Audit and Finance Sub-committee Report to the Steering Committee

1. Audit and Finance Sub-committeeReport to the Steering Committee November 2013

2. Present Members Dorothy Manuel (Chair) via Skype Kenzo Hiroki Secretary Catharina Sahlin-Tegnander The AFSC would be in favour of increasing the number of members of the AFSC Attendance in AFSC

3. Monthly liquidity reports Monthly budget follow-up and forecasts Monthly follow-up of commitments Discussions with the Secretariat on the policy for fixed deposit of the Reserve Fund Approval of funds for the Global Dialogue Skype meetings with the Head of Finance Financial info to AFSC Chair for review and commentsMay 2013 - Nov 2013

4. Remaining issues; Hosting WAF and EAF -> Agenda item Contingency Reserve -> Request sent to the FPG – not many responses – UK responded negatively The AFSC considers a change of procedure to enable a more efficient handling of deposits of the Reserve Fund Continuous fundraising beyond 2015 is vital to ensure stable growth of GWP budget -> Agenda item AFSC Report May 2013

5. Deposit of excess liquidity including the Reserve Fund • The SC has decided that the SC Chair shall • approve all deposits • The AFSC considers a change of procedure to enable a more efficient handling; • AFSC asked that SC Chair and Secretariat to discuss a proposal for change • The Secretariat will draft a policy to be approved by the SC

6. Terms of Reference for the Audit of 2013 • No comments on the ToR. • Same as 2012 and the same audit fee • Procurement of audit 2014 • Ernst & Young has had the assignment for 5 years • The Secretariat is asked to list pros and cons procuring for new auditors as well as including Ernst and Young as a candidate for new contract • The Nomination Committee formally proposes the audit firm

7. Discussed together with the PRSC – in addition; Work Programme 2014 - 2016 • AFSC was searching for answers to; • Relations among GWPO, RWP and CWP, including the role of the Secretariat, to ensure the best performance of GWP as a whole • The expectation to CWP now and in the future • The support to the CWP – how will it be positioned and designed in the GWP system? • What should be done to enable the CWPs to increase financial sustainability? • The funding strategy in 2015 and beyond – where are the opportunities and challenges?

8. Note; 46% increase in Secretariat staff costs 2012–2014 which will give budgetary pressure in 2015- Recommendation; Prioritize recruitment in 2014 so that recruitment of some staff is decided after secured fund in 2015-2016 is confirmed Note; Regional core funds to increase by 10% in 2014 Recommendation; Remain at this (i.e. 10% increased) level in 2015 only if funding is secured Note; Some budget-lines have been based on unrealistic forecasts Recommendation; The Secretariat to examine budget-lines in order for more reliable forecasts through discussion with budget requesters Work Plan and Budget 2014

9. Budget in 2014 addressing fluctuation of revenue should be considered • (1) Single-year budget items in 2014 should be considered in order to: • avoid expenditure pressure in later years (e.g. by sharp increase of core budget) • help sustainable function of GWP networks in the future • contribute to energized actions by CWP • For example, by • Establishing earmarked fund for seed money, as a pilot case, to help CWP to draft project proposal to local donors (covering not hiring consultant but communication fee, visit to donors, etc.) • Establishing earmarked fund, as a pilot case, to help translation of GWP documents and materials into local languages • (2) Multiple revenue sources (other than bilateral donation) reflecting • diverse business models should be sought in the long run Work Plan and Budget 2014 SC Discussion, particularly on (1), is requested

10. Work Plan and Budget 2014 • As agreements with Danida, Netherlands, Switzerland and the EC Mekrou • are not yet in place the Secretariat is requested to present the confirmed • agreements by the end of March 2014 for the AFSC. • AFSC recommends the Secretariat to carefully consider; • Single-year budget items in 2014 should be considered in order to: • avoid expenditure pressure in later years (e.g. by sharp increase of core budget) • help sustainable function of GWP networks in the future • contribute to energized actions by CWP The AFSC recommends approval of the 2014 budget

11. Secretariat reported that: • Fund required to cover for an unforeseen closedown of GWPO in 2014 is increased to Euro 1,836k due to increased budget • The RF needs to be within the available equity (accumulated surplus), currently Euro 1,571k • There is no revenue item out of which fund can be used for RF to meet increased requirement of 1,836k • Deficit being Euro 265,000 • There is no imminent prospect of unforeseen closedown of GWPO in 2014 • The AFSC recommends approval of a RF of Euro 1,571k • The AFSC requests the Secretariat to propose solutions to fill the gap • If needed, Financial Partners should be consulted to find out the solution Reserve Fund 2014

12. Risk Register • Note; The forecast 2013 and the budget 2014 includes legal fees of approximately Euro 80,000 in connection with staff complaints • Recommendation; • Include this as a risk in the Risk Register and to implement mitigation activities • Lessons from past and current cases should be reflected in Risk Register. Discussion by HRSC is requested

13. Hosting West Africa, Eastern Africa, CEE, SITWA West Africa; Agreement signed between West Africa and GWPO 25 Nov. 2013 Review of procedures and financial management will be done Jan. 2014 Eastern Africa; Registered legal entity but not yet deemed capable of self hosting Central Eastern Europe; Registered legal entity and in the process of signing a “self-hosting” agreement with GWPO SITWA Project; Financial review was done in September 2013 (hosted by OMVS). Positive review with some minor recommendations for improved routines

14. STRATEGY - Not discussed as time has been spent to solve imminent issues -

15. Thank you