efficiency of the
Secretariat, and to actively support the
information exchange requirements of
participants in the activities of all ITU sectors.
The demands made by the membership (e.g., as
expressed via TSAG and RAG) will surely
require major investments, as requirements,
technology and the working methods generally
used by the membership evolve in the period
through 2007 (See also document C02/31,
Information and Communication Technology
Capital Fund, Report by the Secretary-General).
The estimated resource of CHF 6 million is in
addition to the proposed CHF 2 million to be
withdrawn from the Reserve Account.
The above proposal is still below the minimum
resource requirements deemed necessary for the
normal maintenance of ITU buildings and
related installations, which is estimated at CHF
2.6 million per annum. This is calculated at
1.5% of the value of the premises CHF 173
million (See also document C01/006).
Maintenance of the physical infrastructure is
essential both for safety and for the efficiency of
programme implementation. The resources
foreseen under this UMAC would be used for
the completion of items such as replacement of
electronic conference equipment in Room C
which becomes 17 years old in 2006, and
resealing of roofing over the first basement.
Total
(Programme activities +
Capital expenditure
funds)
7 000
6 000
25 234
- 34 –
ANNEX C
Some options for reducing expenditure
Item
In CHF 0000s
1. Reduce length of PP-06 to three weeks
(535)
2. Reduce length of PP-06 to two weeks
(1 072)
3. Reduce length of Council to 7 days each year, in line with UN best practice
(506)
4. Replace RTDCs by regional preparatory meetings
5. Terminate payment of mission expenses for Council, except for Least Developed Country
councillors
6. Reduce number of RRB meetings to 3 per year
(1 577)
(653)
7. Reduce Study Group meeting days with interpretation to 1996-99 levels
8. Reduce all meetings by 1 day
(1 561)
9. Abolish summary records (except for plenary sessions of treaty conferences and RRB)
(1 795)
10. Terminate production and dispatch of Recommendations in paper format (electronic format
only)
11. Abolish the Library while maintaining the archives
Further possible savings measures
In CHF ‘000s
Options
1. Limit expenditure on travel by applying standard UN practice or commercial telecom
practice
Options for income
In CHF ‘000s
Options
1. Apply full cost-recovery principle to the administration of the TELECOM Surplus Funds (at
13% over CHF 4.4 million yearly implementation)
2. Apply only 60% cost recovery to TELECOM activities
2 300
(3 041)
3. Apply full cost recovery to TELECOM activities
3 041
4. Adopt new 2001 time survey to SNF cost recovery
5 294
5. Review Resolution 88 to include additional SNF activities in SNF cost recovery
6. Include additional ongoing BR activities in SNF cost recovery
_____________________