Intergovernmental Council of the IHP; 13th; Report of the

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					                                                                                          LErP/rc-xnm 2
                                                                                      Paris, 20 April 1998
                                                                                          Original: English




                              UNITED NATIONS EDUCATIONAL,
                         SCIENTIFIC AND CULTURAL ORGANIZATION


                 INTERNATIONAL             HYDROLOGICAL              PROGRAMME




                     Thirteenth Session of the Intergovernmental           Council
                                         (Paris, 8 - 13 June 1998)




              REPORT OF THE IHP FINANCE COMMITTEE




 Items 10 and 13 of the Revised Provisional Agenda



           The Council is invited to consider the findings of the IHP Finance Committee and to
           decide upon its recommendations and proposals.




SC-981CONF.20YCLD.3
  IHPAC-xIm2
Table of Contents




                     REPORT OF THE IHP FINANCE               COMMITTEE

                                     TABLE     OF CONTENTS


                                                                                Pa@

1. INTRODUCTION                                                                  1

2. STABILITY    OF THE IHP REGULAR BUDGET

3. STRATEGY ON EXTERNAL            FUNDJNG

4. MEMBER STATES’ CONTRIBUTIONS              TO IHP

5. CORE PROJECTS AS A TOOL IN PRIORITY SETTING                                   3

6. REVIEW AND ADVICE ON UNESCO REGULAR BUDGET FOR IHP                            3

   6.1 Review of 1996-1997 Regular Budget                                        3
   6.2 Advice on 1998-1999 Regular Budget                                        3

7. FINANCIAL        IMPLICATIONS   OF IHE’ GOVERNANCE STRUCTURE                  4


8. ROLE OF THE FINANCE COMMITTEE             IN THE PLANNING PROCESS OF MP-VI    5

9. FUTURE ROLE OF THE FINANCE COMMITTEE                                          5

10. PROPOSED DECISIONS TO THE COUNCIL                                            5



ANNEXES

ANNEX I         TERMS OF REFERENCE OF THE MP FINANCE COMMITTEE
ANNEXII         COMPOSITION OF THE IHP FINANCE COMMITTEE
                                                                                                lHP/lc-XIII/l2




1.      INTRODUCTION

         At its twelfth session (September 1996) the IHP Council (IC) decided to establish a Finance
Committee (FC). The Terms of Reference and the composition are given in Annexes I and II respectively. It
was decided that the FC should not limit its assessment to the biennium 1996- 1997, but should consider the
full scope of MP-V.

        The FC started its work during that session of the Council, formulated a Workplan and made a quick
mventory of relevant questions to be studied by the IHP Secretariat. At the end of the Council’s session, the
Chairperson of the FC presented the scope of the work foreseen for the FC. During the intersessional period,
two meetings of the FC were held: the first was held in Tehran, Iran, from 24-28 November 1996, fully
financed by the Iranian Government, in a generous gesture of co-operation with the IHP, which is highly
appreciated. The second meeting was held in Paris at UNESCO Headquarters, 4-6 February 1998.

       The FC has prepared the following reports: Workplan 1996-1998 (September 1996) Advice on the
IHP Regular Budget 1998-1999 (February 1997) and two Reports of the intersessional meeting to the IHP
Bureau (May 1997 and March 1998).

         On the basis of these reports and in agreement with relevant decisions of the RIP-Bureau, at its
twenty-sixth session, two documents have been prepared for the thirteenth session of the 1HP
Intergovernmental Council: this Working Document MP/IC-XzII/ 12 Report of the IHP Finance Committee
and Information Document IHPAC-XIIIAnf.14 Financial matters of the IHP: considerations by the IHP
Finance Committee.

         This Working Document consists of: analysis of budget flows (Sections 2, 3, 4) proposal on core
projects (Section 5) review and advice on IHP Regular Budget 1996-1997 and 1998-1999 (Section 6)
financial considerations at governance structure and future planning of IHP (Sections 7 and S), proposals on
future FC-role and IC-decisions (Sections 9 and 10).


2.      STABlLlTY      OF THE IHP REGULAR           BUDGET

          Stability of the Regular Budget is an essential condition for an adequate and well balanced
implementation of IHP. During the last years, especially the last biennium 1996/1997, programme execution
has suffered severe delays due to deferments of funds. Therefore the FC welcomes the policy note
DG/Note/98/3 of the Director-General (DG) of UNESCO of January 1998 on reinforcing water/related
activities. The FC concludes that the DG’s Green Note may guarantee the stability of the IHP Regular
Budget, in case the intention of his statement, (ton reinforcing the funding of IHP)) is fulfilled. In order to
ensure the attainment of this objective, the Council is invited to consider proposing a Draft Resolution on the
2000-2001 Regular Budget to be submitted to the General Conference of UNESCO.               In this respect it is
referred to a FC proposal to the twenty-fifth session of the IHP Bureau (June 1997) stating that, in agreement
with Resolution XII6, the IHP Regular Budget should be increased in order to allow the IHP achieve its
objectives. The FC is of the view that a reasonable increase would be 7 per cent each biennium.


3.      STRATEGY       ON EXTERNAL         FUNDING

         The referred policy note of the Director-General of UNESCO on reinforcing water-related activities in
UNESCO presents a two-track strategy of funding, namely the decision of the DG ctto reinforce the funding of
the International Hydrological Programme)) and the intensification of ((efforts to mobilize additional extra-
budgetary resources)). The FC accepts the invitation of the DG to provide advice in this regard.
lHP/IC-XIII/   12
Page 2


         The FC developed a strategy on external funding and concluded that acquisition of external funds
requires long-term efforts of many persons involved. Therefore, the FC proposed that, by means of close co-
operation between the IHP Secretariat and the FC, the following strategy could be made operational during the
next intersessional period:

1.       combined analysis of the co-operative partners’ willingness [Detailed Plan of the Fifth Phase of IHP -
         Blue Book] and real support by Member States [Surveys, see Section 41.

2.       immediate secondment of a communication expert from one of the Member States, and in case no
         resources are made available from Member States in 1998, provisions to ensure the services of such a
         specialist at the earliest.

3.       step-by-step improvement of IHP National Committees (IHP/NCs) involvement in looking for extra
         funds, starting in the short-term with a few already active IHP/NCs.

4.       careful selection of promising items and extrabudgetary projects/activities.

5.       adequate, output-driven and product-oriented formulation of extrabudgetary projects.

6.       preference on reonal-sized   proposals.

7.       wide dissemination of the scope of IHP’s mission and philosophy.

         The IC is invited to consider these strategic elements and to take the appropriate decisions.


4.       MEMBER      STATES’ CONTRIBUTIONS              TO JHP

          At the request of the IC, the FC has executed two surveys in order to inventory current and potential
supporting contributions of Member States to RIP-V, in terms of man-months and direct funding for IHP
activities conducted at national, regional and global scale.

         The first survey, launched in October 1996, directed its queries to contributions during the biennia
1996-1997 and 1998-1999 [replies from 27 countries]. The second one, launched in December 1997, deals
with contributions during the biennia 1998-1999 and 2000-2001, and includes also project level information
[replies from 17 countries up to April 19981.

         The figures of the first survey indicate approximately the equivalent of USD 3.0 million in national
contributions during the 1996-1997 biennium, and USD 3.5 million during the 1998-1999 biennium. For
further information, please refer to Document IIWIC-XIII/I&.    14.

         From the first survey it may be surmised that, as only nearly one-fifth of all Member States responded,
the contributions to IHP of the totality of countries may be expected to be substantially greater. It also proves
that, apart from extra-budgetary funds from a number of Member States, the total of contributions of Member
States amounts to more than the Regular Budget for IHP.

         However, the FC emphasizes that there is still no balance between the considerable number of justified
demands of Member States and international organizations for IHP activities on one side, and available funds
in support on the other side. In this respect, the FC recommends to the IC that all Member States be invited to
materialize the commitments they made in connection to MP-V [Detailed Plan of the Fifth Phase of the MP-
Blue Book].
                                                                                               tHP/lC-XllV12
                                                                                                        page 3


5.      CORE PROJECTS AS A TOOL Ih’ PRIORITY                SETTING

         As there is still an imbalance between available funds and the resources necessary to satisfy the
demands put forward by Member States, as pointed out at the end of Section 4, it requires further priority
settmg for programme implementation. In this respect, the FC strongly advocates the selection of core
projects/core activities, the implementation of which should be always made available by allocation of funds.
The FC recommends the following criteria for core projects/core activities.

        -   top priority activities set by the IC;
            interdisciplinary or regional activities, which were initiated through special funds by the DG on a
            General Conference decision;
            activities which are also financially supported [however not fully] from extrabudgetary funds or
            NC budgets,
            a minimum annual budget of USD 15,000 per activity [see also Subsection 6.11,

         The IC is invited to consider this proposal and to make explicit its view. For further information on
the activities which might be considered, ((core projects/core activities)), please refer to Document MP/ICY-
XIMnf. 14.


6.      REVIEW AND ADVICE          ON UNESCO REGULAR            BUDGET FOR IHP

61      REVIEW OF 1996- 1997 REGULAR BUDGET

         The FC has noted that the execution of IHP-V has suffered severe delays due to the fact that only a
part, USD 125,000, of the redeployment announced by the DG in July 1997 of USD 400,000 of the deferred
funds, has been made available in January 1998. The FC expresses its deep concern that the results of all
actions to materialize the timely redeployment undertaken by the IC of the IHP, the IC Chairperson and the FC
Chairperson were very ineffective,

         In this respect, the FC would like to recall the promise of the DG of UNESCO made at the opening of
the twelfth session of the IC, September 1996, to fully redeploy the amount of the Regular Budget 1996- 1997,
which had been deferred. Because the total amount of deferred funds [on the order of USD 700,000], in fact
the budgetary execution rate with respect to the original budget only reached on the order of 65 per cent. As
no detailed information on the impact of the budget cut on programme execution could be produced for the
second FC intersessional meeting, February 1998, the FC has proposed that an overview of projects with
consequencesof financial difficulties and spent and required budget be presented at the Thirteenth IC session.

       On the basis of the approved budget of USD 2,795,OOO‘for the biennium 1996-1997, 85 activities
have been planned [40 at Headquarters, 45 at Regional Offices], with an average normal budget of USD
15,000 each. The FC considers this amount as an absolute minimum per activity.

        The FC proposes that the IC considers the present situation and make an appropriate decision in order
to avoid that the future execution of IHP-V be affected in such a negative, nearly devastating way.

6.2     ADVICE ON 1998- 1999 REGULAR BUDGET

        At its 29th session [October-November 19971 the General Conference of UNESCO approved a 1998-
1999 Regular Budget for 1HP of USD 2,875,000, basically the same amount as the 1996- 1997 amount [before
reductions and deferments],
Il-IP/lC-XIII/I   2
pa.9 4


        At its first intersessional meeting [Tehran, November 19961, the FC has given extensive attention to
the preparation of the Advice on the 1998-1999 IHP Regular Budget. This Advice was submitted in February
 1997 to the Chairperson of the IC in order to make it available to the IHP Secretariat in time for the
preparation of the 1998- 1999 Regular Budget.

        The recommendations presented in the FC Advice, have not been fulfilled in the form requested, as a
new procedure of Workplan Preparation was introduced by the Bureau of Budget of UNESCO, and the DG
has not yet approved the IHP Workplan, set up by the IHP Secretariat [situation as of 6 April 19981. For this
reason the FC could not give its opinion on the financial implications of the Workplan at its second
intersessional meeting [February 19981.

        The FC has concluded that a table with information on budget and planning which links IHP Main
Lines of Action/Actions and IHP Themes/Projects would be valuable to the FC, the Bureau and the IC. The
FC appreciates the intention of the Secretariat to provide this table in connection with the updating of the
Status Report of RIP-Projects.

        The FC has noted that a substantial number of commitments [i.e., international co-operation activities
within IHP, and DG commitments to which the Division of Water Sciences has to contribute] are for 1998,
and the resources to cover them will have to be taken out of the 1998 share of the budget. As UNESCO has
issued the directive that only 45% of the biennial budget is assigned to 1998, the execution of 1998 IHP
programme activities will run into serious difficulties because of the limited remaining availability, unless the
share of 45% is allocated from the biennial budget net of the amount required by the above-mentioned
                                                         -
commitments. The FC has recommended to the Bureau that they take action in this respect.

         Furthermore, the FC has recommended that the mandated allocation of the budget between
Headquarters and the Field Offices in the 55%:45% ratio be made after deduction of the costs of the global
and general commitments, instead of charging Headquarters with virtually all these costs. The FC argues that
this type of expenses should be absorbed by the IHP as a whole as they serve global and regional interests.
The IC is invited to take action.


7.         FINANCIAL   IMPLICATIONS         OF IEtP GOVERNANCE          STRUCTURE

         In view of Resolution XII-3, adopted by the IC at its session of September 1996, the FC has discussed
this item at its meting in Tehran of November 1996. The FC compared relevant cost items of two options and
concluded that Option 3 with a General Council and Regional Councils is more expensive than the present
situation [Intergovernmental Council, Option 01. The FC argued to consider also the benefits of the options,
and suggested to search pros and cons of joint meetings, with parallel scientific and administrative sessions.

         On request of the IHP Secretariat, the FC has considered the responses by NC’s on this matter at the
 FC meeting in Paris, February 1998. The FC concludes that some of the 22 responses by the Member States
 (received up to that moment) include comments on the budgetary aspects, however not in the same direction.
 The FC is of the opinion that in any case the additional questions of some NC’s have to be considered by the
 FC before further decisions are made. Furthermore, the FC recommended the Secretariat to send out a
 reminder to the NC’s which had not responded, in order to give the Bureau the opportunity to consider their
 views at its twenty-sixth session, 6-8 April 1998. By the time that meeting took place, 17 additional replies
 had been received, making a total of 39 which were subjected to an analysis by the Secretariat.
                                                                                                IHP/IC-XIII/12
                                                                                                         pa.9 5


8.      ROLE OF THE FINANCE            COMMITTEE        KN THE PLANNING         PROCESS OF IHP-VI

        The FC is of the opinion that the planning of MP-VI has to be accompanied by financial planning at
two levels: budget strategy and financial aspects of programme execution. Therefore, the FC proposes that its
views and recommendations be introduced at two moments of the planning process:

1.      March-June 1998: to include a budgetary strategy in the Strategy Paper on IHP-VI, and
2.      January-June 1999 and autumn 1999-March 2000: to include financial planning                      in the
        technical/scientific planning of RIP-VI.

          Furthermore, the FC recommends that, apart from the above proposal, during the planning process of
RIP-VI, attention be given to: unfinished products of IHP-V, marketing capabilities of IHP and
commercialization of the products of IHP projects, involvement of the highly qualified Secretariat staff in new
international activities, greater visibility of IHP, role of Field Offices/Regional Hydrologists.


9.      FUTURE ROLE OF TEIE FINANCE              COMMITTEE

         The current members of the FC believe that in the coming years the FC may fulfil1 important duties
with respect to, among others, review of the Regular Budget, external funding, contribution of Member States,
financial planning of RIP-VI, financial aspects of programme evaluation, communication with lHP/NCs on
financial matters.

        The IC may wish to review the Terms of Reference on some specific aspects:

                FC meetings: not only at IC sessions, but also during the intersessional period, in the months
                preceding the Bureau and Council sessions.
                communication: presence of FC Chairperson as observer at Bureau sessions (this has already
                been carried out twice in practice).
                continuity: the outgoing Chairperson may be considered ex-officio member of the next FC.
                II-W progress reports: FC and Secretariat agreed on yearly reports instead of the 6-monthly
                reports indicated in the current Terms of Reference.
                evaluation: the FC recommends to evaluate the functioning of the FC every four years, so for
                the first time would be in the fourteenth session of the IC in year 2000. In that occasion the IC
                might decide to establish the FC as a permanent standing committee of the Council.
                Meanwhile, the FC mandate would have to be extended temporarily for the next intersessional
                period 1998-2000.


10.     PROPOSED DECISIONS                  COUNCIL
                                     TO TELEZ

        The IC is invited to give its views on the findings of the present Report of the IHP Finance Committee,
and to decide on recommendations and proposals of the FC.

        The IC is invited to review the Terms of Reference on the aspects given in Section 9 of this report, and
to decide on the continuation of the FC as its subsidiary body for the period 1998-2000.
                                                                                             IHlYlc-xIlY12
                                                                                                      Annex I


                                               ANNEX1

     TERMS OF REFERENCE                     OF THE H3P FINANCE                 COMMITTEE

1.   OBJECTIVE      OF TBE IHP EINANCE COMMITTEE

     The Finance Committee for the IHP is a subsidiary body of the Intergovernmental Council, established
     for the intersessional period of the said Council to act on behalf of the MP in assessing financial state
     and needs of the Programme, in undertaking initiatives conducive to secure adequate funding for the
     Programme and in overseeing the financial execution of the Programme.


2.   COMPOSITION        OF THE FINANCE         COMMITTEE

     The Finance Committee will be composed of six members who will be elected at the twelfth session of
     the Intergovernmental Council. The members will then elect the chairperson. The members shall hold
     office during the intersessional period. The composition of the Finance Committee so formed shall
     reflect an equitable geographical distribution,

     The Committee will meet once during a biennium on the occasion of the sessions of the
     Intergovernmental Council.


3.   FUNCTIONS       OF TBE COMMITTEE

     3.1     Assess the financial requirements to execute the projects and activities planned to accomplish
             the set goals for the IHP phase being implemented to its final completion, with particular
             focus on the requirements for the following biennium.

     3.2     Based upon the six-month reports of the Secretariat, appraise the adequacy of UNESCO’s
             Regular Budget to perform the required IHP activities, assess achievable progress with
             Regular Budget funds foreseen and magnitude of and opportunity in which additional funding,
             if any, will be required

     3.3     Identify potential sources and means to obtain additional financial resources on the basis of
             information provided by the Secretariat, the Member States and other donor sources. The
             Finance Committee should seek means to actively involve National Committees from
             developed and developing countries in this process.

     3.4     Present to the Bureau meeting a written summary Status Report including recommendations
             for further action, and at the next Council meeting, an in-depth report of the current financial
             situation and the financial execution in the previous biennium, suggesting policy issues for the
             following biennia to be considered by the Council.
                                                                                       IHwIc-xrIl/ 12
                                                                                              Annex ri


                                             ANNEXII

              COMPOSITION            OF THE IHP FINANCE             COMMITTEE

MEMBERS

Mr B. Hadid                                            Mr C. Salazar
Chairperson, Syrian IHI’ Committee                     Direction General de Aguas
Deputy Minister of Irrigation                          Morande 59, Piso 8
P.O. Box 445 1                                         Santiago
Rue Fardous                                            Chile
Damascus                                               Fax:     +5626722124
Syrian Arab Republic
Fax:    +963 11 224 6888
                                                       Mr 8. Starosolszky
                                                       Managing Director, Water Resources Research
Mr A. Jahani                                           Center (VITUIU)
General Director, Water Planning Bureau                Kvassay Jeno Ut. 1
Ministry of Energy                                     P.O. Box 27
No. 8 1 Felestine Avenue                               H-1453 Budapest 92
Tehran                                                 HWWY
Islamic Republic of Iran                               Fax:    +36 12161514
Fax:     +98 21 893 566

                                                       Mr F.C. Zuidema        (Chairperson)
Mr G. Van Langenhove                                   Netherlands National Committee for IHlYOHP
Head. Hydrological Services                            Senior Programme Manager
Department of Water Affairs                            c/o KNMl
Ministry of Agriculture, Water                         P.O. Box 201
and Rural Development                                  3730 AE De Bilt
Private Bag 13193                                      The Netherlands
Windhoek                                               Fax:    +31302210407
Namibia
Fax:     i-26461224512




UNESCO

Mr J.A. Tejada-Guibert
Liaison Officer/Secretary, IHP Finance Committee
Programme Specialist
Division of Water Sciences/UNESCO
1, rue Miollis
75732 Paris Cedex 15
France
Fax:     +33 145685811