Terms of Reference for the Finance Committee
Confirmed by the Council - June 2005
Updated - June 2007
Updated - June 2014
Established : 1953
Duration : Unspecified
The Finance Committee acts under the overall direction of the WCO Council with administrative support provided by the WCO Secretariat. Its role and responsibility is to provide support and advice to the Policy Commission and Council in budgetary and financial matters.
A specific responsibility of the Finance Committee, as described in the Financial Rules adopted by the Council, is to examine the estimates of all of the Organization’s resources and uses for the following financial year and prepare a report to the Council thereon. The estimates shall include an estimated Profit and Loss Account, a statement on cash flow and an estimated Balance Sheet. They shall cover all operations envisaged for the financial year concerned.
As described in Rule 28 of the Rules of Procedure of the Customs Co-operation Council, the Council each year invites nineteen Members each to nominate a delegate to serve on the Finance Committee.
The seats on the Finance Committee are allocated on a regional basis from among the active Members in the region, in accordance with the following distribution :
|Europe||: 8 seats
|North of Africa, Near and Middle East
||: 1 seats
|East and Southern Africa
||: 1 seats
|West and Central Africa
||: 1 seats
|South America, North America, Central America and the Caribbean
||: 4 seats
|Far East, South and South East Asia, Australasia and the Pacific Islands
||: 4 seats
Within the allocation specified above, the two Members paying the highest contributions to the budget of the Organization as shown in the Financial Decision adopted by the Council for the following financial year, shall be members of the Finance Committee.
Regions that are allocated a single seat on the Finance Committee shall arrange for a Member from their region to attend Finance Committee meetings as an alternate if the designated Member is unable to attend.
The Chairperson of the Audit Committee is invited to attend meetings of the Finance Committee as an observer.
3. Purpose and scope
The purpose of the Finance Committee is to perform the functions assigned to it by the Financial Rules made by the Council, as well as to examine specific financial or budgetary matters referred to it by the Council, by the Policy Commission or by the Secretary General.
In order to prepare decisions by the Policy Commission and the Council, the Finance Committee presents a financial situation report in respect of the achievement of the Strategic Plan objectives.
4. Key Deliverables
The key deliverables of the Finance Committee are to :
In respect of the previous financial year
- Examine the full Audit Report prepared by the WCO’s External Financial Auditors, together with the Secretary General’s comments thereon and, on the basis of that Report and the audited accounts for the previous financial year, to recommend if appropriate that the Council approve those accounts, accept the Secretary General’s proposals for the apportionment of the result of the Profit and Loss Account, and acquit the Secretary General of his financial responsibilities for the previous financial year.
In respect of the financial year in progress
- Consider the situation with regard to the receipt of Members’ contributions and capital subscriptions, the execution of the budget and the cash flow situation for the financial year in progress and, where appropriate, advise the Council of measures to be taken.
- Examine and, where appropriate, endorse any measures already taken during the financial year in order to apply to the WCO’s various remuneration scales any changes made in the Co-ordinated Organizations.
- Look into the financial implications of any new tasks assigned to the Secretariat and not included in the budget appropriations approved by the Council, and make recommendations to the Council concerning the financing of those tasks.
In respect of the next financial year
- Consider a provisional scale of Members’ contributions for the next financial year;
- Examine - based on the recommendations made by the Policy Commission with regard to the Programme Budget - and, as appropriate, recommend to the Council for adoption, total Members’ contributions, General Operating Expenses, an estimated Profit and Loss Account and Balance Sheet, and a Staffing Table for the next financial year.
And, in addition to the above deliverables relating specifically to the previous, current or next financial year
- Analyse the financial implications of implementing the Strategic Plan and report the assessment to the Policy Commission and the Council;
- Participate - through its Chairperson and Vice-Chairperson - in the process for selecting the External Financial Auditors;
- Consider the results of the external financial audit;
- Participate - through its Chairperson who is a member of the Audit Committee - in the planning of internal audits, and in the selection of areas to be examined in management audits;
- Analyse the WCO’s financial and budget situation on a quarterly basis, in addition to the examinations conducted at the annual session of the Committee;
- Examine and, where appropriate, make recommendations to the Council on the medium-term financial perspectives or multi-year budgeting of the Organization;
- Examine and, where appropriate, make recommendations to the Council on the Organization’s financial investments and income;
- Examine and, where appropriate, make recommendations to the Council on the production and sale of WCO publications;
- Examine and, where appropriate, make recommendations to the Council on alternative sources of funding for the Organization;
- Examine and, where appropriate, make recommendations to the Council regarding the Annual Report on the Customs Co-operation Fund;
- Examine and, where appropriate, make recommendations to the Council on the position with regard to the Organization’s capital expenditures;
- Keep WCO conditions of service under review and, where appropriate, make recommendations to the Council on amendments to the Staff Regulations and Staff Rules;
- Deal with certain specific situations envisaged by the Financial Rules of the Organization, namely :
- approving requests by the Secretary General to transfer appropriations from one Chapter to another;
- reviewing supplementary estimates submitted by the Secretary General;
- scrutinizing reports by the Secretary General on the short-term investment of monies not needed for immediate requirements;
- if necessary, directing the appointed External Financial Auditors to hold an extraordinary audit of any of the Organization’s accounts, and providing for the submission of a report on that audit.
5. Means of Operation
The Finance Committee, under its Chairperson, examines issues on the basis of documents prepared by the Secretariat. Although the Finance Committee is a “restricted membership” body, the working documents prepared for the sessions are circulated to all WCO Members for information.
The Rules of Procedure of the Customs Co-operation Council specify that the Finance Committee shall meet at such intervals as may be necessary to execute its functions. In order to deal with decisions taken by the Council without prior costing or where new programmes arise during the course of the budget year, the Finance Committee may conduct “virtual” consultations among its members using electronic means organized by the Chairperson of the Finance Committee.
The members of the Finance Committee are elected by the Council (the composition of the Committee is described under Part 2 - Membership, above). The ordinary members of the Committee are elected for a 1-year term, renewable indefinitely. The Committee Chairperson and Vice-Chairperson are also elected for a 1-year term and are eligible for reappointment but may not serve for more then four consecutive terms in their respective offices. They are elected from among the members of the Finance Committee.
Being a “restricted membership” body, the Finance Committee is not open to observers (apart from representatives of the WCO Staff Committee for matters relating to the working conditions of WCO staff). Nevertheless, in exceptional circumstances a WCO Member which is not a member of the Finance Committee may be invited to attend part of a Finance Committee session.
The External Financial Auditors appear before the Finance Committee each year to present their report and answer any questions on it. They may also be invited to participate in the discussions on specific Agenda items relevant to their financial or management audits. In addition, the Organization’s portfolio managers may be asked to appear before the Finance Committee to report on their strategy and answer questions about its implementation. From time to time, other specialists (actuaries, investment analysts, etc.) may be invited to attend part of a Finance Committee session, to provide information or advice on specific issues.
Although the Finance Committee is essentially an advisory body for the Policy Commission and Council and normally arrives at its recommendations by consensus, there are detailed provisions governing voting in the Finance Committee; these are set out in Rule 28 of the Rules of Procedure of the Customs Co-operation Council. Essentially, these provisions state that the quorum of the Committee shall be ten delegates or alternates.
6. Resources Required
The Finance Committee meets at WCO Headquarters. If required by the WCO, the Chairperson of the Finance Committee may participate in WCO regional meetings.
The WCO Secretariat is responsible for making the arrangements and preparations for the Finance Committee sessions, providing professional, administrative and technical services during the sessions, and performing follow-up tasks after the sessions. The report on its April session is drafted during the session and adopted before the close of the session.
The home administrations of the Chairperson, Vice-Chairperson and members of the Finance Committee are required to bear their own expenses (travel and accommodation). In the case of the Chairperson’s participation in WCO regional meetings, the WCO may bear part of the cost.