DRAFTING DOCUMENT

CORRECTIONS MADE DURING THE 6TH SESSION ON 22, 23 AND 24 MARCH 2004,INTERNATIONAL ORGANISATION OF VINE AND WINE

DRAFT INTERNAL RULES OF PROCEDURE

Title II : Financial regulations

Version 3

Article 29 *

Reserved *

Article 30 *

Reserved *

Title II *

Financial regulation *

Article 31 *

The objective of the Financial regulations *

Article 32 *

Budget. *

Article 33 *

Financial management *

Article 34 *

General accounting *

Article 35 *

Auditing of accounts *

Article 36 *

Approval of the accounts *

Article 37 *

Special financial provisions *

Article 38 *

Updating or revision of the Financial regulations *

Article 39 *

Annex to the Financial regulation - Agreement of the 20th of January 1965 between the Government of the French Republic and the International Office of Vine and Wine related to the International Office of Vine and Wine headquarters, privileges and immunities on the French territory (Decree n° 66-680 of 15th of September 1996) *

 

 

 

 

References to the articles of the Agreement of 3rd April 2001 are indicated in the margin between square brackets as follows: [Ag. Article ……]

Article 29

Reserved

 

 

 

 

Article 30

Reserved

 

 

 

 

Title II

Financial regulation

 

 

 

 

Article 31

The objective of the Financial regulations

 

 

 

 

 

31.1 –The financial regulations shall regulate the financial management of the International Organisation of Vine and Wine.

 

 

31.2 - The financial year shall extend over one calendar year, from the 1st of January to the 31st of December.

 

 

 

 

Article 32

Budget.

 

 

 

 

 

32.1 - The Director General shall prepare the budget, estimates for expenditure and revenue for the next budget year so that the budget is put to the vote of the General Assembly.

 

 

32.2 –The budget shall be divided into parts, chapters and sections. It shall be accompanied by such information, annexes and explanatory statements as may be requested by the General Assembly, including a statement on the main changes in comparison with the budget of the previous financial period and such further annexes or statements as the Director General deems necessary

Estimated expenditure and revenue shall be expressed in the currency which has legal tender in France.

 

 

.

 

[Ag.Article 5.5]

32.3 – The Director General shall make the necessary arrangements in order that the members of the Executive Committee have available the information and elements necessary to form an opinion one month before the date of the meeting during which the Executive Committee shall express an opinion on the budget proposals of the Director General and the amount of the members financial contributions and if necessary shall modify them before submitting them to the General Assembly.

 

 

32.4 - The Director General shall make the necessary arrangements in order that the heads of delegation representing each member at the General Assembly have available the elements necessary to form an opinion at least two weeks before the meeting of the General Assembly, during which the budget is voted , in addition to the amount of the members’ financial contributions.

 

[Ag. Article 5.1, 5.5 and 6.1]

32.5 - The General Assembly adopts the budget by a weighted qualified majority vote and fixes the amount of the financial contributions of the members following from it, from the proposals which are submitted by the Director General, taking into account the proposals formulated by the executive Committee. The budget must allow the O.I.V to execute correctly the permanent missions it is assigned and to develop its scientific activities as part of the strategic plan approved by the General Assembly. This includes fixed and variable costs which are balanced out.

 

[Ag. Article 3.3]

32.6.1 - Estimated expenditures includes fixed and variable costs which are divided up between:

  1. administration and management expenses,
  2. technical expenses,
  3. expenses related to miscellaneous publication activities and others,
  4. headquarter office rental costs and related charges,
  5. allocations for amortizations and for provisions
  6. other particular expenses.

 

 

32.6.2 Estimatedrevenues of the O.I.V, of any nature, must be clearly indicated in the budget proposals established by the Director General and shall include:

 

[Ag. Article 6.2]

a) The obligatory annual financial contribution share of each member and observer

 

 

The amount of the members financial contribution, set by the General Assembly for each financial year, shall be notified to each member by the Director General at the end of the General Assembly. He/she shall do the same concerning each observer.

 

 

 

 

 

The obligatory financial contributions shall be calculated in the currency which has legal tender in France and must be paid in this currency or in one of the currencies accepted by the Director General. The entire contribution should be paid at the beginning of each year. As of 1st of January of the following calendar year, the unpaid financial contribution or its debit balance are considered in arrears for one year.

 

 

New members must pay a contribution for the year during which they become members; it is calculated pro rata temporis, based on the actual date of membership. It is the same for the new observers.

 

 

The Director General presents regularly to the Executive Committee and the General Assembly the status of collection of the obligatory annual financial contributions.

 

 

b) Revenue from activities,

 

 

c) voluntary contributions from its members,

 

[Ag. Article 6.3]

d) Donations, allocations, subsidies, or financing of any nature coming from international or national organisations, of public, para-public or private nature.

 

 

 

 

 

 

 

[ ]

 

 

[ ]

e) – The financing provided for in letters c) and d) must be according to the following general principles:

[The conformity of this financing with OIV attributions, its scientific, technical, economic and legal activities, and its intergovernmental nature is subject to [the Steering committee appreciation] [the decision of the Executive Committee],

[The resulting financial decision is made by the Executive Committee, according to Article 7.10 of Title 1 of the present agreement]

The total amount of this revenue can not exceed 20% of the global amount of the annual financial contributions. Above this percentage, its acceptation is subject to the decision of the General Assembly, according to Article 6.10 of Title 1 of the present agreement.

 

f) Investment earnings

 

32.7 On an exceptional basis, the Director General may present supplementary budget proposals to the Executive Committee, which shall be then submitted to the General Assembly. These proposals shall be prepared in accordance with the approved format. The provisions of this regulation shall apply to the supplementary budget.

 

 

 

DE: 32.8 - At the end of the financial year mentioned above the then remaining unspent balance of appropriations retained after deducting therefrom any contributions from Member States relating to that financial year which remain unpaid plus provisions for unliquidated obligations for that financial period shall be treated as cash surplus.

Unless the General Assembly upon a proposal of the Executive Committee does not take another decision, any cash surplus in the budget at the close of any financial period shall be apportioned among Member States in proportion to the scale of assessment applicable to the period to which the surplus relates. As of 1 January following the year in which the audit of the accounts of the financial period is completed, the amount so apportioned to a Member State shall be surrendered to such Member State if its contribution for that final period has been paid in full and shall be applied to liquidate, in whole or in part, first, any arrears of assessed contributions; and secondly, assessed contributions for the calendar year following the year in which the audit is completed. Amounts apportioned but not surrendered shall be retained by the Director General until such time as the contribution for the relevant financial period is paid in full, at which time they shall be applied in the sequence set forth before."

Article 33

Financial management

 

 

 

 

 

33.1 - In voting the financial year budget, the General Assembly authorises the Director General to carry out spending and effect payments within the bounds voted.

 

 

33.2 - The Director General can make transfers within a same budget chapter, or following the favourable opinion of the Steering committee, from one to another.

 

 

33.3 - Management account, established for each financial year shall trace:

  1. Revenues: the amount of the members annual financial contributions, the subsidy from the French Republic assigned to cover rental for the headquarters of the O.I.V and the related expenses, the amount of observers financial contributions, the income from bank investments on available funds, the proceeds resulting from the activities of the OIV, and the detail of other revenues;
  2. Expenditures: administration and management expenses, miscellaneous equipment and furniture acquisition expenses, technical expenses, as the amount of allocations for amortizations and for provisions.

 

 

33.4- A reserve fund shall be created to ensure the continuation of the functioning of the OIV under exceptional circumstances.

The amount of this fund can neither exceed the amount of the annual budget, nor be less than half, corresponding to six months activity.

The Director General must obtain the OIV Steering Committee's prior agreement and the authorisation of the Executive Committee to use these funds.

When the reserve fund exceeds the sum corresponding to six months activity, it can be transferred to the revenues of a budget, subject to the General Assembly agreement upon the proposal of the Executive Committee and under the sole condition that once the withdrawal is carried out that the amount of the reserve fund is at least equal to the financial coverage corresponding to six months activity.

The reserve fund is provided as needed by deduction from available annual resources in order that the amount stays within the aforementioned limits.

DE: 33.4 – A Reserve Fund shall be established to ensure the functioning of the OIV

a) under exceptional circumstances and

b) to meet short-term liquidity problems pending receipt of assessed contributions.

The amount of this fund shall neither exceed one third of the annual budget, corresponding to 4 months of activity, nor be less than one quarter, corresponding to 3 months of activity. Member States contributions in arrears shall not be part of the Reserve Fund. The limits of the Reserve Fund shall be determined from time to time by the General Assembly.

The Director General must obtain the OIV Steering Committee’s prior agreement and the authorisation of the Executive Committee to use this fund according to item a) above.

Withdrawals under items a) and b) shall not be credited to the unpaid contributions or arrears of any Member State.

When the Reserve Fund exceeds the amount corresponding to 4 months of activity, it can be transferred to the revenues of a budget, subject to the agreement of the General Assembly upon a proposal of the Executive Committee and under the sole condition that that once the withdrawal is carried out the amount of the Reserve Fund is at least equal to the financial coverage corresponding to 3 months of activity.

By agreement of the General Assembly upon a proposal of the Executive Committee the Reserve Fund is provided by deduction from available annual resources in order that the amount stays within the aforementioned limits."

 

33.5 - The Director General can set up special accounts. He/she must, in such cases, define precisely the objective and the conditions for the establishment of each special account. He/she can, if needed, taking into consideration the objective of a special account, establish a particular financial regulation ruling the management of the account. The regulation must obtain the agreement of the Steering Committee. The Executive Committee shall be accounted for it.

 

 

33.6 - The Director General shall choose the bank or the banks where the funds of the OIV are deposited. He is authorised to invest the funds which are not necessary for the immediate running needs of the OIV, on condition that he/she uses care in selecting investments and in addressing establishments in which he/she has no vested interest. This likewise holds true for the reserve funds. The Director General accounts for the results of these investments during the presentation of the annual management accounts.

FR: The establishment of special accounts, if they are to be authorised, can only be done with non-budgetary resources such as donations, various subsidies, gifts or others. (It would therefore be appropriate not to include the revenues from these sources in the budget)

 

33.7 - The Director General sets the rules and methods to ensure the exactness and efficiency of the management. He/she shall notably:

  1. provide details concerning the commitment of expenditure procedure;
  2. lays down that any payment must be done upon the presentation of relevant documents and any other documents certifying that the services or products have actually been provided and have not been paid yet;
  3. appoint the members of the staff authorised, under his/her responsibility, to receive funds, engage expenses and carry out payments in the name of the OIV;

d) establishes an internal financial control enabling either a permanent monitoring, or a checking a posteriori of financial transactions, or both in order to ensure:

- the regularity of collection operations, deposit and use of funds and other financial resources;

- the conformity of engagements and expenses with appropriations and other financial arrangements as decided by the General Assembly;

- the rational use of OIV resources.

FR: It is essential that the Steering committee of the O.I.V have certain number of amenities and responsibilities in the day-to-day management of the organisation during the time interval between two general assemblies. To this effect, a procedure of obligatory consultation with a report submitted by the Steering committee on the choice of banks and the type of investment planned by the Director General could be set up. The funds would be deemed as being not necessary for the immediate running needs or on the options of the Director General regarding the OIV staff members authorised to receive funds, to incur expenses or to make payments. The introduction of a certain joint management between the DG and the Steering Committee would be such as to reduce the responsibilities of the person appointed in the financial management field, which is of a sensitive nature given the absence of a treasurer in the Organisation.

 

33.8 - The Director General shall fix the rules applying to acquisition of equipment, goods, facilities and supplies as well as to the realisation of works or outside services.

DE: 33.8 The Director General shall provide the rules for acquisition of equipment, goods, facilities, supply and services. Substantial purchases [exceeding ……. €] shall be made by tender. Such tenders shall be invited by advertisement."

Article 34

General accounting

 

 

 

 

 

34.1 - The Director General shall manage the general accounting for each financial year to include:

  1. the revenues and expenditures;
  2. the use of appropriations;
  3. the financial situation, in the form of a balance sheet, including:
  • the assets: fixed assets, convertible assets, disposable assets and funds to be collected;
  • the liabilities: the amount of the statutory reserve funds, provision accounts, outstanding debts, accruals and deferred income.

 

 

34.2 - The accounting system is based in the currency which has legal tender in France.

FR: In the currency which as legal tender in the country which houses the OIV headquarters

 

 

 

Article 35

Auditing of accounts

 

 

 

 

[Ag. Articles 5.5]

35.1 - The General Assembly, by a weighted qualified majority vote, shall appoint a financial auditor, upon the joint proposition of the Director General and the OIV Steering Committee, with the Executive Committee's favourable opinion. He/she is appointed for a period of three successive financial years. /. The office term is renewable.

DE: 35.1 External Auditor(s), each of whom shall be the Auditor-General (or officer holding equivalent title or otherwise qualified) of a Member State, shall be appointed by the General Assembly, in the manner decided by the General Assembly. Auditor(s) appointed may be removed only by the General Assembly. The Auditor shall be appointed for a period of four years and may be reappointed for one further period only.

 

35.2 - The auditor must have all titles and qualifications required for the achievement of his/her mission, which entails with the annual verification of the accounts with respect to the provisions of the Financial Regulations.

DE: 35.2 The audit shall be conducted in conformity with generally accepted common auditing standards and in accordance with the additional terms of reference set out in the annex to these Regulations.

 

35.3 - The auditing of accounts shall include the carrying out of inspections considered to be useful by the financial auditor, in the course of year then at the end of the year, as well on parts as on the spot, as checking the balance of the accounts for the general accounting, the consistency between the accounting entries and the bank statements, the reconciliation of entries and revenue and expenditure supporting documents.

DE: 35.3 The Auditor may make observations with respect to the efficiency of the financial procedures, the accounting system, the internal financial controls and, in general, the administration and management of the Organization.

 

35.4 - The financial auditor shall present a report on each financial year certifying that:

  • the management accounts submitted are correct and consistent with the journals and accounting records;
  • the financial operations recorded in these documents were done in agreement with the provisions of the Financial Regulations and thus, that the budgetary credits were respected;
  • the financial standing submitted correctly shows he investments and the cash in hand or deposited in the bank(s), which must correspond to the amounts mentioned on statements received from the depositaries.
  • the value taken into account in the financial position of material, furniture and other equipment shall be consistent with the inventories.

The report shall also register all observations and comments considered to be useful to be brought to the attention of the Director General, the Steering Committee, the Executive Committee or the General Assembly on the establishment and presentation of accounts.

DE: 35.4 The Auditor shall be completely independent and solely responsible for the conduct of the audit.

 

35.5 - The financial auditor's report shall be delivered to the Director General at the latest three months after the end of the financial year to which it refers. To this end, the management accounts, the financial position, and the accounting are submitted to him/her, at the latest, on March 15 following the end of the related financial year.

FR: Replace 15 March by 28 February in order to allow one month for the financial auditor to draw up and to submit his/her report.

DE: 35.5 The General Assembly may request the Auditor to perform certain specific examinations and issue separate reports on the results.

 

 

DE: 35.6 The Director-General shall provide the Auditor with the facilities required in the performance of the audit.

 

 

DE: 35.7 For the purpose of making a local or special examination or for effecting economies of audit cost, the Auditor(s) may engage the services of any national Auditor-General (or equivalent title) or commercial public auditors of known repute or any other person or firm who, in the opinion of the Auditor(s), is technically qualified.

 

 

DE: 35.8 The Auditor shall issue a report on the audit of the financial statements and relevant schedules relating to the accounts for the financial period, which shall include such information as the Auditor deems necessary with regard to matters referred to in regulation 35.3 and in the additional terms of reference.

 

 

DE: 35.9 The Director-General shall examine the financial statements and the audit reports and shall forward them through the Steering Committee through the Executive Committee to the General Assembly, with such comments as it deems appropriate."

Article 36

Approval of the accounts

 

 

 

 

[Ag. Article 10]

36.1 - The members of the Executive Committee shall have available the financial auditor's report, documents and possible background information a month before the date of the meeting at which time the Executive Committee must give its opinion on the previous financial year.

 

 

 

 

 

 

 

 

[Ag. Article 5.3.b] or [Ag. Article 5.4.b]

36.2 – Based on the report of the financial auditor and the additional information or possible background information brought by General Director, the Executive Committee shall decide, at the end of the financial year on the management accounts, the balance sheet, the assignment of the possible surplus and the final discharge (quietus) of the Director General for the management of the aforesaid financial year. Should a consensus not be reached, it is proceeded by a weighted majority vote or carried out under conditions set for elections or the removal of the Director General ].

FR: Replace "on the management account" by "yearly management account". "Should a consensus not be reached" should be deleted.

[Ag. Article 10]

36.3 - The heads of delegation representing each member at the General Assembly shall have available the financial auditor's report, documents and possible further background information a month before the date of the General Assembly meeting during which the management accounts of the previous financial year and the following financial year budget will be submitted for approval.

 

 

 

 

[Ag. Article 5.3.b] or [Ag. Article 5.4.b]

36.4 – Based on the report of the financial auditor, possible additional information, instructions or recommendations of the Executive Committee, the General Assembly, by a weighted qualified majority vote [ in the] or [ carried out under the conditions set for the election or the removal of the Director General ] shall approve the management accounts, the balance sheet, the propositions of appropriation of the possible surplus and discharge (give quietus to) the Director General, before voting the following financial year budget.

 

Article 37

Special financial provisions

 

 

 

 

 

37.1 - The Director General can delegate, under his/her responsibility, other members of the personnel of the OIV, all or in part the powers he/she holds, if he/she considers that this measure is necessary for the carrying out of the Financial Regulations. On the other hand, these members can not sub-delegate the powers received from the Director General.

 

 

37.2 - In the event of a change in the Director General position, and to ensure the continuity of the financial management of the OIV, the transfer of related instructions between the exiting Director General and the new Director General shall be carried out. A provisional status of the management account and balance sheet at the date of the taking up of the Director General, shall be established when this date does not correspond to the end of the financial year. This statement shall be co-signed by each party, which is addressed for information purposes to the Steering Committee of the O.I.V and kept in the accounting files of the O.I.V.

 

Article 38

Updating or revision of the Financial regulations

 

 

 

 

 

The Financial regulations can be updated or revised, according to the needs or changes in the regulations and legislation applicable by the General Assembly under conditions provided in the Agreement of the 3rd April 2001.

The propositions of updating or revision shall be submitted to the General Assembly by the Executive Committee which can be referred to by the Director General, the Steering Committee, or a member of the Executive Committee.

 

FR: Paragraph 2, replace "which can be referred to" by "which can be referred to, where relevant"

in order to reflect the obligatory referral of the Executive Committee in the present case.

 

 

DE: Annex to the Financial Regulations

Additional terms of reference governing the audit

1. The Auditor shall perform such audit of the accounts, including all trust funds and special accounts, as it deems necessary in order to satisfy itself:

(a) That the financial statements are in accord with the books and records of the Organization;

(b) That the financial transactions reflected in the statements have been in accordance with the financial rules and regulations, the budgetary provisions and other applicable directives;

(c) That the securities and moneys on deposit and on hand have been verified by certificates received direct from the Organization’s depositaries or by actual count;

(d) That the internal controls, including internal oversight, are adequate in the light of the extent of reliance placed thereupon.

2. The Auditor shall be the sole judge as to the acceptance in whole or in part of certifications and representations by the Director-General and may proceed to such detailed examination and verification as it chooses of all financial records, including those relating to supplies and equipment.

3. The Auditor and its staff shall have free access at all convenient times to all books, records and other documentation which are, in the opinion of the Auditor, necessary for the performance of the audit. Information which is classified as privileged and which the Director-General (or a designated senior official) agrees is required by the Auditor for the purposes of the audit and information classified as confidential shall be made available on application. The Auditor and its staff shall respect the privileged and confidential nature of any information so classified which has been made available and shall not make use of it except in direct connection with the performance of the audit. The Auditor may draw the attention of the the Steering Committee, the Executive Committee and the General Assembly to any denial of information classified as privileged which, in its opinion, was required for the purpose of the audit.

4. The Auditor shall have no power to disallow items in the accounts but shall draw the attention of the Director-General, for appropriate action, to any transaction for which it entertains doubt as to legality or propriety. Audit objections, to these or any other transactions, arising during the examination of the accounts shall be communicated immediately to the Diretor-General.

5. The Auditor (or such of its officers as it may designate) shall express and sign an opinion on the financial statements which shall read as follows:

„We have examined the following appended financial statements, numbered ... to ..., properly identified, and relevant schedules of the OIV for the financial period ended 31 December ... Our examination included a general review of the accounting procedures and such tests of the accounting records and other supporting evidence as we considered necessary in the circumstances."

The opinion shall also state, as appropriate, whether:

(a) The financial statements present fairly the financial position as at the end of the period and the results of their operations for the period then ended;

(b) The financial statements were prepared in accordance with the stated accounting principles;

(c) The accounting principles were applied on a basis consistent with that of the preceding financial report;

(d) Transactions were in accordance with the Financial Regulations and legislative authority.

6. The report of the Auditor in the financial operations of the Organization for the financial period shall be submitted to the Assembly through the Director-General. It shall indicate:

(a) The type and scope of the Auditor’s examination;

(b) Matters affecting the completeness and accuracy of the accounts, including, where appropriate:

(i) Information necessary to the correct interpretation of the accounts;

(ii) Any amounts which ought to have been received but which have not been brought to account;

(iii) Any amounts for which a legal or contingent obligation exists and which have not been recorded or reflected in the financial statements;

(iv) Expenditures not properly substantiated;

(v) Whether proper books of accounts have been kept — where in the presentation of statements there are deviations of a material nature from the generally accepted accounting principles applied on a consistent basis, these should be disclosed;

(c) Other matters which the Auditor considers should be brought to the notice of the Assembly, such as:

(i) Cases of fraud or presumptive fraud;

(ii) Wasteful or improper expenditure of the Organizations money or other assets, notwithstanding that the accounting for the transaction may be correct;

(iii) Expenditure likely to commit the Organization to further outlay on a large scale;

(iv) Any defect in the general system or detailed regulations governing the control of receipts and disbursements or of supplies and equipment;

(v) Expenditure not in accordance with the intention of the General Assembly after making allowance for duly authorized transfers within the budget;

(vi) Expenditure in excess of appropriations as amended by duly authorized transfers within the budget;

(vii) Expenditure not in conformity with the authority which governs it;

(d) The accuracy or otherwise of the supplies and equipment records as determined by stock-taking and examination of the reports;

(e) If appropriate, transactions accounted for in a previous period concerning which further information has been obtained or transactions in a later period concerning which it seems desirable that the General Assembly should have early knowledge.

7. The Auditor may make such observations with respect to its findings resulting from the audit and such comments on the Director-Generals’s financial report as it deems appropriate to the General Assembly.

8. Whenever the scope of audit of the Auditor is restricted, or whenever it is unable to obtain sufficient evidence, it shall refer to the matter in its opinion and report, making clear in the report the reasons for its comments and the effect on the financial position and the financial transactions as recorded.

9. The Auditor shall not be required to mention any matter referred to in the foregoing that, in its opinion, is insignificant in all respects.

Article 39

Annex to the Financial regulation - Agreement of the 20th of January 1965 between the Government of the French Republic and the International Office of Vine and Wine related to the International Office of Vine and Wine headquarters, privileges and immunities on the French territory (Decree n° 66-680 of 15th of September 1966)