Description
The financial statements, accounting policies and notes to the financial statements have been prepared in compliance with International Public Sector Accounting Standards (IPSAS) and WHO's Financial Regulations and Financial Rules. The statutory components of the Financial Report have been audited by the Organization's External Auditor, the Republic of the Philippines Commission on Audit, whose opinion is included in the Financial Report.
Cover by WHO/GRA Graphic Design and Layout
7.89 12%
$$$$$$$$$$$$$$$$$$$$$$$
1534651.156
1.2
$$$$$$$$$$$$$$$$$$$$$$$
14858850.488 5.69
2%
$$$$$$$$$$$$$$$$$$$$$$$
4685.5456 2.36 45%
$$$$$$$$$$$$$$$$$$$$$$$
4654654.65465 5.89 0.2%
$$$$$$$$$$$$$$$$$$$$$$$
154654.11 7.26
5%
$$$$$$$$$$$$$$$$$$$$$$$
321654.54616
5.6
1%
$$$$$$$$$$$$$$$$$$$$$$$
5646987.65465
1.2 12%
$$$$$$$$$$$$$$$$$$$$$$$
654654.654
2.3 23%
$$$$$$$$$$$$$$$$$$$$$$$
1494519.48598 5.98
2%
$$$$$$$$$$$$$$$$$$$$$$$
48949.56 7.23
6%
$$$$$$$$$$$$$$$$$$$$$$$
4156654. 6.25 1.3%
$$$$$$$$$$$$$$$$$$$$$$$
A66/29*
SIXTY-SIXTH WORLD HEALTH ASSEMBLY
Provisional agenda item 21.1
15 April 2013
Financial Report
and Audited Financial
Statements
7.89 12%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
1534651.156
1.2
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
14858850.488 5.69
2%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
4685.5456 2.36 45%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
14654654654.65465 5.89 0.2%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
154654.11 7.26
5%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
321654.54616
5.6
1%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
45646987.65465
1.2 12%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
654654.654
2.3 23%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
81494519.48598 5.98
2%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
48949.56 7.23
6%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
4156654. 6.25 1.3%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
for the year ended
31 December 2012
* Information on voluntary contributions by fund and by contributor for the year
ended 31 December 2012 is contained in the Annex (document A66/29 Add.1).
A66/29
Page 1
Table of contents
Director?General’s report ........................................................................................................................................ 2
Certification of the financial statements for the year ended 31 December 2012................................................. 14
Letter of transmittal .............................................................................................................................................. 15
Opinion of the External Auditor ............................................................................................................................ 16
Statement I. Statement of Financial Position ........................................................................................................ 18
Statement II. Statement of Financial Performance ............................................................................................... 19
Statement III. Statement of Changes in Net Assets/Equity ................................................................................... 20
Statement IV. Statement of Cash Flow .................................................................................................................. 21
Statement V. Statement of Comparison of Budget and Actual Amounts ............................................................. 22
Notes to the financial statements ......................................................................................................................... 23
1.
Basis of preparation and presentation ........................................................................................... 23
2.
Significant accounting policies ........................................................................................................ 25
3.
Note on the implementation of IPSAS and opening balance adjustments ..................................... 34
4.
Supporting information to the Statement of Financial Position ..................................................... 37
5.
Supporting information to the Statement of Financial Performance ............................................. 56
6.
Supporting information to the Statement of Net Assets/Equity .................................................... 59
7.
Comparison of budget and actual amounts .................................................................................... 62
8.
Segment reporting .......................................................................................................................... 63
9.
Administrative waivers, amounts written?off and ex?gratia payments .......................................... 65
10.
Related party and other senior management disclosures ............................................................... 65
11.
Events after the reporting date ....................................................................................................... 66
12.
Contingent liabilities, commitments and contingent assets ........................................................... 66
Schedule I. Statement of Financial Performance by major funds ......................................................................... 67
Schedule II. General Fund expenses ...................................................................................................................... 68
Schedule III. Programme budget utilization 2012?2013 ? assessed contributions ............................................... 69
Schedule IV. Programme budget utilization 2012?2013 – voluntary contributions ............................................. 70
Schedule V. Expenses by major office ? General Fund only .................................................................................. 71
A66/29
Page 2
Director-General’s report
INTRODUCTION
1.
In accordance with Article 34 of the Constitution and Financial Regulation XIII of the World
Health Organization, I have the honour to present the Financial Report for the year ended
31 December 2012. The financial statements, accounting policies and notes to the financial statements
have been prepared in compliance with International Public Sector Accounting Standards (IPSAS) and
WHO’s Financial Regulations and Financial Rules. The statutory components of the Financial Report
have been audited by the Organization’s External Auditor, the Republic of the Philippines
Commission on Audit, whose opinion is included in the Financial Report.
2.
I am very pleased to announce that 2012 is the first year in which the Organization’s financial
statements have been prepared under the IPSAS basis of accounting. This is a significant achievement
and brings greater transparency, accountability and a higher standard of financial reporting. I have
added a section in this report to outline the main changes brought about by IPSAS implementation and
its advantages for WHO.
3.
The implementation of IPSAS in turn has been facilitated by the implementation of the Global
Management System, which has greatly improved the accuracy and timeliness of data presented in this
report. In addition, managers across the Organization have access to a consistent set of data, which
tracks implementation against the programme budget.
4.
The year 2012 was a period of financial consolidation for WHO. Total revenue was US$ 2294
million and total expenses were US$ 2080 million, resulting in a surplus of US$ 214 million. Overall the
Organization is on track to meet its programme budget revenue and expense targets. A review of the levels
and trends of both revenue and expenses is included in the following sections of the report. However,
within this improved overall financial situation, there are still some budget centres that are underfunded as a
result of mismatches between planned spending and actual resources received. This situation is one of the
central issues being addressed through the WHO financing reforms that are underway.
5.
The financial statements cover the total effective budget under all sources of funds (assessed and
voluntary contributions) of US$ 3959 million as noted by the Sixty-fourth World Health Assembly in
May 2011 in resolution WHA64.3. Although the Organization has adopted an annual financial reporting
period as stipulated in the revised Financial Regulation XIII, the budgetary period remains a biennium
(Financial Regulation II). Therefore, for the purposes of actual versus budget comparisons, the
biennium’s budget must be compared to annual expenses. Further analysis of the use of funds is
available in document A66/5 “Implementation of the Programme budget 2012–2013: interim report”,
which describes the implementation of the Programme budget 2012–2013 and the results achieved.
6.
In addition to the General Fund which includes the programme budget, there are two other fund
groups summarized in the financial statements: “Member States – other”, and the Fiduciary Fund. The
“Member States – other” fund group includes the Common Fund (reflecting changes in asset and
liability accounts), the Enterprise Fund (mainly procurement activities on behalf of Member States and
the Revolving Sales Fund), and the Special Purpose Fund (such as the Real Estate and Security Funds
maintained for the purpose of financing longer-term costs).The Fiduciary Fund is used where the
Organization is managing revenue and expenses on behalf of other entities consolidated within
WHO’s financial statements. Details of the revenue and expenses for each of these three main fund
groups can be found in Schedule I of this report. The figures shown in this introduction elaborate both
programme budget and non-programme budget components. In addition, the Organization provides
services to six other entities: The Trust Fund for the Joint United Nations Programme on HIV/AIDS
(UNAIDS), the International Drug Purchase Facility (UNITAID), the International Agency for
Research on Cancer (IARC), the International Computing Centre (ICC), the African Programme for
Onchocerciasis Control (APOC) and the staff health insurance (SHI). Separate financial statements
are prepared for each entity, and these are subject to separate external audit review.
A66/29
Page 3
7.
Highlights of the assets, liabilities and net assets/equity of the Organization are provided,
together with information on cash flow, liquidity and investment management in order to provide a
complete picture of WHO’s financial position as at 31 December 2012. Finally, I have highlighted
certain financial risks facing the Organization and the measures in place to manage these risks.
INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS
8.
The Organization’s full implementation of IPSAS in 2012 further raises the standard of WHO’s
financial reporting. Financial reporting is a critical element of governance and of sound management,
the improvement of which are both important parts of the WHO reform process. The implementation
of IPSAS requires increased transparency, which allows for better understanding of the Organization’s
financial performance and health. Enhanced financial information supports governance, and the
management of assets and liabilities, and facilitates decision-making. Compliance with IPSAS has
also necessitated the introduction of an enhanced system of internal control in order to support the
additional financial reporting requirements.
9.
I would like to highlight the following significant changes arising from the full implementation
of IPSAS in the 2012 financial statements.
10. For the first time, the full actuarial valuation for after-service health insurance has been
recognized in our accounts. This includes the estimated future cost of health insurance for employees
and retired staff. The total liability as at 31 December 2012 was estimated at US$ 1329 million, of
which US$ 506 million is funded and US$ 823 million is unfunded. The unfunded balance is reflected
as a long-term accrued staff liability. A funding plan based on increased contributions is in place to
fund the unfunded portion of the liability, however, based on actuarial projections, WHO will only
achieve full funding by 2042. In addition, the full actuarial valuation for other staff benefits such
accrued annual leave, compensation for death and disability, and termination benefits such as
repatriation travel and grants are also recorded as a liability in the accounts, resulting in a total liability
of US$ 160 million.
11. Inventories are now recorded as assets in the Organization’s financial statements. Inventories
consist of medicines and vaccines, humanitarian supplies and publications and are recorded as assets
until they are sold, distributed or until their useful life has expired. As at 31 December 2012, the
Organization had conducted a physical verification of all stock on hand and had included some 80
locations with inventory valued at a total of US$ 67 million. By recording inventories, the
Organization is better able to review the extent and location of inventories held, leading to enhanced
stewardship and management of logistics.
12. Under IPSAS, “property, plant and equipment” including buildings, land, vehicles, fixtures and
fittings, and equipment, are recognized as assets and amortized over their useful lives. However, due
to the time it takes to obtain valuations and to establish residual useful lives, the full value of these
assets and accumulated asset depreciation will only be reported after the transitional period of up to
five years that is permitted under IPSAS. In order to prepare for this requirement, a full record of all
property ownership arrangements is being collected for all WHO locations. Excluding the Region of
the Americas/PAHO, the Organization currently operates from 313 premises around the world.
Although 29 of these locations are owned, the remainder are either rented or have been granted by a
Member State.
A66/29
Page 4
13. IPSAS requires the use of accrual accounting so that all revenue and expenses are recognized in
the financial statements for the period to which they relate. For voluntary contributions, the revenue is
recorded when the agreement is signed and not when the cash was received (this procedure has been
implemented since 2008). Expenses are recognized when the goods and services are received and not
when the commitments or the payments have been made. As at 31 December 2012, an accrual of
US$ 18 million has been made to record goods received and not yet paid for.
14. Another important change is the policy for estimating the allowance for “doubtful accounts
receivable”. In the past, for assessed contributions, a full allowance was made for any amounts that
were not paid at the end of the year. This brought the assessed contribution revenue to a cash basis of
accounting (i.e., only the revenue for the amounts paid was recognized). Based on previous payment
experience and IPSAS requirements, this allowance has been revised to recognize an allowance only
for those amounts that may be in doubt. In agreement with the External Auditor it was decided that
this constitutes any amounts outstanding for more than two years or any rescheduled amounts. This
opening adjustment has resulted in a US$ 63 million one-time increase in the fund balance of
“Member States? regular budget”.
15. The implementation of IPSAS currently has no impact on the preparation of the programme
budget, which is still presented on a cash basis. As this basis differs from the accrual accounting basis
applied to the financial statements, comparison with the figures used for the programme budget and
the actual results require greater explanation. In addition, it should be noted that the programme
budget continues to operate on a two-yearly basis, whereas expenses are reported on an annual basis.
FINANCIAL HIGHLIGHTS
Summary
16. Total revenue from all sources for 2012 was US$ 2294 million and total expenses for 2012 were
US$ 2080 million, resulting in a surplus of US$ 214 million. Table 1 below provides financial
highlights in 2012 compared with 2011. In line with IPSAS requirements for the first year of adoption,
2011 comparative figures are not restated or presented in the financial statements however, restated
figures are presented in this introduction in order to provide a perspective on the overall trends.
Table 1. Financial highlights – all funds, 2012 and 2011 (US$ million)
Programme budget
Assessed contributions
Voluntary contributions
In?kind and in?service contributions
Total contributions per programme budget
Total 2012
Total 2011
475
472
1 539
1 424
56
342
2 070
2 238
Non?programme budget revenue
112
Reimbursable procurement
62
41
Increase in allowance for doubtful accounts receivable
(3)
(33)
In?kind and in?service contributions
10
7
Finance revenue
100
43
53
Total revenue (all sources)
2 294
2 406
Total expenses
2 080
2 515
Net surplus/(deficit)
214
(109)
A66/29
Page 5
17. As shown in Table 1 above, total contributions for the programme budget in 2012 were
US$ 2070 million (in 2011, US$ 2238 million) including US$ 475 million from Member States’
assessed contributions, and US$ 1539 million from voluntary contributions. In-kind and in-service
contributions are reported separately (US$ 56 million for the programme budget and US$ 10 million
for the non-programme budget for 2012). Non-programme budget revenue recorded for the Special
Purpose Fund, Enterprise Fund, and Fiduciary Fund is mainly from voluntary contributions under
partnerships outside the programme budget, such as the Stop TB Global Drug Facility Fund and the
Roll Back Malaria Partnership Fund.
18. Total expenses in 2012 were US$ 2080 million which is a significantly lower level than the
US$ 2515 million for 2011 reported above. However, if in-kind and in-service expenses are excluded,
the 2011 figure is US$ 2166 million. Expenses in the second year of the biennium are generally
higher than the first year of the biennium, once funding is assured and implementation has been
planned. A further important reason for lower expenses is the cost-saving measures that were
introduced in 2011 in response to the financial uncertainties faced by the Organization over the last
two years.
19. Statement V – the Statement of Comparison of Budget and Actual Amounts provides
information by strategic objective. Further analysis of the use of funds under the Programme budget
2012–2013 is provided in document A66/5, which provides an interim report on implementation and
the results achieved. A summary showing the source of funding for the Programme budget
2012–2013 compared with the use of funding in 2012 is provided in Table 2.
Table 2. Comparison of Programme budget 2012–2013 with actual use of funds in 2012 (US$ million)
Programme
budget
2012–2013
2012
actual use of
funds
Percentage
(target is 50%
for 1 year)
Source of funding:
Assessed contributions
944
475
50%
Highly flexible funding – voluntary contributions – core
400
116
29%
Medium flexible funding – voluntary contributions – core
400
14
4%
Specified funding – voluntary contributions – specified
2 215
1 409
64%
Total voluntary contributions
3 015
1 539
51%
Total financing for the programme budget
3 959
2 014
51%
In?kind and in?service contributions
56
Total revenue
2 070
Use of funding:
Programme budget 2012–2013 expenses – in cash
Programme budget 2012–2013 expenses – in?kind and in?service
Total
Previous bienniums workplans – expenses in 2012–2013
Tax equalization and other non?programme budget utilization
Total expenses
Net surplus – programme budget
3 959
1 694
43%
44
1 738
125
22
1 885
185
20. It should be noted that although the total revenue and total expenses were in line with
expectations, within that, the level of flexible funding was lower than originally planned and the level
of specified funding was higher than planned. The total programme budget expenses for 2012 were
US$ 1885 million and the net surplus under the General Fund was US$ 185 million.
A66/29
Page 6
NET ASSETS/EQUITY
21. Statement III, the Statement of Changes in Net Assets/Equity provides information on the fund
balances for all funds as at 31 December 2012, the movement during 2012 and the restated opening
balances as at 1 January 2012. The amount of total net assets/equity (carry forward) as at 31 December
2012 was US$ 1159 million. The break down is shown in Table 3.
Table 3. Summary of net assets/equity in 2012 (US$ million)
31 December
2012
Surplus/(deficit)
2012
1 January 2012
(restated)
General Fund
Total Member States – regular budget
84
18
66
1 642
161
1 481
Total ? General Fund
1 726
179
1 547
Total Member States – other
( 715)
28
(743)
148
30
118
1 159
237
922
Total voluntary funds
Total Fiduciary Fund
Total net assets/equity
22. The restated opening net assets/equity balance under “Member States - regular budget”
increased to a level of US$ 66 million due to the change in the allowance for “doubtful accounts
receivable” (see paragraph 14 above). The further increase during 2012 is due to slightly lower
programme implementation in the first year of the biennium.
23. The net assets/equity under the voluntary funds increased from US$ 1481 million to US$ 1642
million by the end of 2012. These funds represent contribution agreements recorded and not yet spent.
An amount of approximately US$ 110 million within this balance is encumbered and will be used for
the settlement of commitments made in 2012 for which expenses will be recorded in 2013. The
remainder of this balance is planned to support work in 2013 and beyond. The increase is mainly due
to the agreements recorded in the first year of the biennium, the implementation of which will take
place in the second year.
24. The negative balance in the net assets/equity of US$ 715 million for the group of funds under
“Member States – other”, arises primarily from the future unfunded liabilities for after-service health
insurance (see paragraph 10 above).
REVENUE
25. Total revenue for 2012 was US$ 2294 million (in 2011, US$ 2406 million) – see Table 1 above.
Voluntary contributions are summarized in Table 4 below for 2012 and 2011.
Table 4. Voluntary contributions revenue in 2012 and 2011 (US$ million)
2012
Voluntary contributions – core
Voluntary contributions – specified
Voluntary contributions – Fiduciary Fund
Total voluntary contributions
2011
Percentage
130
125
104%
1 409
1 299
108%
97
80
121%
1 636
1 504
109%
A66/299
Page 7
26. Out of the total voluntaary contributtions for 201
12 of US$ 16
636 million, US$ 1539 million
m
weree
for thhe programm
me budget. The
T remaininng amount was
w received for the Fiducciary Fund. Overall, thee
volunntary contribbutions com
mbined for 22012 were slightly hig
gher than thhe combineed voluntaryy
contrributions for 2011.
27. Figure 1 below illusttrates the rrelative prop
portions of the variouss sources of
o voluntaryy
contrributions in 2012.
2
Memb
ber States coontinued to be
b the largesst source of voluntary co
ontributions,,
contrributing to 51% of the to
otal non-asseessed (volun
ntary) budgett. Revenue ffrom the Un
nited Nationss
and inntergovernm
mental organiizations was 23%, foundaations 20%, and nongovvernmental organizations
o
s
and oother instituttions represeented 5%. P
Private sectorr donations of 1% accouunted for th
he remainingg
volunntary contribbutions to th
he Organizattion. The relative
r
perccentages are similar to the
t previouss
biennnium with a slight decreaase in Membber State con
ntributions an
nd slight inccreases from foundationss
and thhe United Naations organiizations.
Figurre 1. Sourcees of voluntarry contributi
tions in 2012
Private secttor
(1%)
Nongovern
nmental and ot her
instittutions (5%)
Fooundations
(20%)
Member States
M
(51%)
United N
Nations and
intergovvernmental
organnizations
(223%)
28. Many of thhe voluntary
y contributioons were hig
ghly earmark
ked and relatte to individ
dual projectss
with differing repporting requiirements witthin the fram
mework of th
he planned reesults of thee programmee
budgeet. Full dettails of all th
he voluntaryy contribution
ns recorded in 2012 aree contained in
i documentt
A66/229 Add.1.
29. The total of contributio
ons by Membber States (vo
oluntary contributions annd assessed contributions
c
s)
was U
US$ 1304 million
m
(reprresenting 62 % of total voluntary
v
an
nd assessed contribution
ns). The 100
largesst contributoors among the Member S
States are sho
own below. They
T
contribbuted a comb
bined total off
US$ 1005 millionn, or 77% off the total coontributions from
f
Membeer States andd 48% of thee total of thee
volunntary and asssessed contrib
butions.
A66/29
Page 8
Figure 22. Top 10 Meember State contributorrs for 2012, combining
c
asssessed and vvoluntary
contribu
utions (US$ million)
m
4000
3500
Assessed contributions
Voluntary ccontributions
US$ million
3000
2500
2000
1500
1000
Sweden
Netherlands
France
Norway
Germany
Japan
Australia
Canada
United Kingdom of
United Kingdom of
Great Britain and
Northern Ireland
0
United States
of America
500
EXPEN
NSES
30. Tootal expenses for 2012 were US
S$ 2080 million.
m
To
otal expensees incurred for the
implemeentation of thhe programm
me budget w
were US$ 188
85 million (in 2011, US$$ 2346 millio
on). The
exclusion of in-kind and in-service expensess under the General
G
Fund
d of US$ 444 million for 2012 (in
2011, US$ 342 milliion) resulted
d in net expeenses of US$
$ 1841 milliion for 20122 (in 2011, US$
U 2004
million).. The analyssis of expenses that follow
ws is for the programme budget onlyy and excludees in-kind
and in-seervice expennses. Furtherr details of eexpenses by cost categorry, major offfices, and by
y strategic
objectivee, are providded in Schedu
ules I to IV oof this report.
31. Thhe share of overall
o
expen
nses by majoor office is shown
s
below
w in Figure 33. In comparison with
2011 theere has been a decrease in
n headquarterrs’ share, from
m 36% to 34%, and a prooportionate in
ncrease in
the regioons’ share, which
w
has gro
own from 64%
% to 66%. Total expensses decreasedd in each maj
ajor office
compareed to 2011 with
w the excep
ption of the E
Eastern Mediterranean Region, wheree increases in
n medical
supplies and contracttual services produced a nnet increase of 5%. In all offices, nonn-staff expen
nse levels
are oftenn lower in thhe first year of a bienniuum due to th
he planning required
r
for pprojects cov
vering the
full biennnium. In adddition, the cost-saving
c
m
measures thaat were introd
duced in 20111 in respon
nse to the
financiall uncertaintiees faced by th
he Organizattion over thee last two yeaars have reduuced expensees.
A66/299
Page 9
Figurre 3. Prograamme budget expenses b
by major office (excluding
g in-kind annd in-service)) in 2011
and 22012 (US$ million)
m
800
713
2011
2012
700
621
US$ million
600
36% 34%
500
400
518 507
26% 28%
274
4 287
300
200
1800
14%
% 16%
100
73
4%
0
Headqu
uarters
Afrrica
108
8 101
61
3%
The Am
mericas
5%
Easstern
Medite
erranean
5%
Eurrope
148
9%
% 8%
Soutth?East
AAsia
139
9
116
7%
% 6%
estern
We
Pa
acific
Note: FFor better comparison, 2011 figures have been resstated to reflect the reclassification of special serviice agreements and fellowship
costs frrom staff and oth
her personnel cossts to contractuall services.
32. Summary information by cost cattegory is shown below in Figure 4 comparing programmee
budgeet expenses in
i 2012 with
h those for 20011.
Figurre 4. Prograamme budget expenses b
by category (eexcluding in-kind and inn-service) in 2011
2
and
2012 (US$ million
n)
1200
1000
2011
2012
977
7
US$ million
US$ million
887
800
600
400
3445
301
21
18 214
200
47 145
14
78
8 77
0
Staff and Supp
plies and Conttractual
otther
materials
serrvices
person
nnel costs
2001 189
37
3 28
Transsfers and
graants to
coun
nterparts
Travel
Geeneral
opeerating
exppenses
Equipment,
vehicles and
furrniture
w
the larg
gest categoryy of expenses and represented 48%
% of the tottal expensess
33. Salaries were
me budget inn 2012. This representeed the total cost of employing staff,,
incurrred under thhe programm
includding chargess for base salary, post aadjustment and
a any otheer types of eentitlements paid by thee
Organnization (e.gg. pensions an
nd insurancees). Costs fo
or special serrvice agreem
ments are refllected withinn
contrractual servicces.
34. Compared to 2011, to
otal salary ccosts have decreased
d
by 9%. This is a result of the stafff
reducctions (937) that took place duringg 2011 and
d early 2012
2. The larrgest decreases were att
headqquarters and in the Africaan Region.
A66/29
Page 10
35. Coontractual seervices weree the secondd highest cattegory of ex
xpenses (16%
%) and represent the
costs of contracts givven to experrts and servicce providers who supportted the Orgaanization in achieving
a
or agreemen
nts for perfoormance of work or
its plannned objectivves. The maain componeents were fo
consultinng and speciial service co
ontracts that were given to individuaals to perform
m activities on
o behalf
of the O
Organization. Medical research activiities are also
o included in
n contractuaal services. There
T
has
been an overall decrrease of 13%
% in contracttual service costs with decreases
d
acrross all majo
or offices
East Asia Reegion, wheree the increasee is due to ree-categorizattion of speciaal service
except inn the South-E
contractoors from sallary to the contractual seervices categ
gory (this ree-categorizatition also exp
plains the
decreasee in recordedd salary cost in
i that regionn).
36. Thhe total of expenses
e
inccurred for sspecial servicce contracts (‘SSAs’) inn 2012 was US$ 40
million w
with the larggest amounts for the Afriican, Eastern
n Mediterranean and Souuth-East Asiaa regions.
This is accounted for
f by the employment
e
of approxim
mately 3200
0 additional personnel for
f WHO
mmes in thesee regions, maany deployedd in the Glob
bal Polio Erad
dication Initiiative.
program
37. Trransfers and grants to co
ounterparts reepresented 12% of the ov
verall expensses, and werre highest
in the Affrican and Eastern Meditterranean reggions. Thesee costs were for contractss signed with
h national
counterpparts (mainlyy health ministries) to perrform activitiies that are in
n line with thhe programm
me budget.
The use of funds wass recorded att the time of transfer of the
t funds to the
t contractuual partner.
38. Trravel constituuted 8% of the
t Organizaation’s total expenses, beeing US$ 1445 million in 2012 (in
2011, US$ 147 milliion) under th
he General F
Fund. This is the second successive yyear of reducced travel
expensess. Closer anaalysis shows the amount spent on stafff travel to haave been furt
rther diminish
hed: staff
travel byy the end of 2012 constituted 43% oof the total trravel cost, down from 488% in 2011, with the
balance being costss that related
d to travel by participaants in meettings and addvisors (deleegates of
Memberr States and non-Secretaariat personnnel). Travel expenses
e
incclude airfaree, per diem and
a other
travel-reelated costs. The cost of travel is shoown by major office in Fiigure 5.
Figure 55. Programm
me budget trravel expensees by major office
o
in 2011 and 2012 ((US$ million
n)
70
US$ million
60
60
58
2011
2012
50
40
37
31
30
20
15
13
10
3
0
Heeadquarters
Africa
11
15
10
0
11
12
11
4
The Americass
Eastern
Mediterrane
ean
Europe
e
South? East
Asiaa
Wesstern
Paccific
39. Thhe increase in
i travel exp
penses for thhe African Reegion arose from the higgher staff traavel costs
and the rre-categorizaation of traveel expenses oof special serrvice contract holders.
40. M
Medical suppllies and mateerials relatedd primarily to
t medical su
upplies purchhased and diistributed
by the O
Organization for programm
me implemeentation as well
w medical literature
l
andd accounted for just 4%
of total eexpenses for 2012. The category of g eneral operaating expensees (10% of tootal expensess) reflects
WHO ruunning costss, including utilities andd other officce costs, maainly at loccal level. Eq
quipment,
vehicles and furniture represent only 2% off WHO totall expenses and
a are signiificantly low
wer in the
biennium
m 2012–20133 than in prev
vious bienniuums.
A66/29
Page 11
ASSETS
Liquidity and investment management
41. Total cash and cash equivalents at the end of the period were US$ 1184 million with a further
US$ 1636 million held in investments. The investments are primarily short-term measures taken in
order to ensure that cash is available for programmatic needs. Some funds for longer-term liabilities
have been invested in securities, in accordance with the recommendations of the Advisory Investment
Committee. The total cash and cash equivalents balance available for the Organization’s programmatic
activities was US$ 1830 million. US$ 990 million was cash held in the Organization’s accounts on
behalf of other entities – the African Programme for Onchocerciasis Control, The Trust Fund for the
Joint United Nations Programme on HIV/AIDS, the International Drug Purchase Facility, the
International Computing Centre and the staff health insurance.
Accounts receivable
42. The balance of “accounts receivable” includes amounts due from Member States for assessed
contributions and from Member States and other contributors for voluntary contributions. The total
receivable for assessed contributions, including rescheduled payments, amounted to US$ 104 million
including US$ 39 million for rescheduled arrears; this is a further improvement over the previous year.
The continued good collection rate has been a contributing factor to the reduction mentioned above in
paragraph 14 in the allowance for doubtful accounts receivables. Further information on the collection
of assessed contributions for 2012 is provided in document A66/30.
43. For voluntary contributions, the total receivable amount was similar to the end of 2011, at
US$ 852 million, of which US$ 210 million is due in future years. The recording of these future
amounts – which is required under IPSAS – has made prospective revenue more visible, which has
assisted in the Organization’s overall revenue planning and further clarified WHO’s overall financial
situation. As these future, deferred revenue amounts become due for payment, the amounts are
transferred to current period revenue and made available for incurring expenses. Full details of all
voluntary contributions including amounts receivable, by contributor, are provided in document
A66/29 Add.1.
Other assets
44.
Inventories have been recognized for the first time under IPSAS (see paragraph 11 above).
LIABILITIES
Staff liabilities
45. Based on the latest actuarial projections, the total required to settle current liabilities for staff
entitlements was US$ 72 million. A further US$ 912 million has been estimated for future staff
liabilities. These liabilities cover the expected costs for accrued annual leave, accrued repatriation
grant and travel, the cost of future removal of a staff member upon separation, and the current and
future health care scheme costs.
46. The health care scheme provides medical reimbursements for serving and retired staff members,
and their dependents, subject to strict rules and limits. The actuarial valuation of the future liability for
the Organization was estimated at US$ 823 million at the end of 2012. This valuation was based on
estimates of future health care costs and the projections of retired staff, as well as a range of
socioeconomic assumptions. The staff health insurance scheme covers other entities, namely PAHO,
UNAIDS, UNITAID, APOC, IARC and ICC. Their share of the future staff liability is reflected in
their respective financial statements. The assets of the Staff Health Insurance Fund are reflected in its
own financial statements, which, in accordance with IPSAS, are now subject to a full, separate,
A66/29
Page 12
independent audit. In order to establish a long-term provision in order to ensure full financing of this
liability, changes to the staff health insurance contribution rates were approved in 2011, affecting both
the Organization and the scheme participants, and covering all entities.
FINANCIAL RISKS
47. The Organization must manage a number of financial risks. These are now regularly reviewed
by the Independent Expert Oversight Advisory Committee and are described further below.
Investment risks
48. The Organization is exposed to financial risks including credit risk, interest rate risk, foreign
exchange risk and investment price risk. WHO uses derivative financial instruments to hedge some of
its risk exposures. In accordance with the Financial Regulations, funds not required for immediate use
may be invested. All investments are carried out within the framework of investment policies
approved by the Director-General. Some portfolios are managed by external managers appointed by
the Organization to manage funds in accordance with a defined mandate. The Advisory Investment
Committee regularly reviews the investment policies and the investment performance and risk for each
investment portfolio. This Committee comprises of external investment specialists and can make
recommendations to the Director-General.
49. Investments are placed with a wide range of financial counterparties, whose credit risk is
minimized by applying minimum credit quality requirements and maximum investment exposure
limits, both by the counterparty and by groups of related counterparties. These terms are set out in
agreed investment mandates.
Foreign exchange currency risk
50. The Organization receives contributions and makes payments in currencies other than the
United States dollar and it is exposed to foreign exchange currency risk arising from fluctuations in
currency exchange rates. Translation into United States dollars of transactions expressed in other
currencies is done at the prevailing United Nations Operational Rates of Exchange at the date of
transaction. Assets and liabilities that are denominated in foreign currencies are translated at the
United Nations Operational Rates of Exchange that prevail at the end of each month. Forward foreign
exchange contracts are transacted in order to hedge foreign currency exposures and to manage shortterm cash flows. Realized and unrealized gains and losses resulting from the settlement and
revaluation of foreign currency transactions are recognized in the Statement of Financial Performance.
51. Hedging foreign exchange exposures on future payroll costs. The United States dollar value
of non-dollar expenses in 2013 has been protected from the impact of movements in foreign exchange
rates through the transaction of forward currency contracts during 2012. Full details of all hedging
contracts are contained in Note 4.2.
Staff financing risks
52. Although this report shows an improvement to the overall financial situation of the Organization,
some budget centres continue to have difficulty in ensuring sufficient stability in the financing of
salary costs. In 2012, 59% of staff salaries were financed from voluntary funds, most of which were
specified funds. There are limited possibilities for shifting funds between budget centres in order to
ensure consistency in salary financing across the Organization. This risk is subject to close monitoring
through review of staff work plans and the matching of these plans to sources of funds.
A66/299
Page 133
Riskss of non-receipt of fund
ds (“doubtfu
ul accounts receivable”)
r
53. As noted inn paragraph 42 above, thhe Organization has larg
ge amounts re
receivable that are due too
be prrovided by contributors and
a Memberr States, and which are commitmentss made to provide funds..
This amount incluudes the assessed contribbutions that were not recceived as at 31 Decembeer 2012. Thee
Organnization recoognizes reveenue at the tiime of signaature of agreeements, or aapproval of the assessedd
contrributions. Thhis allows project
p
comm
mitments to
o be made and expensees to be in
ncurred. Thee
Organnization has a very good
d record of ccollecting all amounts du
ue but somee risk exists. To mitigatee
this rrisk, monthlyy reporting is
i carried ouut on all projjects which have
h
expensses incurred in excess off
cash received, annd regular checks
c
are m
made of the status of amounts receeivable. In a few cases,,
wances are made
m
against revenue, succh that an ex
xpense canno
ot be incurreed unless thee funds havee
allow
been received. The value of such allowaances for assessed contrributions hass been reducced with thee
introdduction of IP
PSAS, due to
o an accountiing change as
a noted abov
ve, resulting in a one-time increase too
the oopening fundd balance of US$ 63 milllion. A totaal of US $44
4 million waas provided for assessedd
contrributions andd US$ 11 million for voluuntary contrib
butions as at 31 Decembeer 2012.
Riskss associated with long-term liabilitiies
54. The Organnization operrates on a tw
wo-year budg
get cycle. Th
hree quarterrs of its reveenue is from
m
volunntary funds – a situation which m
may not bee sustainablee in the lonng term. However, thee
Organnization has long- term financial
f
com
mmitments in
n respect of future staff liabilities, giiven that thee
majorrity of stafff have long
g-term appoointments, with
w
associated future eentitlements. The mostt
signifficant of thesse is the futu
ure cost of staaff health beenefits that arre provided ffor staff and dependents,,
includding into rettirement for those staff w
who remain eligible.
e
Given that almoost two thirdss of staff aree
paid ffrom voluntaary funds, there is a risk that insufficient funds arre being set aaside againstt these short-term funds for thhe long-term liabilities thhat must be met. To mitigate this rissk the Organ
nization now
w
comm
missions an annual
a
actuarrial assessmeent for all fu
uture staff liaabilities. As a result of th
hese reports,,
adjusstments havee been madee recently to funding rates. Further regular
r
reporrting of thesse long-term
m
liabillities and fuunding plan
ns will be pprovided to the Indepeendent Expeert Oversigh
ht Advisoryy
Comm
mittee.
CON
NCLUSION
N
55. This has beeen a year off financial coonsolidation for the Orgaanization: m
measures takeen in 2011 too
reducce expenses have improv
ved the finanncial situatio
on. This was critical in vview of the uncertainties
u
s
that pprevailed (annd continue to
o prevail) ovver the level of
o voluntary contributionns to WHO. The
T ongoingg
workk on WHO reform will help
h
to addreess the strucctural financing risks whhich remain, notably thee
lack oof predictabiility and the level
l
of speccification of funding.
f
Dr
D Margaret Chan
Director-Gen
D
neral
Geneva,
G
8 March 2013
A66/29
Page 14
he financiall statementts for the yeear ended 31
3 Decembeer 2012
Certificcation of th
Accordinng to Financcial Regulatio
on XIII ? Acccounts and Financial Statements, acccounts for th
he World
Health O
Organizationn have been established and maintaiined in acco
ordance withh Internation
nal Public
Sector A
Accounting Standards.
S
Th
he financial sstatements fo
or the year en
nded 31 Deccember 2012,, together
with the notes to the statements and
a supportinng scheduless, have been reviewed
r
andd are approv
ved.
Nichoolas R. Jeffreys
Comptroller
8 Maarch 2013
Dr Marrgaret Chan
Directo
or-General
A66/29
Page 15
Letter of transmittal
A66/29
Page 16
Opinion of the External Auditor
A66/29
Page 17
A66/29
Page 18
Financial statements
World Health Organization
Statement I. Statement of Financial Position
As at 31 December 2012
(In US dollars)
ASSETS
Current assets
Cash and cash equivalents
Short?term investments
Accounts receivable – net current
Staff receivables
Inventories
Prepayments
Other current assets
Total current assets
Notes
31 December 2012
1 January 2012
(restated)
4.1
4.2
4.3
4.4
4.5
4.6
4.7
1 184 358 416
1 369 531 140
695 054 637
12 263 937
67 458 323
1 299 838
12 191 472
3 342 157 763
643 516 528
2 253 303 807
729 229 217
16 710 890
64 149 230
1 567 910
22 864 545
3 731 342 127
4.3
4.2
4.6
4.8
210 277 136
266 323 581
309 148
41 180 878
518 090 743
3 860 248 506
224 896 094
34 833 438
362 303
42 297 077
302 388 912
4 033 731 039
4.10
4.11
4.12
4.13
4.14
4.2
4.15
4.16
86 329 879
24 983 899
4 366 015
71 735 099
317 034 710
21 403 427
41 442 241
989 810 138
1 557 105 408
100 728 551
32 287 143
7 143 440
74 187 562
457 640 785
331 076 923
46 080 782
933 396 863
1 982 542 049
4.17
4.13
4.14
21 912 231
911 532 131
210 277 136
1 143 721 498
2 700 826 906
22 725 204
880 900 388
224 896 093
1 128 521 685
3 111 063 734
NET ASSETS/EQUITY
Member States – regular budget
Voluntary funds
Member States – other
Fiduciary Fund
TOTAL NET ASSETS/EQUITY
84 121 732
1 642 008 469
(715 185 725)
148 477 124
1 159 421 600
66 449 981
1 481 067 258
(743 026 383)
118 176 449
922 667 305
TOTAL LIABILITIES AND NET ASSETS/EQUITY
3 860 248 506
4 033 731 039
Non?current assets
Accounts receivable – net non?current
Long?term investments
Deposits
Property, plant and equipment – net
Total non?current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Contributions received in advance
Accounts payable
Staff payable
Accrued staff benefits – current
Deferred revenue
Financial liabilities
Other current liabilities
Inter?entity liabilities
Total current liabilities
Non?current liabilities
Long?term borrowings
Accrued staff benefits – non?current
Deferred revenue – non?current
Total non?current liabilities
TOTAL LIABILITIES
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
A66/29
Page 19
World Health Organization
Statement II. Statement of Financial Performance
For the year ended 31 December 2012
(In US dollars)
Notes
REVENUE
Member States’ assessed contributions
Increase in allowance for doubtful accounts receivable
Voluntary contributions
Voluntary contributions in?kind and in?service
Reimbursable procurement
Other operating revenue
Finance revenue
Total revenue
5.1
EXPENSES
Staff and other personnel costs
Medical supplies and materials
Contractual services
Transfers and grants to counterparts
Travel
General operating expenses
Equipment, vehicles and furniture
Depreciation and amortization
Finance costs
Total expenses
5.2
31 December 2012
474 609 150
(3 321 404)
1 636 552 815
66 468 439
62 459 972
13 981 777
43 116 045
2 293 866 794
912 439 371
199 567 941
324 645 528
215 889 802
152 770 486
235 654 979
32 025 524
1 116 199
5 853 575
2 079 963 405
TOTAL SURPLUS FOR THE YEAR
213 903 389
Comparative information for the previous year has not been provided, as permitted in the first year of IPSAS adoption.
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
A66/29
Page 20
World Health Organization
Statement III. Statement of Changes in Net Assets/Equity
For the year ended 31 December 2012
(In US dollars)
Notes 31 December 2012
General Fund
Member States – regular budget
6.1
Member States’ Assessed Contributions Fund
Member States’ Non?Assessed Income Fund
Tax Equalization Fund
Working Capital Fund
Total Member States – regular budget
Voluntary funds
Voluntary Contributions Core Fund
Voluntary Contributions Specified Fund
1
TDR Trust Fund
2
HRP Trust Fund
Stop TB Fund
Special Programmes and Collaborative Arrangements Fund
Other Partnership Fund
Special Account for Servicing Costs Fund
6.2
Outbreak and Crisis Response Fund
Total voluntary funds
Total General Fund
Member States – other
Common Fund
Enterprise Fund
Revolving Sales Fund
Concessions Fund
Insurance Policies Fund
Office/Garage Rental Fund
Global Conference and Training Centre – Tunis Fund
Total Enterprise Fund
Special Purpose Fund
Real Estate Fund
Security Fund
Information Technology Fund
Revolving Fund for Teaching and Laboratory Equipment
Special Fund for Compensation
Terminal Payments Fund
Non?Payroll Staff Entitlements Fund
Post Occupancy Charge Fund
Internal Service Cost Recovery Fund
After?Service Health Insurance Fund
Total Special Purpose Fund
Total Member States – other
3.1
6.3
Fiduciary Fund
Other Fiduciary Fund
WHO Framework Convention on Tobacco Control
Stop TB Partnership Global Drug Facility Fund
Roll Back Malaria Partnership Fund
Health Metrics Network Fund
Partnership for Maternal, Newborn and Child Health Fund
United Nations System Standing Committee on Nutrition Fund
Alliance for Health Policy and System Research Fund
Global Health Workforce Alliance Fund
Total Fiduciary Fund
TOTAL NET ASSETS/EQUITY
Surplus/(deficit)
2012
1 January 2012
(restated)
Other
adjustments
55 218 265
10 321 511
(12 418 044)
31 000 000
84 121 732
35 550 072
(13 533 880)
(4 344 441)
–
17 671 751
–
19 668 193
23 855 391
(8 073 603)
31 000 000
66 449 981
245 768 622
987 723 666
13 243 217
27 080 952
59 154 438
141 604 324
–
150 126 831
17 306 419
1 642 008 469
1 726 130 201
(8 905 396)
216 619 128
3 642 901
10 225 134
(983 767)
(59 237 691)
329 717
38 942 850
(39 691 665)
160 941 211
178 612 962
–
–
254 674 018
771 104 538
9 600 316
16 855 818
60 138 205
200 842 015
(329 717)
111 183 981
56 998 084
1 481 067 258
1 547 517 239
107 679 711
24 109 207
22 850 906
60 719 598
3 975 937
2 325 809
912 829
1 371 915
991 469
9 577 959
(569 326)
(395 820)
343 695
(462 017)
991 469
(91 999)
19 095 600
4 436 270
(124 453)
16 520
(5 711 535)
(88 003 508)
28 836 922
30 769 533
1 224 441
(822 983 185)
(832 443 395)
(715 185 725)
975 020
(214 185)
(241 459)
(33 426)
424 538
6 385 316
(3 712 262)
8 025 375
420 518
(31 056 891)
(19 027 456)
4 989 752
–
5 321 738
90 734 009
7 333 914
5 203 897
10 523 409
466 717
26 540 711
2 352 729
148 477 124
1 159 421 600
4 545 263
2 721 629
569 134
1 833 932
–
9 669 958
–
–
22 850 906
18 120 580
4 650 455
117 006
49 946
(6 136 073)
(94 388 824)
32 549 184
22 744 158
803 923
(791 926 294)
(813 415 939)
(743 026 383)
(12 249)
5 251 334
(12 642 454)
4 023 768
(3 600 721)
8 321 304
66 253
26 540 711
2 352 729
30 300 675
–
12 249
70 404
103 376 463
3 310 146
8 804 618
2 202 105
400 464
–
–
118 176 449
213 903 389
22 850 906
922 667 305
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
1
Trust Fund for the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases.
Trust Fund for the UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research Training in Human
Reproduction.
2
A66/29
Page 21
World Health Organization
Statement IV. Statement of Cash Flow
For the year ended 31 December 2012
(In US dollars)
31 December 2012
CASH FLOWS FROM OPERATING ACTIVITIES
TOTAL SURPLUS FOR THE YEAR
Depreciation and amortization
(Increase)/decrease in accounts receivable – net current
(Increase)/decrease in staff receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
(Increase)/decrease in other current assets
(Increase)/decrease in accounts receivable – net non?current
(Increase)/decrease in deposits
Increase/(decrease) in contributions received in advance
Increase/(decrease) in accounts payable
Increase/(decrease) in staff payables
Increase/(decrease) in accrued staff benefits – current
Increase/(decrease) in deferred revenue
Increase/(decrease) in other current liabilities
Increase/(decrease) in inter?entity liabilities
Increase/(decrease) in accrued staff benefits – non?current
Increase/(decrease) in deferred revenue – non?current
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase)/decrease in short?term investments
(Increase)/decrease in long?term investments
Increase/(decrease) in financial liabilities
Reversal of opening adjustment for unrealized foreign exchange loss
Net cash flows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase/(decrease) in long?term borrowings
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
213 903 389
1 116 199
34 174 580
4 446 953
(3 309 093)
268 072
10 673 073
14 618 958
53 155
(14 398 672)
(7 303 244)
(2 777 425)
(2 452 463)
(140 606 075)
(4 638 541)
56 413 275
30 631 743
(14 618 957)
176 194 927
883 772 667
(231 490 143)
(309 673 496)
22 850 906
365 459 934
(812 973)
(812 973)
540 841 888
643 516 528
1 184 358 416
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
A66/29
Page 22
World Health Organization
Statement V. Statement of Comparison of Budget and Actual Amounts
For the year ended 31 December 2012
(In US dollars)
Programme
budget
2012–2013
Programme
budget
utilization 2012
Remaining
balance
Percentage
implementation
Strategic objectives
1
Communicable diseases
2
3
613 991 614
664 138 386
48%
HIV/AIDS, tuberculosis and malaria
540 298 000
181 715 241
358 582 759
34%
Chronic noncommunicable conditions
113 763 000
47 436 719
66 326 281
42%
4
Child, adolescent, maternal, sexual and
reproductive health, and ageing
218 306 000
97 649 248
120 656 752
45%
5
Emergencies and disasters
382 028 000
144 162 770
237 865 230
38%
6
Risk factors for health
122 255 000
44 783 635
77 471 365
37%
7
Social and economic determinants of health
42 789 000
16 845 245
25 943 755
39%
8
Healthier environment
86 825 000
38 854 688
47 970 312
45%
9
Nutrition, food safety and food security
54 898 000
27 154 565
27 743 435
49%
10 Health systems and services
348 093 000
134 847 454
213 245 546
39%
11 Medical products and technologies
137 283 000
61 909 929
75 373 071
45%
12 WHO leadership, governance, and partnerships
257 570 000
124 325 654
133 244 346
48%
13 Enabling and support functions
376 741 000
160 003 601
216 737 399
42%
3 958 979 000
1 693 680 363
2 265 298 637
43%
Total
1 278 130 000
Basis differences
In?kind/in?service expenses
44 681 506
Tax Equalization Fund expenses
14 533 591
Other non?programme budget utilization
Common Fund activities
Total Basis differences
6 601 885
365 102
66 182 084
Timing differences
Programme budget expenses for prior periods
Total timing differences
125 153 581
125 153 581
Total expenses per the General Fund and Common Fund
1 885 016 028
Entity differences
Expenses under Enterprise Fund, Special Purpose Fund and Fiduciary Fund
Total entity differences
194 947 377
194 947 377
Total expenses per the Statement of Financial Performance (Statement II)
2 079 963 405
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
A66/29
Page 23
Notes to the financial statements
1.
Basis of preparation and presentation
The financial statements of the World Health Organization have been prepared in accordance with
International Public Sector Accounting Standards (IPSAS). The financial statements have been
prepared using the historical cost convention with the exception of investments and loans, which are
recorded at fair value or at amortized cost. Where IPSAS does not address a specific matter, the
appropriate International Financial Reporting Standards (IFRS) have been applied.
This is the first set of financial statements to be prepared in accordance with IPSAS. The adoption of
IPSAS has required changes to the accounting policies previously followed by the Organization. This
includes the preparation of financial statements on an annual basis. The new accounting policies under
IPSAS have resulted in changes to the assets and liabilities recognized in the Statement of Financial
Position. Accordingly, the last audited Statement of Financial Position dated 31 December 2011 and
the resulting changes are reported in the Statement of Changes in Net Assets/Equity and Note 3.1. The
revised 31 December 2011 Statement of Financial Position is described in these financial statements as
the opening balance as at 1 January 2012 (restated). The net effect of the changes arising from the
adoption of IPSAS in the Statement of Financial Position amounted to a decrease in net assets/equity
of US$ 951 million.
As permitted in the year of IPSAS adoption, comparative information for the previous year has not
been provided.
These financial statements have been prepared under the assumption that WHO is a going concern,
will continue in operation, and will meet its mandate for the foreseeable future (IPSAS 1).
Functional currency and translation of foreign currencies
The functional and reporting currency of the Organization is the United States dollar.
Foreign currency transactions are translated into United States dollars at the prevailing United Nations
Operational Rates of Exchange, which approximates to the exchange rates at the date of the
transactions. The Operational Rates of Exchange are set once a month, and revised mid-month if there
are significant exchange rate fluctuations relating to individual currencies.
Assets and liabilities in currencies other than United States dollars are translated into United States
dollars at the prevailing Operational Rates of Exchange of the first day of the subsequent month.
Resulting gains or losses are accounted for in the Statement of Financial Performance.
The non-United States dollar denominated assets and liabilities in the investment portfolios are
translated into United States dollars at the month-end closing rate used by the custodian.
Materiality1 and the use of judgments and estimates
Materiality is central to WHO’s financial statements. The Organization’s process for reviewing
accounting materiality provides a systematic approach to the identification, analysis, evaluation,
endorsement and periodic review of decisions taken involving the materiality of information, spanning
a number of accounting areas.
The financial statements include amounts based on judgments, estimates and assumptions by
management. Changes in estimates are reflected in the period in which they become known.
1
Omissions or misstatements of items are material if they could, individually or collectively, influence the decisions or assessments of
users made on the basis of the financial statements.
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Financial statements
In accordance with IPSAS 1, a complete set of financial statements have been prepared as follows:
? Statement of Financial Position;
? Statement of Financial Performance;
? Statement of Changes in Net Assets/Equity;
? Statement of Cash Flow;
? Statement of Comparison of Budget and Actual Amounts; and
? Notes to the financial statements, comprising a summary of significant accounting policies and
other relevant information.
Use of transitional provisions and early adoption of accounting policies
As permitted on the initial adoption of IPSAS, transitional provisions have been applied in the
following areas:
? Comparative information has not been provided in the Statement of Financial Performance and
Statement of Cash Flow (IPSAS 1);
? Transitional provisions have been applied in the initial recognition of property, plant, and
equipment (IPSAS 17); and
? Transitional provisions have been applied in the initial recognition of intangible assets (IPSAS 31).
The following Accounting Standards have been adopted prior to their required implementation dates
of 1 January 2013:
? IPSAS 28: Financial Instruments: Presentation;
? IPSAS 29: Financial Instruments: Recognition and Measurement; and
? IPSAS 30: Financial Instruments: Disclosures.
These standards replace IPSAS 15 (Financial Instruments: Disclosure and Presentation).
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2.
Significant accounting policies
2.1
Cash and cash equivalents
Cash and cash equivalents are held at nominal value and comprise cash on hand, cash at banks,
collateral deposits, commercial paper, money market funds and short-term bills and notes. All
investments that have a maturity of three months or less from the date of acquisition are included as
cash and cash equivalents. This includes cash and cash equivalents held in the portfolios managed by
external investment managers.
2.2
Investments and financial instruments
Financial instruments are recognized when WHO becomes party to the contractual provisions of the
instrument until such time as the rights to receive cash flows from those assets have expired or have
been transferred and the Organization has transferred substantially all the risks and rewards of
ownership. Investments can be classified as being: (i) financial assets or financial liabilities at fair
value through surplus or deficit; (ii) held-to-maturity; (iii) available-for-sale; or (iv) bank deposits and
other receivables. All purchases and sales of investments are recognized on the basis of their trade date.
Financial assets or financial liabilities at fair value through surplus or deficit are financial
instruments that meet either of the following conditions: (i) they are held-for-trading; or (ii) they
are designated by the entity upon initial recognition as at fair value through surplus or deficit.
Financial instruments in this category are measured at fair value and any gains or losses arising
from changes in the fair value are accounted for through surplus or deficit and included within the
Statement of Financial Performance in the period in which they arise. All derivative instruments,
such as swaps, currency forward contracts or options are classified as held-for-trading except for
designated and effective hedging instruments as defined under IPSAS 29.
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that WHO has both the intention and the ability to hold the
investment to maturity. Held-to-maturity investments are stated at amortized cost using the
effective interest rate method, with interest revenue being recognized on an effective yield basis in
the Statement of Financial Performance.
Available-for-sale investments are classified as being available-for-sale where WHO has not
designated them either as held-for-trading or as held-to-maturity. Available-for-sale items are
stated at fair value (including transaction costs that are directly attributable to the acquisition of the
financial asset) with value changes recognized in net assets/equity. Impairment charges and interest
calculated using the effective interest rate method are recognized in the Statement of Financial
Performance. As at 31 December 2012, no available-for-sale financial assets were held by the
Organization.
Bank deposits and other receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Accrued revenue related to interest,
dividends and pending cash to be received from investments are included herein. Bank deposits and
other receivables are stated at amortized cost calculated using the effective interest rate method,
less any impairments. Interest revenue is recognized on the effective interest rate basis with the
exception of short-term receivables for which the recognition of interest would be immaterial.
Other financial liabilities include payables and accruals relating to investments and are recognized
initially at fair value and subsequently measured at amortized cost using the effective interest rate
method with the exception of short-term liabilities for which the recognition of interest would be
immaterial.
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2.3
Accounts receivable
Accounts receivable are non-derivative financial assets with fixed or determinable payments that are
not traded in an active market. Current receivables are for amounts due within 12 months of the
reporting date, while non-current receivables are those that are due more than 12 months from the
reporting date of the financial statements.
Voluntary accounts receivable are recognized based on a binding agreement between WHO and the
contributor. Assessed accounts receivable are recognized annually, at the beginning of the year as per
the assessments approved by the Health Assembly. Accounts receivable are recorded at their
estimated net realizable value and not discounted as the effect of discounting is considered immaterial.
An allowance for doubtful accounts receivable is recognized when there is a risk that the receivable
may be impaired. Changes in the allowance for doubtful accounts receivable are recognized in the
Statement of Financial Performance.
2.4
Inventories
WHO recognizes medicines, vaccines, humanitarian supplies, and publications as part of its inventory.
Inventories for medicines, vaccines and humanitarian supplies are valued taking the lower amount of
(i) cost or (ii) net realizable value, using a weighted average basis. Inventories for publications are
valued at net cost of sales.
Where inventories have been acquired through a non-exchange transaction (i.e. inventories were
donated as an in-kind contribution), the value of inventory is determined by reference to the donated
goods’ fair value at the date of acquisition.
When inventories are sold, exchanged or distributed, their carrying amount is recognized as an
expense.
2.5
Prepayments and deposits
Prepayments relate to amounts paid to suppliers for goods or services not yet received.
Deposits relate to amounts paid as security for the leasing of office space.
Deposits and prepayments are recorded at cost. Deposits are classified as non-current assets as they are
paid and held on account with the lessor over the life of the lease.
2.6
Property, plant and equipment
Property, plant and equipment with a value greater than US$ 5000 are recognized as non-current assets
in the Statement of Financial Position. Property, plant and equipment are initially recognized at cost
unless acquired through a non-exchange transaction, in which case they are recognized at fair value at
the date of acquisition.
Property, plant and equipment are stated at historical cost, less accumulated depreciation and any
impairment losses. WHO considers all assets of this type to be non-cash generating.
Depreciation is calculated on a straight-line basis over the asset’s useful life except for land, which is
not subject to depreciation. Property, plant and equipment are reviewed annually for impairment to
ensure that the carrying amount is still considered to be recoverable. The estimated useful lives of the
asset classes that make up property, plant and equipment are provided in the table below.
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Asset class
Land
Buildings ? permanent
Buildings ? mobile
Fixtures and fittings
Vehicles and transport
Office equipment
Communications equipment
Audiovisual equipment
Computer equipment
Network equipment
Security equipment
Other equipment
Estimated useful life (in years)
N/A
60
5
5
5
3
3
3
3
3
3
3
A transitional provision has been applied in the initial recognition of property, plant and equipment
that were purchased or donated before 1 January 2012. Land and building assets will be recognized by
location commencing on 1 January 2012 up to the end of the transitional period. Other assets in the
form of property, plant and equipment acquired prior to 1 January 2012 were expensed at the date of
purchase and have not been recognized as assets in 2012. The effect of the initial recognition of
property, plant and equipment is shown as an adjustment to the opening balance of accumulated
surplus or deficit.
2.7
Intangible assets
Intangible assets which are above the pre-established threshold of US$ 100 000 are stated at historical
cost less accumulated amortization and any impairment losses. Amortization is determined over the
estimated useful life of the assets using the straight-line method of amortization. The estimated useful
lives of intangible asset classes are as follows:
Asset class
Estimated useful life (in years)
Software acquired externally
1–3
Software internally developed
1–3
Licences and rights
2–6
Copyrights
3–10
WHO’s intangible assets are assumed to have a residual value of zero as intangible assets are not sold
or transferred at the end of their useful life. Intangible assets are reviewed annually for impairment.
In accordance with the transitional provision under IPSAS 31, the requirements of IPSAS 31 have
been applied on a prospective basis. No adjustments will be made to WHO’s financial records for
items previously expensed that meet the definition of an intangible asset.
2.8
Leases
A lease is an agreement whereby the lessor conveys to the lessee (the Organization), in return for a
payment or series of payments, the right to use an asset for an agreed period of time. Every lease is
reviewed to determine whether it constitutes a financial or operating lease. Necessary accounting
entries and disclosures are made accordingly.
Where the WHO is the lessor, lease revenue from operating leases is recognized as revenue on a
straight-line basis over the lease term. All costs associated with the asset incurred in earning the lease
revenue, including depreciation, are recognized as an expense.
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2.9
Contributions received in advance
Contributions received in advance arise from legally binding agreements between WHO and its
contributors ? including governments, international organizations and private and public institutions ?
whereby contributions are received in advance of the amounts concerned falling due to the Organization.
2.10 Accounts payable and accrued liabilities
Accounts payable are financial liabilities for goods or services that have been received by WHO but
not paid for.
Accrued liabilities are financial liabilities for goods or services that have been received by WHO and
which have neither been paid for nor invoiced to WHO.
Accounts payable and accrued liabilities are recognized at cost as the effect of discounting is
considered immaterial.
2.11 Employee benefits
WHO recognizes the following categories of employee benefits:
? short-term employee benefits that fall due wholly within 12 months following the end of the
accounting period in which employees render the related service
? post-employment benefits
? other long-term employee benefits
? termination benefits
WHO is a member organization participating in the United Nations Joint Staff Pension Fund, which
was established by the United Nations General Assembly to provide retirement, death, disability and
related benefits to employees. The Pension Fund is a funded, multi-employer defined benefit plan. As
specified by Article 3(b) of the Regulations of the Fund, membership in the Fund shall be open to the
specialized agencies and to any other international, intergovernmental organization which participates
in the common system of salaries, allowances and other conditions of service of the United Nations
and the specialized agencies.
The plan exposes participating organizations to actuarial risks associated with the current and former
employees of other organizations participating in the Pension Fund, with the result that there is no
consistent and reliable basis for allocating the obligation, plan assets, and costs to individual
organizations participating in the plan. The Organization and the Pension Fund, in line with the other
participating organizations in the Fund, are not in a position to identify the Organization’s
proportionate share of the defined benefit obligation, the plan assets and the costs associated with the
plan with sufficient reliability for accounting purposes. For this reason, WHO has treated this plan as
if it were a defined contribution plan in line with the requirements of IPSAS 25. The Organization’s
contributions to the plan during the financial period are recognized as expenses in the Statement of
Financial Performance.
2.12 Provisions and contingent liabilities
Provisions are recognized for future liabilities and charges where WHO has a present legal or
constructive obligation as a result of past events and it is probable that the Organization will be
required to settle the obligation.
Other commitments, which do not meet the recognition criteria for liabilities, are disclosed in the notes
to the financial statements as contingent liabilities when their existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events which are not wholly within the
control of WHO.
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2.13 Contingent assets
Contingent assets will be disclosed when an event gives rise to a probable inflow of economic benefits
or service potential and there is sufficient information to assess the probability of the inflow of
economic benefits or service potential.
2.14 Deferred revenue
Deferred revenue derives from legally binding agreements between WHO and its contributors,
including governments, international organizations and private and public institutions. Deferred
revenue is recognized when:
? a contractual agreement is confirmed in writing by both the Organization and the contributor;
and
? the funds are earmarked and due in a future period.
Deferred revenue also includes any advances from exchange transactions.
Deferred revenue is presented as non-current if the revenue is due one year or more after the reporting
date.
2.15 Revenue
Revenue comprises gross inflows of economic benefits or service potential received and receivable by
WHO during the year, which represents an increase in net assets/equity. The Organization recognizes
revenue following the established criteria of IPSAS 9 (Revenue from Exchange Transactions) and
IPSAS 23 (Revenue from Non-Exchange Transactions).
The main sources of revenue for WHO include but are not limited to:
Non-exchange revenue
? Member States’ assessed contributions. Revenue from contributions from Member States and
Associate Members is recorded annually at the beginning of the year as per the assessments
approved by the Health Assembly.
? Voluntary contributions. Revenue from voluntary contributions is recorded when a binding
agreement is signed between WHO and the contributor. The Organization considers that while
there are restrictions on the use of contributions, these restrictions do not constitute conditions
on transferred assets as defined under IPSAS 23.
? Contributions in-kind and in-service. Contributions in-kind and in-service received by WHO
are recorded upon receipt from the contributor at an amount equal to their fair market value as
determined at the time of acquisition. Donated property, plant and equipment are recognized as
an asset with a corresponding entry to revenue. Other in-kind or in-service contributions are
recognized as revenue with a corresponding entry to expense.
Exchange revenue
? Reimbursable procurement, concessions, and revolving sales. Revenue from reimbursable
procurement on behalf of Member States or from the sale of goods or services are recorded on
an accrual basis at the fair value of the consideration received or receivable when it is probable
that the future economic benefits and/or service potential will flow to WHO and those benefits
can be measured reliably.
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2.16 Expenses
Expenses are decreases in economic benefits or service potential during the reporting period in the
form of outflows, consumption of assets, or incurrences of liabilities that result in decreases in net
assets/equity. WHO recognizes expenses at the point where goods have been received or services
rendered (delivery principle) and not when cash or its equivalent is paid.
2.17 Fund accounting
Fund accounting is a method of segregating resources into categories (i.e. funds) to identify both the
source and the use of the funds. Establishing such funds helps to ensure better reporting of revenue
and expenses. The General Fund, the Special Purpose Fund, the Enterprise Fund and the Fiduciary
Fund serve to ensure the proper segregation of revenue and expenses. Any transfers between funds
that would result in duplication of revenue and/or expenses are eliminated during consolidation. Intrafund transfers such as programme support costs within the General Fund are also eliminated.
General Fund
The accounts contained under this fund support the implementation of the programme budget. The
General Fund contains the following accounts:
? Member States’ Assessed Contributions Fund. This fund consolidates revenues and expenses
arising from assessed contributions from Member States.
? Member States’ Non-Assessed Income Fund. This fund (formerly referred to as the
Miscellaneous Income Fund) consolidates all sources of revenue attributable to Member States
other than current period assessed contributions. The Fund earns revenue from interest and other
miscellaneous revenue.
? Tax Equalization Fund. In accordance with resolution WHA21.10, under which the Tax
Equalization Fund was established, the assessed contributions of all Member States are reduced
by the revenue generated by the staff assessment plan. In determining the reduction of assessed
contributions to be applied to the Member States concerned, the Tax Equalization Fund is
credited with the revenue from the staff assessment plan, the credits being recorded in the name
of individual Member States, in proportion to their assessments for the biennium. For those
Member States that levy income tax on emoluments received from the Organization by their
nationals or others liable to such taxes, the credit from the staff assessment plan is charged with
the estimated amount to be levied by those Member States. Those amounts which have been
charged are, in turn, used by the Organization to reimburse income tax paid by the staff
concerned as per resolution WHA21.10.
? Working Capital Fund. The fund was established to implement the programme budget for any
arrears in the receipt of assessed contributions. In accordance with Financial Regulation VII,
pending the receipts of assessed contributions, implementation of the regular budget may be
financed from the Working Capital Fund and thereafter by internal borrowing against available
cash reserves of WHO, excluding trust funds. Amounts borrowed are repaid from the collection
of arrears of assessed contributions and are credited first against any internal borrowing
outstanding and then against any borrowing outstanding from the Working Capital Fund.
?
Voluntary funds (core, specified and partnerships). This fund consolidates revenues and
expenses arising from voluntary contributions and includes the special account for servicing costs.
Member States – other
Member States ? other contains the following accounts:
? Common Fund. This fund reflects the movement in the asset and liability accounts of the
Organization resulting from changes in items such as inventory, depreciation and unrealized
exchange gains and losses.
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? Enterprise Fund. This fund contains accounts that generate self-sustaining revenue. The
revenue and expenses under this fund are not included in the reporting of the programme budget.
The Enterprise Fund contains the following accounts:
? Revolving Sales Fund1
? Concessions Fund
? Insurance Policies Fund
? Office/Garage Rental Fund
? Reimbursable Procurement Fund
? Global Conference and Training - Tunis Fund
? Special Purpose Fund. The accounts contained under this fund represent transfers from the
General Fund or appropriations by the Health Assembly. The revenue and expenses under this
fund are not included in the reporting of the programme budget. The Special Purpose Fund
contains the following accounts:
? Real Estate Fund
? Security Fund
? Information Technology Fund
? Revolving Fund for Teaching and Laboratory Equipment
? Special Fund for Compensation
? Terminal Payments Fund
? Non-Payroll Staff Entitlements Fund
? Post Occupancy Charge Fund
? Internal Service Cost Recovery Fund
? After-Service Health Insurance Fund
Fiduciary Fund
This fund accounts for assets that are held by WHO in a trustee or agent capacity for others and cannot
be used to support the Organization’s own programmes. The Fund includes partnerships that are
administered by the Organization and whose budgets are not approved by the Health Assembly.
Similarly, financial activities related to financing WHO’s long-term liabilities are managed through
this fund. The Fund is not available for operations and does not contribute to the Programme budget
2012–2013. The Fiduciary Fund contains the following accounts:
? Other Fiduciary Fund
? WHO Framework Convention on Tobacco Control
? Stop TB Partnership Global Drug Facility Fund
? Roll Back Malaria Partnership Fund
? Health Metrics Network Fund
? Partnership for Maternal, Newborn and Child Health Fund
? United Nations System Standing Committee on Nutrition Fund
? Alliance for Health Policy and System Research Fund
? Global Health Workforce Alliance Fund
1
In accordance with Health Assembly resolutions WHA22.8 and WHA55.9, this Fund is credited with proceeds from the sale of
publications, international certificates of vaccination, films, videos, DVDs and other information material. The related costs of production
and printing are charged to the Fund.
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2.18 Segment reporting
As required under IPSAS, WHO reports on segments based on its regional structure. Revenue,
expenses, assets and liabilities are reported for each major office (region). The use of major offices is
in line with the way that Member States and management make decisions over the allocation of
resources to the Organization. The Organization’s programme budget is presented by major office
which supports using major offices as the segments. Furthermore the accountability for results and
management of assets and liabilities lies with the heads of each regional office.
2.19 Statement of Cash Flow
The Statement of Cash Flow (Statement IV) is prepared using the indirect method.
2.20 Budget comparison
WHO’s budget and accounting bases differ. Budgets within the Organization are approved on a
modified cash basis rather than the full accrual basis of IPSAS. In addition, budgets are prepared on a
biennial basis.
Whereas WHO’s financial statements cover all activities of the Organization, budgets are approved
only for the General Fund. There are no approved budgets for other funds. All funds are administered
in accordance with the Financial Regulations and Financial Rules.
As required under IPSAS 24, the actual amounts presented on a comparable basis to the budget shall,
where the financial statements and the budget are not prepared on a comparable basis, be reconciled to
the actual amounts presented in the financial statements, identifying separately any basis, timing,
presentation and entity differences. There may also be differences in formats and classification
schemes adopted for the presentation of financial statements and the budget.
The Health Assembly approved the Programme budget 2012?2013 through resolution WHA64.3.
WHO’s Statement V: Comparison of Budget and Actual Amounts compares the final budget to actual
amounts calculated on the same basis as the corresponding budgetary amounts. As the bases used to
prepare the budget and financial statements differ, Note 7 provides a reconciliation between the actual
amounts presented in Statement V to the actual amounts presented in Statement IV.
2.21 Consolidated and non-consolidated entities
Non-consolidated entities
WHO provides administrative services to a number of entities. Each of these entities produces a full
set of financial statements that are subject to a separate audit. The following six entities have their own
governing bodies and are not controlled by the Health Assembly:
? Trust Fund for the Joint United Nations programme on HIV/AIDS (UNAIDS)
? International Drug Purchase Facility (UNITAID)
? International Agency for Research on Cancer (IARC)
? International Computing Centre (ICC)
? African Programme for Onchocerciasis Control (APOC)1
? Staff health insurance (SHI)
1
Includes residual values for the former Onchocerciasis Control Programme.
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Consolidated entities
WHO administers or participates in a large number of global health partnerships, and maintains some
special programmes and collaborative arrangements. These contribute to the achievement of the
Organization’s objectives and as such were reflected in the Programme budget 2012–2013, under the
Special programmes and collaborative arrangements segment of the budget. The activities
implemented by the Organization have been consolidated under the General Fund. The activities
covered under the Special programmes and collaborative arrangements segment of the budget,
following a revision made at the beginning of 2012, are as follows:
? Codex Alimentarius Commission
? European Observatory on Health Systems and Policies
? Collaboration with partners in the GAVI Alliance
? Global Polio Eradication Initiative
? Health and Nutrition Tracking Service
? Intergovernmental Forum on Chemical Safety
? UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical
Diseases (TDR)
? UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research
Training in Human Reproduction (HRP)
? HIV Vaccine Initiative (including the African AIDS Vaccine Programme)
? Vaccine research partnerships
? Partnership for the control of neglected tropical diseases
? WHO/UN Programme on Prequalification of Medicines
? WHO-FAO-OIE agreement on the management of avian influenza and other emerging diseases
? WHO Centre for Health Development (Kobe)
? World Alliance for Patient Safety
? Stop TB Partnership, including Green Light Committee and Global Laboratory Initiative
In addition, the following partnerships are not included within the programme budget. They are
therefore consolidated but are outside the programme budget and the General Fund.
? WHO Framework Convention on Tobacco Control
? Stop TB Partnership Global Drug Facility
? Roll Back Malaria Partnership secretariat
? Health Metrics Network
? Partnership for Maternal, Newborn and Child Health
? United Nations System Standing Committee on Nutrition
? Alliance for Health Policy and Systems Research
? Global Health Workforce Alliance
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3.
Note on the implementation of IPSAS and opening balance adjustments
The financial statements for the 2012 financial period are the first financial statements that comply
with the requirements of IPSAS. WHO’s financial statements for the prior biennium were prepared to
conform to the United Nations System Accounting Standards (UNSAS) and were presented on a
modified cash basis.
The opening balances represent the 2011 audited Statement of Financial Position, which has been
restated to incorporate adjustments made due to changes in accounting policies and other adjustments
made as at 1 January 2012 as a result of the implementation of IPSAS.
Implementation of IPSAS and opening balance adjustments (US dollars)
ASSETS
Current assets
Cash and cash equivalents
Short?term investments
Accounts receivable – net current
Staff receivables
Inventories
Prepayments
Interest receivable
Other current assets
Total current assets
Non?current assets
Accounts receivable – net non?current
Long?term investments
Deposits
Property, plant and equipment – net
Total non?current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Contributions received in advance
Accounts payable
Staff payables
Accrued staff benefits – current
Deferred revenue
Allowance for doubtful accounts
receivable
Financial liabilities
Other current liabilities
Inter?entity liabilities
Total current liabilities
Non?current liabilities
Long?term borrowings
Accrued staff benefits – non?current
Deferred revenue – non?current
Staff health insurance
Total non?current liabilities
31 December 2011
ending balance
Staff health
insurance as
separate entity
1 January 2012
opening balance
248 295 135
2 713 833 801
747 812 022
9 805 637
–
1 567 910
2 017 729
–
–
(339 806 469)
(199 459)
(298 840)
–
–
–
–
248 295 135
2 374 027 332
747 612 563
9 506 797
–
1 567 910
2 017 729
–
–
2 017 728
(119 923 819)
–
–
–
(2 017 729)
22 864 545
395 221 393
(122 741 253)
101 540 473
7 204 093
64 149 230
–
–
–
643 516 528
2 253 303 807
729 229 217
16 710 890
64 149 230
1 567 910
–
22 864 545
3 723 332 234
(340 304 768)
3 383 027 466
(97 059 275)
445 373 936
3 731 342 127
265 332 191
–
362 303
97 950 420
–
–
–
–
265 332 191
–
362 303
97 950 420
–
–
–
–
(40 436 097)
34 833 438
–
(55 653 343)
224 896 094
34 833 438
362 303
42 297 077
Mapping changes
IPSAS adjustments
Note 3.1
1 January 2012
(restated)
363 644 914
–
363 644 914
–
(61 256 002)
302 388 912
4 086 977 148
(340 304 768)
3 746 672 380
(97 059 275)
384 117 934
4 033 731 039
100 728 551
32 287 143
–
–
321 397 775
–
–
5 468
–
–
100 728 551
32 287 143
5 468
–
321 397 775
–
–
7 137 972
25 345 090
–
–
–
–
48 842 472
136 243 010
100 728 551
32 287 143
7 143 440
74 187 562
457 640 785
119 923 818
–
36 538 900
746 723 081
–
–
187 508 013
–
119 923 818
–
224 046 913
746 723 081
(119 923 818)
–
(177 966 131)
187 586 221
–
331 076 923
–
(912 439)
–
331 076 923
46 080 782
933 396 863
1 357 599 268
187 513 481
1 545 112 749
(77 820 666)
515 249 966
1 982 542 049
21 007 421
81 875 366
224 896 093
527 818 250
–
–
–
(527 818 250)
21 007 421
81 875 366
224 896 093
–
–
(19 238 606)
–
–
1 717 783
818 263 628
–
–
22 725 204
880 900 388
224 896 093
–
855 597 130
(527 818 250)
327 778 880
(19 238 606)
819 981 411
1 128 521 685
TOTAL LIABILITIES
2 213 196 398
(340 304 769)
1 872 891 629
(97 059 272)
1 335 231 377
3 111 063 734
NET ASSETS/EQUITY
Member States – regular budget
Member States equity in capital assets
Voluntary funds
Member States – other
Fiduciary Fund
3 847 123
76 792 400
1 482 565 740
192 399 036
118 176 449
–
–
–
–
–
3 847 123
76 792 400
1 482 565 740
192 399 036
118 176 449
–
(76 792 400)
–
76 792 400
–
62 602 858
–
(1 498 482)
(1 012 217 819)
–
66 449 981
–
1 481 067 258
(743 026 383)
118 176 449
TOTAL NET ASSETS/EQUITY
1 873 780 748
–
1 873 780 748
–
(951 113 443)
922 667 305
TOTAL LIABILITIES AND NET
ASSETS/EQUITY
4 086 977 146
(340 304 769)
3 746 672 377
(97 059 272)
384 117 934
4 033 731 039
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3.1
Adjustments to net assets/equity
In order to comply with IPSAS, the preparation and presentation of opening balances as at 1 January
2012 required adjustments to be made to the balances reflected as at 31 December 2011 in the
Statement of Financial Position. The net assets/equity of WHO changed as at 1 January 2012 due to
changes in accounting policies with the adoption of IPSAS and due to the treatment of staff health
insurance as a separate entity. The changes as a result of IPSAS implementation totalled US$ (951)
million as shown below:
1 January 2012
Opening balance net assets/equity
Recognition of inventory
1 873 780 748
64 149 230
Adjustment to land and building
(29 978 438)
Adjustment to land and building ? accumulated depreciation for headquarters
(25 674 905)
Adjustment to foreign exchange, swaps and hedging (unrealized exchange loss)
Recognition of employee benefit liability (after?service staff health insurance)
Recognition of employee benefit liability (terminal payments)
(22 850 906)
(791 926 294)
(94 388 824)
Adjustment to employee benefit accrual
26 413 111
Adjustment to long?term borrowings
(1 717 783)
Adjustment to other accounts receivable
(1 498 482)
Adjustment to allowance for doubtful accounts receivable
62 602 858
Adjustment to reimbursable procurement deferred revenue
Total adjustments to net assets/equity
Opening balance net assets/equity (restated)
(136 243 010)
(951 113 443)
922 667 305
Recognition of inventory. In order to comply with IPSAS, inventory is recognized in the Statement
of Financial Position for the first time as at 1 January 2012. Inventory was not recognized under
UNSAS.
Adjustment to land and building. WHO has adopted the transitional provision for property, plant,
and equipment. The only asset class recognized as at 1 January 2012 is land and buildings for
headquarters. Under UNSAS, land and buildings for headquarters and regional offices were included
in the financial statements. An adjustment for accumulated depreciation for headquarters buildings
was recognized as an adjustment to net assets/equity.
Adjustment to foreign exchange, swaps and hedging (unrealized exchange loss). Unrealized
foreign exchange gains and losses for hedging foreign exchange exposures are now disclosed
separately as either financial assets or liabilities at fair value through surplus or deficit (held-fortrading). Under UNSAS, any unrealized foreign exchange gains and losses for hedging were disclosed
in the notes to the financial statements and were recognized in the financial statements in the
accounting period in which they crystallized. As this amount is realized in 2012, the original
transaction is reversed in order to avoid recognizing the amount twice.
Recognition of employee benefit liability. Liabilities relating to post-employment benefits as per
actuarial valuations have been recognized in the financial statements based on their valuation as at 1
January 2012. The valuation for terminal payments has been adjusted by US$ 94.4 million. The
valuation representing the after-service health insurance for the Organization’s staff has been adjusted by
US$ 792 million. Employee benefit liabilities have been classified as either “current” or “non-current”.
Adjustment to employee benefit accrual. Existing balances for employee benefit accruals (relating,
for example, to education grant and home leave) are not recognized in net assets/equity.
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Adjustment to long-term borrowings. In December 2003, the Swiss Confederation provided an
interest-free loan for the construction of a shared building in Geneva for the UNAIDS secretariat and
WHO. The joint loan of CHF 59.8 million, of which the Organization’s share is CHF 29.9 million, is
repayable over a 50-year period with effect from the first year of the completion of the building. The
loan was adjusted by US$ 1.7 million to reflect the amortized cost of the loan using the effective
interest rate of 1.23% (Swiss franc Libor rate for 30 years).
Adjustment to other accounts receivable. An adjustment of US$ 1.5 million was required to opening
net assets/equity in order to reverse a receivable from a contributor that was incorrectly recorded in the
conversion to the Global Management System.
Adjustment to allowance for doubtful accounts receivable. To comply with IPSAS, an adjustment
of US$ 63 million was recorded to reflect the reduction of the allowance for assessed contributions at
the beginning of the year.
Adjustment to reimbursable procurement deferred revenue. An adjustment of US$ 136 million
was required to the opening balance of net assets/equity in order to reclassify as deferred revenue,
revenue that had been recognized for reimbursable procurement in 2011.
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4.
Supporting information to the Statement of Financial Position
4.1
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at banks, investments in money market funds,
collateral deposits, bank deposits, and short-term highly liquid investments with original maturity
dates of three months or less from the date of acquisition.
Cash and cash equivalents are held for the purpose of meeting the short-term cash requirements of the
Organization, rather than for longer-term investment purposes. They are held on behalf of the
Organization, including the General Fund, the Special Purpose Fund, the Enterprise Fund, the
Fiduciary Fund and non-WHO entities administered by the Organization. The figures include cash and
cash equivalents held in the portfolios managed by investment managers.
Major office
31 December 2012
1 January 2012
(restated)
Headquarters
171 023 455
152 312 290
Africa
29 126 359
47 685 369
Eastern Mediterranean
23 389 879
37 489 496
Europe
1 531 029
1 163 710
South?East Asia
7 799 091
6 614 239
Western Pacific
5 596 234
3 030 031
Cash at banks, investment accounts, in transit and on hand
238 466 047
248 295 135
Headquarters
945 892 369
395 221 393
Cash and cash equivalents held by investment portfolios
945 892 369
395 221 393
1 184 358 416
643 516 528
Total cash and cash equivalents
4.2
Investments and financial instruments
Details of the accounting policies for investments and financial instruments are described in Note 2.2.
WHO’s principal investment objectives in descending order of priority are:
? the preservation of capital;
? the maintenance of sufficient liquidity to meet the payment of liabilities on time; and
? the optimization of investment returns.
The Organization’s investment policy reflects the nature of its funds which may either be held shortterm pending implementation of programmes, or held longer term to meet its long-term liabilities.
WHO’s investments include funds managed for other entities.
An analysis of the investments of the Organization is provided in the following table.
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Investments and financial instruments (US dollars)
Internally managed funds
Current assets
Cash and cash equivalents
Cash and time
deposits
860 131 461
Held?to?
maturity
portfolio
Externally managed funds
Long?term
portfolio
191 881
1 828 149
Short?term
portfolio A
Total
862 151 491
Short?term investments
–
Financial assets at fair value through surplus
or deficit – upon initial recognition
Financial assets at amortized cost
Total short?term investments
Total current assets
–
–
Short?term
portfolio D
61 733 553
13 169 701
8 081 391
Total
83 740 878
–
–
–
48 575 780
301 167 273
–
945 892 369
–
10 508 594
–
–
126 800
10 635 394
13 182 337
23 817 731
–
–
169 458 167
187 635 212
237 958 816
275 368 466
870 420 661
–
870 420 661
–
48 575 780
–
–
–
–
–
–
48 575 780
219 690
436 821
301 823 784
122 504 289
798 994
665 026
924 875
124 893 184
–
426 716 968
301 167 273
48 795 470
436 821
350 399 564
302 471 050
188 434 206
238 623 842
276 420 141
1 005 949 239
13 182 337
1 369 531 140
1 161 298 734
48 987 351
2 264 970
1 212 551 055
303 227 283
250 167 759
251 793 543
284 501 532
1 089 690 117
13 182 337
2 315 423 509
Non?current assets
Long?term investments
Financial assets at fair value through surplus
or deficit – upon initial recognition
–
–
35 844 887
35 844 887
–
–
–
–
–
–
35 844 887
Financial assets at amortized cost
–
230 478 694
–
230 478 694
–
–
–
–
–
230 478 694
–
230 478 694
35 844 887
266 323 581
–
–
–
–
–
–
266 323 581
–
230 478 694
35 844 887
266 323 581
–
–
–
–
–
–
266 323 581
Total long?term investments
Total non?current assets
Current liabilities
Financial liabilities
Financial liabilities at fair value through
surplus or deficit ? held?for?trading
–
–
–
–
10 378 896
–
–
66 856
10 445 752
2 843 648
Payables and accruals
–
–
–
–
8 113 075
30
278
644
8 114 027
–
8 114 027
Total financial liabilities
–
–
–
–
18 491 971
30
278
67 500
18 559 779
2 843 648
21 403 427
–
–
–
–
18 491 971
30
278
67 500
18 559 779
2 843 648
21 403 427
1 161 298 734
279 466 045
38 109 857
1 478 874 636
284 735 312
250 167 729
251 793 265
284 434 032
1 071 130 338
10 338 689
2 560 343 663
Total current liabilities
Total investments – net
Short?term
portfolio C
Financial assets at fair value through surplus
or deficit – held?for?trading
Bank deposits and other receivables
756 233
Short?term
portfolio B
Total
managed
funds
and
contracts
Foreign
exchange
hedging
contracts
13 289 400
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Short-term investments
Short-term investments relating to funds held pending the implementation of programmes are invested
in cash and high-quality short-term government, agency, corporate bonds and time deposits as defined
in the approved investment policy. Investments included within “financial assets at fair value through
surplus or deficit” include fixed income securities and derivatives instruments held to cover projected
liabilities and any unexpected cash requirements. The investments in the “held-to-maturity” portfolio
with a duration of less than one year are classified as current assets in the category “financial assets at
amortized cost”. Other receivables include accrued revenue on investments and receivables from
investments that were sold but settled after 2012.
Financial assets at fair value through surplus or deficit ? held?for?trading
Financial assets at fair value through surplus or deficit ? upon initial recognition
Financial assets at amortized cost
Bank deposits and other receivables
Total short?term investments
1 January 2012
(restated)
31 December 2012
23 817 731
6 185 144
870 420 661
660 129 398
48 575 780
198 548 932
426 716 968
1 388 440 333
1 369 531 140
2 253 303 807
Long-term investments
Long-term investments are placed for the Terminal Payments Fund as defined in the approved
investment policy and are invested in high-quality, medium-dated and long-dated, government, agency
and corporate bonds. Investments maturing greater than one year and held in the “held-to-maturity”
portfolio are included as “financial assets at amortized cost”.
1 January 2012
(restated)
31 December 2012
Financial assets at fair value through surplus or deficit ? upon initial recognition
Financial assets at amortized cost
Total long?term investments
35 844 887
34 833 438
230 478 694
–
266 323 581
34 833 438
Financial liabilities
Financial liabilities disclosed under “financial liabilities at fair value through surplus or deficit ? heldfor-trading” include derivative transactions such as foreign exchange forward contracts and interest
rate swaps. Financial liabilities disclosed under “payables and accruals” relate to other financial
liabilities from investments.
In late December 2011, three new short-term externally managed fixed income investment portfolio
mandates were implemented involving US$ 660 million in funds invested, and at the time of the 2011
closure, the external managers were in the process of acquiring the new securities under these new
investment mandates. The nature of the market cycle, in which a period elapses between the
acquisition and sale of securities and the moment of their settlement, means that many of the securities
acquired under these new mandates had not yet been paid for as at 31 December 2011. Unsettled
security purchases of this type caused the restated figures for financial assets and financial liabilities as
at 1 January 2012 to be temporarily inflated by US$ 297 million in unsettled security sales and
purchases. This arose due to the timing of the implementation of the new investment portfolios which
straddled the end of 2011. There were no significant portfolio rebalancing activities at the end of 2012.
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31 December 2012
Financial liabilities at fair value through surplus or deficit ? held?for?trading
Payables and accruals
Total financial liabilities
1 January 2012
(restated)
13 289 400
30 025 025
8 114 027
301 051 898
21 403 427
331 076 923
The fair value hierarchy
The fair value hierarchy represents the categorization of market pricing to indicate the relative ease
with which the value of investments held by WHO can be realized.
The majority of the financial instruments held by WHO have quoted prices in active markets and are
classified as Level 1. Derivative instruments that are “over-the-counter” are classified as Level 2
because their fair value is observable ? either directly as a price, or indirectly after being derived from
prices. The instruments shown under the Level 2 fair value measurement category consist of the
foreign currency hedging forward contracts and the derivative contracts in the externally managed
portfolios. Level 3 valuations include financial instruments for which the fair value is not based on
observable market data. As at 31 December 2012, WHO held no financial instruments that would be
classified as Level 3.
Level 1
Level 2
Short?term investments
Financial assets at fair value through surplus or deficit ? held?for?trading
Financial assets at fair value through surplus or deficit ? upon initial recognition
23 817 731
870 420 661
–
35 844 887
–
–
(13 289 400)
Total
906 265 548
10 528 331
–
23 817 731
– 870 420 661
Financial liabilities
Financial liabilities at fair value through surplus or deficit ? held?for?trading
Total
–
Long?term investments
Financial assets at fair value through surplus or deficit ? upon initial recognition
Level 3
–
35 844 887
– (13 289 400)
– 916 793 879
Risk management
WHO is exposed to financial risks including credit risk, interest rate risk, foreign exchange risk and
investment price risk. Derivative financial instruments are used to hedge some of its risk exposures. In
accordance with WHO’s Financial Regulations, funds not required for immediate use may be invested.
All investments are carried out within the framework of the investment policy approved by the
Director-General. Some portfolios are managed by external managers appointed by the Organization
to manage funds in accordance with a defined mandate. The Advisory Investment Committee reviews
regularly the investment policies, the investment performance and the investment risk for each
investment portfolio. This Committee is composed of external investment specialists who can make
investment recommendations to the Director-General.
Nature of financial instruments
Investments are categorized as follows:
? Investments with short-term maturities. These investments are invested in cash and high-
quality short-dated government, agency, and corporate bonds as defined in the approved
investment policy.
? Investments with long-term maturities. These investments comprise funds managed for the
Terminal Payments Fund as defined in the approved investment policy. These investments are
invested in high-quality medium-dated and long-dated, government, agency, and corporate
bonds.
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Credit risk
WHO’s investments are widely diversified in order to limit its credit risk exposure to any individual
investment counterparty. Investments are placed with a wide range of counterparties using minimum
credit quality limits and maximum exposure limits by counterparty (and by groups of related
counterparties) established in investment mandates. These limits are applied both to the portfolios
managed internally by the Organization’s Treasury Unit, and also to the portfolios managed by
external investment managers. The Treasury Unit monitors the total exposure to counterparties across
all internally and externally managed portfolios to ensure that total counterparty exposures across
portfolios are tracked and managed.
The credit risk and liquidity risk for cash and cash equivalents are minimized by investing only in
major financial institutions that have received strong investment grade credit ratings from primary
credit rating agencies. The Treasury Unit regularly reviews the credit ratings of the approved financial
counterparties and takes prompt action whenever a credit rating is downgraded. The investments with
long-term credit ratings are summarized as follows:
Minimum rating category
AAA
AA+
AA
AA?
A+
A
A?
BBB+
BBB
Total asset value
US dollars
370 058 080
275 620 223
19 453 094
240 071 460
46 401 508
34 980 830
40 299 767
652 309
5 446 996
1 032 984 267
Interest rate risk
WHO is exposed to interest rate risk through its short-term and long-term fixed income investments.
The investment duration is a measure of sensitivity to changes in market interest rates, and the
effective average duration of the Organization’s investments as at 31 December 2012 was 0.3 years for
the short-term investments and 2.6 years for the long-term investments.
Fixed income derivative instruments may be used by external investment managers to manage interest
rate risk under strict investment guidelines. These interest rate instruments are used for portfolio
duration management and for strategic interest rate positioning.
Foreign exchange currency risk
WHO receives contributions and makes payments in currencies other than the United States dollar and
it is exposed to foreign exchange currency risk arising from fluctuations in currency exchange rates.
Exchange rate gains and losses on the purchase and sale of currencies, revaluation of cash book
balances, and all other exchange differences are adjusted against the funds and accounts eligible to
receive interest under the interest apportionment programme. The translation of transactions expressed
in other currencies into the United States dollar is performed at the United Nations Operational Rates
of Exchange prevailing at the date of transaction. Assets and liabilities that are denominated in foreign
currencies are translated at the Operational Rates of Exchange prevailing at the end of each month.
Forward foreign exchange contracts are transacted to hedge foreign currency exposures and to manage
short-term cash flows. Realized and unrealized gains and losses resulting from the settlement and
revaluation of foreign currency transactions are recognized in the Statement of Financial Performance.
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Hedging foreign exchange exposures on future payroll costs. The United States dollar value of
non-dollar expenses in 2013 has been protected from the impact of movements in foreign exchange
rates through the transaction of forward currency contracts during 2012. As at 31 December 2012
these forward foreign currency exchange hedging contracts by currency are summarized as follows:
Currency forward bought
Net amount sold
(US dollars)
Net unrealized gain/(loss)
(US dollars)
Swiss francs
318 000 000
342 280 783
6 507 931
Egyptian pounds
102 000 000
14 375 537
523 694
82 800 000
107 058 845
2 305 417
876 000 000
15 452 087
27 503
27 960 000
9 200 208
120 637
704 400 000
16 603 918
651 369
504 971 378
10 136 551
Euros
Indian rupees
Malaysian ringgits
Philippine pesos
Total
There was a net unrealized gain on these contracts of US$ 10.1 million as at 31 December 2012
(unrealized loss of US$ 21.4 million as at 1 January 2012). Realized gains or losses on these contracts
will be recorded on maturity of the contracts and applied during 2013.
Hedging foreign exchange exposures on receivables and payables. Currency exchange risk arises
as a result of differences in the exchange rates at which foreign currency receivables or payables are
recorded, and the exchange rates at which the cash receipt or payment is subsequently recorded. A
monthly programme of currency hedging is in place to protect against this foreign currency risk. On an
ongoing monthly basis the exposures in respect of awards, accounts receivable and accounts payable
are netted by currency and each significant net foreign currency exposure is bought or sold forward
using a forward foreign exchange contract equal and opposite to the net currency exposure.
These exposures are re-balanced at each month-end to coincide with the setting of the monthly United
Nations Operational Rates of Exchange. Through this process the exchange gains or losses realized on
the forward foreign currency contracts match the corresponding unrealized exchange losses and gains
on the movements in net accounts receivable and accounts payable. As at 31 December 2012 the total
forward foreign currency exchange hedging contracts by currency were as follows:
Currency forward sold
Euros
Currency forward bought
(US dollars)
Net unrealized gain/(loss)
(US dollars)
104 600 000
138 854 122
804 179
Australian dollars
27 700 000
28 655 124
(70 634)
Canadian dollars
116 500 000
117 333 419
387 658
Danish kroner
40 000 000
7 121 594
43 798
Pounds sterling
104 900 000
169 509 848
(1 003 171)
Norwegian kroner
Swedish kronor
Total
11 500 000
2 066 369
328
157 950 000
24 347 247
66 259
487 887 723
228 417
There was a net unrealized gain on these contracts of US$ 0.2 million as at 31 December 2012
(unrealized net loss of US$ 2.4 million as at 1 January 2012). Realized gains or losses on these
contracts will be recorded on the maturity of the contracts and applied during 2013.
Forward foreign exchange contracts to manage operational cash flows. Forward foreign exchange
contracts are also used to manage short-term cash flows of foreign currency balances to minimize
foreign currency transaction risk. At 31 December 2012 the total amount sold was CHF 2.1 million
against Australian dollars, Canadian dollars, Norwegian kroner and Swedish kronor. The maturity
dates of these forward foreign exchange contracts are January 2013. Net unrealized losses on these
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contracts amounted to US$ 26 277 as at 31 December 2012 (unrealized net gains of US$ 20 142 as at
1 January 2012).
Sensitivity of forward foreign exchange contracts to movements in the relative value of the
United States dollar. A 1% appreciation in the relative value of the United States dollar against the
above forward foreign exchange hedging contracts would result in an increase in the net unrealized
gain of US$ 10.7 million. A 1% depreciation in the relative value of the United States dollar would
result in a decrease in the net unrealized gain of US$ 10.5 million.
Forward foreign exchange contracts and other derivative financial instruments held within the
externally managed investment portfolios. In accordance with the investment guidelines set up for
each externally managed portfolio, the external investment managers use forward foreign exchange
contracts, futures contracts and interest rate swap contracts to manage the currency and interest rate
risk of groups of securities within each portfolio. The net values of these instruments as at
31 December 2012 as evaluated by the Organization’s investment custodian are recorded by portfolio
under “financial assets/liabilities at fair value – held-for-trading” and are summarized below. There
were no outstanding futures contracts.
(US dollar
equivalent)
Net sold amount
Australian dollars
Euros
Pounds sterling
Japanese yen
3 064 000
3 179 207
14 877 000
20 707 997
4 135 000
6 721 301
19 980 000
2 310 886
Total
32 919 391
Net purchased amount
(US dollar
equivalent)
Chinese yuan renminbi
36 749 768
5 744 826
US dollars
25 766 053
25 766 053
Total
31 510 879
A 1% appreciation in the relative value of the United States dollar against the above-mentioned
forward foreign exchange hedging contracts would result in a decrease in the unrealized gain of
US$ 0.7 million. A 1% depreciation in the relative value of the United States dollar would result in an
increase in the unrealized gain of US$ 0.7 million.
Forward foreign exchange contract for currency risk hedging within the held-to-maturity
portfolio. The currency exchange risk of a Japanese Government Treasury Bill investment
denominated in Japanese yen is fully hedged until maturity by the transaction of a forward foreign
exchange contract to sell Japanese yen and buy United States dollars. The Treasury Bill is valued at
amortized cost in United States dollars including the currency hedging instrument in accordance with
hedge accounting.
4.3
Accounts receivable ? net
As at 31 December 2012, total accounts receivable?net amounted to US$ 905 million
(US$ 954 million as at 1 January 2012 (restated)). The receivable balance includes outstanding
amounts for both assessed and voluntary contributions. Amounts receivable are split between current
and non-current based on when the amounts become due.
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Accounts receivable – net current
Member States’ assessed contributions receivable – current
biennium
Member States’ assessed contributions receivable – previous
biennium
Voluntary contributions receivable
Reimbursable procurement receivable
Revolving sales receivable
Other receivables
Allowance for doubtful accounts receivable
Total accounts receivable – net current
31 December 2012
1 January 2012
(restated)
65 246 279
64 235 237
4 136 501
6 739 828
641 850 953
672 279 217
1 092 985
784 330
388 748
289 686
2 691 663
3 418 159
(20 352 492)
(18 517 240)
695 054 637
729 229 217
Accounts receivable – net non?current
Outstanding rescheduled assessments receivable
34 757 280
38 803 720
Voluntary contributions receivable
210 277 136
224 896 094
Allowance for doubtful accounts receivable
(34 757 280)
(38 803 720)
Total accounts receivable – net non?current
210 277 136
224 896 094
Total accounts receivable – net
905 331 773
954 125 311
The total allowance for doubtful accounts receivable is US$ 55.1 million (US$ 57.3 million at 1
January 2012 (restated)). This is composed of an allowance of US$ 44.1 million for assessed
contributions and US$ 11.0 million for voluntary contributions.
The allowance for assessed contributions receivable includes any Member State with amounts
receivable from prior years, all rescheduled amounts receivable and any current amounts receivable
from Member States in arrears. The allowance for voluntary contributions receivable is based on a
detailed review of all amounts receivable more than one year overdue and on a review of amounts less
than one year overdue where there is evidence that the amount is unlikely to be received.
In 2012, the Health Assembly adopted resolution WHA65.12, in which it approved the write-off of the
unpaid arrears from the former Yugoslavia from 1991 to 2000 amounting to US$ 5.5 million.
1 January 2012
(restated)
31 December 2012
Opening balance ? assessed contributions
47 175 926
109 778 784
Write?off of unpaid arrears from the former Yugoslavia
(5 532 592)
?
Increase/(decrease) in allowance for doubtful accounts receivable
2 429 324
(62 602 858)
Ending balance ? assessed contributions
44 072 658
47 175 926
Opening balance ? voluntary contributions
10 145 034
?
892 080
10 145 034
Ending balance ? voluntary contributions
11 037 114
10 145 034
Total allowance for doubtful accounts receivable
55 109 772
57 320 960
Increase in allowance for doubtful accounts receivable
Allowance for doubtful accounts receivable
Allowance ? current
20 352 492
18 517 240
Allowance ? non?current
34 757 280
38 803 720
55 109 772
57 320 960
Total allowance for doubtful accounts receivable
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4.4
Staff receivables
In accordance with WHO’s Staff Rules and Regulations, staff members are entitled to certain
advances including those for salary, education, rent and travel.
The total balance of staff receivables amounted to US$ 12.3 million at 31 December 2012. The
education grant balance represents advances made to staff for the scholastic year 2012?2013.
31 December 2012
1 January 2012
(restated)
Salary advances
2 465 979
5 141 268
Education grant advances
6 706 172
7 267 736
Rental advances
1 906 945
1 454 684
Travel receivables
1 013 709
2 264 846
Other staff receivables
171 132
582 356
Total staff receivables
12 263 937
16 710 890
4.5
Inventories
The total value of inventory was US$ 67.5 million as at 31 December 2012.
The following table shows the movement of inventory items (medicines, vaccines, humanitarian
supplies and publications) during the year.
1 January 2012
Net additions
Net
shipments
Net disposals and
write?offs
31 December
2012
Medicines, vaccines and
humanitarian supplies
53 310 203
46 860 703
42 628 358
5 077 428
52 465 120
Publications
10 839 027
15 115 837
9 724 128
1 237 533
14 993 203
Total inventory
64 149 230
61 976 540
52 352 486
6 314 961
67 458 323
Medicines, vaccines and humanitarian supplies were valued using the weighted average cost method
and were validated by a physical stock count in December 2012.
Publications were validated by a physical stock count in December 2012 and balances were valued at
net cost of sales.
Total expenses relating to inventories during the period (net shipments, net disposals and write-offs)
amounted to US$ 58.7 million.
4.6
Prepayments and deposits
The total value of prepayments was US$ 1.3 million (US$ 1.6 million as at 1 January 2012). These
represent payments to suppliers in advance of the receipt of goods or services. It is common practice
for technical service contractors to request payments in advance to support project work. When goods
or services are delivered, prepayments are applied to the appropriate expense account.
The figure of US$ 0.3 million in respect of deposits represents amounts given to landlords as a
security to rent office space.
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4.7
Other current assets
Other current assets refer to receivables from PAHO in the amount of US$ 12.2 million
(US$ 22.9 million as at 1 January 2012). The receivables concerned are primarily in respect of the
programmes funded and executed by the Organization on behalf of PAHO.
4.8
Property, plant and equipment – net
WHO has invoked the transition provision under IPSAS 17, which allows a period of up to five years
before requiring full recognition of property, plant and equipment. As at 31 December 2012, the
Organization had recognized land and buildings at headquarters only. All other assets were expensed
at acquisition. The total value of land and buildings recognized in property, plant and equipment net of
accumulated depreciation is US$ 41.2 million.
1 January 2012
(restated)
31 December 2012
Land
1 000 095
Buildings
Accumulated depreciation ? buildings
Total property, plant and equipment – net
1 000 095
66 971 887
66 971 887
(26 791 104)
(25 674 905)
41 180 878
42 297 077
When accumulated depreciation of property, plant and equipment is recognized for the first time, the
calculation is made for the entire year, irrespective of the date on which the asset was placed in service.
In order to ensure appropriate control and stewardship over property, plant and equipment, existing
assets have been recorded in the asset register in the system except for the African Region, which
continues to maintain the asset register offline.
In 2012, WHO purchased property, plant and equipment (with a threshold value greater than
US$ 5000) worth US$ 1.7 million (with the exception of the African Region). The property, plant and
equipment concerned have not been recognized in WHO’s financial statements in the current year
since the transitional provision mentioned above has been invoked. Details of the property, plant and
equipment not recognized are as follows:
Fixtures and fittings
Vehicles and transport
Office equipment
Communications equipment
Total
25 166
645 794
17 172
9 017
Computer equipment
108 955
Network equipment
678 981
Other equipment
Total property, plant and equipment – excluding land and buildings
182 637
1 667 722
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4.9
Intangible assets
WHO has no intangible assets to report.
4.10 Contributions received in advance
The amount for contributions received in advance mainly concerns payments received from Member
States in 2012 for their 2013 assessed contributions. The balance for advance payments for voluntary
contributions reflects funds received for agreements starting in 2013. Unapplied and unidentified
receipts are amounts received in 2012 but not yet matched to awards as at 31 December 2012.
1 January 2012
(restated)
31 December 2012
Assessed contribution advances
60 363 091
70 276 957
Advances for voluntary contributions
19 327 188
26 740 312
Unapplied and unidentified receipts
6 622 339
2 329 995
Other advances
Total contributions received in advance
17 261
1 381 287
86 329 879
100 728 551
4.11 Accounts payable
Accounts payable represents the total amount due to suppliers by major office as at 31 December 2012.
Major office
31 December 2012
1 January 2012
(restated)
Headquarters
8 267 051
11 260 434
Africa
5 491 858
5 210 396
Eastern Mediterranean
6 713 885
7 585 127
Europe
1 103 480
1 276 513
South?East Asia
1 605 293
2 938 249
Western Pacific
Total accounts payable
1 802 332
4 016 424
24 983 899
32 287 143
4.12 Staff payable
The balance of staff payable represents the total amount outstanding to staff as at 31 December 2012.
Salaries payable consist of balances due to staff pending the finalization of clearance certificates.
Bank returns are balances due to staff for which the payment is pending the receipt of updated bank
account information.
31 December 2012
1 January 2012
(restated)
1 807 549
1 082 773
Bank returns
1 494 157
5 051 019
Travel claims payable
1 064 309
1 009 648
Total staff payable
4 366 015
7 143 440
Salaries payable
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4.13 Accrued staff benefits
Accrued staff benefits include terminal payments, after-service health insurance and liabilities due to
service-incurred death or disability (Special Fund for Compensation).
31 December 2012
1 January 2012
(restated)
Accrued staff benefits – current
Terminal payments
Special Fund for Compensation
380 679
367 503
Total accrued staff benefits – current
71 735 099
74 187 562
71 354 420
73 820 059
Accrued staff benefits – non?current
Terminal payments
Special Fund for Compensation
12 750 061
11 875 053
After?service health insurance
822 983 185
791 926 294
911 532 131
880 900 388
Total accrued staff benefits – non?current
75 798 885
77 099 041
Accrued staff benefits
Terminal payments
147 153 305
150 919 100
Special Fund for Compensation
13 130 740
12 242 556
After?service health insurance
822 983 185
791 926 294
Total accrued staff benefits
983 267 230
955 087 950
Terminal payments
The Terminal Payments Fund was established to finance the terminal emoluments of staff members,
including repatriation grants, accrued annual leave, repatriation travel and removal on repatriation. It is
funded by a salary and post adjustment budgetary provision set for 2012?2013.
Liabilities arising from repatriation benefits and annual leave are determined by independent
consulting actuaries. However, the accrued leave is calculated on a walk-away basis ? that is, as if all
staff separated immediately ? and, therefore, is not discounted.
The latest actuarial study (as at 31 December 2012) estimated the full terminal payment liability to be
US$ 147.2 million (short-term US$ 71.4 million and long-term US$ 75.8 million). This calculation did
not include costs for the end of service grant and separation by mutual agreement on abolishment of
posts. The defined benefit obligation amounted to US$ 85.3 million for terminal entitlements, and
US$ 61.8 million for annual leave which is included in the terminal payments current balance.
As per the actuarial study, a net reduction of US$ 3.7 million is recognized in the Statement of
Financial Performance (total liability was US$ 147.2 million in 2012 and US$ 150.9 million in 2011).
After-service health insurance
WHO participates in a health insurance scheme. The scheme is managed as a separate entity, Staff
Health Insurance, which has its own governance. It provides for the reimbursement of expenses for
medically recognized health care incurred by staff members, recognized dependants and retired staff.
It is financed from the contributions made by the participants and the Organization.
The Organization accounts for after-service health insurance as a post-employment benefit. All gains
and losses were recognized upon the adoption of IPSAS 25. Thereafter, gains and losses (unexpected
changes in surplus or deficit) will be recognized over time via the corridor method. Under this method,
amounts up to 10% of the defined benefit obligation are not recognized, so as to allow gains and losses
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the reasonable possibility of offsetting one another over time. Gains and losses over 10% of the
defined benefit obligation are amortized over the average remaining service period of active staff
expected to receive each benefit.
The defined benefit obligation as at 31 December 2012 was determined by professional actuaries,
based on personnel data and past payment experience provided by WHO. As at 31 December 2012 the
unfunded defined benefit obligation amounted to US$ 823 million for after-service health insurance.
Further details on after-service health insurance can be found in the annual report on after-service staff
health insurance. As per the actuarial study, an additional accrual of US$ 31 million is charged to
staff costs (total liability was US$ 823 million in 2012 and US$ 792 million in 2011).
No actuarial gain or loss was recognized in the financial statements as the gain or loss was less than 10%
of the defined benefit obligation.
Special Fund for Compensation
In the event of a death or disablement attributable to the performance of official duties of an eligible
staff member, the Special Fund for Compensation covers all reasonable medical, hospital, and other
directly related costs, as well as funeral expenses. In addition, the Fund will provide compensation to
the disabled staff member (for the duration of the disability) or the surviving family members.
WHO accounts for the Special Fund for Compensation as a post-employment benefit. All gains and
losses were immediately recognized upon adoption of IPSAS 25. Thereafter, gains and losses
(unexpected changes in surplus or deficit) are recognized over time via the corridor method. Under
this method, amounts up to 10% of the defined benefit obligation are not recognized, so as to allow
gains and losses the reasonable possibility of offsetting one another over time. Gains and losses over
10% of the defined benefit obligation are amortized over the average remaining service of active staff
expected to receive each benefit. For accounting purposes, the plan is considered unfunded (the
liability is not reduced by plan assets).
As per the actuarial study, an additional accrual of US$ 0.9 million (total liability was US$ 13.1 million
in 2012 and US$ 12.2 million in 2011) has been recognized by nature of expenses in the Statement of
Financial Performance.
No actuarial gain or loss was recognized in the financial statements as the net cumulative gain or loss
was less than 10% of the defined benefit obligation.
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Actuarial summary of terminal payments, after-service health insurance, and the Special Fund for
Compensation (US dollars)
Terminal payments
(other than accrued After?service health
leave)
insurance
Reconciliation of defined benefit obligation
Defined benefit obligation as at 31 December 2011
Service cost
Interest cost
Actual gross benefit payments for 2012
Actual administrative expenses
Actual contributions by participants
Actuarial (gain)/loss
Defined benefit obligation as at 31 December 2012
Reconciliation of plan assets
Assets as at 31 December 2011
Actual gross benefit payments for 2012
Actual administrative expenses
WHO contributions during 2012
Participant contributions during 2012
Increase/decrease in WHO SHI Rule 470.1 liability
Expected return on assets
Asset gain/(loss)
Assets as at 31 December 2012
Reconciliation of unfunded obligation status
Defined benefit obligation
Active
Inactive
Total defined benefit obligation
86 866 729
10 889 143
2 294 579
(7 392 901)
–
–
(7 350 743)
85 306 807
1 235 922 134
56 381 886
46 773 057
(28 238 400)
(2 093 479)
7 571 356
48 466 636
1 364 783 190
Special Fund for
Compensation
12 242 556
892 247
337 611
(341 674)
–
–
(1 474 442)
11 656 298
–
(7 392 901)
–
7 392 901
–
–
–
–
–
443 995 840
(52 964 753)
(3 762 523)
54 794 007
27 977 520
29 554
23 263 725
12 963 830
506 297 200
–
(341 674)
–
341 674
–
–
–
–
–
85 306 807
–
85 306 807
688 127 344
676 655 846
1 364 783 190
4 063 327
7 592 971
11 656 298
–
–
–
(525 194 995)
18 897 795
(506 297 200)
–
–
–
Deficit/(surplus)
85 306 807
858 485 990
11 656 298
Unrecognized gain/(loss)
Net liability/(asset) recognized in the Statement of Financial Position
Current liability
Non?current liability
Net liability/(asset) recognized in the Statement of Financial Position
Expenses for 2012
Service cost
Interest cost
Expected return on assets
Recognition of (gain)/loss
Total expenses recognized in the Statement of Financial Performance
Expected contributions for 2013
WHO contributions
Participant contributions
Total expected contributions for 2013
–
85 306 807
9 507 922
75 798 885
85 306 807
(35 502 805)
822 983 185
–
822 983 185
822 983 185
1 474 442
13 130 740
380 679
12 750 061
13 130 740
10 889 143
2 294 579
–
(7 350 743)
5 832 979
56 381 886
46 773 057
(23 263 725)
–
79 891 218
892 247
337 611
–
–
1 229 858
9 649 486
–
9 649 486
41 809 366
12 565 352
54 374 718
386 346
–
386 346
Plan assets
Gross plan assets
Offset for WHO SHI Rule 470.1 liability
Total plan assets
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After-service health insurance medical sensitivity analysis
2012 service cost plus interest cost
Current medical inflation assumption minus 1%
72 356 000
Current medical inflation assumption
103 154 943
Current medical inflation assumption plus 1%
145 098 000
31 December 2012 defined benefit obligation
Current medical inflation assumption minus 1%
1 034 845 000
Current medical inflation assumption
1 364 783 189
Current medical inflation assumption plus 1%
1 796 063 000
Actuarial methods and assumptions
Each year the Organization identifies and selects assumptions and methods that will be used by the
actuaries in the year-end valuation to determine the expense and contribution requirements for the
Organization’s employee benefits. Actuarial assumptions are required to be disclosed in the financial
statements in accordance with IPSAS 25. In addition, each actuarial assumption is required to be
disclosed in absolute terms.
Measurement date
All plans:
31 December 2012
Discount rate
Terminal payments (other than
accrued leave):
The discount rate used is 3.0%. Based on the combined projected benefit payments
for both plans and with weights of 75% on the Aon Hewitt AA Bond Universe yield
curve and 25% on the SIX Swiss Exchange yield curve as at 31 December 2012. The
resulting discount rate is rounded to the nearest 0.1%. Last year, the discount rate
was based on a weighted average of Bloomberg indices in the United States and
Switzerland.
After?service health insurance:
Europe, 2.6% (decrease from 3.1% in prior valuation); the Americas, 4.1% (decrease
from 4.7% in prior valuation); Other Countries, 4.5% (decrease from 4.7% in prior
valuation). For Europe, beginning with the 31 December 2010 valuation, WHO
adopted a yield curve approach to reflect the pattern of expected cash flows from
the European major office. The rate is a weighted average of the 2.05% rate from
the SIX Swiss Exchange yield curve and the 3.79% rate from the iBoxx Euro Zone
curve, with a two?thirds weight on the former. The resulting rate is rounded to the
nearest 0.10%.
For the Americas and Other Countries, the rates use the same methodology as the
31 December 2012 PAHO valuation of the after?service health insurance. Beginning
with the 31 December 2012 valuation, PAHO adopted a yield curve approach using
the Aon Hewitt AA Bond Universe Curve. Thus, the rates for the Americas and
Other Countries can differ due to different patterns of expected cash flows from
those regions.
Special Fund for Compensation:
The discount rate is 3.0%. Based on the combined projected benefit payments for
both plans and with weights of 75% on the Aon Hewitt AA Bond Universe yield
curve and 25% on the SIX Swiss Exchange yield curve as at 31 December 2012. The
resulting discount rate is rounded to the nearest 0.1%. Last year, the discount rate
was based on a weighted average of Bloomberg indices in the United States and
Switzerland.
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Annual general inflation
Terminal payments (other than
accrued leave):
The inflation rate used is 2.2%. Based on a weighted average of inflation rates of
2.5% for United States and 1.3% for Switzerland with weights of 75% and 25%,
respectively. The resulting inflation rate is rounded to the nearest 0.1%.
After?service health insurance:
Europe 1.6%, the Americas 2.5%, Other Countries 2.5%
Special Fund for Compensation:
The inflation rate used is 2.2%. Based on a weighted average of inflation rates of
2.5% for the United States and 1.3% for Switzerland with weights of 75% and 25%,
respectively. The resulting inflation rate is rounded to the nearest 0.1%.
Annual salary scale
All plans:
General inflation, plus 0.5% per year productivity increases, plus merit increases.
Productivity and merit increases are set equal to those from the 31 December 2011
valuation of the United Nations Joint Staff Pension Fund.
Regional groupings for all purposes except claims costs
Terminal payments (other than
accrued leave):
Not applicable
After?service health insurance:
Based on: the Regional Office for Europe, headquarters, International Computing
Centre, IARC, UNAIDS, and the International Drug Purchasing Facility (UNITAID),
which are grouped as Europe; the Regional Office for the Americas for the Region
of the Americas; and the African Region, the Eastern Mediterranean Region, the
African Programme for Onchocerciasis (APOC), the South?East Asia Region, and the
Western Pacific Region, which are grouped as Other Countries.
Special Fund for Compensation:
Not applicable
Repatriation travel and removal on repatriation
Terminal payments (other than
accrued leave):
Calculated using the projected unit credit method with service prorated, and an
attribution period from the “entry on duty date” to separation.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
Repatriation grant, termination indemnity, and grant in case of death
Terminal payments (other than
accrued leave):
Using the projected unit credit method with accrual rate proration.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
Accrued leave
Terminal payments (other than
accrued leave):
The liability is set equal to the walk?away liability ? that is, as if all staff separated
immediately.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
Abolition of post, end?of?service grant, and separation by mutual agreement
Terminal payments (other than
accrued leave):
These benefits are considered termination benefits under IPSAS 25 and, therefore,
are excluded from the valuation.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
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United Nations Joint Staff Pension Fund
The Pension Fund’s Regulations state that the Pension Board shall have an actuarial valuation made of
the Fund at least once every three years by the Consulting Actuary. The practice of the Pension Board
has been to carry out an actuarial valuation every two years using the Open Group Aggregate Method.
The primary purpose of the actuarial valuation is to determine whether the current and estimated
future assets of the Pension Fund will be sufficient to meet its liabilities.
WHO’s financial obligation to the United Nations Joint Staff Pension Fund consists of its mandated
contribution, at the rate established by the United Nations General Assembly (currently 7.9% for
participants and 15.8% for member organizations) together with any share of any actuarial deficiency
payments under Article 26 of the Regulations of the Pension Fund. Such deficiency payments are only
payable if and when the United Nations General Assembly has invoked the provision of Article 26,
following determination that there is a requirement for deficiency payments based on an assessment of
the actuarial sufficiency of the Pension Fund as of the valuation date. Each member organization shall
contribute to this deficiency an amount proportionate to the total contributions that each paid during
the three years preceding the valuation date.
The latest actuarial valuation was performed as at 31 December 2011. The valuation revealed an
actuarial deficit of 1.87% (0.38% in the 2009 valuation) of pensionable remuneration, implying that
the theoretical contribution rate required to achieve balance as at 31 December 2011 was 25.57% of
pensionable remuneration, compared with the actual contribution rate of 23.7%. The actuarial deficit
was primarily attributable to the lower-than-expected investment experience in recent years.
As at 31 December 2011, the funded ratio of actuarial assets to actuarial liabilities, assuming no future
pension adjustments, was 130% (140% in the 2009 valuation). The funded ratio was 86% (91% in the
2009 valuation) when the current system of pension adjustments was taken into account.
After assessing the actuarial sufficiency of the Fund, the Consulting Actuary concluded that there was
no requirement, as at 31 December 2011, for deficiency payments under Article 26 of the Regulations
of the Fund as the actuarial value of assets exceeded the actuarial value of all accrued liabilities under
the Fund. In addition, the market value of assets also exceeded the actuarial value of all accrued
liabilities as of the valuation date. At the time of this report, the General Assembly has not invoked the
provision of Article 26. The pensionable remuneration will be reviewed at the time of the next
actuarial valuation as at 31 December 2013.
In the report of the United Nations Joint Staff Pension Board on its fifty-ninth session (3?11 July
2012), submitted for consideration by the United Nations General Assembly,1 the Pension Board noted
that an increase in the normal age of retirement for new participants of the Fund to 65 is expected to
significantly reduce the deficit and would potentially cover half of the current deficit of 1.87%. In
December 2012, in resolution 67/240, the General Assembly authorized the Pension Board to increase
the normal retirement age to 65 for new participants of the Fund, with effect not later than from 1
January 2014, subject to a decision of the General Assembly on a corresponding increase in the
mandatory age of separation.
During 2012, contributions paid to the United Nations Joint Staff Pension Fund amounted to US$ 206
million (US$ 232 million in 2011). Expected contributions due in 2013 are US$ 216 million.
The United Nations Board of Auditors carries out an annual audit of the Pension Fund and reports to
the Pension Board on the audit every year. The Pension Fund publishes quarterly reports on its
investments and these are made public online.2
1
Official records of the General Assembly, sixty-seventh session, supplement no.9 (document A/67/9).
2
Available at http://www.unjspf.org/UNJSPF_Web/ (accessed 22 March 2013).
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4.14 Deferred revenue
Deferred revenue on voluntary contributions represents multi-year agreements signed in 2012 but for
which the revenue recognition has been deferred to future financial periods. The balance on voluntary
contributions is split into current and non-current deferred revenue, depending upon when the funds
are available to the Organization to spend.
Deferred revenue on reimbursable procurement relates to cash received where supplies or services
have not been delivered to requesting parties at year end. As reimbursable procurement is an
exchange transaction, revenue is recorded on an accrual basis and any revenue received in advance of
delivery is recorded as deferred revenue. The entire amount of deferred revenue for reimbursable
procurement is current.
1 January 2012
(restated)
31 December 2012
Voluntary contributions
239 161 415
321 397 775
77 873 295
136 243 010
Total deferred revenue – current
317 034 710
457 640 785
Voluntary contributions
210 277 136
224 896 093
Total deferred revenue – non?current
210 277 136
224 896 093
Total deferred revenue
527 311 846
682 536 878
Reimbursable procurement
4.15 Other current liabilities
The total balance for other current liabilities as at 31 December 2012 was US$ 41.4 million. These
amounts relate to various short-term liabilities as detailed below. Refunds payable relate to the balance
of funds due to contributors after programme implementation.
31 December 2012
Accrual for un?invoiced goods and services
1 January 2012
(restated)
17 726 261
16 183 798
3 901 890
12 671 129
Accrual for restructuring cost
Due to estates of deceased staff members
273 148
273 148
5 111 282
–
Pension payable
2 487 305
3 603 401
Insurance payable
3 761 018
2 753 779
Foundations
3 567 774
3 651 697
Other liabilities
4 613 563
6 943 830
41 442 241
46 080 782
Refunds payable
Total other current liabilities
The balance for foundations concerns funds that WHO holds in trust and for whose financial and
administrative management the Organization is responsible. As at 31 December 2012, the foundations
with funds in trust were as follows:
? Down Syndrome Research Prize in the Eastern Mediterranean Region
? Dr A.T. Shousha Foundation
? Dr Comlan A.A. Quenum Prize
? Ihsan Dogramaci Family Health Foundation
? Jacques Parisot Foundation
? Léon Bernard Foundation
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? Professor Francesco Pocchiari Fellowship Prize
? State of Kuwait Prize for the Control of Cancer, Cardiovascular Diseases and Diabetes in the
Eastern Mediterranean Region
? State of Kuwait Prize for Research in Health Promotion
? United Arab Emirates Health Foundation
4.16 Inter-entity liabilities
WHO hosts a number of entities through administrative service agreements. As cash for all entities is
managed by the Organization, liabilities exist with these entities for funds held on their behalf. The
total amounts due per entity are as follows:
31 December 2012
Staff health insurance (SHI)
International Computing Centre (ICC)
International Drug Purchase Facility (UNITAID)
African Programme for Onchocerciasis Control (APOC)
207 903 045
1 January 2012
(restated)
187 586 220
16 561 280
11 942 469
553 805 387
488 757 828
7 018 925
4 748 447
Trust Fund for the Joint United Nations Programme on HIV/AIDS (UNAIDS)
204 521 501
240 361 899
Total inter?entity liabilities
989 810 138
933 396 863
4.17 Long-term borrowings
The Health Assembly, in resolutions WHA55.8 and WHA56.13, authorized the Director-General to
proceed with the construction of a new building at headquarters for the Organization and UNAIDS at a
cost estimated at CHF 66 million, of which WHO’s share was estimated at CHF 33 million. The Swiss
Confederation agreed to provide an interest-free loan to the Organization and UNAIDS of CHF 59.8
million, of which WHO’s share is CHF 29.9 million. The Health Assembly also approved the use of
the Real Estate Fund for the repayment over a 50-year period of the Organization’s share of the
interest-free loan provided by the Swiss Confederation with effect from the first year of the
completion of the building.
The loan of US$ 21.9 million (US$ 22.7 million in 2011) is reflected at amortized cost using the
effective interest rate of 1.16% (Swiss franc Libor rate for 30 years).
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5.
Supporting information to the Statement of Financial Performance
5.1
Revenue
Member States’ assessed contributions
In May 2011, the Sixty-fourth World Health Assembly adopted the appropriation resolution for the
financial period 2012?2013,1 in which it welcomed a total effective budget of US$ 3959 million. In
the same resolution, the Health Assembly further resolved that the total assessment on Member States
in respect of the financial period 2012–2013 would be US$ 949 million. US$ 475 million has been
recognized as revenue for the year 2012 and assessed to Member States.2 US$ 10.2 million was
transferred to the Tax Equalization Fund in 2012. In line with resolution WHA64.3, US$ 15 million
was approved for transfer from the Member States’ Non-Assessed Income Fund (refer to Note 6.1).
Increase in allowance for doubtful accounts receivable
The allowance for doubtful accounts receivable represents accounts receivable where the collection is
considered uncertain, both for voluntary and for assessed contributions. The increase in the allowance
for doubtful accounts receivable of US$ 3.3 million represents an increase in the allowance for
assessed accounts receivable of US$ 2.4 million and an increase in the allowance for voluntary
accounts receivable of US$ 0.9 million (refer to Note 4.3).
Voluntary contributions
The total of voluntary contributions to WHO was US$ 1636 million in 2012. These contributions
represent revenue recognized from governments, intergovernmental organizations, institutions, other
United Nations organizations and bodies, as well as the private sector.3
The figure for total voluntary contributions reported of US$ 1636 million is after the deduction of (i)
refunds to contributors ? these amount to US$ 17 million ? and (ii) reductions in revenue recognized
in prior years due to evidence arising in the current year that amounts will no longer be collected ?
these amount to US$ 13 million.
Voluntary contributions in-kind and in-service
WHO receives non-cash contributions from Member States and other contributors. In 2012, the
Organization received in-kind and in-service contributions amounting to US$ 66.5 million.4
31 December 2012
Voluntary contributions in?kind
51 133 480
Voluntary contributions in?service
15 334 959
Total voluntary contributions in?kind and?in service
66 468 439
Reimbursable procurement
WHO procures medicines and vaccines on behalf of Member States and other United Nations agencies.
The total revenue and expenses recognized for 2012 for reimbursable procurement was
US$ 62.5 million. The funds received in advance for reimbursable procurement are recorded as
deferred revenue. The revenue and expenses related to reimbursable procurement form part of the
Enterprise Fund and are not reported against the programme budget.
1
Resolution WHA64.3.
2
See document A66/30 for details of the status of collection of assessed contributions.
3
See document A66/29 Add.1 for details by fund and by contributor.
4
See document A66/29 Add.1, Schedule 5, for details of all in-kind and in-service contributions by contributor.
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Other operating revenue
In 2012, WHO earned fees of US$ 14 million for hosting other entities such as UNAIDS, the
International Drug Purchase Facility (UNITAID), the International Computing Centre (ICC) and the
African Programme for Onchocerciasis Control (APOC). Other sources of earnings also included the
sale of publications and royalties earned.
Finance revenue
Finance revenue includes the following:
31 December 2012
Investment revenue
Realized foreign exchange gains on transactions and bank balances
19 013 674
1 809 681
Net unrealized foreign exchange gains on hedging
10 364 967
Net unrealized foreign exchange gains on balance sheet revaluation
15 524 796
Actuarial revaluation gains on Terminal Payments Fund
Investment revenue and foreign exchange gains and losses apportioned to other entities
Total finance revenue
5.2
7 350 743
(10 947 816)
43 116 045
Expenses
Staff and other personnel costs
Staff and other personnel costs constitute the total cost of employing staff at all locations and include
charges for base salary, post adjustment and any other types of entitlements (e.g. pensions and
insurances) paid by the Organization. Staff costs also include the movement in the after-service health
insurance actuarial liability which is recognized in the Statement of Financial Performance.
Medical supplies and materials
The majority of the balance for medical supplies and materials relates to medical supplies purchased
and distributed by WHO for programme activities. Medical supplies and materials include in-kind
expenses of US$ 31 million and reimbursable procurement related expenses of US$ 58 million.
Contractual services
The amount for contractual services represents expenses for service providers. The main components
are sums for agreements for performance of work or consulting contracts given to individuals to
perform activities on behalf of the Organization. Medical research activities, costs for special service
agreements, fellowships and security expenses are also considered to be contractual services.
Transfers and grants to counterparts
Transfers and grants to counterparts relate to non-exchange contracts signed with national counterparts
(mainly health ministries) to perform activities that are in line with the Organization’s Programme
budget. Funds are expensed at the point of time when the funds are transferred to the contractual
partner and WHO has no continuing involvement. These expenses are also referred to as “direct
financial cooperation”.
Travel
The cost of travel for WHO staff, non-staff participants in meetings, consultants and representatives of
Member States paid by the Organization is included in the balance for total travel costs. Travel
expenses include airfare, per diem and other travel-related costs. This amount does not include
statutory travel for home leave and education grant which is accounted for within staff costs.
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General operating expenses
General operating expenses represent general operations to support country offices, regional offices
and headquarters including utilities, telecommunications (fixed telephone, mobile phone, Internet and
global network expenses) and rents.
Equipment, vehicles and furniture
As WHO opted for the transitional provision under IPSAS 17, the Organization expenses the full cost
of equipment, vehicles and furniture at the point of delivery excluding the headquarters building.
Depreciation and amortization
Depreciation is the expense resulting from the systematic allocation of the depreciable amounts of
property, plant and equipment over their useful lives. This relates principally to the Organization’s
buildings. Amortization is the expense resulting from the systematic allocation of the amortizable
amount of intangible assets over their useful lives.
Finance costs
Finance costs include the following:
31 December 2012
Bank charges and investment management fees
Net realized foreign exchange losses on balance sheet hedging
2 242 258
979 127
Actuarial interest cost related to valuation of Terminal Payments Fund
2 632 190
Total finance costs
5 853 575
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6.
Supporting information to the Statement of Net Assets/Equity
6.1
Member States - regular budget
This note provides details of financing and revenue of assessed contributions, along with the
appropriations from the Member States’ Non-Assessed Income Fund for 2012. The status of the funds
available highlights the net surplus/deficit of the Member States’ regular budget.
Member States’
Assessed
Member States’
Contributions Non?Assessed Tax Equalization Working Capital
Fund
Income Fund
Fund
Fund
Balance as at 1 January 2012
Programmatic revenue and expenses
Member States’ assessed contributions
Appropriations
Tax equalization reimbursements
Effective programme budget
Programmatic expenses related to 2012–2013
Programmatic expenses related to 2010–2011
Tax reimbursements to staff members
Total surplus/(deficit)
Allowance for doubtful accounts receivable
Increase in allowance for doubtful accounts
receivable
Member States’ non?assessed income
Interest
Miscellaneous revenue
Member States’ non?assessed income – net
Balance as at 31 December 2012
19 668 193
23 855 391
(8 073 603)
474 609 150
15 000 000
(10 189 150)
479 420 000
(427 310 158)
(14 130 446)
–
37 979 396
–
(15 000 000)
–
(15 000 000)
–
–
–
(15 000 000)
–
–
10 189 150
10 189 150
–
–
(14 533 591)
(4 344 441)
(2 429 324)
–
–
–
55 218 265
–
452 931
1 013 189
1 466 120
10 321 511
31 000 000
Total
66 449 981
–
–
–
–
–
–
–
–
474 609 150
–
–
474 609 150
(427 310 158)
(14 130 446)
(14 533 591)
18 634 955
–
–
(2 429 324)
–
–
–
–
–
–
452 931
1 013 189
1 466 120
(12 418 044)
31 000 000
84 121 732
In resolution WHA64.3, the Health Assembly resolved to appropriate US$ 15 million to finance the
regular budget for the financial period 2012?2013.
In addition, in resolution WHA64.3, the Health Assembly decided that the Working Capital Fund
should be maintained at its existing level of US$ 31 million.
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6.2
Special Account for Servicing Costs Fund
This fund was established in order to support the costs of servicing activities financed from sources
other than the assessed contribution budget (i.e. from voluntary contributions).
The Fund is credited with revenue from the following sources:
? under resolution WHA34.17, funds are received for programme support costs from voluntary
sources and are calculated by applying a fixed percentage rate to total expenses
? administrative service agreements with other entities
? interest earned on voluntary funds as described in document EB122/3
Total
Balance as at 1 January 2012
111 183 981
Revenue
Programme support costs
Interest
Administrative service agreements with other entities
Repayment of advances (Note a)
Total revenue
111 347 786
6 872 997
4 814 538
2 154 433
125 189 754
Expenses
Global and interregional activities
Major office – Africa
Major office – Western Pacific
Major office – Europe
Major office – South?East Asia
Major office – Americas
Major office – Eastern Mediterranean
Total expenses
Less:
Increase in allowance for doubtful accounts receivables
– voluntary contributions (Note b)
Other expenses (Note c)
Balance as at 31 December 2012
36 220 150
18 524 026
3 611 480
8 398 337
4 986 292
3 460 154
7 398 613
82 599 052
892 080
2 755 772
150 126 831
Note a. In 2011, advances were given for administrative services to the UNICEF/UNDP/World Bank/WHO Special Programme for Research
and Training in Tropical Diseases and the WHO Framework Convention on Tobacco Control for a total of US$ 3.80 million (US$ 3.22 million
and US$ 0.54 million respectively). Half the advance to the Special Programme was repaid in 2012 (US$ 1.61 million); in addition, the
advance to the WHO Framework Convention on Tobacco Control was repaid in 2012 (US$ 0.54) for a total of US$ 2.20 million.
Note b. The increase in the allowance for doubtful accounts receivable for voluntary contributions is US$ 0.9 million (from US$ 10.1 million
as at 31 December 2011 to US$ 11.0 million as at 31 December 2012). Refer to Note 4.3 for details of the balance of accounts receivable
and the allowance.
Note c. At the end of 2011, a balance of US$ 5.8 million was credited to the Special Account for Servicing Costs Fund and is included in the
opening fund balance for 2012. An amount of US$ 2.8 million was required to cover expenses from this balance and is reported in the
Statement of Financial Performance.
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6.3
Real Estate Fund
This fund was established by the Health Assembly in resolution WHA23.14. The Fund is used to meet
the cost of construction of buildings or extensions to existing buildings, the acquisition of land that
may be required, and major repairs and alterations to WHO’s existing office buildings and residences
leased to staff by the Organization. Specific Health Assembly authorization is required for acquisition
of land and construction of buildings or building extensions.
Total
Balance as at 1 January 2012
18 120 580
Revenue
Rents collected
Other revenue
In?kind revenue
Total revenue
11 761 021
198 754
7 752 917
19 712 692
Expenses
In?kind expenses
Major office – headquarters
Major office – Africa
Major office – Eastern Mediterranean
Major office – Europe
Total expenses
Balance as at 31 December 2012
7 752 917
8 229 995
1 306 540
1 486 211
(37 991)
18 737 672
19 095 600
In-kind revenue and expenses represents contributions from Member States for donated office space.
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7.
Comparison of budget and actual amounts
In May 2011, the Health Assembly adopted resolution WHA64.3, the appropriation resolution for the
financial period 2012–2013, in which it noted the total effective budget of US$ 3959 million. WHO’s
budget is adopted on a biennial basis by the Health Assembly. There have been no revisions made to
the Programme budget 2012–2013. As the Organization’s methodology is based on a results-based
framework the approved programme budget is measured on expenses incurred during the programme
budget period.
WHO’s budget and financial statements are prepared using different accounting bases. The Statement
of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/Equity,
and Statement of Cash Flow are prepared on a full accrual basis, whereas the budget is established on
a modified cash basis (i.e. actual expense is used to measure the budget utilization).
As per the requirements of IPSAS 24, the actual amounts presented on a comparable basis to the budget
shall, where the financial statements and the budget are not prepared on a comparable basis, be
reconciled to the actual amounts presented in the financial statements, identifying separately any basis,
timing, presentation and entity differences. The General Fund, as per Note 2.17, represents the
programme budget results, except for the Tax Equalization Fund expense, other non-programme budget
utilization and all in-kind/in-service expenses which are not included in the programme budget results.
Explanations of material differences between the final budget and the actual amounts are available in
document A66/5,which describes the implementation of the Programme budget 2012–2013 and the
results achieved.
As required by IPSAS 24, a reconciliation is provided on a comparable basis between the actual
amounts as presented in Statement V and the actual amounts in the financial accounts identifying
separately any basis, timing, entity and presentation differences.
Basis differences occur when the components of the approved programme budget are used for activities
other than the implementation of technical programmes such as the Tax Equalization Fund expense, inkind/in-service expenses, other non-programme budget utilization and other common fund activities.
Timing differences represent the inclusion in WHO’s financial accounts programme budget expenses
in other financial periods.
Entity differences represent the inclusion in WHO’s financial accounts of the Member States – other
and the Fiduciary Fund which do not form part of the Organization’s programme budget.
Presentation differences are summarized under the headings “Operating”, “Investing” and “Financing”,
consistent with Statement IV: Statement of Cash Flow. The amount reflected for presentation
differences under the heading operating reflects cash flows from operations and also revenue that is
not included in the programme budget or in Statement V.
A reconciliation between the actual amounts on a comparable basis in the Statement of Comparison of
Budget and Actual Amounts (Statement V) and the actual amounts in the Statement of Cash Flow
(Statement IV) for the year 2012 is presented below.
Operating
Actual amount on a comparable basis (Statement V)
Basis differences
Timing differences
Entity differences
Presentation differences
Actual amount in the Statement of Cash Flow (Statement IV)
Investing
Financing
(1 693 680 363)
Total
(1 693 680 363)
66 182 084
66 182 084
125 153 581
125 153 581
194 947 377
194 947 377
1 483 592 248
365 459 934
(812 973)
1 848 239 209
176 194 927
365 459 934
(812 973)
540 841 888
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8.
Segment reporting
8.1
Statement of Financial Position by segments
As at 31 December 2012 (In US dollars)
HQ
AFRO
AMRO
EMRO
SEARO
WPRO
1 531 029
–
261 312
276 767
–
13 556
–
2 082 664
7 799 091
–
79 687
850 548
5 167 235
249 262
–
14 145 823
5 596 234
–
17 975
1 812 071
4 127 236
127 311
–
11 680 827
1 184 358 416
1 369 531 140
695 054 637
12 263 937
67 458 323
1 299 838
12 191 472
3 342 157 763
–
–
–
–
–
33 503 910
–
–
13 556
–
13 556
2 096 220
–
–
208 809
–
208 809
14 354 632
–
–
79 722
–
79 722
11 760 549
210 277 136
266 323 581
309 148
41 180 878
518 090 743
3 860 248 506
–
–
–
–
–
–
153 282 363
–
153 282 363
30 000
6 713 885
490 353
5 948 177
–
–
1 391 998 471
–
1 405 180 886
39 596
1 103 480
300 794
4 781 943
–
–
519 804 214
–
526 030 027
–
1 605 293
254 778
4 720 011
–
–
886 858 517
–
893 438 599
–
1 802 332
239 999
4 871 197
–
–
636 848 433
–
643 761 961
86 329 879
24 983 899
4 366 015
71 735 099
317 034 710
21 403 427
41 442 241
989 810 138
1 557 105 408
–
–
–
–
153 282 363
–
52 304 658
–
52 304 658
1 457 485 544
–
67 402 316
–
67 402 316
593 432 343
–
62 794 570
–
62 794 570
956 233 169
–
54 300 626
–
54 300 626
698 062 587
21 912 231
911 532 131
210 277 136
1 143 721 498
2 700 826 906
(198 103 144)
(156 306 242)
(6 564 944)
(155 534)
(361 129 864)
(212 772 306)
(1 052 384 059)
(158 650 094)
(175 175)
(1 423 981 634)
(154 366 711)
(353 097 607)
(83 777 961)
(93 844)
(591 336 123)
(242 862 763)
(623 092 360)
(75 620 101)
(303 313)
(941 878 537)
(188 160 747)
(411 982 949)
(86 005 628)
(152 714)
(686 302 038)
84 121 732
1 642 008 469
(715 185 725)
148 477 124
1 159 421 600
(207 847 501)
33 503 910
2 096 220
14 354 632
11 760 549
3 860 248 506
ASSETS
Current assets
Cash and cash equivalents
Short?term investments
Accounts receivable – net current
Staff receivables
Inventories
Prepayments
Other current assets
Total current assets
1 116 915 824
1 369 531 140
693 609 422
6 458 299
46 980 604
288 075
220 829 413
3 454 612 777
29 126 359
–
202 436
2 291 139
1 737 695
621 634
–
33 979 263
–
–
790 440
–
–
–
(208 637 941)
(207 847 501)
23 389 879
–
93 365
575 113
9 445 553
–
–
33 503 910
Non?current assets
Accounts receivable – net non?current
Long?term investments
Deposits
Property, plant and equipment – net
Total non?current assets
TOTAL ASSETS
210 277 136
266 323 581
–
41 180 878
517 781 595
3 972 394 372
–
–
7 061
–
7 061
33 986 324
–
–
–
–
–
(207 847 501)
86 260 283
8 267 051
2 053 609
33 898 313
317 034 710
21 403 427
(6 145 253 941)
989 810 138
(4 686 526 410)
–
5 491 858
1 026 482
17 515 458
–
–
2 597 904 184
–
2 621 937 982
21 912 231
531 450 309
210 277 136
763 639 676
(3 922 886 734)
–
143 279 652
–
143 279 652
2 765 217 634
NET ASSETS/EQUITY
Member States – regular budget
Voluntary funds
Member States – other
Fiduciary Fund
TOTAL NET ASSETS/EQUITY
1 585 632 246
6 293 590 325
(133 631 063)
149 689 598
7 895 281 106
(505 244 843)
(2 054 718 639)
(170 935 934)
(331 894)
(2 731 231 310)
TOTAL LIABILITIES AND NET ASSETS/EQUITY
3 972 394 372
33 986 324
LIABILITIES
Current liabilities
Contributions received in advance
Accounts payable
Staff payables
Accrued staff benefits – current
Deferred revenue
Financial liabilities
Other current liabilities
Inter?entity liabilities
Total current liabilities
Non?current liabilities
Long?term borrowings
Accrued staff benefits – non?current
Deferred revenue – non?current
Total non?current liabilities
TOTAL LIABILITIES
EURO
Total
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8.2
Statement of Financial Performance by segments
For the year ended 31 December 2012
(In US dollars)
HQ
Revenue
Member States’ assessed contributions
AFRO
AMRO
EMRO
EURO
SEARO
WPRO
Total
474 609 150
–
–
–
–
–
–
474 609 150
(3 321 404)
–
–
–
–
–
–
(3 321 404)
1 636 499 031
–
–
–
53 784
–
–
1 636 552 815
Voluntary contributions in?kind and in?service
66 468 439
–
–
–
–
–
–
66 468 439
Reimbursable procurement
62 459 972
–
–
–
–
–
–
62 459 972
Other operating revenue
19 575 827
(2 048 012)
(2 523 719)
118 424
(982 044)
124 652
(283 351)
13 981 777
Finance revenue
40 847 428
1 030 453
–
(312 087)
868 486
146 667
535 098
43 116 045
2 297 138 443
(1 017 559)
(2 523 719)
(193 663)
(59 774)
271 319
251 747
2 293 866 794
Staff and other personnel costs
428 546 875
198 982 466
31 684 610
73 429 444
67 212 218
52 527 982
60 055 776
912 439 371
Medical supplies and materials
51 075 029
20 746 170
1 312 499
88 411 209
407 463
31 175 446
6 440 125
199 567 941
123 193 758
36 681 993
16 348 551
57 109 511
19 098 700
47 205 777
25 007 238
324 645 528
5 519 692
102 569 581
1 036 114
77 813 236
521 924
15 027 864
13 401 391
215 889 802
Travel
64 872 279
38 165 935
4 264 714
13 515 490
10 022 613
11 396 652
10 532 803
152 770 486
General operating expenses
59 880 425
117 058 512
2 625 102
29 659 314
9 373 523
9 953 751
7 104 352
235 654 979
Equipment, vehicles and furniture
4 003 296
10 252 336
2 498 562
7 787 485
1 061 174
2 714 294
3 708 377
32 025 524
Depreciation and amortization
1 116 199
–
–
–
–
–
–
1 116 199
Increase in allowance for doubtful accounts receivable
Voluntary contributions
Total revenue
Expenses
Contractual services
Transfers and grants to counterparts
Finance costs
6 809 645
665 966
–
(2 120 649)
157 128
(116 606)
458 091
5 853 575
Total expenses
745 017 198
525 122 959
59 770 152
345 605 040
107 854 743
169 885 160
126 708 153
2 079 963 405
1 552 121 245
(526 140 518)
(62 293 871)
(345 798 703)
(107 914 517)
(169 613 841)
(126 456 406)
213 903 389
TOTAL SURPLUS/(DEFICIT) FOR THE YEAR
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9.
Administrative waivers, amounts written-off and ex-gratia payments
During 2012, three administrative waivers were approved. At the Regional Office for the South-East
Asia, an amount of US$ 3550 relating to a direct financial cooperation granted in the biennium 2006?
2007 to the Municipal Corporation, Patna (Bihar State), India was deemed impossible to recover.
Furthermore, at the Regional Office for South-East Asia, an amount of US$ 18 723 relating to two
grants for a direct financial cooperation granted in the biennium 2008?2009 to the Director of Health
Services (Maharashtra State), India, was deemed impossible to recover.
During 2012, a total of US$ 2250 was approved for write-off. This balance related to the bankruptcy
of a bank in the Democratic Republic of the Congo.
No ex-gratia payments were made in 2012.
10.
Related party and other senior management disclosures
Staff members considered to be “key management personnel” are the Director-General, regional
directors and all other ungraded staff.
The table below details the number of key management personnel who held these positions over the
course of the year as well as the aggregate remuneration.
Key management personnel
Number of individuals
Compensation and post adjustment
Entitlements
19
4 549 493
605 607
Pension and health plans
1 144 135
Total remuneration
6 299 235
Outstanding advances against entitlements
Outstanding loans (in addition to normal entitlements, if any)
170 796
–
The aggregate remuneration paid to key management personnel includes: net salaries, post adjustment,
entitlements such as representation allowance and other allowances, assignment and other grants,
rental subsidy, personal effect shipment costs, and employer pension and current health insurance
contributions.
Key management personnel are also qualified for post-employment benefits at the same level as other
employees. These benefits cannot be reliably quantified. Key management personnel are ordinary
members of the United Nations Joint Staff Pension Fund.
The Regional Director for the Americas is included among the key management personnel. However,
as the Regional Director is receiving all entitlements and benefits from PAHO, those entitlements and
benefits are disclosed in PAHO’s financial statements and not in the Organization’s financial
statements.
During the year, no loans were granted to key management personnel beyond those widely available to
staff outside this grouping.
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11.
Events after the reporting date
WHO’s reporting date is 31 December 2012. On the date of the signing of these accounts, no material
events, favourable or unfavourable, had been incurred between the balance sheet date and the date
when the financial statements were authorized for issue that would have had an impact on the financial
statements.
12.
Contingent liabilities, commitments and contingent assets
Contingent liabilities
As at 31 December 2012, WHO had a number of pending legal cases. Most involve disputes that are
not recorded because the likelihood of repayment has been determined to be remote. However, there
are four cases involving contractual disputes which are to be considered contingent liabilities. The
total potential cost to the Organization is estimated at US$ 95 000.
Operating leases commitments
WHO enters into operating lease arrangements for renting office space in various country offices.
Future minimum lease rental payments for the following periods are:
Total
Under 1 year
3 319 313
1–5 years
5 183 137
Beyond 5 years
Total property lease commitments
3 838 114
12 340 564
The Organization has no outstanding leases qualifying as finance leases at the reporting date.
WHO leased office space to six tenants. Total revenue from the leasing activities was US$ 1.2 million
in 2012. Current lease agreements are renewable on a yearly basis.
Contingent assets
In accordance with IPSAS 19, contingent assets will be disclosed for cases where an event will give
rise to a probable inflow of economic benefits. As at 31 December 2012, there are no material
contingent assets to disclose.
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Page 67
Schedule I. Statement of Financial Performance by major funds
For the year ended 31 December 2012
(In US dollars)
General Fund
Member
States –
regular budget
Voluntary
funds
Member States – other
Eliminations
Common
Fund
Subtotal
Enterprise
Fund
Fiduciary Fund
Special
Purpose Fund
Fiduciary
Fund
Subtotal
Eliminations
Total
Percentage
Revenue
Member States’ assessed contributions
Increase in allowance for doubtful
accounts receivable
Voluntary contributions
Voluntary contributions in?kind and in?
service
Reimbursable procurement
Other operating revenue
Finance revenue
Total operating revenue
474 609 150
–
(2 429 324)
(892 080)
– 1 542 409 490
–
–
474 609 150
–
–
–
(3 321 404)
–
–
–
–
–
(3 019 363) 1 539 390 127
–
–
170 277
97 352 898
97 523 175
–
–
7 752 917
2 318 919
10 071 836
–
–
62 459 972
–
62 459 972
3%
187 678 222 (151 704 433)
13 981 777
1%
56 396 603
–
–
–
–
–
62 459 972
–
–
88 342 586 (111 347 787)
(21 992 012)
(427 526)
7 625 667
155 429 301
25 050 780
8 297 359
24 901 835
–
9 591 953
324 898
473 645 946 1 694 101 027 (114 367 150) 2 053 379 823
24 474 309
70 085 639
172 944 448
125 047 495
–
1 013 189
452 931
7 844 428
?
56 396 603
–
–
34 818 686
–
474 609 150
–
(3 321 404)
0%
(360 487) 1 636 552 815
71%
–
66 468 439
21%
3%
43 116 045
2%
392 551 891 (152 064 920) 2 293 866 794
100%
Expenses
Staff and other personnel costs
376 925 451
524 440 866
–
901 366 317
–
5 003 291
132 331 343
25 215 712
912 439 371
44%
Medical supplies and materials
2 582 925
102 616 357
–
105 199 282
(3 309 093)
57 740 196
786 363
39 151 193
94 368 659
–
199 567 941
10%
Contractual services
25 877 392
275 153 896
–
301 031 288
–
976 838
11 852 553
11 582 444
24 411 835
(797 595)
324 645 528
16%
Transfers and grants to counterparts
10 775 490
203 284 230
(265 487)
213 794 233
–
2 971
147 572
4 906 423
5 056 966
(2 961 397)
215 889 802
10%
Travel
14 193 397
130 495 695
–
144 689 092
–
111 522
2 131 345
5 875 099
8 117 966
(36 572)
152 770 486
7%
General operating expenses
20 924 129
273 521 484 (104 217 598)
190 228 015
–
4 496 822
39 620 846
7 985 422
52 103 090
(6 676 126)
235 654 979
11%
2 462 895
30 356
3 682 828
(3)
32 025 524
2%
0%
Equipment, vehicles and furniture
162 550 346 (151 477 292)
4 695 411
23 647 288
–
28 342 699
(656 421)
1 845 998
Depreciation and amortization
–
–
–
–
1 116 199
–
–
–
1 116 199
–
1 116 199
Finance costs
–
–
–
–
3 214 417
–
2 638 987
171
5 853 575
–
5 853 575
0%
455 974 195 1 533 159 816 (104 483 085) 1 884 650 926
365 102
70 177 638
191 971 904
94 746 820
357 261 464 (161 948 985) 2 079 963 405
100%
Total expenses
TOTAL SURPLUS/(DEFICIT) FOR THE YEAR
Fund balance – 1 January 2012
Reversal of IPSAS opening adjustment
(unrealized exchange gain)
Fund balance – 31 December 2012
17 671 751
160 941 211
66 449 981 1 481 067 258
84 121 732 1 642 008 469
(9 884 065)
168 728 897
1 547 517 239
24 109 207
60 719 598
(91 999) (19 027 456)
9 669 958 (813 415 939)
30 300 675
35 290 427
118 176 449 (624 849 934)
9 884 065
–
213 903 389
922 667 305
(9 884 065) 1 716 246 136
22 850 906
107 679 711
9 577 959 (832 443 395)
22 850 906
148 477 124 (566 708 601)
22 850 906
9 884 065 1 159 421 600
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Schedule II. General Fund expenses
For the year ended 31 December 2012
(In US dollars)
2012–2013 Programme budget utilization
Previous bienniums
Assessed
contributions
Voluntary funds
Total from
2012–2013
1 Communicable diseases
38 498 161
575 493 453
613 991 614
2 HIV/AIDS, tuberculosis and malaria
20 276 392
161 438 849
181 715 241
3 Chronic noncommunicable conditions
18 507 378
28 929 341
47 436 719
641 939
4 Child, adolescent, maternal, sexual and reproductive
health, and ageing
22 571 334
75 077 914
97 649 248
601 404
6 917 441
137 245 329
144 162 770
128 306
14 113 623
30 670 012
44 783 635
558 711
9 173 408
7 671 837
16 845 245
16 127 580
22 727 108
9 831 370
10 Health systems and services
11 Medical products and technologies
Strategic objectives
5 Emergencies and disasters
6 Risk factors for health
7 Social and economic determinants of health
8 Healthier environment
9 Nutrition, food safety and food security
12 WHO leadership, governance, and partnerships
13 Enabling and support functions
Total
Basis differences
Assessed
contributions
General Fund total
Voluntary
funds
Total from
2012–2013
Assessed
contributions
Voluntary funds
General Fund
total expenses
733 712
37 601 247
1 029 796
18 330 581
38 334 959
39 231 873
613 094 700
652 326 573
19 360 377
21 306 188
179 769 430
1 189 587
201 075 618
1 831 526
19 149 318
30 118 928
49 268 246
5 980 142
6 581 546
23 172 739
81 058 056
104 230 795
26 382 358
26 510 664
7 045 747
163 627 687
170 673 434
2 093 516
2 652 227
14 672 333
32 763 528
47 435 861
256 912
1 122 547
1 379 459
9 430 320
8 794 384
18 224 704
38 854 688
641 121
1 745 062
2 386 183
16 768 700
24 472 170
41 240 870
17 323 195
27 154 565
257 894
1 062 505
1 320 399
10 089 264
18 385 700
28 474 964
59 532 725
75 314 729
134 847 454
2 728 472
6 877 924
9 606 396
62 261 197
82 192 653
144 453 850
12 820 818
49 089 111
61 909 929
513 582
2 327 560
2 841 142
13 334 400
51 416 671
64 751 071
101 335 638
22 990 016
124 325 654
1 015 246
299 262
1 314 508
102 350 884
23 289 278
125 640 162
6 010 844
11 034 195
102 626 633
68 411 163
171 037 796
111 023 135 125 153 581
441 439 596
1 377 394 348
1 818 833 944
97 603 282
62 400 319
160 003 601
5 023 351
427 309 150
1 266 371 213
1 693 680 363
14 130 446
44 681 506
Tax Equalization Fund expenses
14 533 591
Other non?programme budget utilization
6 601 885
Total basis differences
Total expenses – General Fund
In?kind/in?service expenses
65 816 982
1 884 650 926
The balance for General Fund expenses includes US$ 62 million of the approved programme budget allocation of US$ 138 million for the Post Occupancy Charge Fund, which is transferred to the Special
Purpose Fund to finance additional enabling and support functions under strategic objective 13bis.
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Schedule III. Programme budget utilization 2012?2013 ? assessed contributions
For the year ended 31 December 2012
(In US dollars)
Contingency
Remaining balance withholding Note (a)
Balance after
contingency
withholding
Percentage
implementation
excluding contingency
withholding
Programme budget
Programme budget
utilization
1 Communicable diseases
79 186 000
38 498 161
40 687 839
3 169 000
37 518 839
49%
2 HIV/AIDS, tuberculosis and malaria
45 634 000
20 276 392
25 357 608
1 844 000
23 513 608
44%
3 Chronic noncommunicable conditions
44 809 000
18 507 378
26 301 622
1 820 000
24 481 622
41%
4 Child, adolescent, maternal, sexual and
reproductive health, and ageing
55 754 000
22 571 334
33 182 666
2 348 000
30 834 666
40%
5 Emergencies and disasters
18 568 000
6 917 441
11 650 559
736 000
10 914 559
37%
6 Risk factors for health
37 731 000
14 113 623
23 617 377
1 584 000
22 033 377
37%
7 Social and economic determinants of health
18 753 000
9 173 408
9 579 592
767 000
8 812 592
49%
8 Healthier environment
32 507 000
16 127 580
16 379 420
1 314 000
15 065 420
50%
9 Nutrition, food safety and food security
22 359 000
9 831 370
12 527 630
894 000
11 633 630
44%
145 421 000
59 532 725
85 888 275
5 987 000
79 901 275
41%
30 751 000
12 820 818
17 930 182
1 234 000
16 696 182
42%
12 WHO leadership, governance, and partnerships
202 410 000
101 335 638
101 074 362
3 354 000
97 720 362
50%
13 Enabling and support functions
209 957 000
97 603 282
112 353 718
3 264 000
109 089 718
46%
943 840 000
427 309 150
516 530 850
28 315 000
488 215 850
45%
Strategic objectives
10 Health systems and services
11 Medical products and technologies
Total
Note a. Contingency withholding represents a budget reduction for non?payment of Member States’ assessed contributions.
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Schedule IV. Programme budget utilization 2012?2013 – voluntary contributions
For the year ended 31 December 2012
(In US dollars)
Programme budget
Strategic objectives
1 Communicable diseases
2 HIV/AIDS, tuberculosis and malaria
3 Chronic noncommunicable conditions
Percentage
implementation
1 198 944 000
575 493 453
623 450 547
48%
494 664 000
161 438 849
333 225 151
33%
68 954 000
28 929 341
40 024 659
42%
4 Child, adolescent, maternal, sexual and reproductive health, and ageing
162 552 000
75 077 914
87 474 086
46%
5 Emergencies and disasters
363 460 000
137 245 329
226 214 671
38%
6 Risk factors for health
84 524 000
30 670 012
53 853 988
36%
7 Social and economic determinants of health
24 036 000
7 671 837
16 364 163
32%
8 Healthier environment
54 318 000
22 727 108
31 590 892
42%
9 Nutrition, food safety and food security
32 539 000
17 323 195
15 215 805
53%
10 Health systems and services
202 672 000
75 314 729
127 357 271
37%
11 Medical products and technologies
106 532 000
49 089 111
57 442 889
46%
12 WHO leadership, governance, and partnerships
13 Enabling and support functions
Total
Programme budget
utilization
Remaining balance
55 160 000
22 990 016
32 169 984
42%
166 784 000
62 400 319
104 383 681
37%
3 015 139 000
1 266 371 213
1 748 767 787
42%
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Schedule V. Expenses by major office ? General Fund only
For the year ended 31 December 2012
(In US dollars)
HQ
Expenses
Staff and other personnel costs
Medical supplies and materials
Contractual services
Transfers and grants to counterparts
AFRO
419 654 257
AMRO
195 530 085
EMRO
34 273 954
EURO
73 466 386
SEARO
65 139 657
WPRO
53 037 062
Total
60 264 916
901 366 317
14 590 313
21 018 864
1 311 874
33 480 261
405 800
30 426 074
3 966 096
105 199 282
104 083 874
34 483 399
15 801 829
57 087 599
18 725 859
46 415 296
24 433 432
301 031 288
3 424 123
102 569 581
1 036 114
77 813 236
521 924
15 027 864
13 401 391
213 794 233
Travel
58 245 137
37 121 003
4 173 900
13 416 129
10 012 496
11 196 660
10 523 767
144 689 092
General operating expenses
27 847 455
113 732 840
2 046 643
26 962 469
4 902 974
9 101 608
5 634 026
190 228 015
4 419 553
8 584 953
2 498 562
7 269 933
1 059 720
2 413 073
2 096 905
28 342 699
632 264 712
513 040 725
61 142 876
289 496 013
100 768 430
167 617 637
120 320 533
1 884 650 926
Equipment, vehicles and furniture
Total expenses
Percentage of expenses by expense type across major office
Staff and other personnel costs
47%
22%
4%
8%
7%
6%
7%
100%
Medical supplies and materials
14%
20%
1%
32%
0%
29%
4%
100%
Contractual services
35%
11%
5%
19%
6%
15%
8%
100%
Transfers and grants to counterparts
2%
48%
0%
36%
0%
7%
6%
100%
Travel
40%
26%
3%
9%
7%
8%
7%
100%
General operating expenses
15%
60%
1%
14%
3%
5%
3%
100%
Equipment, vehicles and furniture
16%
30%
9%
26%
4%
9%
7%
100%
34%
27%
3%
15%
5%
9%
6%
100%
66%
38%
56%
25%
Total percentage
Percentage of expenses by expense type within each major office
Staff and other personnel costs
Medical supplies and materials
65%
32%
50%
48%
2%
4%
2%
12%
0%
18%
3%
6%
16%
7%
26%
20%
19%
28%
20%
16%
Transfers and grants to counterparts
1%
20%
2%
27%
1%
9%
11%
11%
Travel
9%
7%
7%
5%
10%
7%
9%
8%
General operating expenses
4%
22%
3%
9%
5%
5%
5%
10%
Equipment, vehicles and furniture
1%
2%
4%
3%
1%
1%
2%
2%
100%
100%
100%
100%
100%
100%
100%
100%
Contractual services
Total percentage
Cover by WHO/GRA Graphic Design and Layout
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A66/29*
SIXTY-SIXTH WORLD HEALTH ASSEMBLY
Provisional agenda item 21.1
15 April 2013
Financial Report
and Audited Financial
Statements
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for the year ended
31 December 2012
* Information on voluntary contributions by fund and by contributor for the year
ended 31 December 2012 is contained in the Annex (document A66/29 Add.1).
doc_148633134.pdf
The financial statements, accounting policies and notes to the financial statements have been prepared in compliance with International Public Sector Accounting Standards (IPSAS) and WHO's Financial Regulations and Financial Rules. The statutory components of the Financial Report have been audited by the Organization's External Auditor, the Republic of the Philippines Commission on Audit, whose opinion is included in the Financial Report.
Cover by WHO/GRA Graphic Design and Layout
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A66/29*
SIXTY-SIXTH WORLD HEALTH ASSEMBLY
Provisional agenda item 21.1
15 April 2013
Financial Report
and Audited Financial
Statements
7.89 12%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
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for the year ended
31 December 2012
* Information on voluntary contributions by fund and by contributor for the year
ended 31 December 2012 is contained in the Annex (document A66/29 Add.1).
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Table of contents
Director?General’s report ........................................................................................................................................ 2
Certification of the financial statements for the year ended 31 December 2012................................................. 14
Letter of transmittal .............................................................................................................................................. 15
Opinion of the External Auditor ............................................................................................................................ 16
Statement I. Statement of Financial Position ........................................................................................................ 18
Statement II. Statement of Financial Performance ............................................................................................... 19
Statement III. Statement of Changes in Net Assets/Equity ................................................................................... 20
Statement IV. Statement of Cash Flow .................................................................................................................. 21
Statement V. Statement of Comparison of Budget and Actual Amounts ............................................................. 22
Notes to the financial statements ......................................................................................................................... 23
1.
Basis of preparation and presentation ........................................................................................... 23
2.
Significant accounting policies ........................................................................................................ 25
3.
Note on the implementation of IPSAS and opening balance adjustments ..................................... 34
4.
Supporting information to the Statement of Financial Position ..................................................... 37
5.
Supporting information to the Statement of Financial Performance ............................................. 56
6.
Supporting information to the Statement of Net Assets/Equity .................................................... 59
7.
Comparison of budget and actual amounts .................................................................................... 62
8.
Segment reporting .......................................................................................................................... 63
9.
Administrative waivers, amounts written?off and ex?gratia payments .......................................... 65
10.
Related party and other senior management disclosures ............................................................... 65
11.
Events after the reporting date ....................................................................................................... 66
12.
Contingent liabilities, commitments and contingent assets ........................................................... 66
Schedule I. Statement of Financial Performance by major funds ......................................................................... 67
Schedule II. General Fund expenses ...................................................................................................................... 68
Schedule III. Programme budget utilization 2012?2013 ? assessed contributions ............................................... 69
Schedule IV. Programme budget utilization 2012?2013 – voluntary contributions ............................................. 70
Schedule V. Expenses by major office ? General Fund only .................................................................................. 71
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Director-General’s report
INTRODUCTION
1.
In accordance with Article 34 of the Constitution and Financial Regulation XIII of the World
Health Organization, I have the honour to present the Financial Report for the year ended
31 December 2012. The financial statements, accounting policies and notes to the financial statements
have been prepared in compliance with International Public Sector Accounting Standards (IPSAS) and
WHO’s Financial Regulations and Financial Rules. The statutory components of the Financial Report
have been audited by the Organization’s External Auditor, the Republic of the Philippines
Commission on Audit, whose opinion is included in the Financial Report.
2.
I am very pleased to announce that 2012 is the first year in which the Organization’s financial
statements have been prepared under the IPSAS basis of accounting. This is a significant achievement
and brings greater transparency, accountability and a higher standard of financial reporting. I have
added a section in this report to outline the main changes brought about by IPSAS implementation and
its advantages for WHO.
3.
The implementation of IPSAS in turn has been facilitated by the implementation of the Global
Management System, which has greatly improved the accuracy and timeliness of data presented in this
report. In addition, managers across the Organization have access to a consistent set of data, which
tracks implementation against the programme budget.
4.
The year 2012 was a period of financial consolidation for WHO. Total revenue was US$ 2294
million and total expenses were US$ 2080 million, resulting in a surplus of US$ 214 million. Overall the
Organization is on track to meet its programme budget revenue and expense targets. A review of the levels
and trends of both revenue and expenses is included in the following sections of the report. However,
within this improved overall financial situation, there are still some budget centres that are underfunded as a
result of mismatches between planned spending and actual resources received. This situation is one of the
central issues being addressed through the WHO financing reforms that are underway.
5.
The financial statements cover the total effective budget under all sources of funds (assessed and
voluntary contributions) of US$ 3959 million as noted by the Sixty-fourth World Health Assembly in
May 2011 in resolution WHA64.3. Although the Organization has adopted an annual financial reporting
period as stipulated in the revised Financial Regulation XIII, the budgetary period remains a biennium
(Financial Regulation II). Therefore, for the purposes of actual versus budget comparisons, the
biennium’s budget must be compared to annual expenses. Further analysis of the use of funds is
available in document A66/5 “Implementation of the Programme budget 2012–2013: interim report”,
which describes the implementation of the Programme budget 2012–2013 and the results achieved.
6.
In addition to the General Fund which includes the programme budget, there are two other fund
groups summarized in the financial statements: “Member States – other”, and the Fiduciary Fund. The
“Member States – other” fund group includes the Common Fund (reflecting changes in asset and
liability accounts), the Enterprise Fund (mainly procurement activities on behalf of Member States and
the Revolving Sales Fund), and the Special Purpose Fund (such as the Real Estate and Security Funds
maintained for the purpose of financing longer-term costs).The Fiduciary Fund is used where the
Organization is managing revenue and expenses on behalf of other entities consolidated within
WHO’s financial statements. Details of the revenue and expenses for each of these three main fund
groups can be found in Schedule I of this report. The figures shown in this introduction elaborate both
programme budget and non-programme budget components. In addition, the Organization provides
services to six other entities: The Trust Fund for the Joint United Nations Programme on HIV/AIDS
(UNAIDS), the International Drug Purchase Facility (UNITAID), the International Agency for
Research on Cancer (IARC), the International Computing Centre (ICC), the African Programme for
Onchocerciasis Control (APOC) and the staff health insurance (SHI). Separate financial statements
are prepared for each entity, and these are subject to separate external audit review.
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7.
Highlights of the assets, liabilities and net assets/equity of the Organization are provided,
together with information on cash flow, liquidity and investment management in order to provide a
complete picture of WHO’s financial position as at 31 December 2012. Finally, I have highlighted
certain financial risks facing the Organization and the measures in place to manage these risks.
INTERNATIONAL PUBLIC SECTOR ACCOUNTING STANDARDS
8.
The Organization’s full implementation of IPSAS in 2012 further raises the standard of WHO’s
financial reporting. Financial reporting is a critical element of governance and of sound management,
the improvement of which are both important parts of the WHO reform process. The implementation
of IPSAS requires increased transparency, which allows for better understanding of the Organization’s
financial performance and health. Enhanced financial information supports governance, and the
management of assets and liabilities, and facilitates decision-making. Compliance with IPSAS has
also necessitated the introduction of an enhanced system of internal control in order to support the
additional financial reporting requirements.
9.
I would like to highlight the following significant changes arising from the full implementation
of IPSAS in the 2012 financial statements.
10. For the first time, the full actuarial valuation for after-service health insurance has been
recognized in our accounts. This includes the estimated future cost of health insurance for employees
and retired staff. The total liability as at 31 December 2012 was estimated at US$ 1329 million, of
which US$ 506 million is funded and US$ 823 million is unfunded. The unfunded balance is reflected
as a long-term accrued staff liability. A funding plan based on increased contributions is in place to
fund the unfunded portion of the liability, however, based on actuarial projections, WHO will only
achieve full funding by 2042. In addition, the full actuarial valuation for other staff benefits such
accrued annual leave, compensation for death and disability, and termination benefits such as
repatriation travel and grants are also recorded as a liability in the accounts, resulting in a total liability
of US$ 160 million.
11. Inventories are now recorded as assets in the Organization’s financial statements. Inventories
consist of medicines and vaccines, humanitarian supplies and publications and are recorded as assets
until they are sold, distributed or until their useful life has expired. As at 31 December 2012, the
Organization had conducted a physical verification of all stock on hand and had included some 80
locations with inventory valued at a total of US$ 67 million. By recording inventories, the
Organization is better able to review the extent and location of inventories held, leading to enhanced
stewardship and management of logistics.
12. Under IPSAS, “property, plant and equipment” including buildings, land, vehicles, fixtures and
fittings, and equipment, are recognized as assets and amortized over their useful lives. However, due
to the time it takes to obtain valuations and to establish residual useful lives, the full value of these
assets and accumulated asset depreciation will only be reported after the transitional period of up to
five years that is permitted under IPSAS. In order to prepare for this requirement, a full record of all
property ownership arrangements is being collected for all WHO locations. Excluding the Region of
the Americas/PAHO, the Organization currently operates from 313 premises around the world.
Although 29 of these locations are owned, the remainder are either rented or have been granted by a
Member State.
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13. IPSAS requires the use of accrual accounting so that all revenue and expenses are recognized in
the financial statements for the period to which they relate. For voluntary contributions, the revenue is
recorded when the agreement is signed and not when the cash was received (this procedure has been
implemented since 2008). Expenses are recognized when the goods and services are received and not
when the commitments or the payments have been made. As at 31 December 2012, an accrual of
US$ 18 million has been made to record goods received and not yet paid for.
14. Another important change is the policy for estimating the allowance for “doubtful accounts
receivable”. In the past, for assessed contributions, a full allowance was made for any amounts that
were not paid at the end of the year. This brought the assessed contribution revenue to a cash basis of
accounting (i.e., only the revenue for the amounts paid was recognized). Based on previous payment
experience and IPSAS requirements, this allowance has been revised to recognize an allowance only
for those amounts that may be in doubt. In agreement with the External Auditor it was decided that
this constitutes any amounts outstanding for more than two years or any rescheduled amounts. This
opening adjustment has resulted in a US$ 63 million one-time increase in the fund balance of
“Member States? regular budget”.
15. The implementation of IPSAS currently has no impact on the preparation of the programme
budget, which is still presented on a cash basis. As this basis differs from the accrual accounting basis
applied to the financial statements, comparison with the figures used for the programme budget and
the actual results require greater explanation. In addition, it should be noted that the programme
budget continues to operate on a two-yearly basis, whereas expenses are reported on an annual basis.
FINANCIAL HIGHLIGHTS
Summary
16. Total revenue from all sources for 2012 was US$ 2294 million and total expenses for 2012 were
US$ 2080 million, resulting in a surplus of US$ 214 million. Table 1 below provides financial
highlights in 2012 compared with 2011. In line with IPSAS requirements for the first year of adoption,
2011 comparative figures are not restated or presented in the financial statements however, restated
figures are presented in this introduction in order to provide a perspective on the overall trends.
Table 1. Financial highlights – all funds, 2012 and 2011 (US$ million)
Programme budget
Assessed contributions
Voluntary contributions
In?kind and in?service contributions
Total contributions per programme budget
Total 2012
Total 2011
475
472
1 539
1 424
56
342
2 070
2 238
Non?programme budget revenue
112
Reimbursable procurement
62
41
Increase in allowance for doubtful accounts receivable
(3)
(33)
In?kind and in?service contributions
10
7
Finance revenue
100
43
53
Total revenue (all sources)
2 294
2 406
Total expenses
2 080
2 515
Net surplus/(deficit)
214
(109)
A66/29
Page 5
17. As shown in Table 1 above, total contributions for the programme budget in 2012 were
US$ 2070 million (in 2011, US$ 2238 million) including US$ 475 million from Member States’
assessed contributions, and US$ 1539 million from voluntary contributions. In-kind and in-service
contributions are reported separately (US$ 56 million for the programme budget and US$ 10 million
for the non-programme budget for 2012). Non-programme budget revenue recorded for the Special
Purpose Fund, Enterprise Fund, and Fiduciary Fund is mainly from voluntary contributions under
partnerships outside the programme budget, such as the Stop TB Global Drug Facility Fund and the
Roll Back Malaria Partnership Fund.
18. Total expenses in 2012 were US$ 2080 million which is a significantly lower level than the
US$ 2515 million for 2011 reported above. However, if in-kind and in-service expenses are excluded,
the 2011 figure is US$ 2166 million. Expenses in the second year of the biennium are generally
higher than the first year of the biennium, once funding is assured and implementation has been
planned. A further important reason for lower expenses is the cost-saving measures that were
introduced in 2011 in response to the financial uncertainties faced by the Organization over the last
two years.
19. Statement V – the Statement of Comparison of Budget and Actual Amounts provides
information by strategic objective. Further analysis of the use of funds under the Programme budget
2012–2013 is provided in document A66/5, which provides an interim report on implementation and
the results achieved. A summary showing the source of funding for the Programme budget
2012–2013 compared with the use of funding in 2012 is provided in Table 2.
Table 2. Comparison of Programme budget 2012–2013 with actual use of funds in 2012 (US$ million)
Programme
budget
2012–2013
2012
actual use of
funds
Percentage
(target is 50%
for 1 year)
Source of funding:
Assessed contributions
944
475
50%
Highly flexible funding – voluntary contributions – core
400
116
29%
Medium flexible funding – voluntary contributions – core
400
14
4%
Specified funding – voluntary contributions – specified
2 215
1 409
64%
Total voluntary contributions
3 015
1 539
51%
Total financing for the programme budget
3 959
2 014
51%
In?kind and in?service contributions
56
Total revenue
2 070
Use of funding:
Programme budget 2012–2013 expenses – in cash
Programme budget 2012–2013 expenses – in?kind and in?service
Total
Previous bienniums workplans – expenses in 2012–2013
Tax equalization and other non?programme budget utilization
Total expenses
Net surplus – programme budget
3 959
1 694
43%
44
1 738
125
22
1 885
185
20. It should be noted that although the total revenue and total expenses were in line with
expectations, within that, the level of flexible funding was lower than originally planned and the level
of specified funding was higher than planned. The total programme budget expenses for 2012 were
US$ 1885 million and the net surplus under the General Fund was US$ 185 million.
A66/29
Page 6
NET ASSETS/EQUITY
21. Statement III, the Statement of Changes in Net Assets/Equity provides information on the fund
balances for all funds as at 31 December 2012, the movement during 2012 and the restated opening
balances as at 1 January 2012. The amount of total net assets/equity (carry forward) as at 31 December
2012 was US$ 1159 million. The break down is shown in Table 3.
Table 3. Summary of net assets/equity in 2012 (US$ million)
31 December
2012
Surplus/(deficit)
2012
1 January 2012
(restated)
General Fund
Total Member States – regular budget
84
18
66
1 642
161
1 481
Total ? General Fund
1 726
179
1 547
Total Member States – other
( 715)
28
(743)
148
30
118
1 159
237
922
Total voluntary funds
Total Fiduciary Fund
Total net assets/equity
22. The restated opening net assets/equity balance under “Member States - regular budget”
increased to a level of US$ 66 million due to the change in the allowance for “doubtful accounts
receivable” (see paragraph 14 above). The further increase during 2012 is due to slightly lower
programme implementation in the first year of the biennium.
23. The net assets/equity under the voluntary funds increased from US$ 1481 million to US$ 1642
million by the end of 2012. These funds represent contribution agreements recorded and not yet spent.
An amount of approximately US$ 110 million within this balance is encumbered and will be used for
the settlement of commitments made in 2012 for which expenses will be recorded in 2013. The
remainder of this balance is planned to support work in 2013 and beyond. The increase is mainly due
to the agreements recorded in the first year of the biennium, the implementation of which will take
place in the second year.
24. The negative balance in the net assets/equity of US$ 715 million for the group of funds under
“Member States – other”, arises primarily from the future unfunded liabilities for after-service health
insurance (see paragraph 10 above).
REVENUE
25. Total revenue for 2012 was US$ 2294 million (in 2011, US$ 2406 million) – see Table 1 above.
Voluntary contributions are summarized in Table 4 below for 2012 and 2011.
Table 4. Voluntary contributions revenue in 2012 and 2011 (US$ million)
2012
Voluntary contributions – core
Voluntary contributions – specified
Voluntary contributions – Fiduciary Fund
Total voluntary contributions
2011
Percentage
130
125
104%
1 409
1 299
108%
97
80
121%
1 636
1 504
109%
A66/299
Page 7
26. Out of the total voluntaary contributtions for 201
12 of US$ 16
636 million, US$ 1539 million
m
weree
for thhe programm
me budget. The
T remaininng amount was
w received for the Fiducciary Fund. Overall, thee
volunntary contribbutions com
mbined for 22012 were slightly hig
gher than thhe combineed voluntaryy
contrributions for 2011.
27. Figure 1 below illusttrates the rrelative prop
portions of the variouss sources of
o voluntaryy
contrributions in 2012.
2
Memb
ber States coontinued to be
b the largesst source of voluntary co
ontributions,,
contrributing to 51% of the to
otal non-asseessed (volun
ntary) budgett. Revenue ffrom the Un
nited Nationss
and inntergovernm
mental organiizations was 23%, foundaations 20%, and nongovvernmental organizations
o
s
and oother instituttions represeented 5%. P
Private sectorr donations of 1% accouunted for th
he remainingg
volunntary contribbutions to th
he Organizattion. The relative
r
perccentages are similar to the
t previouss
biennnium with a slight decreaase in Membber State con
ntributions an
nd slight inccreases from foundationss
and thhe United Naations organiizations.
Figurre 1. Sourcees of voluntarry contributi
tions in 2012
Private secttor
(1%)
Nongovern
nmental and ot her
instittutions (5%)
Fooundations
(20%)
Member States
M
(51%)
United N
Nations and
intergovvernmental
organnizations
(223%)
28. Many of thhe voluntary
y contributioons were hig
ghly earmark
ked and relatte to individ
dual projectss
with differing repporting requiirements witthin the fram
mework of th
he planned reesults of thee programmee
budgeet. Full dettails of all th
he voluntaryy contribution
ns recorded in 2012 aree contained in
i documentt
A66/229 Add.1.
29. The total of contributio
ons by Membber States (vo
oluntary contributions annd assessed contributions
c
s)
was U
US$ 1304 million
m
(reprresenting 62 % of total voluntary
v
an
nd assessed contribution
ns). The 100
largesst contributoors among the Member S
States are sho
own below. They
T
contribbuted a comb
bined total off
US$ 1005 millionn, or 77% off the total coontributions from
f
Membeer States andd 48% of thee total of thee
volunntary and asssessed contrib
butions.
A66/29
Page 8
Figure 22. Top 10 Meember State contributorrs for 2012, combining
c
asssessed and vvoluntary
contribu
utions (US$ million)
m
4000
3500
Assessed contributions
Voluntary ccontributions
US$ million
3000
2500
2000
1500
1000
Sweden
Netherlands
France
Norway
Germany
Japan
Australia
Canada
United Kingdom of
United Kingdom of
Great Britain and
Northern Ireland
0
United States
of America
500
EXPEN
NSES
30. Tootal expenses for 2012 were US
S$ 2080 million.
m
To
otal expensees incurred for the
implemeentation of thhe programm
me budget w
were US$ 188
85 million (in 2011, US$$ 2346 millio
on). The
exclusion of in-kind and in-service expensess under the General
G
Fund
d of US$ 444 million for 2012 (in
2011, US$ 342 milliion) resulted
d in net expeenses of US$
$ 1841 milliion for 20122 (in 2011, US$
U 2004
million).. The analyssis of expenses that follow
ws is for the programme budget onlyy and excludees in-kind
and in-seervice expennses. Furtherr details of eexpenses by cost categorry, major offfices, and by
y strategic
objectivee, are providded in Schedu
ules I to IV oof this report.
31. Thhe share of overall
o
expen
nses by majoor office is shown
s
below
w in Figure 33. In comparison with
2011 theere has been a decrease in
n headquarterrs’ share, from
m 36% to 34%, and a prooportionate in
ncrease in
the regioons’ share, which
w
has gro
own from 64%
% to 66%. Total expensses decreasedd in each maj
ajor office
compareed to 2011 with
w the excep
ption of the E
Eastern Mediterranean Region, wheree increases in
n medical
supplies and contracttual services produced a nnet increase of 5%. In all offices, nonn-staff expen
nse levels
are oftenn lower in thhe first year of a bienniuum due to th
he planning required
r
for pprojects cov
vering the
full biennnium. In adddition, the cost-saving
c
m
measures thaat were introd
duced in 20111 in respon
nse to the
financiall uncertaintiees faced by th
he Organizattion over thee last two yeaars have reduuced expensees.
A66/299
Page 9
Figurre 3. Prograamme budget expenses b
by major office (excluding
g in-kind annd in-service)) in 2011
and 22012 (US$ million)
m
800
713
2011
2012
700
621
US$ million
600
36% 34%
500
400
518 507
26% 28%
274
4 287
300
200
1800
14%
% 16%
100
73
4%
0
Headqu
uarters
Afrrica
108
8 101
61
3%
The Am
mericas
5%
Easstern
Medite
erranean
5%
Eurrope
148
9%
% 8%
Soutth?East
AAsia
139
9
116
7%
% 6%
estern
We
Pa
acific
Note: FFor better comparison, 2011 figures have been resstated to reflect the reclassification of special serviice agreements and fellowship
costs frrom staff and oth
her personnel cossts to contractuall services.
32. Summary information by cost cattegory is shown below in Figure 4 comparing programmee
budgeet expenses in
i 2012 with
h those for 20011.
Figurre 4. Prograamme budget expenses b
by category (eexcluding in-kind and inn-service) in 2011
2
and
2012 (US$ million
n)
1200
1000
2011
2012
977
7
US$ million
US$ million
887
800
600
400
3445
301
21
18 214
200
47 145
14
78
8 77
0
Staff and Supp
plies and Conttractual
otther
materials
serrvices
person
nnel costs
2001 189
37
3 28
Transsfers and
graants to
coun
nterparts
Travel
Geeneral
opeerating
exppenses
Equipment,
vehicles and
furrniture
w
the larg
gest categoryy of expenses and represented 48%
% of the tottal expensess
33. Salaries were
me budget inn 2012. This representeed the total cost of employing staff,,
incurrred under thhe programm
includding chargess for base salary, post aadjustment and
a any otheer types of eentitlements paid by thee
Organnization (e.gg. pensions an
nd insurancees). Costs fo
or special serrvice agreem
ments are refllected withinn
contrractual servicces.
34. Compared to 2011, to
otal salary ccosts have decreased
d
by 9%. This is a result of the stafff
reducctions (937) that took place duringg 2011 and
d early 2012
2. The larrgest decreases were att
headqquarters and in the Africaan Region.
A66/29
Page 10
35. Coontractual seervices weree the secondd highest cattegory of ex
xpenses (16%
%) and represent the
costs of contracts givven to experrts and servicce providers who supportted the Orgaanization in achieving
a
or agreemen
nts for perfoormance of work or
its plannned objectivves. The maain componeents were fo
consultinng and speciial service co
ontracts that were given to individuaals to perform
m activities on
o behalf
of the O
Organization. Medical research activiities are also
o included in
n contractuaal services. There
T
has
been an overall decrrease of 13%
% in contracttual service costs with decreases
d
acrross all majo
or offices
East Asia Reegion, wheree the increasee is due to ree-categorizattion of speciaal service
except inn the South-E
contractoors from sallary to the contractual seervices categ
gory (this ree-categorizatition also exp
plains the
decreasee in recordedd salary cost in
i that regionn).
36. Thhe total of expenses
e
inccurred for sspecial servicce contracts (‘SSAs’) inn 2012 was US$ 40
million w
with the larggest amounts for the Afriican, Eastern
n Mediterranean and Souuth-East Asiaa regions.
This is accounted for
f by the employment
e
of approxim
mately 3200
0 additional personnel for
f WHO
mmes in thesee regions, maany deployedd in the Glob
bal Polio Erad
dication Initiiative.
program
37. Trransfers and grants to co
ounterparts reepresented 12% of the ov
verall expensses, and werre highest
in the Affrican and Eastern Meditterranean reggions. Thesee costs were for contractss signed with
h national
counterpparts (mainlyy health ministries) to perrform activitiies that are in
n line with thhe programm
me budget.
The use of funds wass recorded att the time of transfer of the
t funds to the
t contractuual partner.
38. Trravel constituuted 8% of the
t Organizaation’s total expenses, beeing US$ 1445 million in 2012 (in
2011, US$ 147 milliion) under th
he General F
Fund. This is the second successive yyear of reducced travel
expensess. Closer anaalysis shows the amount spent on stafff travel to haave been furt
rther diminish
hed: staff
travel byy the end of 2012 constituted 43% oof the total trravel cost, down from 488% in 2011, with the
balance being costss that related
d to travel by participaants in meettings and addvisors (deleegates of
Memberr States and non-Secretaariat personnnel). Travel expenses
e
incclude airfaree, per diem and
a other
travel-reelated costs. The cost of travel is shoown by major office in Fiigure 5.
Figure 55. Programm
me budget trravel expensees by major office
o
in 2011 and 2012 ((US$ million
n)
70
US$ million
60
60
58
2011
2012
50
40
37
31
30
20
15
13
10
3
0
Heeadquarters
Africa
11
15
10
0
11
12
11
4
The Americass
Eastern
Mediterrane
ean
Europe
e
South? East
Asiaa
Wesstern
Paccific
39. Thhe increase in
i travel exp
penses for thhe African Reegion arose from the higgher staff traavel costs
and the rre-categorizaation of traveel expenses oof special serrvice contract holders.
40. M
Medical suppllies and mateerials relatedd primarily to
t medical su
upplies purchhased and diistributed
by the O
Organization for programm
me implemeentation as well
w medical literature
l
andd accounted for just 4%
of total eexpenses for 2012. The category of g eneral operaating expensees (10% of tootal expensess) reflects
WHO ruunning costss, including utilities andd other officce costs, maainly at loccal level. Eq
quipment,
vehicles and furniture represent only 2% off WHO totall expenses and
a are signiificantly low
wer in the
biennium
m 2012–20133 than in prev
vious bienniuums.
A66/29
Page 11
ASSETS
Liquidity and investment management
41. Total cash and cash equivalents at the end of the period were US$ 1184 million with a further
US$ 1636 million held in investments. The investments are primarily short-term measures taken in
order to ensure that cash is available for programmatic needs. Some funds for longer-term liabilities
have been invested in securities, in accordance with the recommendations of the Advisory Investment
Committee. The total cash and cash equivalents balance available for the Organization’s programmatic
activities was US$ 1830 million. US$ 990 million was cash held in the Organization’s accounts on
behalf of other entities – the African Programme for Onchocerciasis Control, The Trust Fund for the
Joint United Nations Programme on HIV/AIDS, the International Drug Purchase Facility, the
International Computing Centre and the staff health insurance.
Accounts receivable
42. The balance of “accounts receivable” includes amounts due from Member States for assessed
contributions and from Member States and other contributors for voluntary contributions. The total
receivable for assessed contributions, including rescheduled payments, amounted to US$ 104 million
including US$ 39 million for rescheduled arrears; this is a further improvement over the previous year.
The continued good collection rate has been a contributing factor to the reduction mentioned above in
paragraph 14 in the allowance for doubtful accounts receivables. Further information on the collection
of assessed contributions for 2012 is provided in document A66/30.
43. For voluntary contributions, the total receivable amount was similar to the end of 2011, at
US$ 852 million, of which US$ 210 million is due in future years. The recording of these future
amounts – which is required under IPSAS – has made prospective revenue more visible, which has
assisted in the Organization’s overall revenue planning and further clarified WHO’s overall financial
situation. As these future, deferred revenue amounts become due for payment, the amounts are
transferred to current period revenue and made available for incurring expenses. Full details of all
voluntary contributions including amounts receivable, by contributor, are provided in document
A66/29 Add.1.
Other assets
44.
Inventories have been recognized for the first time under IPSAS (see paragraph 11 above).
LIABILITIES
Staff liabilities
45. Based on the latest actuarial projections, the total required to settle current liabilities for staff
entitlements was US$ 72 million. A further US$ 912 million has been estimated for future staff
liabilities. These liabilities cover the expected costs for accrued annual leave, accrued repatriation
grant and travel, the cost of future removal of a staff member upon separation, and the current and
future health care scheme costs.
46. The health care scheme provides medical reimbursements for serving and retired staff members,
and their dependents, subject to strict rules and limits. The actuarial valuation of the future liability for
the Organization was estimated at US$ 823 million at the end of 2012. This valuation was based on
estimates of future health care costs and the projections of retired staff, as well as a range of
socioeconomic assumptions. The staff health insurance scheme covers other entities, namely PAHO,
UNAIDS, UNITAID, APOC, IARC and ICC. Their share of the future staff liability is reflected in
their respective financial statements. The assets of the Staff Health Insurance Fund are reflected in its
own financial statements, which, in accordance with IPSAS, are now subject to a full, separate,
A66/29
Page 12
independent audit. In order to establish a long-term provision in order to ensure full financing of this
liability, changes to the staff health insurance contribution rates were approved in 2011, affecting both
the Organization and the scheme participants, and covering all entities.
FINANCIAL RISKS
47. The Organization must manage a number of financial risks. These are now regularly reviewed
by the Independent Expert Oversight Advisory Committee and are described further below.
Investment risks
48. The Organization is exposed to financial risks including credit risk, interest rate risk, foreign
exchange risk and investment price risk. WHO uses derivative financial instruments to hedge some of
its risk exposures. In accordance with the Financial Regulations, funds not required for immediate use
may be invested. All investments are carried out within the framework of investment policies
approved by the Director-General. Some portfolios are managed by external managers appointed by
the Organization to manage funds in accordance with a defined mandate. The Advisory Investment
Committee regularly reviews the investment policies and the investment performance and risk for each
investment portfolio. This Committee comprises of external investment specialists and can make
recommendations to the Director-General.
49. Investments are placed with a wide range of financial counterparties, whose credit risk is
minimized by applying minimum credit quality requirements and maximum investment exposure
limits, both by the counterparty and by groups of related counterparties. These terms are set out in
agreed investment mandates.
Foreign exchange currency risk
50. The Organization receives contributions and makes payments in currencies other than the
United States dollar and it is exposed to foreign exchange currency risk arising from fluctuations in
currency exchange rates. Translation into United States dollars of transactions expressed in other
currencies is done at the prevailing United Nations Operational Rates of Exchange at the date of
transaction. Assets and liabilities that are denominated in foreign currencies are translated at the
United Nations Operational Rates of Exchange that prevail at the end of each month. Forward foreign
exchange contracts are transacted in order to hedge foreign currency exposures and to manage shortterm cash flows. Realized and unrealized gains and losses resulting from the settlement and
revaluation of foreign currency transactions are recognized in the Statement of Financial Performance.
51. Hedging foreign exchange exposures on future payroll costs. The United States dollar value
of non-dollar expenses in 2013 has been protected from the impact of movements in foreign exchange
rates through the transaction of forward currency contracts during 2012. Full details of all hedging
contracts are contained in Note 4.2.
Staff financing risks
52. Although this report shows an improvement to the overall financial situation of the Organization,
some budget centres continue to have difficulty in ensuring sufficient stability in the financing of
salary costs. In 2012, 59% of staff salaries were financed from voluntary funds, most of which were
specified funds. There are limited possibilities for shifting funds between budget centres in order to
ensure consistency in salary financing across the Organization. This risk is subject to close monitoring
through review of staff work plans and the matching of these plans to sources of funds.
A66/299
Page 133
Riskss of non-receipt of fund
ds (“doubtfu
ul accounts receivable”)
r
53. As noted inn paragraph 42 above, thhe Organization has larg
ge amounts re
receivable that are due too
be prrovided by contributors and
a Memberr States, and which are commitmentss made to provide funds..
This amount incluudes the assessed contribbutions that were not recceived as at 31 Decembeer 2012. Thee
Organnization recoognizes reveenue at the tiime of signaature of agreeements, or aapproval of the assessedd
contrributions. Thhis allows project
p
comm
mitments to
o be made and expensees to be in
ncurred. Thee
Organnization has a very good
d record of ccollecting all amounts du
ue but somee risk exists. To mitigatee
this rrisk, monthlyy reporting is
i carried ouut on all projjects which have
h
expensses incurred in excess off
cash received, annd regular checks
c
are m
made of the status of amounts receeivable. In a few cases,,
wances are made
m
against revenue, succh that an ex
xpense canno
ot be incurreed unless thee funds havee
allow
been received. The value of such allowaances for assessed contrributions hass been reducced with thee
introdduction of IP
PSAS, due to
o an accountiing change as
a noted abov
ve, resulting in a one-time increase too
the oopening fundd balance of US$ 63 milllion. A totaal of US $44
4 million waas provided for assessedd
contrributions andd US$ 11 million for voluuntary contrib
butions as at 31 Decembeer 2012.
Riskss associated with long-term liabilitiies
54. The Organnization operrates on a tw
wo-year budg
get cycle. Th
hree quarterrs of its reveenue is from
m
volunntary funds – a situation which m
may not bee sustainablee in the lonng term. However, thee
Organnization has long- term financial
f
com
mmitments in
n respect of future staff liabilities, giiven that thee
majorrity of stafff have long
g-term appoointments, with
w
associated future eentitlements. The mostt
signifficant of thesse is the futu
ure cost of staaff health beenefits that arre provided ffor staff and dependents,,
includding into rettirement for those staff w
who remain eligible.
e
Given that almoost two thirdss of staff aree
paid ffrom voluntaary funds, there is a risk that insufficient funds arre being set aaside againstt these short-term funds for thhe long-term liabilities thhat must be met. To mitigate this rissk the Organ
nization now
w
comm
missions an annual
a
actuarrial assessmeent for all fu
uture staff liaabilities. As a result of th
hese reports,,
adjusstments havee been madee recently to funding rates. Further regular
r
reporrting of thesse long-term
m
liabillities and fuunding plan
ns will be pprovided to the Indepeendent Expeert Oversigh
ht Advisoryy
Comm
mittee.
CON
NCLUSION
N
55. This has beeen a year off financial coonsolidation for the Orgaanization: m
measures takeen in 2011 too
reducce expenses have improv
ved the finanncial situatio
on. This was critical in vview of the uncertainties
u
s
that pprevailed (annd continue to
o prevail) ovver the level of
o voluntary contributionns to WHO. The
T ongoingg
workk on WHO reform will help
h
to addreess the strucctural financing risks whhich remain, notably thee
lack oof predictabiility and the level
l
of speccification of funding.
f
Dr
D Margaret Chan
Director-Gen
D
neral
Geneva,
G
8 March 2013
A66/29
Page 14
he financiall statementts for the yeear ended 31
3 Decembeer 2012
Certificcation of th
Accordinng to Financcial Regulatio
on XIII ? Acccounts and Financial Statements, acccounts for th
he World
Health O
Organizationn have been established and maintaiined in acco
ordance withh Internation
nal Public
Sector A
Accounting Standards.
S
Th
he financial sstatements fo
or the year en
nded 31 Deccember 2012,, together
with the notes to the statements and
a supportinng scheduless, have been reviewed
r
andd are approv
ved.
Nichoolas R. Jeffreys
Comptroller
8 Maarch 2013
Dr Marrgaret Chan
Directo
or-General
A66/29
Page 15
Letter of transmittal
A66/29
Page 16
Opinion of the External Auditor
A66/29
Page 17
A66/29
Page 18
Financial statements
World Health Organization
Statement I. Statement of Financial Position
As at 31 December 2012
(In US dollars)
ASSETS
Current assets
Cash and cash equivalents
Short?term investments
Accounts receivable – net current
Staff receivables
Inventories
Prepayments
Other current assets
Total current assets
Notes
31 December 2012
1 January 2012
(restated)
4.1
4.2
4.3
4.4
4.5
4.6
4.7
1 184 358 416
1 369 531 140
695 054 637
12 263 937
67 458 323
1 299 838
12 191 472
3 342 157 763
643 516 528
2 253 303 807
729 229 217
16 710 890
64 149 230
1 567 910
22 864 545
3 731 342 127
4.3
4.2
4.6
4.8
210 277 136
266 323 581
309 148
41 180 878
518 090 743
3 860 248 506
224 896 094
34 833 438
362 303
42 297 077
302 388 912
4 033 731 039
4.10
4.11
4.12
4.13
4.14
4.2
4.15
4.16
86 329 879
24 983 899
4 366 015
71 735 099
317 034 710
21 403 427
41 442 241
989 810 138
1 557 105 408
100 728 551
32 287 143
7 143 440
74 187 562
457 640 785
331 076 923
46 080 782
933 396 863
1 982 542 049
4.17
4.13
4.14
21 912 231
911 532 131
210 277 136
1 143 721 498
2 700 826 906
22 725 204
880 900 388
224 896 093
1 128 521 685
3 111 063 734
NET ASSETS/EQUITY
Member States – regular budget
Voluntary funds
Member States – other
Fiduciary Fund
TOTAL NET ASSETS/EQUITY
84 121 732
1 642 008 469
(715 185 725)
148 477 124
1 159 421 600
66 449 981
1 481 067 258
(743 026 383)
118 176 449
922 667 305
TOTAL LIABILITIES AND NET ASSETS/EQUITY
3 860 248 506
4 033 731 039
Non?current assets
Accounts receivable – net non?current
Long?term investments
Deposits
Property, plant and equipment – net
Total non?current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Contributions received in advance
Accounts payable
Staff payable
Accrued staff benefits – current
Deferred revenue
Financial liabilities
Other current liabilities
Inter?entity liabilities
Total current liabilities
Non?current liabilities
Long?term borrowings
Accrued staff benefits – non?current
Deferred revenue – non?current
Total non?current liabilities
TOTAL LIABILITIES
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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World Health Organization
Statement II. Statement of Financial Performance
For the year ended 31 December 2012
(In US dollars)
Notes
REVENUE
Member States’ assessed contributions
Increase in allowance for doubtful accounts receivable
Voluntary contributions
Voluntary contributions in?kind and in?service
Reimbursable procurement
Other operating revenue
Finance revenue
Total revenue
5.1
EXPENSES
Staff and other personnel costs
Medical supplies and materials
Contractual services
Transfers and grants to counterparts
Travel
General operating expenses
Equipment, vehicles and furniture
Depreciation and amortization
Finance costs
Total expenses
5.2
31 December 2012
474 609 150
(3 321 404)
1 636 552 815
66 468 439
62 459 972
13 981 777
43 116 045
2 293 866 794
912 439 371
199 567 941
324 645 528
215 889 802
152 770 486
235 654 979
32 025 524
1 116 199
5 853 575
2 079 963 405
TOTAL SURPLUS FOR THE YEAR
213 903 389
Comparative information for the previous year has not been provided, as permitted in the first year of IPSAS adoption.
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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World Health Organization
Statement III. Statement of Changes in Net Assets/Equity
For the year ended 31 December 2012
(In US dollars)
Notes 31 December 2012
General Fund
Member States – regular budget
6.1
Member States’ Assessed Contributions Fund
Member States’ Non?Assessed Income Fund
Tax Equalization Fund
Working Capital Fund
Total Member States – regular budget
Voluntary funds
Voluntary Contributions Core Fund
Voluntary Contributions Specified Fund
1
TDR Trust Fund
2
HRP Trust Fund
Stop TB Fund
Special Programmes and Collaborative Arrangements Fund
Other Partnership Fund
Special Account for Servicing Costs Fund
6.2
Outbreak and Crisis Response Fund
Total voluntary funds
Total General Fund
Member States – other
Common Fund
Enterprise Fund
Revolving Sales Fund
Concessions Fund
Insurance Policies Fund
Office/Garage Rental Fund
Global Conference and Training Centre – Tunis Fund
Total Enterprise Fund
Special Purpose Fund
Real Estate Fund
Security Fund
Information Technology Fund
Revolving Fund for Teaching and Laboratory Equipment
Special Fund for Compensation
Terminal Payments Fund
Non?Payroll Staff Entitlements Fund
Post Occupancy Charge Fund
Internal Service Cost Recovery Fund
After?Service Health Insurance Fund
Total Special Purpose Fund
Total Member States – other
3.1
6.3
Fiduciary Fund
Other Fiduciary Fund
WHO Framework Convention on Tobacco Control
Stop TB Partnership Global Drug Facility Fund
Roll Back Malaria Partnership Fund
Health Metrics Network Fund
Partnership for Maternal, Newborn and Child Health Fund
United Nations System Standing Committee on Nutrition Fund
Alliance for Health Policy and System Research Fund
Global Health Workforce Alliance Fund
Total Fiduciary Fund
TOTAL NET ASSETS/EQUITY
Surplus/(deficit)
2012
1 January 2012
(restated)
Other
adjustments
55 218 265
10 321 511
(12 418 044)
31 000 000
84 121 732
35 550 072
(13 533 880)
(4 344 441)
–
17 671 751
–
19 668 193
23 855 391
(8 073 603)
31 000 000
66 449 981
245 768 622
987 723 666
13 243 217
27 080 952
59 154 438
141 604 324
–
150 126 831
17 306 419
1 642 008 469
1 726 130 201
(8 905 396)
216 619 128
3 642 901
10 225 134
(983 767)
(59 237 691)
329 717
38 942 850
(39 691 665)
160 941 211
178 612 962
–
–
254 674 018
771 104 538
9 600 316
16 855 818
60 138 205
200 842 015
(329 717)
111 183 981
56 998 084
1 481 067 258
1 547 517 239
107 679 711
24 109 207
22 850 906
60 719 598
3 975 937
2 325 809
912 829
1 371 915
991 469
9 577 959
(569 326)
(395 820)
343 695
(462 017)
991 469
(91 999)
19 095 600
4 436 270
(124 453)
16 520
(5 711 535)
(88 003 508)
28 836 922
30 769 533
1 224 441
(822 983 185)
(832 443 395)
(715 185 725)
975 020
(214 185)
(241 459)
(33 426)
424 538
6 385 316
(3 712 262)
8 025 375
420 518
(31 056 891)
(19 027 456)
4 989 752
–
5 321 738
90 734 009
7 333 914
5 203 897
10 523 409
466 717
26 540 711
2 352 729
148 477 124
1 159 421 600
4 545 263
2 721 629
569 134
1 833 932
–
9 669 958
–
–
22 850 906
18 120 580
4 650 455
117 006
49 946
(6 136 073)
(94 388 824)
32 549 184
22 744 158
803 923
(791 926 294)
(813 415 939)
(743 026 383)
(12 249)
5 251 334
(12 642 454)
4 023 768
(3 600 721)
8 321 304
66 253
26 540 711
2 352 729
30 300 675
–
12 249
70 404
103 376 463
3 310 146
8 804 618
2 202 105
400 464
–
–
118 176 449
213 903 389
22 850 906
922 667 305
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
1
Trust Fund for the UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical Diseases.
Trust Fund for the UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research Training in Human
Reproduction.
2
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World Health Organization
Statement IV. Statement of Cash Flow
For the year ended 31 December 2012
(In US dollars)
31 December 2012
CASH FLOWS FROM OPERATING ACTIVITIES
TOTAL SURPLUS FOR THE YEAR
Depreciation and amortization
(Increase)/decrease in accounts receivable – net current
(Increase)/decrease in staff receivables
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
(Increase)/decrease in other current assets
(Increase)/decrease in accounts receivable – net non?current
(Increase)/decrease in deposits
Increase/(decrease) in contributions received in advance
Increase/(decrease) in accounts payable
Increase/(decrease) in staff payables
Increase/(decrease) in accrued staff benefits – current
Increase/(decrease) in deferred revenue
Increase/(decrease) in other current liabilities
Increase/(decrease) in inter?entity liabilities
Increase/(decrease) in accrued staff benefits – non?current
Increase/(decrease) in deferred revenue – non?current
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
(Increase)/decrease in short?term investments
(Increase)/decrease in long?term investments
Increase/(decrease) in financial liabilities
Reversal of opening adjustment for unrealized foreign exchange loss
Net cash flows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase/(decrease) in long?term borrowings
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
213 903 389
1 116 199
34 174 580
4 446 953
(3 309 093)
268 072
10 673 073
14 618 958
53 155
(14 398 672)
(7 303 244)
(2 777 425)
(2 452 463)
(140 606 075)
(4 638 541)
56 413 275
30 631 743
(14 618 957)
176 194 927
883 772 667
(231 490 143)
(309 673 496)
22 850 906
365 459 934
(812 973)
(812 973)
540 841 888
643 516 528
1 184 358 416
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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World Health Organization
Statement V. Statement of Comparison of Budget and Actual Amounts
For the year ended 31 December 2012
(In US dollars)
Programme
budget
2012–2013
Programme
budget
utilization 2012
Remaining
balance
Percentage
implementation
Strategic objectives
1
Communicable diseases
2
3
613 991 614
664 138 386
48%
HIV/AIDS, tuberculosis and malaria
540 298 000
181 715 241
358 582 759
34%
Chronic noncommunicable conditions
113 763 000
47 436 719
66 326 281
42%
4
Child, adolescent, maternal, sexual and
reproductive health, and ageing
218 306 000
97 649 248
120 656 752
45%
5
Emergencies and disasters
382 028 000
144 162 770
237 865 230
38%
6
Risk factors for health
122 255 000
44 783 635
77 471 365
37%
7
Social and economic determinants of health
42 789 000
16 845 245
25 943 755
39%
8
Healthier environment
86 825 000
38 854 688
47 970 312
45%
9
Nutrition, food safety and food security
54 898 000
27 154 565
27 743 435
49%
10 Health systems and services
348 093 000
134 847 454
213 245 546
39%
11 Medical products and technologies
137 283 000
61 909 929
75 373 071
45%
12 WHO leadership, governance, and partnerships
257 570 000
124 325 654
133 244 346
48%
13 Enabling and support functions
376 741 000
160 003 601
216 737 399
42%
3 958 979 000
1 693 680 363
2 265 298 637
43%
Total
1 278 130 000
Basis differences
In?kind/in?service expenses
44 681 506
Tax Equalization Fund expenses
14 533 591
Other non?programme budget utilization
Common Fund activities
Total Basis differences
6 601 885
365 102
66 182 084
Timing differences
Programme budget expenses for prior periods
Total timing differences
125 153 581
125 153 581
Total expenses per the General Fund and Common Fund
1 885 016 028
Entity differences
Expenses under Enterprise Fund, Special Purpose Fund and Fiduciary Fund
Total entity differences
194 947 377
194 947 377
Total expenses per the Statement of Financial Performance (Statement II)
2 079 963 405
The statement of significant accounting policies and the accompanying notes form part of the financial statements.
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Notes to the financial statements
1.
Basis of preparation and presentation
The financial statements of the World Health Organization have been prepared in accordance with
International Public Sector Accounting Standards (IPSAS). The financial statements have been
prepared using the historical cost convention with the exception of investments and loans, which are
recorded at fair value or at amortized cost. Where IPSAS does not address a specific matter, the
appropriate International Financial Reporting Standards (IFRS) have been applied.
This is the first set of financial statements to be prepared in accordance with IPSAS. The adoption of
IPSAS has required changes to the accounting policies previously followed by the Organization. This
includes the preparation of financial statements on an annual basis. The new accounting policies under
IPSAS have resulted in changes to the assets and liabilities recognized in the Statement of Financial
Position. Accordingly, the last audited Statement of Financial Position dated 31 December 2011 and
the resulting changes are reported in the Statement of Changes in Net Assets/Equity and Note 3.1. The
revised 31 December 2011 Statement of Financial Position is described in these financial statements as
the opening balance as at 1 January 2012 (restated). The net effect of the changes arising from the
adoption of IPSAS in the Statement of Financial Position amounted to a decrease in net assets/equity
of US$ 951 million.
As permitted in the year of IPSAS adoption, comparative information for the previous year has not
been provided.
These financial statements have been prepared under the assumption that WHO is a going concern,
will continue in operation, and will meet its mandate for the foreseeable future (IPSAS 1).
Functional currency and translation of foreign currencies
The functional and reporting currency of the Organization is the United States dollar.
Foreign currency transactions are translated into United States dollars at the prevailing United Nations
Operational Rates of Exchange, which approximates to the exchange rates at the date of the
transactions. The Operational Rates of Exchange are set once a month, and revised mid-month if there
are significant exchange rate fluctuations relating to individual currencies.
Assets and liabilities in currencies other than United States dollars are translated into United States
dollars at the prevailing Operational Rates of Exchange of the first day of the subsequent month.
Resulting gains or losses are accounted for in the Statement of Financial Performance.
The non-United States dollar denominated assets and liabilities in the investment portfolios are
translated into United States dollars at the month-end closing rate used by the custodian.
Materiality1 and the use of judgments and estimates
Materiality is central to WHO’s financial statements. The Organization’s process for reviewing
accounting materiality provides a systematic approach to the identification, analysis, evaluation,
endorsement and periodic review of decisions taken involving the materiality of information, spanning
a number of accounting areas.
The financial statements include amounts based on judgments, estimates and assumptions by
management. Changes in estimates are reflected in the period in which they become known.
1
Omissions or misstatements of items are material if they could, individually or collectively, influence the decisions or assessments of
users made on the basis of the financial statements.
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Financial statements
In accordance with IPSAS 1, a complete set of financial statements have been prepared as follows:
? Statement of Financial Position;
? Statement of Financial Performance;
? Statement of Changes in Net Assets/Equity;
? Statement of Cash Flow;
? Statement of Comparison of Budget and Actual Amounts; and
? Notes to the financial statements, comprising a summary of significant accounting policies and
other relevant information.
Use of transitional provisions and early adoption of accounting policies
As permitted on the initial adoption of IPSAS, transitional provisions have been applied in the
following areas:
? Comparative information has not been provided in the Statement of Financial Performance and
Statement of Cash Flow (IPSAS 1);
? Transitional provisions have been applied in the initial recognition of property, plant, and
equipment (IPSAS 17); and
? Transitional provisions have been applied in the initial recognition of intangible assets (IPSAS 31).
The following Accounting Standards have been adopted prior to their required implementation dates
of 1 January 2013:
? IPSAS 28: Financial Instruments: Presentation;
? IPSAS 29: Financial Instruments: Recognition and Measurement; and
? IPSAS 30: Financial Instruments: Disclosures.
These standards replace IPSAS 15 (Financial Instruments: Disclosure and Presentation).
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2.
Significant accounting policies
2.1
Cash and cash equivalents
Cash and cash equivalents are held at nominal value and comprise cash on hand, cash at banks,
collateral deposits, commercial paper, money market funds and short-term bills and notes. All
investments that have a maturity of three months or less from the date of acquisition are included as
cash and cash equivalents. This includes cash and cash equivalents held in the portfolios managed by
external investment managers.
2.2
Investments and financial instruments
Financial instruments are recognized when WHO becomes party to the contractual provisions of the
instrument until such time as the rights to receive cash flows from those assets have expired or have
been transferred and the Organization has transferred substantially all the risks and rewards of
ownership. Investments can be classified as being: (i) financial assets or financial liabilities at fair
value through surplus or deficit; (ii) held-to-maturity; (iii) available-for-sale; or (iv) bank deposits and
other receivables. All purchases and sales of investments are recognized on the basis of their trade date.
Financial assets or financial liabilities at fair value through surplus or deficit are financial
instruments that meet either of the following conditions: (i) they are held-for-trading; or (ii) they
are designated by the entity upon initial recognition as at fair value through surplus or deficit.
Financial instruments in this category are measured at fair value and any gains or losses arising
from changes in the fair value are accounted for through surplus or deficit and included within the
Statement of Financial Performance in the period in which they arise. All derivative instruments,
such as swaps, currency forward contracts or options are classified as held-for-trading except for
designated and effective hedging instruments as defined under IPSAS 29.
Held-to-maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that WHO has both the intention and the ability to hold the
investment to maturity. Held-to-maturity investments are stated at amortized cost using the
effective interest rate method, with interest revenue being recognized on an effective yield basis in
the Statement of Financial Performance.
Available-for-sale investments are classified as being available-for-sale where WHO has not
designated them either as held-for-trading or as held-to-maturity. Available-for-sale items are
stated at fair value (including transaction costs that are directly attributable to the acquisition of the
financial asset) with value changes recognized in net assets/equity. Impairment charges and interest
calculated using the effective interest rate method are recognized in the Statement of Financial
Performance. As at 31 December 2012, no available-for-sale financial assets were held by the
Organization.
Bank deposits and other receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Accrued revenue related to interest,
dividends and pending cash to be received from investments are included herein. Bank deposits and
other receivables are stated at amortized cost calculated using the effective interest rate method,
less any impairments. Interest revenue is recognized on the effective interest rate basis with the
exception of short-term receivables for which the recognition of interest would be immaterial.
Other financial liabilities include payables and accruals relating to investments and are recognized
initially at fair value and subsequently measured at amortized cost using the effective interest rate
method with the exception of short-term liabilities for which the recognition of interest would be
immaterial.
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2.3
Accounts receivable
Accounts receivable are non-derivative financial assets with fixed or determinable payments that are
not traded in an active market. Current receivables are for amounts due within 12 months of the
reporting date, while non-current receivables are those that are due more than 12 months from the
reporting date of the financial statements.
Voluntary accounts receivable are recognized based on a binding agreement between WHO and the
contributor. Assessed accounts receivable are recognized annually, at the beginning of the year as per
the assessments approved by the Health Assembly. Accounts receivable are recorded at their
estimated net realizable value and not discounted as the effect of discounting is considered immaterial.
An allowance for doubtful accounts receivable is recognized when there is a risk that the receivable
may be impaired. Changes in the allowance for doubtful accounts receivable are recognized in the
Statement of Financial Performance.
2.4
Inventories
WHO recognizes medicines, vaccines, humanitarian supplies, and publications as part of its inventory.
Inventories for medicines, vaccines and humanitarian supplies are valued taking the lower amount of
(i) cost or (ii) net realizable value, using a weighted average basis. Inventories for publications are
valued at net cost of sales.
Where inventories have been acquired through a non-exchange transaction (i.e. inventories were
donated as an in-kind contribution), the value of inventory is determined by reference to the donated
goods’ fair value at the date of acquisition.
When inventories are sold, exchanged or distributed, their carrying amount is recognized as an
expense.
2.5
Prepayments and deposits
Prepayments relate to amounts paid to suppliers for goods or services not yet received.
Deposits relate to amounts paid as security for the leasing of office space.
Deposits and prepayments are recorded at cost. Deposits are classified as non-current assets as they are
paid and held on account with the lessor over the life of the lease.
2.6
Property, plant and equipment
Property, plant and equipment with a value greater than US$ 5000 are recognized as non-current assets
in the Statement of Financial Position. Property, plant and equipment are initially recognized at cost
unless acquired through a non-exchange transaction, in which case they are recognized at fair value at
the date of acquisition.
Property, plant and equipment are stated at historical cost, less accumulated depreciation and any
impairment losses. WHO considers all assets of this type to be non-cash generating.
Depreciation is calculated on a straight-line basis over the asset’s useful life except for land, which is
not subject to depreciation. Property, plant and equipment are reviewed annually for impairment to
ensure that the carrying amount is still considered to be recoverable. The estimated useful lives of the
asset classes that make up property, plant and equipment are provided in the table below.
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Asset class
Land
Buildings ? permanent
Buildings ? mobile
Fixtures and fittings
Vehicles and transport
Office equipment
Communications equipment
Audiovisual equipment
Computer equipment
Network equipment
Security equipment
Other equipment
Estimated useful life (in years)
N/A
60
5
5
5
3
3
3
3
3
3
3
A transitional provision has been applied in the initial recognition of property, plant and equipment
that were purchased or donated before 1 January 2012. Land and building assets will be recognized by
location commencing on 1 January 2012 up to the end of the transitional period. Other assets in the
form of property, plant and equipment acquired prior to 1 January 2012 were expensed at the date of
purchase and have not been recognized as assets in 2012. The effect of the initial recognition of
property, plant and equipment is shown as an adjustment to the opening balance of accumulated
surplus or deficit.
2.7
Intangible assets
Intangible assets which are above the pre-established threshold of US$ 100 000 are stated at historical
cost less accumulated amortization and any impairment losses. Amortization is determined over the
estimated useful life of the assets using the straight-line method of amortization. The estimated useful
lives of intangible asset classes are as follows:
Asset class
Estimated useful life (in years)
Software acquired externally
1–3
Software internally developed
1–3
Licences and rights
2–6
Copyrights
3–10
WHO’s intangible assets are assumed to have a residual value of zero as intangible assets are not sold
or transferred at the end of their useful life. Intangible assets are reviewed annually for impairment.
In accordance with the transitional provision under IPSAS 31, the requirements of IPSAS 31 have
been applied on a prospective basis. No adjustments will be made to WHO’s financial records for
items previously expensed that meet the definition of an intangible asset.
2.8
Leases
A lease is an agreement whereby the lessor conveys to the lessee (the Organization), in return for a
payment or series of payments, the right to use an asset for an agreed period of time. Every lease is
reviewed to determine whether it constitutes a financial or operating lease. Necessary accounting
entries and disclosures are made accordingly.
Where the WHO is the lessor, lease revenue from operating leases is recognized as revenue on a
straight-line basis over the lease term. All costs associated with the asset incurred in earning the lease
revenue, including depreciation, are recognized as an expense.
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2.9
Contributions received in advance
Contributions received in advance arise from legally binding agreements between WHO and its
contributors ? including governments, international organizations and private and public institutions ?
whereby contributions are received in advance of the amounts concerned falling due to the Organization.
2.10 Accounts payable and accrued liabilities
Accounts payable are financial liabilities for goods or services that have been received by WHO but
not paid for.
Accrued liabilities are financial liabilities for goods or services that have been received by WHO and
which have neither been paid for nor invoiced to WHO.
Accounts payable and accrued liabilities are recognized at cost as the effect of discounting is
considered immaterial.
2.11 Employee benefits
WHO recognizes the following categories of employee benefits:
? short-term employee benefits that fall due wholly within 12 months following the end of the
accounting period in which employees render the related service
? post-employment benefits
? other long-term employee benefits
? termination benefits
WHO is a member organization participating in the United Nations Joint Staff Pension Fund, which
was established by the United Nations General Assembly to provide retirement, death, disability and
related benefits to employees. The Pension Fund is a funded, multi-employer defined benefit plan. As
specified by Article 3(b) of the Regulations of the Fund, membership in the Fund shall be open to the
specialized agencies and to any other international, intergovernmental organization which participates
in the common system of salaries, allowances and other conditions of service of the United Nations
and the specialized agencies.
The plan exposes participating organizations to actuarial risks associated with the current and former
employees of other organizations participating in the Pension Fund, with the result that there is no
consistent and reliable basis for allocating the obligation, plan assets, and costs to individual
organizations participating in the plan. The Organization and the Pension Fund, in line with the other
participating organizations in the Fund, are not in a position to identify the Organization’s
proportionate share of the defined benefit obligation, the plan assets and the costs associated with the
plan with sufficient reliability for accounting purposes. For this reason, WHO has treated this plan as
if it were a defined contribution plan in line with the requirements of IPSAS 25. The Organization’s
contributions to the plan during the financial period are recognized as expenses in the Statement of
Financial Performance.
2.12 Provisions and contingent liabilities
Provisions are recognized for future liabilities and charges where WHO has a present legal or
constructive obligation as a result of past events and it is probable that the Organization will be
required to settle the obligation.
Other commitments, which do not meet the recognition criteria for liabilities, are disclosed in the notes
to the financial statements as contingent liabilities when their existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events which are not wholly within the
control of WHO.
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2.13 Contingent assets
Contingent assets will be disclosed when an event gives rise to a probable inflow of economic benefits
or service potential and there is sufficient information to assess the probability of the inflow of
economic benefits or service potential.
2.14 Deferred revenue
Deferred revenue derives from legally binding agreements between WHO and its contributors,
including governments, international organizations and private and public institutions. Deferred
revenue is recognized when:
? a contractual agreement is confirmed in writing by both the Organization and the contributor;
and
? the funds are earmarked and due in a future period.
Deferred revenue also includes any advances from exchange transactions.
Deferred revenue is presented as non-current if the revenue is due one year or more after the reporting
date.
2.15 Revenue
Revenue comprises gross inflows of economic benefits or service potential received and receivable by
WHO during the year, which represents an increase in net assets/equity. The Organization recognizes
revenue following the established criteria of IPSAS 9 (Revenue from Exchange Transactions) and
IPSAS 23 (Revenue from Non-Exchange Transactions).
The main sources of revenue for WHO include but are not limited to:
Non-exchange revenue
? Member States’ assessed contributions. Revenue from contributions from Member States and
Associate Members is recorded annually at the beginning of the year as per the assessments
approved by the Health Assembly.
? Voluntary contributions. Revenue from voluntary contributions is recorded when a binding
agreement is signed between WHO and the contributor. The Organization considers that while
there are restrictions on the use of contributions, these restrictions do not constitute conditions
on transferred assets as defined under IPSAS 23.
? Contributions in-kind and in-service. Contributions in-kind and in-service received by WHO
are recorded upon receipt from the contributor at an amount equal to their fair market value as
determined at the time of acquisition. Donated property, plant and equipment are recognized as
an asset with a corresponding entry to revenue. Other in-kind or in-service contributions are
recognized as revenue with a corresponding entry to expense.
Exchange revenue
? Reimbursable procurement, concessions, and revolving sales. Revenue from reimbursable
procurement on behalf of Member States or from the sale of goods or services are recorded on
an accrual basis at the fair value of the consideration received or receivable when it is probable
that the future economic benefits and/or service potential will flow to WHO and those benefits
can be measured reliably.
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2.16 Expenses
Expenses are decreases in economic benefits or service potential during the reporting period in the
form of outflows, consumption of assets, or incurrences of liabilities that result in decreases in net
assets/equity. WHO recognizes expenses at the point where goods have been received or services
rendered (delivery principle) and not when cash or its equivalent is paid.
2.17 Fund accounting
Fund accounting is a method of segregating resources into categories (i.e. funds) to identify both the
source and the use of the funds. Establishing such funds helps to ensure better reporting of revenue
and expenses. The General Fund, the Special Purpose Fund, the Enterprise Fund and the Fiduciary
Fund serve to ensure the proper segregation of revenue and expenses. Any transfers between funds
that would result in duplication of revenue and/or expenses are eliminated during consolidation. Intrafund transfers such as programme support costs within the General Fund are also eliminated.
General Fund
The accounts contained under this fund support the implementation of the programme budget. The
General Fund contains the following accounts:
? Member States’ Assessed Contributions Fund. This fund consolidates revenues and expenses
arising from assessed contributions from Member States.
? Member States’ Non-Assessed Income Fund. This fund (formerly referred to as the
Miscellaneous Income Fund) consolidates all sources of revenue attributable to Member States
other than current period assessed contributions. The Fund earns revenue from interest and other
miscellaneous revenue.
? Tax Equalization Fund. In accordance with resolution WHA21.10, under which the Tax
Equalization Fund was established, the assessed contributions of all Member States are reduced
by the revenue generated by the staff assessment plan. In determining the reduction of assessed
contributions to be applied to the Member States concerned, the Tax Equalization Fund is
credited with the revenue from the staff assessment plan, the credits being recorded in the name
of individual Member States, in proportion to their assessments for the biennium. For those
Member States that levy income tax on emoluments received from the Organization by their
nationals or others liable to such taxes, the credit from the staff assessment plan is charged with
the estimated amount to be levied by those Member States. Those amounts which have been
charged are, in turn, used by the Organization to reimburse income tax paid by the staff
concerned as per resolution WHA21.10.
? Working Capital Fund. The fund was established to implement the programme budget for any
arrears in the receipt of assessed contributions. In accordance with Financial Regulation VII,
pending the receipts of assessed contributions, implementation of the regular budget may be
financed from the Working Capital Fund and thereafter by internal borrowing against available
cash reserves of WHO, excluding trust funds. Amounts borrowed are repaid from the collection
of arrears of assessed contributions and are credited first against any internal borrowing
outstanding and then against any borrowing outstanding from the Working Capital Fund.
?
Voluntary funds (core, specified and partnerships). This fund consolidates revenues and
expenses arising from voluntary contributions and includes the special account for servicing costs.
Member States – other
Member States ? other contains the following accounts:
? Common Fund. This fund reflects the movement in the asset and liability accounts of the
Organization resulting from changes in items such as inventory, depreciation and unrealized
exchange gains and losses.
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? Enterprise Fund. This fund contains accounts that generate self-sustaining revenue. The
revenue and expenses under this fund are not included in the reporting of the programme budget.
The Enterprise Fund contains the following accounts:
? Revolving Sales Fund1
? Concessions Fund
? Insurance Policies Fund
? Office/Garage Rental Fund
? Reimbursable Procurement Fund
? Global Conference and Training - Tunis Fund
? Special Purpose Fund. The accounts contained under this fund represent transfers from the
General Fund or appropriations by the Health Assembly. The revenue and expenses under this
fund are not included in the reporting of the programme budget. The Special Purpose Fund
contains the following accounts:
? Real Estate Fund
? Security Fund
? Information Technology Fund
? Revolving Fund for Teaching and Laboratory Equipment
? Special Fund for Compensation
? Terminal Payments Fund
? Non-Payroll Staff Entitlements Fund
? Post Occupancy Charge Fund
? Internal Service Cost Recovery Fund
? After-Service Health Insurance Fund
Fiduciary Fund
This fund accounts for assets that are held by WHO in a trustee or agent capacity for others and cannot
be used to support the Organization’s own programmes. The Fund includes partnerships that are
administered by the Organization and whose budgets are not approved by the Health Assembly.
Similarly, financial activities related to financing WHO’s long-term liabilities are managed through
this fund. The Fund is not available for operations and does not contribute to the Programme budget
2012–2013. The Fiduciary Fund contains the following accounts:
? Other Fiduciary Fund
? WHO Framework Convention on Tobacco Control
? Stop TB Partnership Global Drug Facility Fund
? Roll Back Malaria Partnership Fund
? Health Metrics Network Fund
? Partnership for Maternal, Newborn and Child Health Fund
? United Nations System Standing Committee on Nutrition Fund
? Alliance for Health Policy and System Research Fund
? Global Health Workforce Alliance Fund
1
In accordance with Health Assembly resolutions WHA22.8 and WHA55.9, this Fund is credited with proceeds from the sale of
publications, international certificates of vaccination, films, videos, DVDs and other information material. The related costs of production
and printing are charged to the Fund.
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2.18 Segment reporting
As required under IPSAS, WHO reports on segments based on its regional structure. Revenue,
expenses, assets and liabilities are reported for each major office (region). The use of major offices is
in line with the way that Member States and management make decisions over the allocation of
resources to the Organization. The Organization’s programme budget is presented by major office
which supports using major offices as the segments. Furthermore the accountability for results and
management of assets and liabilities lies with the heads of each regional office.
2.19 Statement of Cash Flow
The Statement of Cash Flow (Statement IV) is prepared using the indirect method.
2.20 Budget comparison
WHO’s budget and accounting bases differ. Budgets within the Organization are approved on a
modified cash basis rather than the full accrual basis of IPSAS. In addition, budgets are prepared on a
biennial basis.
Whereas WHO’s financial statements cover all activities of the Organization, budgets are approved
only for the General Fund. There are no approved budgets for other funds. All funds are administered
in accordance with the Financial Regulations and Financial Rules.
As required under IPSAS 24, the actual amounts presented on a comparable basis to the budget shall,
where the financial statements and the budget are not prepared on a comparable basis, be reconciled to
the actual amounts presented in the financial statements, identifying separately any basis, timing,
presentation and entity differences. There may also be differences in formats and classification
schemes adopted for the presentation of financial statements and the budget.
The Health Assembly approved the Programme budget 2012?2013 through resolution WHA64.3.
WHO’s Statement V: Comparison of Budget and Actual Amounts compares the final budget to actual
amounts calculated on the same basis as the corresponding budgetary amounts. As the bases used to
prepare the budget and financial statements differ, Note 7 provides a reconciliation between the actual
amounts presented in Statement V to the actual amounts presented in Statement IV.
2.21 Consolidated and non-consolidated entities
Non-consolidated entities
WHO provides administrative services to a number of entities. Each of these entities produces a full
set of financial statements that are subject to a separate audit. The following six entities have their own
governing bodies and are not controlled by the Health Assembly:
? Trust Fund for the Joint United Nations programme on HIV/AIDS (UNAIDS)
? International Drug Purchase Facility (UNITAID)
? International Agency for Research on Cancer (IARC)
? International Computing Centre (ICC)
? African Programme for Onchocerciasis Control (APOC)1
? Staff health insurance (SHI)
1
Includes residual values for the former Onchocerciasis Control Programme.
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Consolidated entities
WHO administers or participates in a large number of global health partnerships, and maintains some
special programmes and collaborative arrangements. These contribute to the achievement of the
Organization’s objectives and as such were reflected in the Programme budget 2012–2013, under the
Special programmes and collaborative arrangements segment of the budget. The activities
implemented by the Organization have been consolidated under the General Fund. The activities
covered under the Special programmes and collaborative arrangements segment of the budget,
following a revision made at the beginning of 2012, are as follows:
? Codex Alimentarius Commission
? European Observatory on Health Systems and Policies
? Collaboration with partners in the GAVI Alliance
? Global Polio Eradication Initiative
? Health and Nutrition Tracking Service
? Intergovernmental Forum on Chemical Safety
? UNICEF/UNDP/World Bank/WHO Special Programme for Research and Training in Tropical
Diseases (TDR)
? UNDP/UNFPA/WHO/World Bank Special Programme of Research, Development and Research
Training in Human Reproduction (HRP)
? HIV Vaccine Initiative (including the African AIDS Vaccine Programme)
? Vaccine research partnerships
? Partnership for the control of neglected tropical diseases
? WHO/UN Programme on Prequalification of Medicines
? WHO-FAO-OIE agreement on the management of avian influenza and other emerging diseases
? WHO Centre for Health Development (Kobe)
? World Alliance for Patient Safety
? Stop TB Partnership, including Green Light Committee and Global Laboratory Initiative
In addition, the following partnerships are not included within the programme budget. They are
therefore consolidated but are outside the programme budget and the General Fund.
? WHO Framework Convention on Tobacco Control
? Stop TB Partnership Global Drug Facility
? Roll Back Malaria Partnership secretariat
? Health Metrics Network
? Partnership for Maternal, Newborn and Child Health
? United Nations System Standing Committee on Nutrition
? Alliance for Health Policy and Systems Research
? Global Health Workforce Alliance
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3.
Note on the implementation of IPSAS and opening balance adjustments
The financial statements for the 2012 financial period are the first financial statements that comply
with the requirements of IPSAS. WHO’s financial statements for the prior biennium were prepared to
conform to the United Nations System Accounting Standards (UNSAS) and were presented on a
modified cash basis.
The opening balances represent the 2011 audited Statement of Financial Position, which has been
restated to incorporate adjustments made due to changes in accounting policies and other adjustments
made as at 1 January 2012 as a result of the implementation of IPSAS.
Implementation of IPSAS and opening balance adjustments (US dollars)
ASSETS
Current assets
Cash and cash equivalents
Short?term investments
Accounts receivable – net current
Staff receivables
Inventories
Prepayments
Interest receivable
Other current assets
Total current assets
Non?current assets
Accounts receivable – net non?current
Long?term investments
Deposits
Property, plant and equipment – net
Total non?current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Contributions received in advance
Accounts payable
Staff payables
Accrued staff benefits – current
Deferred revenue
Allowance for doubtful accounts
receivable
Financial liabilities
Other current liabilities
Inter?entity liabilities
Total current liabilities
Non?current liabilities
Long?term borrowings
Accrued staff benefits – non?current
Deferred revenue – non?current
Staff health insurance
Total non?current liabilities
31 December 2011
ending balance
Staff health
insurance as
separate entity
1 January 2012
opening balance
248 295 135
2 713 833 801
747 812 022
9 805 637
–
1 567 910
2 017 729
–
–
(339 806 469)
(199 459)
(298 840)
–
–
–
–
248 295 135
2 374 027 332
747 612 563
9 506 797
–
1 567 910
2 017 729
–
–
2 017 728
(119 923 819)
–
–
–
(2 017 729)
22 864 545
395 221 393
(122 741 253)
101 540 473
7 204 093
64 149 230
–
–
–
643 516 528
2 253 303 807
729 229 217
16 710 890
64 149 230
1 567 910
–
22 864 545
3 723 332 234
(340 304 768)
3 383 027 466
(97 059 275)
445 373 936
3 731 342 127
265 332 191
–
362 303
97 950 420
–
–
–
–
265 332 191
–
362 303
97 950 420
–
–
–
–
(40 436 097)
34 833 438
–
(55 653 343)
224 896 094
34 833 438
362 303
42 297 077
Mapping changes
IPSAS adjustments
Note 3.1
1 January 2012
(restated)
363 644 914
–
363 644 914
–
(61 256 002)
302 388 912
4 086 977 148
(340 304 768)
3 746 672 380
(97 059 275)
384 117 934
4 033 731 039
100 728 551
32 287 143
–
–
321 397 775
–
–
5 468
–
–
100 728 551
32 287 143
5 468
–
321 397 775
–
–
7 137 972
25 345 090
–
–
–
–
48 842 472
136 243 010
100 728 551
32 287 143
7 143 440
74 187 562
457 640 785
119 923 818
–
36 538 900
746 723 081
–
–
187 508 013
–
119 923 818
–
224 046 913
746 723 081
(119 923 818)
–
(177 966 131)
187 586 221
–
331 076 923
–
(912 439)
–
331 076 923
46 080 782
933 396 863
1 357 599 268
187 513 481
1 545 112 749
(77 820 666)
515 249 966
1 982 542 049
21 007 421
81 875 366
224 896 093
527 818 250
–
–
–
(527 818 250)
21 007 421
81 875 366
224 896 093
–
–
(19 238 606)
–
–
1 717 783
818 263 628
–
–
22 725 204
880 900 388
224 896 093
–
855 597 130
(527 818 250)
327 778 880
(19 238 606)
819 981 411
1 128 521 685
TOTAL LIABILITIES
2 213 196 398
(340 304 769)
1 872 891 629
(97 059 272)
1 335 231 377
3 111 063 734
NET ASSETS/EQUITY
Member States – regular budget
Member States equity in capital assets
Voluntary funds
Member States – other
Fiduciary Fund
3 847 123
76 792 400
1 482 565 740
192 399 036
118 176 449
–
–
–
–
–
3 847 123
76 792 400
1 482 565 740
192 399 036
118 176 449
–
(76 792 400)
–
76 792 400
–
62 602 858
–
(1 498 482)
(1 012 217 819)
–
66 449 981
–
1 481 067 258
(743 026 383)
118 176 449
TOTAL NET ASSETS/EQUITY
1 873 780 748
–
1 873 780 748
–
(951 113 443)
922 667 305
TOTAL LIABILITIES AND NET
ASSETS/EQUITY
4 086 977 146
(340 304 769)
3 746 672 377
(97 059 272)
384 117 934
4 033 731 039
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3.1
Adjustments to net assets/equity
In order to comply with IPSAS, the preparation and presentation of opening balances as at 1 January
2012 required adjustments to be made to the balances reflected as at 31 December 2011 in the
Statement of Financial Position. The net assets/equity of WHO changed as at 1 January 2012 due to
changes in accounting policies with the adoption of IPSAS and due to the treatment of staff health
insurance as a separate entity. The changes as a result of IPSAS implementation totalled US$ (951)
million as shown below:
1 January 2012
Opening balance net assets/equity
Recognition of inventory
1 873 780 748
64 149 230
Adjustment to land and building
(29 978 438)
Adjustment to land and building ? accumulated depreciation for headquarters
(25 674 905)
Adjustment to foreign exchange, swaps and hedging (unrealized exchange loss)
Recognition of employee benefit liability (after?service staff health insurance)
Recognition of employee benefit liability (terminal payments)
(22 850 906)
(791 926 294)
(94 388 824)
Adjustment to employee benefit accrual
26 413 111
Adjustment to long?term borrowings
(1 717 783)
Adjustment to other accounts receivable
(1 498 482)
Adjustment to allowance for doubtful accounts receivable
62 602 858
Adjustment to reimbursable procurement deferred revenue
Total adjustments to net assets/equity
Opening balance net assets/equity (restated)
(136 243 010)
(951 113 443)
922 667 305
Recognition of inventory. In order to comply with IPSAS, inventory is recognized in the Statement
of Financial Position for the first time as at 1 January 2012. Inventory was not recognized under
UNSAS.
Adjustment to land and building. WHO has adopted the transitional provision for property, plant,
and equipment. The only asset class recognized as at 1 January 2012 is land and buildings for
headquarters. Under UNSAS, land and buildings for headquarters and regional offices were included
in the financial statements. An adjustment for accumulated depreciation for headquarters buildings
was recognized as an adjustment to net assets/equity.
Adjustment to foreign exchange, swaps and hedging (unrealized exchange loss). Unrealized
foreign exchange gains and losses for hedging foreign exchange exposures are now disclosed
separately as either financial assets or liabilities at fair value through surplus or deficit (held-fortrading). Under UNSAS, any unrealized foreign exchange gains and losses for hedging were disclosed
in the notes to the financial statements and were recognized in the financial statements in the
accounting period in which they crystallized. As this amount is realized in 2012, the original
transaction is reversed in order to avoid recognizing the amount twice.
Recognition of employee benefit liability. Liabilities relating to post-employment benefits as per
actuarial valuations have been recognized in the financial statements based on their valuation as at 1
January 2012. The valuation for terminal payments has been adjusted by US$ 94.4 million. The
valuation representing the after-service health insurance for the Organization’s staff has been adjusted by
US$ 792 million. Employee benefit liabilities have been classified as either “current” or “non-current”.
Adjustment to employee benefit accrual. Existing balances for employee benefit accruals (relating,
for example, to education grant and home leave) are not recognized in net assets/equity.
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Adjustment to long-term borrowings. In December 2003, the Swiss Confederation provided an
interest-free loan for the construction of a shared building in Geneva for the UNAIDS secretariat and
WHO. The joint loan of CHF 59.8 million, of which the Organization’s share is CHF 29.9 million, is
repayable over a 50-year period with effect from the first year of the completion of the building. The
loan was adjusted by US$ 1.7 million to reflect the amortized cost of the loan using the effective
interest rate of 1.23% (Swiss franc Libor rate for 30 years).
Adjustment to other accounts receivable. An adjustment of US$ 1.5 million was required to opening
net assets/equity in order to reverse a receivable from a contributor that was incorrectly recorded in the
conversion to the Global Management System.
Adjustment to allowance for doubtful accounts receivable. To comply with IPSAS, an adjustment
of US$ 63 million was recorded to reflect the reduction of the allowance for assessed contributions at
the beginning of the year.
Adjustment to reimbursable procurement deferred revenue. An adjustment of US$ 136 million
was required to the opening balance of net assets/equity in order to reclassify as deferred revenue,
revenue that had been recognized for reimbursable procurement in 2011.
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4.
Supporting information to the Statement of Financial Position
4.1
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash at banks, investments in money market funds,
collateral deposits, bank deposits, and short-term highly liquid investments with original maturity
dates of three months or less from the date of acquisition.
Cash and cash equivalents are held for the purpose of meeting the short-term cash requirements of the
Organization, rather than for longer-term investment purposes. They are held on behalf of the
Organization, including the General Fund, the Special Purpose Fund, the Enterprise Fund, the
Fiduciary Fund and non-WHO entities administered by the Organization. The figures include cash and
cash equivalents held in the portfolios managed by investment managers.
Major office
31 December 2012
1 January 2012
(restated)
Headquarters
171 023 455
152 312 290
Africa
29 126 359
47 685 369
Eastern Mediterranean
23 389 879
37 489 496
Europe
1 531 029
1 163 710
South?East Asia
7 799 091
6 614 239
Western Pacific
5 596 234
3 030 031
Cash at banks, investment accounts, in transit and on hand
238 466 047
248 295 135
Headquarters
945 892 369
395 221 393
Cash and cash equivalents held by investment portfolios
945 892 369
395 221 393
1 184 358 416
643 516 528
Total cash and cash equivalents
4.2
Investments and financial instruments
Details of the accounting policies for investments and financial instruments are described in Note 2.2.
WHO’s principal investment objectives in descending order of priority are:
? the preservation of capital;
? the maintenance of sufficient liquidity to meet the payment of liabilities on time; and
? the optimization of investment returns.
The Organization’s investment policy reflects the nature of its funds which may either be held shortterm pending implementation of programmes, or held longer term to meet its long-term liabilities.
WHO’s investments include funds managed for other entities.
An analysis of the investments of the Organization is provided in the following table.
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Investments and financial instruments (US dollars)
Internally managed funds
Current assets
Cash and cash equivalents
Cash and time
deposits
860 131 461
Held?to?
maturity
portfolio
Externally managed funds
Long?term
portfolio
191 881
1 828 149
Short?term
portfolio A
Total
862 151 491
Short?term investments
–
Financial assets at fair value through surplus
or deficit – upon initial recognition
Financial assets at amortized cost
Total short?term investments
Total current assets
–
–
Short?term
portfolio D
61 733 553
13 169 701
8 081 391
Total
83 740 878
–
–
–
48 575 780
301 167 273
–
945 892 369
–
10 508 594
–
–
126 800
10 635 394
13 182 337
23 817 731
–
–
169 458 167
187 635 212
237 958 816
275 368 466
870 420 661
–
870 420 661
–
48 575 780
–
–
–
–
–
–
48 575 780
219 690
436 821
301 823 784
122 504 289
798 994
665 026
924 875
124 893 184
–
426 716 968
301 167 273
48 795 470
436 821
350 399 564
302 471 050
188 434 206
238 623 842
276 420 141
1 005 949 239
13 182 337
1 369 531 140
1 161 298 734
48 987 351
2 264 970
1 212 551 055
303 227 283
250 167 759
251 793 543
284 501 532
1 089 690 117
13 182 337
2 315 423 509
Non?current assets
Long?term investments
Financial assets at fair value through surplus
or deficit – upon initial recognition
–
–
35 844 887
35 844 887
–
–
–
–
–
–
35 844 887
Financial assets at amortized cost
–
230 478 694
–
230 478 694
–
–
–
–
–
230 478 694
–
230 478 694
35 844 887
266 323 581
–
–
–
–
–
–
266 323 581
–
230 478 694
35 844 887
266 323 581
–
–
–
–
–
–
266 323 581
Total long?term investments
Total non?current assets
Current liabilities
Financial liabilities
Financial liabilities at fair value through
surplus or deficit ? held?for?trading
–
–
–
–
10 378 896
–
–
66 856
10 445 752
2 843 648
Payables and accruals
–
–
–
–
8 113 075
30
278
644
8 114 027
–
8 114 027
Total financial liabilities
–
–
–
–
18 491 971
30
278
67 500
18 559 779
2 843 648
21 403 427
–
–
–
–
18 491 971
30
278
67 500
18 559 779
2 843 648
21 403 427
1 161 298 734
279 466 045
38 109 857
1 478 874 636
284 735 312
250 167 729
251 793 265
284 434 032
1 071 130 338
10 338 689
2 560 343 663
Total current liabilities
Total investments – net
Short?term
portfolio C
Financial assets at fair value through surplus
or deficit – held?for?trading
Bank deposits and other receivables
756 233
Short?term
portfolio B
Total
managed
funds
and
contracts
Foreign
exchange
hedging
contracts
13 289 400
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Short-term investments
Short-term investments relating to funds held pending the implementation of programmes are invested
in cash and high-quality short-term government, agency, corporate bonds and time deposits as defined
in the approved investment policy. Investments included within “financial assets at fair value through
surplus or deficit” include fixed income securities and derivatives instruments held to cover projected
liabilities and any unexpected cash requirements. The investments in the “held-to-maturity” portfolio
with a duration of less than one year are classified as current assets in the category “financial assets at
amortized cost”. Other receivables include accrued revenue on investments and receivables from
investments that were sold but settled after 2012.
Financial assets at fair value through surplus or deficit ? held?for?trading
Financial assets at fair value through surplus or deficit ? upon initial recognition
Financial assets at amortized cost
Bank deposits and other receivables
Total short?term investments
1 January 2012
(restated)
31 December 2012
23 817 731
6 185 144
870 420 661
660 129 398
48 575 780
198 548 932
426 716 968
1 388 440 333
1 369 531 140
2 253 303 807
Long-term investments
Long-term investments are placed for the Terminal Payments Fund as defined in the approved
investment policy and are invested in high-quality, medium-dated and long-dated, government, agency
and corporate bonds. Investments maturing greater than one year and held in the “held-to-maturity”
portfolio are included as “financial assets at amortized cost”.
1 January 2012
(restated)
31 December 2012
Financial assets at fair value through surplus or deficit ? upon initial recognition
Financial assets at amortized cost
Total long?term investments
35 844 887
34 833 438
230 478 694
–
266 323 581
34 833 438
Financial liabilities
Financial liabilities disclosed under “financial liabilities at fair value through surplus or deficit ? heldfor-trading” include derivative transactions such as foreign exchange forward contracts and interest
rate swaps. Financial liabilities disclosed under “payables and accruals” relate to other financial
liabilities from investments.
In late December 2011, three new short-term externally managed fixed income investment portfolio
mandates were implemented involving US$ 660 million in funds invested, and at the time of the 2011
closure, the external managers were in the process of acquiring the new securities under these new
investment mandates. The nature of the market cycle, in which a period elapses between the
acquisition and sale of securities and the moment of their settlement, means that many of the securities
acquired under these new mandates had not yet been paid for as at 31 December 2011. Unsettled
security purchases of this type caused the restated figures for financial assets and financial liabilities as
at 1 January 2012 to be temporarily inflated by US$ 297 million in unsettled security sales and
purchases. This arose due to the timing of the implementation of the new investment portfolios which
straddled the end of 2011. There were no significant portfolio rebalancing activities at the end of 2012.
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31 December 2012
Financial liabilities at fair value through surplus or deficit ? held?for?trading
Payables and accruals
Total financial liabilities
1 January 2012
(restated)
13 289 400
30 025 025
8 114 027
301 051 898
21 403 427
331 076 923
The fair value hierarchy
The fair value hierarchy represents the categorization of market pricing to indicate the relative ease
with which the value of investments held by WHO can be realized.
The majority of the financial instruments held by WHO have quoted prices in active markets and are
classified as Level 1. Derivative instruments that are “over-the-counter” are classified as Level 2
because their fair value is observable ? either directly as a price, or indirectly after being derived from
prices. The instruments shown under the Level 2 fair value measurement category consist of the
foreign currency hedging forward contracts and the derivative contracts in the externally managed
portfolios. Level 3 valuations include financial instruments for which the fair value is not based on
observable market data. As at 31 December 2012, WHO held no financial instruments that would be
classified as Level 3.
Level 1
Level 2
Short?term investments
Financial assets at fair value through surplus or deficit ? held?for?trading
Financial assets at fair value through surplus or deficit ? upon initial recognition
23 817 731
870 420 661
–
35 844 887
–
–
(13 289 400)
Total
906 265 548
10 528 331
–
23 817 731
– 870 420 661
Financial liabilities
Financial liabilities at fair value through surplus or deficit ? held?for?trading
Total
–
Long?term investments
Financial assets at fair value through surplus or deficit ? upon initial recognition
Level 3
–
35 844 887
– (13 289 400)
– 916 793 879
Risk management
WHO is exposed to financial risks including credit risk, interest rate risk, foreign exchange risk and
investment price risk. Derivative financial instruments are used to hedge some of its risk exposures. In
accordance with WHO’s Financial Regulations, funds not required for immediate use may be invested.
All investments are carried out within the framework of the investment policy approved by the
Director-General. Some portfolios are managed by external managers appointed by the Organization
to manage funds in accordance with a defined mandate. The Advisory Investment Committee reviews
regularly the investment policies, the investment performance and the investment risk for each
investment portfolio. This Committee is composed of external investment specialists who can make
investment recommendations to the Director-General.
Nature of financial instruments
Investments are categorized as follows:
? Investments with short-term maturities. These investments are invested in cash and high-
quality short-dated government, agency, and corporate bonds as defined in the approved
investment policy.
? Investments with long-term maturities. These investments comprise funds managed for the
Terminal Payments Fund as defined in the approved investment policy. These investments are
invested in high-quality medium-dated and long-dated, government, agency, and corporate
bonds.
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Credit risk
WHO’s investments are widely diversified in order to limit its credit risk exposure to any individual
investment counterparty. Investments are placed with a wide range of counterparties using minimum
credit quality limits and maximum exposure limits by counterparty (and by groups of related
counterparties) established in investment mandates. These limits are applied both to the portfolios
managed internally by the Organization’s Treasury Unit, and also to the portfolios managed by
external investment managers. The Treasury Unit monitors the total exposure to counterparties across
all internally and externally managed portfolios to ensure that total counterparty exposures across
portfolios are tracked and managed.
The credit risk and liquidity risk for cash and cash equivalents are minimized by investing only in
major financial institutions that have received strong investment grade credit ratings from primary
credit rating agencies. The Treasury Unit regularly reviews the credit ratings of the approved financial
counterparties and takes prompt action whenever a credit rating is downgraded. The investments with
long-term credit ratings are summarized as follows:
Minimum rating category
AAA
AA+
AA
AA?
A+
A
A?
BBB+
BBB
Total asset value
US dollars
370 058 080
275 620 223
19 453 094
240 071 460
46 401 508
34 980 830
40 299 767
652 309
5 446 996
1 032 984 267
Interest rate risk
WHO is exposed to interest rate risk through its short-term and long-term fixed income investments.
The investment duration is a measure of sensitivity to changes in market interest rates, and the
effective average duration of the Organization’s investments as at 31 December 2012 was 0.3 years for
the short-term investments and 2.6 years for the long-term investments.
Fixed income derivative instruments may be used by external investment managers to manage interest
rate risk under strict investment guidelines. These interest rate instruments are used for portfolio
duration management and for strategic interest rate positioning.
Foreign exchange currency risk
WHO receives contributions and makes payments in currencies other than the United States dollar and
it is exposed to foreign exchange currency risk arising from fluctuations in currency exchange rates.
Exchange rate gains and losses on the purchase and sale of currencies, revaluation of cash book
balances, and all other exchange differences are adjusted against the funds and accounts eligible to
receive interest under the interest apportionment programme. The translation of transactions expressed
in other currencies into the United States dollar is performed at the United Nations Operational Rates
of Exchange prevailing at the date of transaction. Assets and liabilities that are denominated in foreign
currencies are translated at the Operational Rates of Exchange prevailing at the end of each month.
Forward foreign exchange contracts are transacted to hedge foreign currency exposures and to manage
short-term cash flows. Realized and unrealized gains and losses resulting from the settlement and
revaluation of foreign currency transactions are recognized in the Statement of Financial Performance.
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Hedging foreign exchange exposures on future payroll costs. The United States dollar value of
non-dollar expenses in 2013 has been protected from the impact of movements in foreign exchange
rates through the transaction of forward currency contracts during 2012. As at 31 December 2012
these forward foreign currency exchange hedging contracts by currency are summarized as follows:
Currency forward bought
Net amount sold
(US dollars)
Net unrealized gain/(loss)
(US dollars)
Swiss francs
318 000 000
342 280 783
6 507 931
Egyptian pounds
102 000 000
14 375 537
523 694
82 800 000
107 058 845
2 305 417
876 000 000
15 452 087
27 503
27 960 000
9 200 208
120 637
704 400 000
16 603 918
651 369
504 971 378
10 136 551
Euros
Indian rupees
Malaysian ringgits
Philippine pesos
Total
There was a net unrealized gain on these contracts of US$ 10.1 million as at 31 December 2012
(unrealized loss of US$ 21.4 million as at 1 January 2012). Realized gains or losses on these contracts
will be recorded on maturity of the contracts and applied during 2013.
Hedging foreign exchange exposures on receivables and payables. Currency exchange risk arises
as a result of differences in the exchange rates at which foreign currency receivables or payables are
recorded, and the exchange rates at which the cash receipt or payment is subsequently recorded. A
monthly programme of currency hedging is in place to protect against this foreign currency risk. On an
ongoing monthly basis the exposures in respect of awards, accounts receivable and accounts payable
are netted by currency and each significant net foreign currency exposure is bought or sold forward
using a forward foreign exchange contract equal and opposite to the net currency exposure.
These exposures are re-balanced at each month-end to coincide with the setting of the monthly United
Nations Operational Rates of Exchange. Through this process the exchange gains or losses realized on
the forward foreign currency contracts match the corresponding unrealized exchange losses and gains
on the movements in net accounts receivable and accounts payable. As at 31 December 2012 the total
forward foreign currency exchange hedging contracts by currency were as follows:
Currency forward sold
Euros
Currency forward bought
(US dollars)
Net unrealized gain/(loss)
(US dollars)
104 600 000
138 854 122
804 179
Australian dollars
27 700 000
28 655 124
(70 634)
Canadian dollars
116 500 000
117 333 419
387 658
Danish kroner
40 000 000
7 121 594
43 798
Pounds sterling
104 900 000
169 509 848
(1 003 171)
Norwegian kroner
Swedish kronor
Total
11 500 000
2 066 369
328
157 950 000
24 347 247
66 259
487 887 723
228 417
There was a net unrealized gain on these contracts of US$ 0.2 million as at 31 December 2012
(unrealized net loss of US$ 2.4 million as at 1 January 2012). Realized gains or losses on these
contracts will be recorded on the maturity of the contracts and applied during 2013.
Forward foreign exchange contracts to manage operational cash flows. Forward foreign exchange
contracts are also used to manage short-term cash flows of foreign currency balances to minimize
foreign currency transaction risk. At 31 December 2012 the total amount sold was CHF 2.1 million
against Australian dollars, Canadian dollars, Norwegian kroner and Swedish kronor. The maturity
dates of these forward foreign exchange contracts are January 2013. Net unrealized losses on these
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contracts amounted to US$ 26 277 as at 31 December 2012 (unrealized net gains of US$ 20 142 as at
1 January 2012).
Sensitivity of forward foreign exchange contracts to movements in the relative value of the
United States dollar. A 1% appreciation in the relative value of the United States dollar against the
above forward foreign exchange hedging contracts would result in an increase in the net unrealized
gain of US$ 10.7 million. A 1% depreciation in the relative value of the United States dollar would
result in a decrease in the net unrealized gain of US$ 10.5 million.
Forward foreign exchange contracts and other derivative financial instruments held within the
externally managed investment portfolios. In accordance with the investment guidelines set up for
each externally managed portfolio, the external investment managers use forward foreign exchange
contracts, futures contracts and interest rate swap contracts to manage the currency and interest rate
risk of groups of securities within each portfolio. The net values of these instruments as at
31 December 2012 as evaluated by the Organization’s investment custodian are recorded by portfolio
under “financial assets/liabilities at fair value – held-for-trading” and are summarized below. There
were no outstanding futures contracts.
(US dollar
equivalent)
Net sold amount
Australian dollars
Euros
Pounds sterling
Japanese yen
3 064 000
3 179 207
14 877 000
20 707 997
4 135 000
6 721 301
19 980 000
2 310 886
Total
32 919 391
Net purchased amount
(US dollar
equivalent)
Chinese yuan renminbi
36 749 768
5 744 826
US dollars
25 766 053
25 766 053
Total
31 510 879
A 1% appreciation in the relative value of the United States dollar against the above-mentioned
forward foreign exchange hedging contracts would result in a decrease in the unrealized gain of
US$ 0.7 million. A 1% depreciation in the relative value of the United States dollar would result in an
increase in the unrealized gain of US$ 0.7 million.
Forward foreign exchange contract for currency risk hedging within the held-to-maturity
portfolio. The currency exchange risk of a Japanese Government Treasury Bill investment
denominated in Japanese yen is fully hedged until maturity by the transaction of a forward foreign
exchange contract to sell Japanese yen and buy United States dollars. The Treasury Bill is valued at
amortized cost in United States dollars including the currency hedging instrument in accordance with
hedge accounting.
4.3
Accounts receivable ? net
As at 31 December 2012, total accounts receivable?net amounted to US$ 905 million
(US$ 954 million as at 1 January 2012 (restated)). The receivable balance includes outstanding
amounts for both assessed and voluntary contributions. Amounts receivable are split between current
and non-current based on when the amounts become due.
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Accounts receivable – net current
Member States’ assessed contributions receivable – current
biennium
Member States’ assessed contributions receivable – previous
biennium
Voluntary contributions receivable
Reimbursable procurement receivable
Revolving sales receivable
Other receivables
Allowance for doubtful accounts receivable
Total accounts receivable – net current
31 December 2012
1 January 2012
(restated)
65 246 279
64 235 237
4 136 501
6 739 828
641 850 953
672 279 217
1 092 985
784 330
388 748
289 686
2 691 663
3 418 159
(20 352 492)
(18 517 240)
695 054 637
729 229 217
Accounts receivable – net non?current
Outstanding rescheduled assessments receivable
34 757 280
38 803 720
Voluntary contributions receivable
210 277 136
224 896 094
Allowance for doubtful accounts receivable
(34 757 280)
(38 803 720)
Total accounts receivable – net non?current
210 277 136
224 896 094
Total accounts receivable – net
905 331 773
954 125 311
The total allowance for doubtful accounts receivable is US$ 55.1 million (US$ 57.3 million at 1
January 2012 (restated)). This is composed of an allowance of US$ 44.1 million for assessed
contributions and US$ 11.0 million for voluntary contributions.
The allowance for assessed contributions receivable includes any Member State with amounts
receivable from prior years, all rescheduled amounts receivable and any current amounts receivable
from Member States in arrears. The allowance for voluntary contributions receivable is based on a
detailed review of all amounts receivable more than one year overdue and on a review of amounts less
than one year overdue where there is evidence that the amount is unlikely to be received.
In 2012, the Health Assembly adopted resolution WHA65.12, in which it approved the write-off of the
unpaid arrears from the former Yugoslavia from 1991 to 2000 amounting to US$ 5.5 million.
1 January 2012
(restated)
31 December 2012
Opening balance ? assessed contributions
47 175 926
109 778 784
Write?off of unpaid arrears from the former Yugoslavia
(5 532 592)
?
Increase/(decrease) in allowance for doubtful accounts receivable
2 429 324
(62 602 858)
Ending balance ? assessed contributions
44 072 658
47 175 926
Opening balance ? voluntary contributions
10 145 034
?
892 080
10 145 034
Ending balance ? voluntary contributions
11 037 114
10 145 034
Total allowance for doubtful accounts receivable
55 109 772
57 320 960
Increase in allowance for doubtful accounts receivable
Allowance for doubtful accounts receivable
Allowance ? current
20 352 492
18 517 240
Allowance ? non?current
34 757 280
38 803 720
55 109 772
57 320 960
Total allowance for doubtful accounts receivable
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4.4
Staff receivables
In accordance with WHO’s Staff Rules and Regulations, staff members are entitled to certain
advances including those for salary, education, rent and travel.
The total balance of staff receivables amounted to US$ 12.3 million at 31 December 2012. The
education grant balance represents advances made to staff for the scholastic year 2012?2013.
31 December 2012
1 January 2012
(restated)
Salary advances
2 465 979
5 141 268
Education grant advances
6 706 172
7 267 736
Rental advances
1 906 945
1 454 684
Travel receivables
1 013 709
2 264 846
Other staff receivables
171 132
582 356
Total staff receivables
12 263 937
16 710 890
4.5
Inventories
The total value of inventory was US$ 67.5 million as at 31 December 2012.
The following table shows the movement of inventory items (medicines, vaccines, humanitarian
supplies and publications) during the year.
1 January 2012
Net additions
Net
shipments
Net disposals and
write?offs
31 December
2012
Medicines, vaccines and
humanitarian supplies
53 310 203
46 860 703
42 628 358
5 077 428
52 465 120
Publications
10 839 027
15 115 837
9 724 128
1 237 533
14 993 203
Total inventory
64 149 230
61 976 540
52 352 486
6 314 961
67 458 323
Medicines, vaccines and humanitarian supplies were valued using the weighted average cost method
and were validated by a physical stock count in December 2012.
Publications were validated by a physical stock count in December 2012 and balances were valued at
net cost of sales.
Total expenses relating to inventories during the period (net shipments, net disposals and write-offs)
amounted to US$ 58.7 million.
4.6
Prepayments and deposits
The total value of prepayments was US$ 1.3 million (US$ 1.6 million as at 1 January 2012). These
represent payments to suppliers in advance of the receipt of goods or services. It is common practice
for technical service contractors to request payments in advance to support project work. When goods
or services are delivered, prepayments are applied to the appropriate expense account.
The figure of US$ 0.3 million in respect of deposits represents amounts given to landlords as a
security to rent office space.
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4.7
Other current assets
Other current assets refer to receivables from PAHO in the amount of US$ 12.2 million
(US$ 22.9 million as at 1 January 2012). The receivables concerned are primarily in respect of the
programmes funded and executed by the Organization on behalf of PAHO.
4.8
Property, plant and equipment – net
WHO has invoked the transition provision under IPSAS 17, which allows a period of up to five years
before requiring full recognition of property, plant and equipment. As at 31 December 2012, the
Organization had recognized land and buildings at headquarters only. All other assets were expensed
at acquisition. The total value of land and buildings recognized in property, plant and equipment net of
accumulated depreciation is US$ 41.2 million.
1 January 2012
(restated)
31 December 2012
Land
1 000 095
Buildings
Accumulated depreciation ? buildings
Total property, plant and equipment – net
1 000 095
66 971 887
66 971 887
(26 791 104)
(25 674 905)
41 180 878
42 297 077
When accumulated depreciation of property, plant and equipment is recognized for the first time, the
calculation is made for the entire year, irrespective of the date on which the asset was placed in service.
In order to ensure appropriate control and stewardship over property, plant and equipment, existing
assets have been recorded in the asset register in the system except for the African Region, which
continues to maintain the asset register offline.
In 2012, WHO purchased property, plant and equipment (with a threshold value greater than
US$ 5000) worth US$ 1.7 million (with the exception of the African Region). The property, plant and
equipment concerned have not been recognized in WHO’s financial statements in the current year
since the transitional provision mentioned above has been invoked. Details of the property, plant and
equipment not recognized are as follows:
Fixtures and fittings
Vehicles and transport
Office equipment
Communications equipment
Total
25 166
645 794
17 172
9 017
Computer equipment
108 955
Network equipment
678 981
Other equipment
Total property, plant and equipment – excluding land and buildings
182 637
1 667 722
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4.9
Intangible assets
WHO has no intangible assets to report.
4.10 Contributions received in advance
The amount for contributions received in advance mainly concerns payments received from Member
States in 2012 for their 2013 assessed contributions. The balance for advance payments for voluntary
contributions reflects funds received for agreements starting in 2013. Unapplied and unidentified
receipts are amounts received in 2012 but not yet matched to awards as at 31 December 2012.
1 January 2012
(restated)
31 December 2012
Assessed contribution advances
60 363 091
70 276 957
Advances for voluntary contributions
19 327 188
26 740 312
Unapplied and unidentified receipts
6 622 339
2 329 995
Other advances
Total contributions received in advance
17 261
1 381 287
86 329 879
100 728 551
4.11 Accounts payable
Accounts payable represents the total amount due to suppliers by major office as at 31 December 2012.
Major office
31 December 2012
1 January 2012
(restated)
Headquarters
8 267 051
11 260 434
Africa
5 491 858
5 210 396
Eastern Mediterranean
6 713 885
7 585 127
Europe
1 103 480
1 276 513
South?East Asia
1 605 293
2 938 249
Western Pacific
Total accounts payable
1 802 332
4 016 424
24 983 899
32 287 143
4.12 Staff payable
The balance of staff payable represents the total amount outstanding to staff as at 31 December 2012.
Salaries payable consist of balances due to staff pending the finalization of clearance certificates.
Bank returns are balances due to staff for which the payment is pending the receipt of updated bank
account information.
31 December 2012
1 January 2012
(restated)
1 807 549
1 082 773
Bank returns
1 494 157
5 051 019
Travel claims payable
1 064 309
1 009 648
Total staff payable
4 366 015
7 143 440
Salaries payable
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4.13 Accrued staff benefits
Accrued staff benefits include terminal payments, after-service health insurance and liabilities due to
service-incurred death or disability (Special Fund for Compensation).
31 December 2012
1 January 2012
(restated)
Accrued staff benefits – current
Terminal payments
Special Fund for Compensation
380 679
367 503
Total accrued staff benefits – current
71 735 099
74 187 562
71 354 420
73 820 059
Accrued staff benefits – non?current
Terminal payments
Special Fund for Compensation
12 750 061
11 875 053
After?service health insurance
822 983 185
791 926 294
911 532 131
880 900 388
Total accrued staff benefits – non?current
75 798 885
77 099 041
Accrued staff benefits
Terminal payments
147 153 305
150 919 100
Special Fund for Compensation
13 130 740
12 242 556
After?service health insurance
822 983 185
791 926 294
Total accrued staff benefits
983 267 230
955 087 950
Terminal payments
The Terminal Payments Fund was established to finance the terminal emoluments of staff members,
including repatriation grants, accrued annual leave, repatriation travel and removal on repatriation. It is
funded by a salary and post adjustment budgetary provision set for 2012?2013.
Liabilities arising from repatriation benefits and annual leave are determined by independent
consulting actuaries. However, the accrued leave is calculated on a walk-away basis ? that is, as if all
staff separated immediately ? and, therefore, is not discounted.
The latest actuarial study (as at 31 December 2012) estimated the full terminal payment liability to be
US$ 147.2 million (short-term US$ 71.4 million and long-term US$ 75.8 million). This calculation did
not include costs for the end of service grant and separation by mutual agreement on abolishment of
posts. The defined benefit obligation amounted to US$ 85.3 million for terminal entitlements, and
US$ 61.8 million for annual leave which is included in the terminal payments current balance.
As per the actuarial study, a net reduction of US$ 3.7 million is recognized in the Statement of
Financial Performance (total liability was US$ 147.2 million in 2012 and US$ 150.9 million in 2011).
After-service health insurance
WHO participates in a health insurance scheme. The scheme is managed as a separate entity, Staff
Health Insurance, which has its own governance. It provides for the reimbursement of expenses for
medically recognized health care incurred by staff members, recognized dependants and retired staff.
It is financed from the contributions made by the participants and the Organization.
The Organization accounts for after-service health insurance as a post-employment benefit. All gains
and losses were recognized upon the adoption of IPSAS 25. Thereafter, gains and losses (unexpected
changes in surplus or deficit) will be recognized over time via the corridor method. Under this method,
amounts up to 10% of the defined benefit obligation are not recognized, so as to allow gains and losses
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the reasonable possibility of offsetting one another over time. Gains and losses over 10% of the
defined benefit obligation are amortized over the average remaining service period of active staff
expected to receive each benefit.
The defined benefit obligation as at 31 December 2012 was determined by professional actuaries,
based on personnel data and past payment experience provided by WHO. As at 31 December 2012 the
unfunded defined benefit obligation amounted to US$ 823 million for after-service health insurance.
Further details on after-service health insurance can be found in the annual report on after-service staff
health insurance. As per the actuarial study, an additional accrual of US$ 31 million is charged to
staff costs (total liability was US$ 823 million in 2012 and US$ 792 million in 2011).
No actuarial gain or loss was recognized in the financial statements as the gain or loss was less than 10%
of the defined benefit obligation.
Special Fund for Compensation
In the event of a death or disablement attributable to the performance of official duties of an eligible
staff member, the Special Fund for Compensation covers all reasonable medical, hospital, and other
directly related costs, as well as funeral expenses. In addition, the Fund will provide compensation to
the disabled staff member (for the duration of the disability) or the surviving family members.
WHO accounts for the Special Fund for Compensation as a post-employment benefit. All gains and
losses were immediately recognized upon adoption of IPSAS 25. Thereafter, gains and losses
(unexpected changes in surplus or deficit) are recognized over time via the corridor method. Under
this method, amounts up to 10% of the defined benefit obligation are not recognized, so as to allow
gains and losses the reasonable possibility of offsetting one another over time. Gains and losses over
10% of the defined benefit obligation are amortized over the average remaining service of active staff
expected to receive each benefit. For accounting purposes, the plan is considered unfunded (the
liability is not reduced by plan assets).
As per the actuarial study, an additional accrual of US$ 0.9 million (total liability was US$ 13.1 million
in 2012 and US$ 12.2 million in 2011) has been recognized by nature of expenses in the Statement of
Financial Performance.
No actuarial gain or loss was recognized in the financial statements as the net cumulative gain or loss
was less than 10% of the defined benefit obligation.
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Actuarial summary of terminal payments, after-service health insurance, and the Special Fund for
Compensation (US dollars)
Terminal payments
(other than accrued After?service health
leave)
insurance
Reconciliation of defined benefit obligation
Defined benefit obligation as at 31 December 2011
Service cost
Interest cost
Actual gross benefit payments for 2012
Actual administrative expenses
Actual contributions by participants
Actuarial (gain)/loss
Defined benefit obligation as at 31 December 2012
Reconciliation of plan assets
Assets as at 31 December 2011
Actual gross benefit payments for 2012
Actual administrative expenses
WHO contributions during 2012
Participant contributions during 2012
Increase/decrease in WHO SHI Rule 470.1 liability
Expected return on assets
Asset gain/(loss)
Assets as at 31 December 2012
Reconciliation of unfunded obligation status
Defined benefit obligation
Active
Inactive
Total defined benefit obligation
86 866 729
10 889 143
2 294 579
(7 392 901)
–
–
(7 350 743)
85 306 807
1 235 922 134
56 381 886
46 773 057
(28 238 400)
(2 093 479)
7 571 356
48 466 636
1 364 783 190
Special Fund for
Compensation
12 242 556
892 247
337 611
(341 674)
–
–
(1 474 442)
11 656 298
–
(7 392 901)
–
7 392 901
–
–
–
–
–
443 995 840
(52 964 753)
(3 762 523)
54 794 007
27 977 520
29 554
23 263 725
12 963 830
506 297 200
–
(341 674)
–
341 674
–
–
–
–
–
85 306 807
–
85 306 807
688 127 344
676 655 846
1 364 783 190
4 063 327
7 592 971
11 656 298
–
–
–
(525 194 995)
18 897 795
(506 297 200)
–
–
–
Deficit/(surplus)
85 306 807
858 485 990
11 656 298
Unrecognized gain/(loss)
Net liability/(asset) recognized in the Statement of Financial Position
Current liability
Non?current liability
Net liability/(asset) recognized in the Statement of Financial Position
Expenses for 2012
Service cost
Interest cost
Expected return on assets
Recognition of (gain)/loss
Total expenses recognized in the Statement of Financial Performance
Expected contributions for 2013
WHO contributions
Participant contributions
Total expected contributions for 2013
–
85 306 807
9 507 922
75 798 885
85 306 807
(35 502 805)
822 983 185
–
822 983 185
822 983 185
1 474 442
13 130 740
380 679
12 750 061
13 130 740
10 889 143
2 294 579
–
(7 350 743)
5 832 979
56 381 886
46 773 057
(23 263 725)
–
79 891 218
892 247
337 611
–
–
1 229 858
9 649 486
–
9 649 486
41 809 366
12 565 352
54 374 718
386 346
–
386 346
Plan assets
Gross plan assets
Offset for WHO SHI Rule 470.1 liability
Total plan assets
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After-service health insurance medical sensitivity analysis
2012 service cost plus interest cost
Current medical inflation assumption minus 1%
72 356 000
Current medical inflation assumption
103 154 943
Current medical inflation assumption plus 1%
145 098 000
31 December 2012 defined benefit obligation
Current medical inflation assumption minus 1%
1 034 845 000
Current medical inflation assumption
1 364 783 189
Current medical inflation assumption plus 1%
1 796 063 000
Actuarial methods and assumptions
Each year the Organization identifies and selects assumptions and methods that will be used by the
actuaries in the year-end valuation to determine the expense and contribution requirements for the
Organization’s employee benefits. Actuarial assumptions are required to be disclosed in the financial
statements in accordance with IPSAS 25. In addition, each actuarial assumption is required to be
disclosed in absolute terms.
Measurement date
All plans:
31 December 2012
Discount rate
Terminal payments (other than
accrued leave):
The discount rate used is 3.0%. Based on the combined projected benefit payments
for both plans and with weights of 75% on the Aon Hewitt AA Bond Universe yield
curve and 25% on the SIX Swiss Exchange yield curve as at 31 December 2012. The
resulting discount rate is rounded to the nearest 0.1%. Last year, the discount rate
was based on a weighted average of Bloomberg indices in the United States and
Switzerland.
After?service health insurance:
Europe, 2.6% (decrease from 3.1% in prior valuation); the Americas, 4.1% (decrease
from 4.7% in prior valuation); Other Countries, 4.5% (decrease from 4.7% in prior
valuation). For Europe, beginning with the 31 December 2010 valuation, WHO
adopted a yield curve approach to reflect the pattern of expected cash flows from
the European major office. The rate is a weighted average of the 2.05% rate from
the SIX Swiss Exchange yield curve and the 3.79% rate from the iBoxx Euro Zone
curve, with a two?thirds weight on the former. The resulting rate is rounded to the
nearest 0.10%.
For the Americas and Other Countries, the rates use the same methodology as the
31 December 2012 PAHO valuation of the after?service health insurance. Beginning
with the 31 December 2012 valuation, PAHO adopted a yield curve approach using
the Aon Hewitt AA Bond Universe Curve. Thus, the rates for the Americas and
Other Countries can differ due to different patterns of expected cash flows from
those regions.
Special Fund for Compensation:
The discount rate is 3.0%. Based on the combined projected benefit payments for
both plans and with weights of 75% on the Aon Hewitt AA Bond Universe yield
curve and 25% on the SIX Swiss Exchange yield curve as at 31 December 2012. The
resulting discount rate is rounded to the nearest 0.1%. Last year, the discount rate
was based on a weighted average of Bloomberg indices in the United States and
Switzerland.
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Annual general inflation
Terminal payments (other than
accrued leave):
The inflation rate used is 2.2%. Based on a weighted average of inflation rates of
2.5% for United States and 1.3% for Switzerland with weights of 75% and 25%,
respectively. The resulting inflation rate is rounded to the nearest 0.1%.
After?service health insurance:
Europe 1.6%, the Americas 2.5%, Other Countries 2.5%
Special Fund for Compensation:
The inflation rate used is 2.2%. Based on a weighted average of inflation rates of
2.5% for the United States and 1.3% for Switzerland with weights of 75% and 25%,
respectively. The resulting inflation rate is rounded to the nearest 0.1%.
Annual salary scale
All plans:
General inflation, plus 0.5% per year productivity increases, plus merit increases.
Productivity and merit increases are set equal to those from the 31 December 2011
valuation of the United Nations Joint Staff Pension Fund.
Regional groupings for all purposes except claims costs
Terminal payments (other than
accrued leave):
Not applicable
After?service health insurance:
Based on: the Regional Office for Europe, headquarters, International Computing
Centre, IARC, UNAIDS, and the International Drug Purchasing Facility (UNITAID),
which are grouped as Europe; the Regional Office for the Americas for the Region
of the Americas; and the African Region, the Eastern Mediterranean Region, the
African Programme for Onchocerciasis (APOC), the South?East Asia Region, and the
Western Pacific Region, which are grouped as Other Countries.
Special Fund for Compensation:
Not applicable
Repatriation travel and removal on repatriation
Terminal payments (other than
accrued leave):
Calculated using the projected unit credit method with service prorated, and an
attribution period from the “entry on duty date” to separation.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
Repatriation grant, termination indemnity, and grant in case of death
Terminal payments (other than
accrued leave):
Using the projected unit credit method with accrual rate proration.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
Accrued leave
Terminal payments (other than
accrued leave):
The liability is set equal to the walk?away liability ? that is, as if all staff separated
immediately.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
Abolition of post, end?of?service grant, and separation by mutual agreement
Terminal payments (other than
accrued leave):
These benefits are considered termination benefits under IPSAS 25 and, therefore,
are excluded from the valuation.
After?service health insurance:
Not applicable
Special Fund for Compensation:
Not applicable
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United Nations Joint Staff Pension Fund
The Pension Fund’s Regulations state that the Pension Board shall have an actuarial valuation made of
the Fund at least once every three years by the Consulting Actuary. The practice of the Pension Board
has been to carry out an actuarial valuation every two years using the Open Group Aggregate Method.
The primary purpose of the actuarial valuation is to determine whether the current and estimated
future assets of the Pension Fund will be sufficient to meet its liabilities.
WHO’s financial obligation to the United Nations Joint Staff Pension Fund consists of its mandated
contribution, at the rate established by the United Nations General Assembly (currently 7.9% for
participants and 15.8% for member organizations) together with any share of any actuarial deficiency
payments under Article 26 of the Regulations of the Pension Fund. Such deficiency payments are only
payable if and when the United Nations General Assembly has invoked the provision of Article 26,
following determination that there is a requirement for deficiency payments based on an assessment of
the actuarial sufficiency of the Pension Fund as of the valuation date. Each member organization shall
contribute to this deficiency an amount proportionate to the total contributions that each paid during
the three years preceding the valuation date.
The latest actuarial valuation was performed as at 31 December 2011. The valuation revealed an
actuarial deficit of 1.87% (0.38% in the 2009 valuation) of pensionable remuneration, implying that
the theoretical contribution rate required to achieve balance as at 31 December 2011 was 25.57% of
pensionable remuneration, compared with the actual contribution rate of 23.7%. The actuarial deficit
was primarily attributable to the lower-than-expected investment experience in recent years.
As at 31 December 2011, the funded ratio of actuarial assets to actuarial liabilities, assuming no future
pension adjustments, was 130% (140% in the 2009 valuation). The funded ratio was 86% (91% in the
2009 valuation) when the current system of pension adjustments was taken into account.
After assessing the actuarial sufficiency of the Fund, the Consulting Actuary concluded that there was
no requirement, as at 31 December 2011, for deficiency payments under Article 26 of the Regulations
of the Fund as the actuarial value of assets exceeded the actuarial value of all accrued liabilities under
the Fund. In addition, the market value of assets also exceeded the actuarial value of all accrued
liabilities as of the valuation date. At the time of this report, the General Assembly has not invoked the
provision of Article 26. The pensionable remuneration will be reviewed at the time of the next
actuarial valuation as at 31 December 2013.
In the report of the United Nations Joint Staff Pension Board on its fifty-ninth session (3?11 July
2012), submitted for consideration by the United Nations General Assembly,1 the Pension Board noted
that an increase in the normal age of retirement for new participants of the Fund to 65 is expected to
significantly reduce the deficit and would potentially cover half of the current deficit of 1.87%. In
December 2012, in resolution 67/240, the General Assembly authorized the Pension Board to increase
the normal retirement age to 65 for new participants of the Fund, with effect not later than from 1
January 2014, subject to a decision of the General Assembly on a corresponding increase in the
mandatory age of separation.
During 2012, contributions paid to the United Nations Joint Staff Pension Fund amounted to US$ 206
million (US$ 232 million in 2011). Expected contributions due in 2013 are US$ 216 million.
The United Nations Board of Auditors carries out an annual audit of the Pension Fund and reports to
the Pension Board on the audit every year. The Pension Fund publishes quarterly reports on its
investments and these are made public online.2
1
Official records of the General Assembly, sixty-seventh session, supplement no.9 (document A/67/9).
2
Available at http://www.unjspf.org/UNJSPF_Web/ (accessed 22 March 2013).
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4.14 Deferred revenue
Deferred revenue on voluntary contributions represents multi-year agreements signed in 2012 but for
which the revenue recognition has been deferred to future financial periods. The balance on voluntary
contributions is split into current and non-current deferred revenue, depending upon when the funds
are available to the Organization to spend.
Deferred revenue on reimbursable procurement relates to cash received where supplies or services
have not been delivered to requesting parties at year end. As reimbursable procurement is an
exchange transaction, revenue is recorded on an accrual basis and any revenue received in advance of
delivery is recorded as deferred revenue. The entire amount of deferred revenue for reimbursable
procurement is current.
1 January 2012
(restated)
31 December 2012
Voluntary contributions
239 161 415
321 397 775
77 873 295
136 243 010
Total deferred revenue – current
317 034 710
457 640 785
Voluntary contributions
210 277 136
224 896 093
Total deferred revenue – non?current
210 277 136
224 896 093
Total deferred revenue
527 311 846
682 536 878
Reimbursable procurement
4.15 Other current liabilities
The total balance for other current liabilities as at 31 December 2012 was US$ 41.4 million. These
amounts relate to various short-term liabilities as detailed below. Refunds payable relate to the balance
of funds due to contributors after programme implementation.
31 December 2012
Accrual for un?invoiced goods and services
1 January 2012
(restated)
17 726 261
16 183 798
3 901 890
12 671 129
Accrual for restructuring cost
Due to estates of deceased staff members
273 148
273 148
5 111 282
–
Pension payable
2 487 305
3 603 401
Insurance payable
3 761 018
2 753 779
Foundations
3 567 774
3 651 697
Other liabilities
4 613 563
6 943 830
41 442 241
46 080 782
Refunds payable
Total other current liabilities
The balance for foundations concerns funds that WHO holds in trust and for whose financial and
administrative management the Organization is responsible. As at 31 December 2012, the foundations
with funds in trust were as follows:
? Down Syndrome Research Prize in the Eastern Mediterranean Region
? Dr A.T. Shousha Foundation
? Dr Comlan A.A. Quenum Prize
? Ihsan Dogramaci Family Health Foundation
? Jacques Parisot Foundation
? Léon Bernard Foundation
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? Professor Francesco Pocchiari Fellowship Prize
? State of Kuwait Prize for the Control of Cancer, Cardiovascular Diseases and Diabetes in the
Eastern Mediterranean Region
? State of Kuwait Prize for Research in Health Promotion
? United Arab Emirates Health Foundation
4.16 Inter-entity liabilities
WHO hosts a number of entities through administrative service agreements. As cash for all entities is
managed by the Organization, liabilities exist with these entities for funds held on their behalf. The
total amounts due per entity are as follows:
31 December 2012
Staff health insurance (SHI)
International Computing Centre (ICC)
International Drug Purchase Facility (UNITAID)
African Programme for Onchocerciasis Control (APOC)
207 903 045
1 January 2012
(restated)
187 586 220
16 561 280
11 942 469
553 805 387
488 757 828
7 018 925
4 748 447
Trust Fund for the Joint United Nations Programme on HIV/AIDS (UNAIDS)
204 521 501
240 361 899
Total inter?entity liabilities
989 810 138
933 396 863
4.17 Long-term borrowings
The Health Assembly, in resolutions WHA55.8 and WHA56.13, authorized the Director-General to
proceed with the construction of a new building at headquarters for the Organization and UNAIDS at a
cost estimated at CHF 66 million, of which WHO’s share was estimated at CHF 33 million. The Swiss
Confederation agreed to provide an interest-free loan to the Organization and UNAIDS of CHF 59.8
million, of which WHO’s share is CHF 29.9 million. The Health Assembly also approved the use of
the Real Estate Fund for the repayment over a 50-year period of the Organization’s share of the
interest-free loan provided by the Swiss Confederation with effect from the first year of the
completion of the building.
The loan of US$ 21.9 million (US$ 22.7 million in 2011) is reflected at amortized cost using the
effective interest rate of 1.16% (Swiss franc Libor rate for 30 years).
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5.
Supporting information to the Statement of Financial Performance
5.1
Revenue
Member States’ assessed contributions
In May 2011, the Sixty-fourth World Health Assembly adopted the appropriation resolution for the
financial period 2012?2013,1 in which it welcomed a total effective budget of US$ 3959 million. In
the same resolution, the Health Assembly further resolved that the total assessment on Member States
in respect of the financial period 2012–2013 would be US$ 949 million. US$ 475 million has been
recognized as revenue for the year 2012 and assessed to Member States.2 US$ 10.2 million was
transferred to the Tax Equalization Fund in 2012. In line with resolution WHA64.3, US$ 15 million
was approved for transfer from the Member States’ Non-Assessed Income Fund (refer to Note 6.1).
Increase in allowance for doubtful accounts receivable
The allowance for doubtful accounts receivable represents accounts receivable where the collection is
considered uncertain, both for voluntary and for assessed contributions. The increase in the allowance
for doubtful accounts receivable of US$ 3.3 million represents an increase in the allowance for
assessed accounts receivable of US$ 2.4 million and an increase in the allowance for voluntary
accounts receivable of US$ 0.9 million (refer to Note 4.3).
Voluntary contributions
The total of voluntary contributions to WHO was US$ 1636 million in 2012. These contributions
represent revenue recognized from governments, intergovernmental organizations, institutions, other
United Nations organizations and bodies, as well as the private sector.3
The figure for total voluntary contributions reported of US$ 1636 million is after the deduction of (i)
refunds to contributors ? these amount to US$ 17 million ? and (ii) reductions in revenue recognized
in prior years due to evidence arising in the current year that amounts will no longer be collected ?
these amount to US$ 13 million.
Voluntary contributions in-kind and in-service
WHO receives non-cash contributions from Member States and other contributors. In 2012, the
Organization received in-kind and in-service contributions amounting to US$ 66.5 million.4
31 December 2012
Voluntary contributions in?kind
51 133 480
Voluntary contributions in?service
15 334 959
Total voluntary contributions in?kind and?in service
66 468 439
Reimbursable procurement
WHO procures medicines and vaccines on behalf of Member States and other United Nations agencies.
The total revenue and expenses recognized for 2012 for reimbursable procurement was
US$ 62.5 million. The funds received in advance for reimbursable procurement are recorded as
deferred revenue. The revenue and expenses related to reimbursable procurement form part of the
Enterprise Fund and are not reported against the programme budget.
1
Resolution WHA64.3.
2
See document A66/30 for details of the status of collection of assessed contributions.
3
See document A66/29 Add.1 for details by fund and by contributor.
4
See document A66/29 Add.1, Schedule 5, for details of all in-kind and in-service contributions by contributor.
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Other operating revenue
In 2012, WHO earned fees of US$ 14 million for hosting other entities such as UNAIDS, the
International Drug Purchase Facility (UNITAID), the International Computing Centre (ICC) and the
African Programme for Onchocerciasis Control (APOC). Other sources of earnings also included the
sale of publications and royalties earned.
Finance revenue
Finance revenue includes the following:
31 December 2012
Investment revenue
Realized foreign exchange gains on transactions and bank balances
19 013 674
1 809 681
Net unrealized foreign exchange gains on hedging
10 364 967
Net unrealized foreign exchange gains on balance sheet revaluation
15 524 796
Actuarial revaluation gains on Terminal Payments Fund
Investment revenue and foreign exchange gains and losses apportioned to other entities
Total finance revenue
5.2
7 350 743
(10 947 816)
43 116 045
Expenses
Staff and other personnel costs
Staff and other personnel costs constitute the total cost of employing staff at all locations and include
charges for base salary, post adjustment and any other types of entitlements (e.g. pensions and
insurances) paid by the Organization. Staff costs also include the movement in the after-service health
insurance actuarial liability which is recognized in the Statement of Financial Performance.
Medical supplies and materials
The majority of the balance for medical supplies and materials relates to medical supplies purchased
and distributed by WHO for programme activities. Medical supplies and materials include in-kind
expenses of US$ 31 million and reimbursable procurement related expenses of US$ 58 million.
Contractual services
The amount for contractual services represents expenses for service providers. The main components
are sums for agreements for performance of work or consulting contracts given to individuals to
perform activities on behalf of the Organization. Medical research activities, costs for special service
agreements, fellowships and security expenses are also considered to be contractual services.
Transfers and grants to counterparts
Transfers and grants to counterparts relate to non-exchange contracts signed with national counterparts
(mainly health ministries) to perform activities that are in line with the Organization’s Programme
budget. Funds are expensed at the point of time when the funds are transferred to the contractual
partner and WHO has no continuing involvement. These expenses are also referred to as “direct
financial cooperation”.
Travel
The cost of travel for WHO staff, non-staff participants in meetings, consultants and representatives of
Member States paid by the Organization is included in the balance for total travel costs. Travel
expenses include airfare, per diem and other travel-related costs. This amount does not include
statutory travel for home leave and education grant which is accounted for within staff costs.
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General operating expenses
General operating expenses represent general operations to support country offices, regional offices
and headquarters including utilities, telecommunications (fixed telephone, mobile phone, Internet and
global network expenses) and rents.
Equipment, vehicles and furniture
As WHO opted for the transitional provision under IPSAS 17, the Organization expenses the full cost
of equipment, vehicles and furniture at the point of delivery excluding the headquarters building.
Depreciation and amortization
Depreciation is the expense resulting from the systematic allocation of the depreciable amounts of
property, plant and equipment over their useful lives. This relates principally to the Organization’s
buildings. Amortization is the expense resulting from the systematic allocation of the amortizable
amount of intangible assets over their useful lives.
Finance costs
Finance costs include the following:
31 December 2012
Bank charges and investment management fees
Net realized foreign exchange losses on balance sheet hedging
2 242 258
979 127
Actuarial interest cost related to valuation of Terminal Payments Fund
2 632 190
Total finance costs
5 853 575
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6.
Supporting information to the Statement of Net Assets/Equity
6.1
Member States - regular budget
This note provides details of financing and revenue of assessed contributions, along with the
appropriations from the Member States’ Non-Assessed Income Fund for 2012. The status of the funds
available highlights the net surplus/deficit of the Member States’ regular budget.
Member States’
Assessed
Member States’
Contributions Non?Assessed Tax Equalization Working Capital
Fund
Income Fund
Fund
Fund
Balance as at 1 January 2012
Programmatic revenue and expenses
Member States’ assessed contributions
Appropriations
Tax equalization reimbursements
Effective programme budget
Programmatic expenses related to 2012–2013
Programmatic expenses related to 2010–2011
Tax reimbursements to staff members
Total surplus/(deficit)
Allowance for doubtful accounts receivable
Increase in allowance for doubtful accounts
receivable
Member States’ non?assessed income
Interest
Miscellaneous revenue
Member States’ non?assessed income – net
Balance as at 31 December 2012
19 668 193
23 855 391
(8 073 603)
474 609 150
15 000 000
(10 189 150)
479 420 000
(427 310 158)
(14 130 446)
–
37 979 396
–
(15 000 000)
–
(15 000 000)
–
–
–
(15 000 000)
–
–
10 189 150
10 189 150
–
–
(14 533 591)
(4 344 441)
(2 429 324)
–
–
–
55 218 265
–
452 931
1 013 189
1 466 120
10 321 511
31 000 000
Total
66 449 981
–
–
–
–
–
–
–
–
474 609 150
–
–
474 609 150
(427 310 158)
(14 130 446)
(14 533 591)
18 634 955
–
–
(2 429 324)
–
–
–
–
–
–
452 931
1 013 189
1 466 120
(12 418 044)
31 000 000
84 121 732
In resolution WHA64.3, the Health Assembly resolved to appropriate US$ 15 million to finance the
regular budget for the financial period 2012?2013.
In addition, in resolution WHA64.3, the Health Assembly decided that the Working Capital Fund
should be maintained at its existing level of US$ 31 million.
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6.2
Special Account for Servicing Costs Fund
This fund was established in order to support the costs of servicing activities financed from sources
other than the assessed contribution budget (i.e. from voluntary contributions).
The Fund is credited with revenue from the following sources:
? under resolution WHA34.17, funds are received for programme support costs from voluntary
sources and are calculated by applying a fixed percentage rate to total expenses
? administrative service agreements with other entities
? interest earned on voluntary funds as described in document EB122/3
Total
Balance as at 1 January 2012
111 183 981
Revenue
Programme support costs
Interest
Administrative service agreements with other entities
Repayment of advances (Note a)
Total revenue
111 347 786
6 872 997
4 814 538
2 154 433
125 189 754
Expenses
Global and interregional activities
Major office – Africa
Major office – Western Pacific
Major office – Europe
Major office – South?East Asia
Major office – Americas
Major office – Eastern Mediterranean
Total expenses
Less:
Increase in allowance for doubtful accounts receivables
– voluntary contributions (Note b)
Other expenses (Note c)
Balance as at 31 December 2012
36 220 150
18 524 026
3 611 480
8 398 337
4 986 292
3 460 154
7 398 613
82 599 052
892 080
2 755 772
150 126 831
Note a. In 2011, advances were given for administrative services to the UNICEF/UNDP/World Bank/WHO Special Programme for Research
and Training in Tropical Diseases and the WHO Framework Convention on Tobacco Control for a total of US$ 3.80 million (US$ 3.22 million
and US$ 0.54 million respectively). Half the advance to the Special Programme was repaid in 2012 (US$ 1.61 million); in addition, the
advance to the WHO Framework Convention on Tobacco Control was repaid in 2012 (US$ 0.54) for a total of US$ 2.20 million.
Note b. The increase in the allowance for doubtful accounts receivable for voluntary contributions is US$ 0.9 million (from US$ 10.1 million
as at 31 December 2011 to US$ 11.0 million as at 31 December 2012). Refer to Note 4.3 for details of the balance of accounts receivable
and the allowance.
Note c. At the end of 2011, a balance of US$ 5.8 million was credited to the Special Account for Servicing Costs Fund and is included in the
opening fund balance for 2012. An amount of US$ 2.8 million was required to cover expenses from this balance and is reported in the
Statement of Financial Performance.
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6.3
Real Estate Fund
This fund was established by the Health Assembly in resolution WHA23.14. The Fund is used to meet
the cost of construction of buildings or extensions to existing buildings, the acquisition of land that
may be required, and major repairs and alterations to WHO’s existing office buildings and residences
leased to staff by the Organization. Specific Health Assembly authorization is required for acquisition
of land and construction of buildings or building extensions.
Total
Balance as at 1 January 2012
18 120 580
Revenue
Rents collected
Other revenue
In?kind revenue
Total revenue
11 761 021
198 754
7 752 917
19 712 692
Expenses
In?kind expenses
Major office – headquarters
Major office – Africa
Major office – Eastern Mediterranean
Major office – Europe
Total expenses
Balance as at 31 December 2012
7 752 917
8 229 995
1 306 540
1 486 211
(37 991)
18 737 672
19 095 600
In-kind revenue and expenses represents contributions from Member States for donated office space.
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7.
Comparison of budget and actual amounts
In May 2011, the Health Assembly adopted resolution WHA64.3, the appropriation resolution for the
financial period 2012–2013, in which it noted the total effective budget of US$ 3959 million. WHO’s
budget is adopted on a biennial basis by the Health Assembly. There have been no revisions made to
the Programme budget 2012–2013. As the Organization’s methodology is based on a results-based
framework the approved programme budget is measured on expenses incurred during the programme
budget period.
WHO’s budget and financial statements are prepared using different accounting bases. The Statement
of Financial Position, Statement of Financial Performance, Statement of Changes in Net Assets/Equity,
and Statement of Cash Flow are prepared on a full accrual basis, whereas the budget is established on
a modified cash basis (i.e. actual expense is used to measure the budget utilization).
As per the requirements of IPSAS 24, the actual amounts presented on a comparable basis to the budget
shall, where the financial statements and the budget are not prepared on a comparable basis, be
reconciled to the actual amounts presented in the financial statements, identifying separately any basis,
timing, presentation and entity differences. The General Fund, as per Note 2.17, represents the
programme budget results, except for the Tax Equalization Fund expense, other non-programme budget
utilization and all in-kind/in-service expenses which are not included in the programme budget results.
Explanations of material differences between the final budget and the actual amounts are available in
document A66/5,which describes the implementation of the Programme budget 2012–2013 and the
results achieved.
As required by IPSAS 24, a reconciliation is provided on a comparable basis between the actual
amounts as presented in Statement V and the actual amounts in the financial accounts identifying
separately any basis, timing, entity and presentation differences.
Basis differences occur when the components of the approved programme budget are used for activities
other than the implementation of technical programmes such as the Tax Equalization Fund expense, inkind/in-service expenses, other non-programme budget utilization and other common fund activities.
Timing differences represent the inclusion in WHO’s financial accounts programme budget expenses
in other financial periods.
Entity differences represent the inclusion in WHO’s financial accounts of the Member States – other
and the Fiduciary Fund which do not form part of the Organization’s programme budget.
Presentation differences are summarized under the headings “Operating”, “Investing” and “Financing”,
consistent with Statement IV: Statement of Cash Flow. The amount reflected for presentation
differences under the heading operating reflects cash flows from operations and also revenue that is
not included in the programme budget or in Statement V.
A reconciliation between the actual amounts on a comparable basis in the Statement of Comparison of
Budget and Actual Amounts (Statement V) and the actual amounts in the Statement of Cash Flow
(Statement IV) for the year 2012 is presented below.
Operating
Actual amount on a comparable basis (Statement V)
Basis differences
Timing differences
Entity differences
Presentation differences
Actual amount in the Statement of Cash Flow (Statement IV)
Investing
Financing
(1 693 680 363)
Total
(1 693 680 363)
66 182 084
66 182 084
125 153 581
125 153 581
194 947 377
194 947 377
1 483 592 248
365 459 934
(812 973)
1 848 239 209
176 194 927
365 459 934
(812 973)
540 841 888
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8.
Segment reporting
8.1
Statement of Financial Position by segments
As at 31 December 2012 (In US dollars)
HQ
AFRO
AMRO
EMRO
SEARO
WPRO
1 531 029
–
261 312
276 767
–
13 556
–
2 082 664
7 799 091
–
79 687
850 548
5 167 235
249 262
–
14 145 823
5 596 234
–
17 975
1 812 071
4 127 236
127 311
–
11 680 827
1 184 358 416
1 369 531 140
695 054 637
12 263 937
67 458 323
1 299 838
12 191 472
3 342 157 763
–
–
–
–
–
33 503 910
–
–
13 556
–
13 556
2 096 220
–
–
208 809
–
208 809
14 354 632
–
–
79 722
–
79 722
11 760 549
210 277 136
266 323 581
309 148
41 180 878
518 090 743
3 860 248 506
–
–
–
–
–
–
153 282 363
–
153 282 363
30 000
6 713 885
490 353
5 948 177
–
–
1 391 998 471
–
1 405 180 886
39 596
1 103 480
300 794
4 781 943
–
–
519 804 214
–
526 030 027
–
1 605 293
254 778
4 720 011
–
–
886 858 517
–
893 438 599
–
1 802 332
239 999
4 871 197
–
–
636 848 433
–
643 761 961
86 329 879
24 983 899
4 366 015
71 735 099
317 034 710
21 403 427
41 442 241
989 810 138
1 557 105 408
–
–
–
–
153 282 363
–
52 304 658
–
52 304 658
1 457 485 544
–
67 402 316
–
67 402 316
593 432 343
–
62 794 570
–
62 794 570
956 233 169
–
54 300 626
–
54 300 626
698 062 587
21 912 231
911 532 131
210 277 136
1 143 721 498
2 700 826 906
(198 103 144)
(156 306 242)
(6 564 944)
(155 534)
(361 129 864)
(212 772 306)
(1 052 384 059)
(158 650 094)
(175 175)
(1 423 981 634)
(154 366 711)
(353 097 607)
(83 777 961)
(93 844)
(591 336 123)
(242 862 763)
(623 092 360)
(75 620 101)
(303 313)
(941 878 537)
(188 160 747)
(411 982 949)
(86 005 628)
(152 714)
(686 302 038)
84 121 732
1 642 008 469
(715 185 725)
148 477 124
1 159 421 600
(207 847 501)
33 503 910
2 096 220
14 354 632
11 760 549
3 860 248 506
ASSETS
Current assets
Cash and cash equivalents
Short?term investments
Accounts receivable – net current
Staff receivables
Inventories
Prepayments
Other current assets
Total current assets
1 116 915 824
1 369 531 140
693 609 422
6 458 299
46 980 604
288 075
220 829 413
3 454 612 777
29 126 359
–
202 436
2 291 139
1 737 695
621 634
–
33 979 263
–
–
790 440
–
–
–
(208 637 941)
(207 847 501)
23 389 879
–
93 365
575 113
9 445 553
–
–
33 503 910
Non?current assets
Accounts receivable – net non?current
Long?term investments
Deposits
Property, plant and equipment – net
Total non?current assets
TOTAL ASSETS
210 277 136
266 323 581
–
41 180 878
517 781 595
3 972 394 372
–
–
7 061
–
7 061
33 986 324
–
–
–
–
–
(207 847 501)
86 260 283
8 267 051
2 053 609
33 898 313
317 034 710
21 403 427
(6 145 253 941)
989 810 138
(4 686 526 410)
–
5 491 858
1 026 482
17 515 458
–
–
2 597 904 184
–
2 621 937 982
21 912 231
531 450 309
210 277 136
763 639 676
(3 922 886 734)
–
143 279 652
–
143 279 652
2 765 217 634
NET ASSETS/EQUITY
Member States – regular budget
Voluntary funds
Member States – other
Fiduciary Fund
TOTAL NET ASSETS/EQUITY
1 585 632 246
6 293 590 325
(133 631 063)
149 689 598
7 895 281 106
(505 244 843)
(2 054 718 639)
(170 935 934)
(331 894)
(2 731 231 310)
TOTAL LIABILITIES AND NET ASSETS/EQUITY
3 972 394 372
33 986 324
LIABILITIES
Current liabilities
Contributions received in advance
Accounts payable
Staff payables
Accrued staff benefits – current
Deferred revenue
Financial liabilities
Other current liabilities
Inter?entity liabilities
Total current liabilities
Non?current liabilities
Long?term borrowings
Accrued staff benefits – non?current
Deferred revenue – non?current
Total non?current liabilities
TOTAL LIABILITIES
EURO
Total
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8.2
Statement of Financial Performance by segments
For the year ended 31 December 2012
(In US dollars)
HQ
Revenue
Member States’ assessed contributions
AFRO
AMRO
EMRO
EURO
SEARO
WPRO
Total
474 609 150
–
–
–
–
–
–
474 609 150
(3 321 404)
–
–
–
–
–
–
(3 321 404)
1 636 499 031
–
–
–
53 784
–
–
1 636 552 815
Voluntary contributions in?kind and in?service
66 468 439
–
–
–
–
–
–
66 468 439
Reimbursable procurement
62 459 972
–
–
–
–
–
–
62 459 972
Other operating revenue
19 575 827
(2 048 012)
(2 523 719)
118 424
(982 044)
124 652
(283 351)
13 981 777
Finance revenue
40 847 428
1 030 453
–
(312 087)
868 486
146 667
535 098
43 116 045
2 297 138 443
(1 017 559)
(2 523 719)
(193 663)
(59 774)
271 319
251 747
2 293 866 794
Staff and other personnel costs
428 546 875
198 982 466
31 684 610
73 429 444
67 212 218
52 527 982
60 055 776
912 439 371
Medical supplies and materials
51 075 029
20 746 170
1 312 499
88 411 209
407 463
31 175 446
6 440 125
199 567 941
123 193 758
36 681 993
16 348 551
57 109 511
19 098 700
47 205 777
25 007 238
324 645 528
5 519 692
102 569 581
1 036 114
77 813 236
521 924
15 027 864
13 401 391
215 889 802
Travel
64 872 279
38 165 935
4 264 714
13 515 490
10 022 613
11 396 652
10 532 803
152 770 486
General operating expenses
59 880 425
117 058 512
2 625 102
29 659 314
9 373 523
9 953 751
7 104 352
235 654 979
Equipment, vehicles and furniture
4 003 296
10 252 336
2 498 562
7 787 485
1 061 174
2 714 294
3 708 377
32 025 524
Depreciation and amortization
1 116 199
–
–
–
–
–
–
1 116 199
Increase in allowance for doubtful accounts receivable
Voluntary contributions
Total revenue
Expenses
Contractual services
Transfers and grants to counterparts
Finance costs
6 809 645
665 966
–
(2 120 649)
157 128
(116 606)
458 091
5 853 575
Total expenses
745 017 198
525 122 959
59 770 152
345 605 040
107 854 743
169 885 160
126 708 153
2 079 963 405
1 552 121 245
(526 140 518)
(62 293 871)
(345 798 703)
(107 914 517)
(169 613 841)
(126 456 406)
213 903 389
TOTAL SURPLUS/(DEFICIT) FOR THE YEAR
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9.
Administrative waivers, amounts written-off and ex-gratia payments
During 2012, three administrative waivers were approved. At the Regional Office for the South-East
Asia, an amount of US$ 3550 relating to a direct financial cooperation granted in the biennium 2006?
2007 to the Municipal Corporation, Patna (Bihar State), India was deemed impossible to recover.
Furthermore, at the Regional Office for South-East Asia, an amount of US$ 18 723 relating to two
grants for a direct financial cooperation granted in the biennium 2008?2009 to the Director of Health
Services (Maharashtra State), India, was deemed impossible to recover.
During 2012, a total of US$ 2250 was approved for write-off. This balance related to the bankruptcy
of a bank in the Democratic Republic of the Congo.
No ex-gratia payments were made in 2012.
10.
Related party and other senior management disclosures
Staff members considered to be “key management personnel” are the Director-General, regional
directors and all other ungraded staff.
The table below details the number of key management personnel who held these positions over the
course of the year as well as the aggregate remuneration.
Key management personnel
Number of individuals
Compensation and post adjustment
Entitlements
19
4 549 493
605 607
Pension and health plans
1 144 135
Total remuneration
6 299 235
Outstanding advances against entitlements
Outstanding loans (in addition to normal entitlements, if any)
170 796
–
The aggregate remuneration paid to key management personnel includes: net salaries, post adjustment,
entitlements such as representation allowance and other allowances, assignment and other grants,
rental subsidy, personal effect shipment costs, and employer pension and current health insurance
contributions.
Key management personnel are also qualified for post-employment benefits at the same level as other
employees. These benefits cannot be reliably quantified. Key management personnel are ordinary
members of the United Nations Joint Staff Pension Fund.
The Regional Director for the Americas is included among the key management personnel. However,
as the Regional Director is receiving all entitlements and benefits from PAHO, those entitlements and
benefits are disclosed in PAHO’s financial statements and not in the Organization’s financial
statements.
During the year, no loans were granted to key management personnel beyond those widely available to
staff outside this grouping.
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11.
Events after the reporting date
WHO’s reporting date is 31 December 2012. On the date of the signing of these accounts, no material
events, favourable or unfavourable, had been incurred between the balance sheet date and the date
when the financial statements were authorized for issue that would have had an impact on the financial
statements.
12.
Contingent liabilities, commitments and contingent assets
Contingent liabilities
As at 31 December 2012, WHO had a number of pending legal cases. Most involve disputes that are
not recorded because the likelihood of repayment has been determined to be remote. However, there
are four cases involving contractual disputes which are to be considered contingent liabilities. The
total potential cost to the Organization is estimated at US$ 95 000.
Operating leases commitments
WHO enters into operating lease arrangements for renting office space in various country offices.
Future minimum lease rental payments for the following periods are:
Total
Under 1 year
3 319 313
1–5 years
5 183 137
Beyond 5 years
Total property lease commitments
3 838 114
12 340 564
The Organization has no outstanding leases qualifying as finance leases at the reporting date.
WHO leased office space to six tenants. Total revenue from the leasing activities was US$ 1.2 million
in 2012. Current lease agreements are renewable on a yearly basis.
Contingent assets
In accordance with IPSAS 19, contingent assets will be disclosed for cases where an event will give
rise to a probable inflow of economic benefits. As at 31 December 2012, there are no material
contingent assets to disclose.
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Schedule I. Statement of Financial Performance by major funds
For the year ended 31 December 2012
(In US dollars)
General Fund
Member
States –
regular budget
Voluntary
funds
Member States – other
Eliminations
Common
Fund
Subtotal
Enterprise
Fund
Fiduciary Fund
Special
Purpose Fund
Fiduciary
Fund
Subtotal
Eliminations
Total
Percentage
Revenue
Member States’ assessed contributions
Increase in allowance for doubtful
accounts receivable
Voluntary contributions
Voluntary contributions in?kind and in?
service
Reimbursable procurement
Other operating revenue
Finance revenue
Total operating revenue
474 609 150
–
(2 429 324)
(892 080)
– 1 542 409 490
–
–
474 609 150
–
–
–
(3 321 404)
–
–
–
–
–
(3 019 363) 1 539 390 127
–
–
170 277
97 352 898
97 523 175
–
–
7 752 917
2 318 919
10 071 836
–
–
62 459 972
–
62 459 972
3%
187 678 222 (151 704 433)
13 981 777
1%
56 396 603
–
–
–
–
–
62 459 972
–
–
88 342 586 (111 347 787)
(21 992 012)
(427 526)
7 625 667
155 429 301
25 050 780
8 297 359
24 901 835
–
9 591 953
324 898
473 645 946 1 694 101 027 (114 367 150) 2 053 379 823
24 474 309
70 085 639
172 944 448
125 047 495
–
1 013 189
452 931
7 844 428
?
56 396 603
–
–
34 818 686
–
474 609 150
–
(3 321 404)
0%
(360 487) 1 636 552 815
71%
–
66 468 439
21%
3%
43 116 045
2%
392 551 891 (152 064 920) 2 293 866 794
100%
Expenses
Staff and other personnel costs
376 925 451
524 440 866
–
901 366 317
–
5 003 291
132 331 343
25 215 712
912 439 371
44%
Medical supplies and materials
2 582 925
102 616 357
–
105 199 282
(3 309 093)
57 740 196
786 363
39 151 193
94 368 659
–
199 567 941
10%
Contractual services
25 877 392
275 153 896
–
301 031 288
–
976 838
11 852 553
11 582 444
24 411 835
(797 595)
324 645 528
16%
Transfers and grants to counterparts
10 775 490
203 284 230
(265 487)
213 794 233
–
2 971
147 572
4 906 423
5 056 966
(2 961 397)
215 889 802
10%
Travel
14 193 397
130 495 695
–
144 689 092
–
111 522
2 131 345
5 875 099
8 117 966
(36 572)
152 770 486
7%
General operating expenses
20 924 129
273 521 484 (104 217 598)
190 228 015
–
4 496 822
39 620 846
7 985 422
52 103 090
(6 676 126)
235 654 979
11%
2 462 895
30 356
3 682 828
(3)
32 025 524
2%
0%
Equipment, vehicles and furniture
162 550 346 (151 477 292)
4 695 411
23 647 288
–
28 342 699
(656 421)
1 845 998
Depreciation and amortization
–
–
–
–
1 116 199
–
–
–
1 116 199
–
1 116 199
Finance costs
–
–
–
–
3 214 417
–
2 638 987
171
5 853 575
–
5 853 575
0%
455 974 195 1 533 159 816 (104 483 085) 1 884 650 926
365 102
70 177 638
191 971 904
94 746 820
357 261 464 (161 948 985) 2 079 963 405
100%
Total expenses
TOTAL SURPLUS/(DEFICIT) FOR THE YEAR
Fund balance – 1 January 2012
Reversal of IPSAS opening adjustment
(unrealized exchange gain)
Fund balance – 31 December 2012
17 671 751
160 941 211
66 449 981 1 481 067 258
84 121 732 1 642 008 469
(9 884 065)
168 728 897
1 547 517 239
24 109 207
60 719 598
(91 999) (19 027 456)
9 669 958 (813 415 939)
30 300 675
35 290 427
118 176 449 (624 849 934)
9 884 065
–
213 903 389
922 667 305
(9 884 065) 1 716 246 136
22 850 906
107 679 711
9 577 959 (832 443 395)
22 850 906
148 477 124 (566 708 601)
22 850 906
9 884 065 1 159 421 600
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Schedule II. General Fund expenses
For the year ended 31 December 2012
(In US dollars)
2012–2013 Programme budget utilization
Previous bienniums
Assessed
contributions
Voluntary funds
Total from
2012–2013
1 Communicable diseases
38 498 161
575 493 453
613 991 614
2 HIV/AIDS, tuberculosis and malaria
20 276 392
161 438 849
181 715 241
3 Chronic noncommunicable conditions
18 507 378
28 929 341
47 436 719
641 939
4 Child, adolescent, maternal, sexual and reproductive
health, and ageing
22 571 334
75 077 914
97 649 248
601 404
6 917 441
137 245 329
144 162 770
128 306
14 113 623
30 670 012
44 783 635
558 711
9 173 408
7 671 837
16 845 245
16 127 580
22 727 108
9 831 370
10 Health systems and services
11 Medical products and technologies
Strategic objectives
5 Emergencies and disasters
6 Risk factors for health
7 Social and economic determinants of health
8 Healthier environment
9 Nutrition, food safety and food security
12 WHO leadership, governance, and partnerships
13 Enabling and support functions
Total
Basis differences
Assessed
contributions
General Fund total
Voluntary
funds
Total from
2012–2013
Assessed
contributions
Voluntary funds
General Fund
total expenses
733 712
37 601 247
1 029 796
18 330 581
38 334 959
39 231 873
613 094 700
652 326 573
19 360 377
21 306 188
179 769 430
1 189 587
201 075 618
1 831 526
19 149 318
30 118 928
49 268 246
5 980 142
6 581 546
23 172 739
81 058 056
104 230 795
26 382 358
26 510 664
7 045 747
163 627 687
170 673 434
2 093 516
2 652 227
14 672 333
32 763 528
47 435 861
256 912
1 122 547
1 379 459
9 430 320
8 794 384
18 224 704
38 854 688
641 121
1 745 062
2 386 183
16 768 700
24 472 170
41 240 870
17 323 195
27 154 565
257 894
1 062 505
1 320 399
10 089 264
18 385 700
28 474 964
59 532 725
75 314 729
134 847 454
2 728 472
6 877 924
9 606 396
62 261 197
82 192 653
144 453 850
12 820 818
49 089 111
61 909 929
513 582
2 327 560
2 841 142
13 334 400
51 416 671
64 751 071
101 335 638
22 990 016
124 325 654
1 015 246
299 262
1 314 508
102 350 884
23 289 278
125 640 162
6 010 844
11 034 195
102 626 633
68 411 163
171 037 796
111 023 135 125 153 581
441 439 596
1 377 394 348
1 818 833 944
97 603 282
62 400 319
160 003 601
5 023 351
427 309 150
1 266 371 213
1 693 680 363
14 130 446
44 681 506
Tax Equalization Fund expenses
14 533 591
Other non?programme budget utilization
6 601 885
Total basis differences
Total expenses – General Fund
In?kind/in?service expenses
65 816 982
1 884 650 926
The balance for General Fund expenses includes US$ 62 million of the approved programme budget allocation of US$ 138 million for the Post Occupancy Charge Fund, which is transferred to the Special
Purpose Fund to finance additional enabling and support functions under strategic objective 13bis.
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Schedule III. Programme budget utilization 2012?2013 ? assessed contributions
For the year ended 31 December 2012
(In US dollars)
Contingency
Remaining balance withholding Note (a)
Balance after
contingency
withholding
Percentage
implementation
excluding contingency
withholding
Programme budget
Programme budget
utilization
1 Communicable diseases
79 186 000
38 498 161
40 687 839
3 169 000
37 518 839
49%
2 HIV/AIDS, tuberculosis and malaria
45 634 000
20 276 392
25 357 608
1 844 000
23 513 608
44%
3 Chronic noncommunicable conditions
44 809 000
18 507 378
26 301 622
1 820 000
24 481 622
41%
4 Child, adolescent, maternal, sexual and
reproductive health, and ageing
55 754 000
22 571 334
33 182 666
2 348 000
30 834 666
40%
5 Emergencies and disasters
18 568 000
6 917 441
11 650 559
736 000
10 914 559
37%
6 Risk factors for health
37 731 000
14 113 623
23 617 377
1 584 000
22 033 377
37%
7 Social and economic determinants of health
18 753 000
9 173 408
9 579 592
767 000
8 812 592
49%
8 Healthier environment
32 507 000
16 127 580
16 379 420
1 314 000
15 065 420
50%
9 Nutrition, food safety and food security
22 359 000
9 831 370
12 527 630
894 000
11 633 630
44%
145 421 000
59 532 725
85 888 275
5 987 000
79 901 275
41%
30 751 000
12 820 818
17 930 182
1 234 000
16 696 182
42%
12 WHO leadership, governance, and partnerships
202 410 000
101 335 638
101 074 362
3 354 000
97 720 362
50%
13 Enabling and support functions
209 957 000
97 603 282
112 353 718
3 264 000
109 089 718
46%
943 840 000
427 309 150
516 530 850
28 315 000
488 215 850
45%
Strategic objectives
10 Health systems and services
11 Medical products and technologies
Total
Note a. Contingency withholding represents a budget reduction for non?payment of Member States’ assessed contributions.
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Page 70
Schedule IV. Programme budget utilization 2012?2013 – voluntary contributions
For the year ended 31 December 2012
(In US dollars)
Programme budget
Strategic objectives
1 Communicable diseases
2 HIV/AIDS, tuberculosis and malaria
3 Chronic noncommunicable conditions
Percentage
implementation
1 198 944 000
575 493 453
623 450 547
48%
494 664 000
161 438 849
333 225 151
33%
68 954 000
28 929 341
40 024 659
42%
4 Child, adolescent, maternal, sexual and reproductive health, and ageing
162 552 000
75 077 914
87 474 086
46%
5 Emergencies and disasters
363 460 000
137 245 329
226 214 671
38%
6 Risk factors for health
84 524 000
30 670 012
53 853 988
36%
7 Social and economic determinants of health
24 036 000
7 671 837
16 364 163
32%
8 Healthier environment
54 318 000
22 727 108
31 590 892
42%
9 Nutrition, food safety and food security
32 539 000
17 323 195
15 215 805
53%
10 Health systems and services
202 672 000
75 314 729
127 357 271
37%
11 Medical products and technologies
106 532 000
49 089 111
57 442 889
46%
12 WHO leadership, governance, and partnerships
13 Enabling and support functions
Total
Programme budget
utilization
Remaining balance
55 160 000
22 990 016
32 169 984
42%
166 784 000
62 400 319
104 383 681
37%
3 015 139 000
1 266 371 213
1 748 767 787
42%
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Schedule V. Expenses by major office ? General Fund only
For the year ended 31 December 2012
(In US dollars)
HQ
Expenses
Staff and other personnel costs
Medical supplies and materials
Contractual services
Transfers and grants to counterparts
AFRO
419 654 257
AMRO
195 530 085
EMRO
34 273 954
EURO
73 466 386
SEARO
65 139 657
WPRO
53 037 062
Total
60 264 916
901 366 317
14 590 313
21 018 864
1 311 874
33 480 261
405 800
30 426 074
3 966 096
105 199 282
104 083 874
34 483 399
15 801 829
57 087 599
18 725 859
46 415 296
24 433 432
301 031 288
3 424 123
102 569 581
1 036 114
77 813 236
521 924
15 027 864
13 401 391
213 794 233
Travel
58 245 137
37 121 003
4 173 900
13 416 129
10 012 496
11 196 660
10 523 767
144 689 092
General operating expenses
27 847 455
113 732 840
2 046 643
26 962 469
4 902 974
9 101 608
5 634 026
190 228 015
4 419 553
8 584 953
2 498 562
7 269 933
1 059 720
2 413 073
2 096 905
28 342 699
632 264 712
513 040 725
61 142 876
289 496 013
100 768 430
167 617 637
120 320 533
1 884 650 926
Equipment, vehicles and furniture
Total expenses
Percentage of expenses by expense type across major office
Staff and other personnel costs
47%
22%
4%
8%
7%
6%
7%
100%
Medical supplies and materials
14%
20%
1%
32%
0%
29%
4%
100%
Contractual services
35%
11%
5%
19%
6%
15%
8%
100%
Transfers and grants to counterparts
2%
48%
0%
36%
0%
7%
6%
100%
Travel
40%
26%
3%
9%
7%
8%
7%
100%
General operating expenses
15%
60%
1%
14%
3%
5%
3%
100%
Equipment, vehicles and furniture
16%
30%
9%
26%
4%
9%
7%
100%
34%
27%
3%
15%
5%
9%
6%
100%
66%
38%
56%
25%
Total percentage
Percentage of expenses by expense type within each major office
Staff and other personnel costs
Medical supplies and materials
65%
32%
50%
48%
2%
4%
2%
12%
0%
18%
3%
6%
16%
7%
26%
20%
19%
28%
20%
16%
Transfers and grants to counterparts
1%
20%
2%
27%
1%
9%
11%
11%
Travel
9%
7%
7%
5%
10%
7%
9%
8%
General operating expenses
4%
22%
3%
9%
5%
5%
5%
10%
Equipment, vehicles and furniture
1%
2%
4%
3%
1%
1%
2%
2%
100%
100%
100%
100%
100%
100%
100%
100%
Contractual services
Total percentage
Cover by WHO/GRA Graphic Design and Layout
7.89 12%
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14858850.488 5.69
2%
$$$$$$$$$$$$$$$$$$$$$$$
4685.5456 2.36 45%
$$$$$$$$$$$$$$$$$$$$$$$
4654654.65465 5.89 0.2%
$$$$$$$$$$$$$$$$$$$$$$$
154654.11 7.26
5%
$$$$$$$$$$$$$$$$$$$$$$$
321654.54616
5.6
1%
$$$$$$$$$$$$$$$$$$$$$$$
5646987.65465
1.2 12%
$$$$$$$$$$$$$$$$$$$$$$$
654654.654
2.3 23%
$$$$$$$$$$$$$$$$$$$$$$$
1494519.48598 5.98
2%
$$$$$$$$$$$$$$$$$$$$$$$
48949.56 7.23
6%
$$$$$$$$$$$$$$$$$$$$$$$
4156654. 6.25 1.3%
$$$$$$$$$$$$$$$$$$$$$$$
A66/29*
SIXTY-SIXTH WORLD HEALTH ASSEMBLY
Provisional agenda item 21.1
15 April 2013
Financial Report
and Audited Financial
Statements
7.89 12%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
1534651.156
1.2
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
14858850.488 5.69
2%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
4685.5456 2.36 45%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
14654654654.65465 5.89 0.2%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
154654.11 7.26
5%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
321654.54616
5.6
1%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
45646987.65465
1.2 12%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
654654.654
2.3 23%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
81494519.48598 5.98
2%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
48949.56 7.23
6%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
4156654. 6.25 1.3%
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
for the year ended
31 December 2012
* Information on voluntary contributions by fund and by contributor for the year
ended 31 December 2012 is contained in the Annex (document A66/29 Add.1).
doc_148633134.pdf