Dear Mr Chairperson,
Distinguished Members of the ABAF,
I would like to extend to all of you a very warm welcome to the Fifty-Sixth Session of the ABAF.
Allow me to take this opportunity to thank you, Mr Foggo and all members, once again for your very important service to the OPCW.
I am pleased to note the extension of mandates for Mr Milan Kerber, Mr Hans-Christian Mangelsdorf, Mr Anton Minaev, and Ms Yoko Sakurai.
I also wish to welcome one new member of the ABAF: Ms Lyu Xiaodong. Congratulations on your appointment.
A number of important items are on your agenda this week. These include a review of the 2023 Financial Statements for the OPCW and for the OPCW Provident Fund, a presentation by the External Auditor, the 2023 Programme Performance Report, the status of the OPCW’s 2024 financial performance to date, and the work of the Office of Internal Oversight.
You will also be provided with an update on the OPCW’s progress towards joining the United Nations Joint Staff Pension Fund, as well as the Organisation’s plans to manage the OPCW Provident Fund in-house following a decision by our external service provider to terminate its provident fund services.
As at the end of May 2024, the overall rate of cash inflows is promising compared to the previous year-to-date forecast. However, to avoid the need to draw from the Working Capital Fund, as was last required in 2022, it is important for States Parties to pay their assessed contributions for the year in a timely manner to ensure that the OPCW can meet its obligations and deliver the Organisation’s Programmes.
Although the Working Capital Fund is currently at its fully funded level of 8.1 million Euro, if needed, it can only sustain operational requirements of the OPCW for less than two months.
I am pleased to report that the audit of the OPCW’s 2023 Financial Statements was completed during April by the Comptroller and Auditor General of India and the auditors provided their opinion – free of qualifications – on 27 May, four days before the deadline defined by the Financial Rules and Regulations.
The auditors will join this meeting tomorrow to provide a presentation on their work. The Technical Secretariat appreciates their efforts to provide their opinions of the financial statements in good time.
As this ABAF Session will review past budget and financial performance, I would underline the extraordinary pressure that the Organisation has faced over the 2022-2023 biennium.
The impact of inflation affected all major lines of the OPCW’s expenditure. Staff cost increases mandated by the International Civil Service Commission, travel costs, utilities, rent and third-party services were all affected by unforeseeable inflation that significantly exceeded the expectations of the 2022-2023 Biennium Budget, with the overall budget implementation rate reaching 99%.
At the 55th Session of the ABAF, the Secretariat presented its funding requirements for the current biennium that included a very significant increase in order to ensure that the OPCW could continue to fulfil its mandates, after more than a decade of eroding purchasing power capped by the extreme inflationary impacts of 2022 and 2023.
We recognise that the significant budgetary increases subsequently approved by States Parties for the 2024-2025 biennium came at a time when governments were facing similar inflationary pressures.
The continuing strong financial support of States Parties, despite global fiscal challenges, including via substantial voluntary contributions, is a very positive signal for the OPCW and its vital mandates. It is also an encouragement for the Secretariat to redouble its efforts to deliverable its programmes with maximum efficiency.
As usual, we shall return to budgetary matters at the July Session of the ABAF, when we shall present some mid-biennium Programme and Budget adjustments and proposals.
We look forward to supporting ABAF in your important deliberations, as you prepare your advice on these and other key topics. Once again, welcome back to The Hague – both in person and virtually for this ABAF meeting. Thank you for the important contributions you make to the work of the OPCW.
Turning the floor back to you, Mr Chairperson, I wish you fruitful deliberations, and I am confident that Chris and the whole Administration team will give you all the support you may need.