E wo/pbc/23/3 original: english date: june 4, 2015 Program and Budget Committee Twenty-Third Session Geneva, July 13 to 17, 2015


PROGRAM 22 PROGRAM AND RESOURCE MANAGEMENT



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PROGRAM 22 PROGRAM AND RESOURCE MANAGEMENT


PLANNING CONTEXT




  1. The uncertainties of the global economy, the volatility in the currency markets, changes in the banking environment, the modest increase in income growth, the increase in staff costs and the increasing overall demand for WIPO’s services continue to set a challenging context for this Program in the 2016/17 biennium. The current biennium has seen the positive impact of a fully embedded results based management approach, a more mature risk management process and a sharper focus on strengthened financial management and internal controls. As a consequence of better integration of program performance, budget and financial management and risk management processes and systems, this Program is now well placed to take a more comprehensive Organizational performance management approach that encompasses business, operational and financial management principles.

IMPLEMENTATION STRATEGIES




  1. One of the main areas of focus during the 2016/17 biennium will be to ensure that the full suite of processes from planning through to monitoring, assessment and reporting are of consistent quality across the Organization, thus enabling this Program to better support the Director General and engage with Program Managers to further enhance program delivery. Program delivery will be further enabled through newly deployed business intelligence capabilities that will work on integrated data from our ERP systems which now integrate financial, procurement, program performance, budget, human resources and risk related data. The Program will continue, in the next biennium, to actively support Program Managers in analyzing their business operations and delivery models to identify opportunities to continuously improve performance and cost-effectiveness. This will include strengthened financial management of projects. These initiatives will result in a further strengthening of the Organization’s RBM maturity.




  1. The Program’s priorities will include further improvement of both the processes which forecast and manage WIPO’s income as well as those which track expenditure. This will imply collaborating further with the revenue generating Programs to develop further insights into payment patterns in respect of PCT fees received from Receiving Offices and to improve processes and customer-service levels in respect of Madrid fees. The Program will also, in collaboration with Program 5, follow up on the Member State decisions in respect of hedging against exchange rate losses associated with PCT fees. These initiatives are expected to further strengthen financial risk management. The next biennium will be characterized by several changes in the banking and investment domain on account of the current advantageous banking facility provided to WIPO by the Swiss Federal Department of Finance coming to an end in December 2015 and the introduction of negative interest rates on Swiss franc deposits. This Program will therefore need to ensure a more active and yet prudent investment planning and management approach guided by a revised investment policy approved by Member States. The Program will furthermore ensure, in collaboration with Program 23 (Human Resources Management and Development), a very tight monitoring of personnel costs to ensure that these are contained in accordance with the plan.




  1. The Program will continue to absorb into operations the deployment of the new modules and capabilities of the ERP system resulting in the need to support and sustain a complex and fully integrated ERP system in a cost-effective and service–orientated manner. Outsourcing of support, maintenance and technical development under a robust management and quality assurance framework will remain a key strategy. The implementation of the ERP and enhanced reporting capabilities present a major opportunity to systematize the use of analytics and business intelligence to inform Program and resource management decisions. Enhanced reporting will also enable the Program to assess and further strengthen controls where necessary. The effective completion of the ERP Portfolio of projects, transition of the systems deployed to operational status and an increased focus on benefits tracking and assessment will ensure that the value delivered by the Portfolio of projects is sustained.




  1. The current biennium has seen a significant increase in maturity of our risk management process and culture. Building on this, the Program will continue to facilitate the work of the Risk Management Group through the review and monitoring of critical and organizational risks as well as systematic reporting on risk and support of the risk management process across the Organization. The Program’s focus on visibly increasing the maturity of the Organization’s internal control system will be high. In this context, efforts will continue to ensure that key process controls are documented, that greater and wider awareness of the control environment and key controls is achieved, that the control system is better supported by information and analytics from the ERP systems and that the effectiveness of key controls are then assessed on an on-going basis. The Program will accord high priority to the continuous dialog established with the Audit and Oversight bodies and a systematic follow-up on all outstanding recommendations.

MAJOR RISKS AND MITIGATION STRATEGIES




Risk

Mitigation

Income levels decrease significantly below planned. This combined with an inability to react promptly in order to reduce expenditure to an appropriate level would potentially create a deficit and have detrimental impact on Program delivery.

The Organization currently maintains the amount of reserves at the appropriate level (around 18 per cent of the biennial budget) to be in a position to face a potential decrease in income. An increase in the targeted reserves would further mitigate this risk.
The Secretariat updates income forecasts on a quarterly basis and monitors both income and expenditures closely.

In the context of a risk averse Organization and a change in the Swiss National Bank’s policy regarding the managing of accounts for international organizations, the risk of increased expenditure as well as a reduction in net assets (reserves) may occur owing to: (i) negative interest rates, (ii) additional charges for multiple placements, and (iii) lack of full capital guarantee to cover the liquid assets which will need to be placed with multiple lower rated commercial banks.

The approval of a new investment policy by Member States would (i) enable the Organization to place its liquid assets with financial institutions that have ratings below that of the Swiss National Bank, (ii) allow the liquid assets of the Organization to be invested with some return if the possibility of some limited loss is accepted and iii) allow the Organization’s ASHI funds to be invested in a manner that would earn a positive rate of return over the longer term.

RESULTS FRAMEWORK




Expected Results

Performance Indicators

Baselines

Targets

IX.1 Effective, efficient, quality and customer-oriented support services both to internal clients and to external stakeholders

Provision of financial and management reports and analysis required by senior management, Program Managers and Member States in accordance with agreed deadlines

Monthly closure to be completed 10 working days after month end (except January where monthly close is determined by progress of annual close)

Same as baseline

 

No. of PBC documents submitted on time to the Member States

12% (2014 on the basis of 8 week deadline)

15% (on the basis of 8 week deadline)

 

WIPO’s ERP system (AIMS) is operating efficiently according to business needs and in line with best practices

In 2014, uptime of AIMS was 99.80%. The highest number of high priority Incidents open at any one time was 25.

Uptime of AIMS is greater than 99.90%
No more than 20 high priority incidents are open at any one time. High priority Incidents are not open longer than 8 days.

 

ERP projects are delivered according to plan and within the budget of the portfolio

Updated Plan as communicated to Member States in 2015. Budget as approved by Member States in 2010.

In accordance with plan

IX.2 An agile and smooth functioning Secretariat with a well-managed and appropriately skilled workforce which is effectively delivering results

Satisfactory financial report from the External Auditors confirms the conformity of financial operations to the provisions of the applicable WIPO conventions and treaties, the WIPO Financial Regulations and Rules and IPSAS

Clean audit report received for 2014 and 2015 and answers provided to all audit recommendations

Clean audit report for both years of the biennium

 

Enhanced maturity of managing for results (RBM)

Maturity level 2

Maturity level 3

 

Return on invested funds in line with benchmarks established by the Investment Advisory Committee (IAC)

Investments continue to be with Swiss authorities, in line with the  benchmark established by IAC in 2014/15


Return on invested funds in line with the benchmark established by the IAC in 2016/17

 

Effective management of expenditure and reserves

Expenditure outlook 2014/15 (budgetary before IPSAS adjustments) : 659.9 million Swiss francs (as at April 2015).

Expenditure managed within the overall budgetary envelope but Expenditure not to exceed income ( should income be exceptionally foreseen to drop below planned expenditure levels.)

 

Payments (including Madrid and Hague fees) made on time

90% of payments made within seven days of payment terms or receipt date (in case of late receipting) for those without other workflow issues (e.g. PO not dispatched, etc.)

90% of payments to be made within two three days of receipt of invoice

IX.3 An enabling working environment supported by an effective regulatory framework and appropriate channels to address staff concerns

Financial Regulations and Rules and relevant Office Instructions (OIs) up to date

OIs issued in 2014 and 2015. FRR amended in 2014 as deemed necessary

Review and revision of regulatory framework if/as appropriate

 

Increase in maturity of Risk Management and Internal controls, in accordance with the Roadmap

75% progress on Roadmap for Risk Management; 25% progress on Roadmap for Internal Controls

100% progress on Roadmap for Risk Management; 80% progress on Roadmap for Internal Controls

 

Effective follow-up of oversight recommendations

EA = 47% rec's closed in 2014 of those outstanding at end 2013 (whole organization)
IOD = 64 % rec’s closed in 2014 of those outstanding at end 2013 (program 22)
JIU = 61% rec's closed in 2014 of those outstanding at end 2013 (starting with 2010)

EA = 55% for rec's closed in 2016/17 out of those outstanding at end 2015
IOD = 70% for rec's closed in 2016/17 out of those outstanding at end 2015
JIU = 70% for rec's closed in 2016/17 out of those outstanding at end 2015 (starting with 2010)

RESOURCES FOR PROGRAM 22




  1. An overall increase of 5 million Swiss francs in 2016/17 can be observed compared to the 2014/15 Budget after Transfers. The net increase under Expected Result IX.1 is mainly due to an additional 1.6 million Swiss francs in non-personnel resources for the absorption into operations of the new modules and capabilities of the ERP system as well as an additional 4.3 million increase under ER IX.2 related to the provision for negative interest rates on Swiss franc deposits (2.4 million Swiss francs) and statutory increases under personnel. The marginal increase under ER IX.3 takes into account resources planned for ERM, strengthening of internal controls as well as the transfer of responsibilities for JIU coordination and related costs from Program 24 (General Support Services) into the Program.




  1. The resources associated with Expected Result IX.8 reflect the budgetary provision for External Auditors and the Independent Advisory Oversight Committee (IAOC). The provision of non-personnel resources for the IAOC amounts to 446,600 Swiss francs, an increase of .14 percent compared to the 2014/15 Approved Budget.



Program 22: Resources by Result

(In thousands of Swiss francs)



Program 22: Resources by Object of Expenditure

(In thousands of Swiss francs)





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