- 2 -

PERMANENT COUNCIL OF THE OEA/Ser.G

ORGANIZATION OF AMERICAN STATES CP/CAAP-3419/16

7 June 2016

COMMITTEE ON ADMINISTRATIVE Original: English

AND BUDGETARY AFFAIRS

REPORT OF THE CHAIR OF CAAP FOR THE TERM:

AUGUST 2015 TO JUNE 2016

In my capacity as Chair of the Committee on Administrative and Budgetary Affairs, I am pleased to present to the Permanent Council the report of the activities of the Committee corresponding to the period August 2015 to June 2016.

I.  OFFICERS

For the 2015-2016 period, the Permanent Council installed the CAAP on July 29, 2015 and elected me to serve as the Chair of the CAAP.

The First and Second Vice-Chairs were elected at the Committee meetings held on August 7, and September 15, 2015 as follows:

§  First Vice-Chair: Minister Luis Alberto Del Castillo, Alternate Representative of Mexico

§  Second Vice-Chair: Counselor César Martínez, Alternate Representative of El Salvador (for the period August – September 2015)

Minister Julia Hyatt, Alternate Representative of Jamaica (for the period September 2015 – June 2016)

Additionally, the following Working Groups were installed by the Committee during the meeting held on September 15, 2015, to support the work of CAAP:

§  Working Group to conduct the technical review of the Program–Budget

Chair: Minister Luis Alberto Del Castillo, Alternate Representative of Mexico

Vice-Chair: First Secretary Flávio Dontal, Alternate Representative of Brazil

§  Working Group to Prepare the Draft Resolution on the Program-Budget

Chair: Minister Julia Hyatt, Alternate Representative of Jamaica

§  Working Group on the Review of OAS Programs

Chair: Minister Counselor Ana Lucía Nieto, Alternate Representative of Perú

Vice-Chair: Counselor Magda Guerra, Alternate Representative of Guatemala

II.  ACTIVITIES OF THE CAAP FOR THE 2015-2016 TERM

A.  Consideration of the proposed program-budget of the Organization for 2016

During the term included in this report, the CAAP was in charge of the preparations for a special session of the General Assembly, in accordance with resolution AG/RES. 1 (XLVIII-E/14) “Program-Budget of the Organization for 2015-2016” and resolution AG/RES. 2872 (XLV-O/15) “Financing of the 2016 Program-Budget of the Organization”, in addition to dealing with all administrative, budgetary, and financial matters and related reports that were submitted for its consideration.

The Committee entrusted the following working groups with the negotiation of the proposed program-budget for 2016: 1) the Working Group to Conduct the Technical Review of the Program-Budget and 2) the Working Group to Prepare the Draft Resolution on the Program-Budget.

As a result of various formal and informal meetings and countless informal consultations, the Committee presented the Draft Resolution “Program-Budget of the Organization for 2016” to the Permanent Council on November 23, 2015. This resolution was then approved by the General Assembly at its fiftieth special session as AG/RES. 1 (L-E/15).

B.  Presentation of reports of the General Secretariat

For this year, and in keeping with the pertinent resolutions of the General Assembly and the Permanent Council, the following reports were presented to the CAAP:

§  Quarterly reports on administrative and financial management by the OAS General Secretariat, in accordance with resolution AG/RES. 1 (XLV-E/13) rev. 1. for the periods (January – March, April – June, July – September, and October – December 2015).

§  Consideration of the reports from the General Secretariat on the Use of Authorized Resources and Disbursements Related to the Change of Administration in 2015 Approved by Resolution CP/RES. 1045 (2010/15) corr. 1.

§  Internal Audit Report Costs Related to the Change of Administration (transition Costs Audit) [report Prepared by the Office of the Inspector General Pursuant to Resolution CP/RES. 1045 (2010/15) corr. 1

C.  CAAP Work Plan for the 2015-2016 period

For this period, and following the Work Plan of CAAP for 2015-2016, the Committee addressed the following items:

1.  Analysis of the 2014 Report to the Permanent Council on Annual Audit of Accounts and Financial Statements of the OAS, in pursuance of article 113 of the General Standards. Presented by the Board of External Auditors (CP/doc.5118/15)

In said report, the Board recognized OAS’ efforts to maximize its use of OAS building space. Additionally, the report states that “Space utilization was optimized to free up 6,000 square feet of additional office space in the F Street building for rental. However, the OAS is limited in its ability to rent space because OAS is only allowed to rent to non-profit and international organizations. Also, if the OAS does rent the space but at lower than the market price, there is potential for the OAS to not receive sufficient rental income to meet the mortgage obligation for the F Street building.

Furthermore, the Board “is aware that the historic property referred to as the Casa del Soldado is currently used as office space at less than capacity, and that the cost to maintain the property continues to far exceed the ability of the OAS to absorb it into its budget”. In that regards, the Board issued the following recommendation:

Recommendation No. 8: that the OAS develops a fixed asset strategy (which considers the sale of underutilized assets) that maximizes the use and investments in its fixed assets portfolio.

In response to this recommendation, the Committee addressed the issue at its meeting held on February 29, 2016. After an initial debate, the matter was transferred to the Ad hoc Working on the Implementation of the Strategic Plan for Management Modernization to be studied under the Real Estate Strategy.

2.  Comprehensive review of the General Standards to Govern the Operations of the General Secretariat of the Organization of American States

The General Assembly, at its fiftieth special session held on November 2015, through resolution AG/RES. 1 (L-E/15) [paragraph III.A.7], reiterated the mandate contained in resolution AG/RES. 1 (XLVIII-E/14), which instructed the Permanent Council, through the CAAP, to conduct a comprehensive review of the General Standards, particularly Chapters VII, VIII, and IX thereof, beginning with the norms that refer to the Inspector General, with a view to strengthening his or her role and operational independence, and so that he or she reports directly to the Permanent Council

In this regard, on April 20, 2016, after months of negotiation, the CAAP submitted for the approval of the Permanent Council a draft resolution with amendments to Chapter IX (Subchapter A: The Inspector General) of the General Standards and the Council approved them resolution CP/RES. 1062/16 (2069/16).

3.  Travel

Through resolution AG/RES. 2860 (XLIV-O/14) – paragraph 8.a, the General Assembly instructed the General Secretariat to reinforce the measures that ensure compliance with the rule established by the Permanent Council, which requires that all tickets paid for by the Regular Fund, the OAS Development Cooperation Fund (formerly FEMCIDI), specific funds, and trust funds administered by the General Secretariat be purchased in economy class, except for travel by the Secretary General, the Assistant Secretary General, and the Chair of the Permanent Council

To this respect, the General Secretariat presented relevant information to the Committee and its presentation were recorded in documents CP/CAAP 3390/16 and CP/CAAP 3390/16 add.1. The topic will remain under review for the next period in the framework of CAAP.

4.  Annual Report of the Administrative Tribunal of the Organization of American States

As of this period, the subject of the Administrative Tribunal and the changes affecting the staff of the Organization during the change of administration were assigned to the Committee on Administrative and Budgetary Affairs (CAAP).

In response to this decision, the Annual Report of the Administrative Tribunal of the OAS was presented to the Committee on April 5, 2016 and it has been registered as document CP/doc.5175/16.

D.  Draft resolutions to be submitted to the Forty-Sixth regular session of the General Assembly

On April 15, the Chair of CAAP and acting as Chair of the Sub-Committee on Administrative and Budgetary Affairs (SAAP) entrusted the two vice Chairs of the Committee to begin working on the two draft resolutions to be submitted to the Forty-sixth General Assembly: 1) Progress Toward Accountability, Efficiency, and Effectiveness, and Results in the OAS General Secretariat (also known as the omnibus resolution) and 2) Financing of the 2017 Program-Budget of the Organization (also known as budgetary ceiling).

With respect to the negotiation of the Omnibus resolution, a proposed methodology for the negotiation was agreed to hold a maximum of three informal meetings with interpretation provided. In that regard, the CAAP held informal meetings on April 19, May 12 and May 23 to discuss this text of the omnibus draft resolution.

At its meeting of June 3, the Committee received the results the informal meetings and after reaching agreement on paragraphs that were still pending of approval, the CAAP agreed on the text and it is today put forward for the Permanent Council as document: CP/CAAP-3406/16 rev. 4. It is important to note that at the meeting of June 3, the Delegation of Venezuela included an ad referendum to operative paragraph 4 “Quota System”.

The report of resolution on the Financing of the 2017 Program-Budget of the Organization will be reported under the agenda item # 9.

E.  Other topics addressed by the Committee: Revised Program-budget of the General Secretariat of the Organization of American States of the second year of the 2015-2016 biennium pursuant to resolution AG/RES. 1 (L-E/15) and Extension Authorization to the General Secretariat to temporarily utilize resources from the OAS Treasury Fund for the Regular Fund of the Organization through 31 January 2017

It is important to highlight that the CAAP was also entrusted with the negotiations of the Revised Program-budget of the General Secretariat of the Organization of American States of the second year of the 2015-2016 biennium pursuant to resolution AG/RES. 1 (L-E/15). In response to this mandate, the Committee presented to the Permanent Council on February12, 2016, the Draft Resolution “Adoption of the Final Program-Budget of the Organization for the Second Year of the 2015-2016 Biennium”, which was approved by the Permanent Council as CP/RES. 1058 (2055/16).

Additionally, this Permanent Council delegated the analysis of the request for “Extension Authorization to the General Secretariat to temporarily utilize resources from the OAS Treasury Fund for the Regular Fund of the Organization through 31 January 2017”. As a result, the Committee presented for the consideration of the Council on March 22, 2016 the Draft Resolution: “Extension of the Authorization to the General Secretariat temporarily to utilize resources from the OAS Treasury Fund for the Regular Fund of the Organization until January 31, 2017”, which was adopted as CP/RES. 1059 (2060/16) corr. 1.

I want to extend my gratitude to all the delegations for working with me and for showing their flexibility and commitment to this Committee on Administrative and Budgetary Affairs. My special thanks also to Minister Luis Alberto del Castillo, Minister Julia Hyatt, Minister Counselor Ana Lucía Nieto, Counselor Magda Guerra, and First Secretary Flávio Dontal for their support and dedication to the work of CAAP.

Furthermore, this year has been a crucial and particular one. As Chair, we receive constant support from the General Secretariat, and in that regards, I want to thank our Committee Secretary Georgina N. Mayorga, our Legal Advisors, Ruben Farje and Sarah Davidson for their legal guidance; and my special appreciation to Ambassador Jay Anania and his team: Javier, Ileana and the staff of SAF.

John E. Beale

Ambassador, Permanent Representative of Barbados

Chair of the Committee on Administrative and Budgetary Affairs