Other cash management questions

(A)     Utilization of non-convertible currencies

(A1)      At its 51st session (September 1979) CCAQ discussed difficulties encountered by UNDP in using non-convertible currencies. It expressed the following views on this subject (ACC/1979/R.69, para. 33):

     (a)     During negotiations with them, recipient governments should be urged to accept such currencies under their IPFs;

     (b)     In the case of one non-convertible currency in which substantial balances had accumulated, there were considerable administrative complications in applying arrangements that would facilitate its use and, for purchases of equipment, delays in responses to invitations to tender, distant delivery dates, inadequate after-sales service and a widespread preference for equipment from other sources;

     (c)     UNDP should make use of its normal channels of communications with executing agencies (rather than special focal points) for matters relating to currency utilization;

     (d)     Voluntary third-currency payments to staff, although the organizations encouraged them, could not be expected to contribute significantly to a solution of the currency problem;

     (e)     UNDP should give further consideration to practical means of satisfying requests made in its Governing Council for data on the convertible currency costs associated with the use of accumulated non-convertible currencies;

     (f)     UNDP should also give further consideration to practical means of meeting requests for information on the use of accumulated non-convertible currencies by project component.

(A2)     At the 62nd session, in connection with the question of non-convertible payments of entitlements to staff stationed in countries whose currencies had both convertible and non-convertible forms, the organizations reaffirmed their willingness to continue existing arrangements regarding the use of UNDP holdings of non-convertible currencies to meet their local needs (ACC/1985/7, para. 39). For the general question of payments of staff entitlements as a means of utilization of non-convertible currencies, see Section 18.1.

(A3)     At the 65th session (March 1986) UNDP drew attention to a Governing Council ruling under which a minimum of 75 per cent of the value of UNDP-financed procurement contracts was payable in the currency of the country concerned, and requested the assistance of all members of the Committee in ensuring that this ruling was observed (ACC/1986/4, para. 42).

(B)     Other matters

(B1)     At the 73rd session (September 1990) CCAQ agreed that a meeting of the Treasurers of the organizations be held early in 1991. WHO had suggested that meetings of financial and budgetary specialists be held from time to time (ACC/1990/12, paras. 64, 65).

(B2)     Reviewing a report of the meeting of Treasurers (see para. (4) above) at its 74th session (March 1991), CCAQ decided that although it had been very successful, budgetary and other constraints prevented the Committee from accepting a proposal that similar meetings be convened at least every two years. However, an agenda item providing for discussion of treasury matters would be placed on the agenda of its regular sessions (ACC/1991/6, paras. 39, 40).

(B3)     At its 89th session (February 1999: ACC/1999/6, para. 42) the Committee exchanged information on the use of internal and/or external borrowing to meet cash flow problems and the extent to which such borrowing was permitted by their governing bodies or by financial rules and procedures. Organizations were requested to keep the secretariat informed of any changes proposed and/or approved.

(B4)     At its 90th session (August-September 1999: ACC/1999/14, paras. 38-40) the Committee continued its discussion at its previous session (see section 15.5, paras (1)-(3)) on potential problems arising from the Y2K "bug" with particular regard to Payroll matters. The High Level CCAQ, at its meeting in March 1999, had decided that CCAQ(FB) should, in consultation with personnel colleagues, when necessary, develop system-wide guidelines for dealing with payroll and banking matters which might arise from the Year 2000 "bug." After briefings by the Treasurer of the United Nations on a video-conference on the subject and by the Deputy Security Coordinator about the country risk analysis being undertaken and discussion of the matter, the Committee concluded that it was not appropriate for the United Nations to identify specific high risk countries but that a general policy could be recommended that paid special attention to the likely problems in non-Headquarters duty stations.

(B5)     Accordingly, with regard to Payroll matters, the Committee recommended the following: For duty stations in United States, Canada, United Kingdom, Denmark, Netherlands, France, Germany, Italy, Switzerland, Austria, Japan, Australia no special arrangements need be taken with regard to salary advances for the month of January 2000; salary payments for December should be paid earlier than usual to enable sufficient time for staff to transact any banking business before the end of 1999. In the case of Italy, one organization located in Rome indicated that for operational reasons it would most probably be providing advances to all staff in December with respect to January salary. For other duty stations, salary payments for the month of December 1999 should be paid earlier than usual to enable sufficient time for staff to transact any banking business before the end of 1999. Advances equivalent to 80% of January 2000 salaries should be provided to all locally-recruited staff. Each organization could decide for itself whether or not to provide advances for January 2000 to internationally-recruited staff. Any organization electing not to provide such advances should communicate this fact to the internationally-recruited staff sufficiently early for them to undertake their own contingency planning with regard to cash availability. In order that staff be given adequate notice of the decision, the recommendation would be communicated to CCAQ(PER) and the recommendation would be submitted on 17 September to the Chairman of the High Level CCAQ for final approval by 24 September. Organizations would be informed immediately after final approval was received.

(B6)     After discussion of other banking-related issues identified in the report of the Video Conference, participants agreed that there were sufficient variances between the requirements of different organizations to make a common system-wide policy inappropriate. Accordingly each organization would decide whether or not it wished to bring forward to 1999 purchases and payments which might otherwise have taken place in the first quarter of 2000; build up or minimize funds in certain duty stations, bearing in mind that, in the event of a disruption to local banking facilities, alternative ways of supplying cash (e.g. using courier services) might not be available; keep cash in office safes or rely on banks, bearing in mind the security issues of keeping large amounts of cash in country offices. In this regard, attention was drawn to the "best practices for banknotes," a copy of which had been posted on the CCAQ(FB) web site. It was also suggested that considerable caution should be exercised in that some banks in developing countries might be severely impacted by telecommunications or power problems in addition to the effects of failure to change to Y2K compliant software.

(B7)     At its 91st session (August-September 2000: ACC/2000/6, paras. 31-32) the Committee discussed a Note prepared by WHO on issues raised by the move to the Euro. It was decided that CCAQ(FB) and (PER) should, as soon as possible, jointly approach ICSC to request the ICSC secretariat to start publishing an equivalent Euro amount for DSA rates in "Euroland" countries. The organizations responsible for the implementation and publication of GS salary scales in "Euroland" countries should jointly agree to practical arrangements to ensure that on the occasion of the next adjustment of such salary scales, and in any event by 30 September 2001 at latest, the relevant salary scales would be expressed in Euros. The ICSC should be advised accordingly. It was also decided to request CCAQ(PER) to review the issue of education grant and dependency allowance local currency rates in "Euroland" countries and to submit its considerations and recommendations to ICSC at its session in 2001. This would allow ICSC to consider the matter and to make appropriate recommendations to the 56th session of the General Assembly in time for the promulgation of revisions to these rates by 1 January 2002. The CCAQ secretariat should also ensure that the country rates for free lance interpreters, currently expressed in local currency for Paris, Rome and Vienna, were also expressed in Euro no later than 1 January 2001. It was agreed that, until the above arrangements were in place, organizations could use for their transactions Euro equivalents of "Euroland" currencies, converted at the official conversion rates.


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