Ministers’ Deputies

CM Documents

CM(2012)90      31 May 20121



1152 Meeting, 10 October 2012

11 Administration and Logistics

11.1 Meeting report of the Budget Committee – May 2012 session

Item to be prepared by the GR-PBA on 19 June and 27 September 2012



The Budget Committee met in Strasbourg on 21-25 May 2012.

1. Opening of the meeting

1. Mr Rafael Benitez, Director of Programme, Finance and Linguistic Services opened the meeting of the Committee. The list of participants appears in Appendix I.

2. Election of the Chairperson and Vice-Chairperson of the Budget Committee

2. Mr Åke Hjalmarsson (Sweden) was elected Chair and Ms Joycelyn Buchan (United Kingdom),
Vice-Chair for 2012.

3. Adoption of the Agenda

3. The Committee adopted the Agenda as set out in Appendix II.

4. Examination of the Report of the September 2011 meeting

4. The Committee took note of the report of the September 2011 meeting and of the fact that the Secretariat would resume the practice of preparing minutes.

5. Recent developments concerning the Council of Europe – Statement by Ms Ute Dahremöller, Director General of Administration

5. The Director General of Administration provided the Committee with information in respect of developments that had taken place since the previous meeting of the Committee in particular on the budgetary context. She recalled the main steps of the reform of the Council of Europe. This had been particularly intense in recent months with the review and restructuring of the intergovernmental committees, the restructuring of the Secretariat operational services, the move towards a biennial Programme and Budget, the reform of the Organisation’s pension system, the steps taken to contain staff costs and refocus operations as well as the review of issues relating to hospitality, consultants, missions and publications which is in under way.

6. She stressed that these were critical times for the Council of Europe as an Organisation which was evolving in the context of the difficult economic situation in many member States but stated that she was confident that the necessary reforms would be achieved to make sure that the rationalisation of the Council of Europe’s operations will not compromise the capacity of the Organisation to deliver and fulfil its mission.

7. The Committee had an exchange of views on these developments, in particular on the reform of the intergovernmental structure. In this respect, it noted that the review of the intergovernmental committees brought about substantial savings in operational resources, part of which were redeployed to priority sectors. The Committee also considered that the proposal for the reform of the pensions system, which it addressed under Item 11.a (see below), was of the utmost importance in order to bring the developments of staff costs under control.

6. Implementation of the 2011 Programme and Budget

8. The Committee considered the implementation of the 2011 Programme and Budget.

9. The Committee welcomed the format of the Progress Review Report introduced in 2011, which it considered a useful tool to assess the way the Organisation operates and to design future activities. In this respect, it stressed the importance of relevant expected results and recalled the seminar which will be held under its auspices during its September 2012 meeting (see item 15 below).

10. The Committee noted that the budget had been approved at programme line level without distinction between staff and non-staff appropriations and that, as of necessity, this was also the level at which the Progress Review Report was presented. In these circumstances, the Committee stressed that the staff ceiling, together with the tables of posts and positions and the overall appropriations level per programme line was vital as an instrument to contain staff costs (see also paragraph 51).

11. With regard to activities funded through extra-budgetary resources, the Committee considered that these were an important aspect of the way the Council of Europe operates and that the results achieved should therefore be addressed in the Progress Review Report. The Committee noted that relevant information would be included in future reports.

12. The Committee considered the budget transfers decided in 2011 and recalled that the revised Financial Regulations (Article 28) required that transfers exceeding 10% of the supplying and receiving programme lines or €100 000 be notified to the Committee of Ministers immediately. In this respect, the Secretariat informed the Committee that, given that 2011 was a transitional year with the move towards a biennial Programme and Budget, the comprehensive review of the Financial Regulations and the restructuring of the Secretariat, no specific information had been given to the Committee of Ministers regarding transfers but that this had been included in the Budgetary Management Accounts 2011. The Committee noted that a procedure for informing the Committee of Ministers had been put in place as of 2012, based on a standardised form (see Appendix III) and that the Committee of Ministers would be duly informed about the above-mentioned transfers. The Committee noted that the Committee of Ministers would be informed and recommended that it followed budgetary transfers closely.

13. The Committee held an exchange of views on the activities in the area of youth with Ms Olöf Olafsdottir, Director of Democratic Citizenship and Participation who presented the implementation of the 2011 Programme and Budget in this area as well as recent developments in the relevant programme lines of the Programme and Budget 2012-2013. The Committee recommended that an assessment be carried out on whether the reasons for keeping a separate budget for the European Youth Foundation were still valid, given that all member States were concerned and that the applicable scale of contributions was the same as those for the Ordinary Budget.

7. Consolidated Financial Statements and Budgetary Management Accounts for 2011 – Documents not audited

14. The Committee took note of the Consolidated Financial Statements and Budgetary Management Accounts for 2011 and that they were currently being audited with a view to certification.

15. The Committee noted that the Budgetary Management Accounts for 2011 included explanations of variances in line with IPSAS 24 and that the difference between figures provided in the Progress Review Report and in the budgetary management accounts was due to the fact that those in the Progress Review Report were prepared on the basis of information available in the financial system at the time the report was prepared and which were not final (see Progress Review Report, p. 12). It noted that the credit balance on the Ordinary Budget for 2011 amounted to €1 996 764.89 (subject to external audit, see Budgetary Management Accounts) instead of €2 113 000 (see Progress Review Report).

16. The Committee noted that the external auditor had not yet submitted his final opinion on the budgetary management accounts for 2011. Nevertheless, it could endorse the underlying principle of the related draft decisions in the unaudited Budgetary Management Accounts, namely to return any unspent balance to the member States. This applied to the Ordinary Budget and to the budgets of partial agreements. It noted that in the case of the European Youth Foundation (EYF) and Eurimages, it was proposed to carry forward unspent balances to 2012. With regard to the EYF, the Committee recalled that Article 6 of the Foundation's statute stated: “The credit balance in a financial year shall be added to the Foundation’s resources for the following year and the expenditure budget will be increased by an equivalent amount”. Subject to the conclusions of the external auditor’s report, the Committee therefore recommended that the unspent balance be carried forward to 2012. The same applied to Eurimages, since Article 8 of the Fund's financial regulations stipulated “The credit balance of a financial year shall be added to the Fund's resources for the following financial year. This balance shall be credited to the budget of receipts as of 1 January of the following year, but can be used only for the financing of programme expenditure”.

17. The Committee also noted that the EDQM's cumulative surplus totalled some €11 M and that unrestricted cash at bank amounted to some €13.5 M (see P-Bud(2012)9rev). It further noted that it was proposed to reimburse to the member States an amount equivalent to the contributions called in 2011, i.e. €2.8 M and to carry forward to 2012 the balance of some €8 M. Subject to the conclusions of the external auditor’s report, the Committee recommended that given the strong financial situation of the EDQM and the positive results achieved in 2011, an additional €1 M be reimbursed to the member States following the same procedure used in previous years. This would leave about €7 M to be carried forward to 2012.

8. Office of the Director General of Programmes – Exchange of views on recent developments with Ms Claudia Luciani, Deputy to the Director General

18. The Committee held and exchange of views with the Deputy to the Director General of Programmes (DGPROG) and took note of the developments relating to the mandate and operation of DGPROG.

19. The discussions focused in particular on: (i) the coordination of operational activities on the basis of a geographical (Action Plans) and thematic approach and the importance of the Council of Europe policy towards neighbouring regions; (ii) the mobilisation and management of extrabudgetary resources with a particular focus on the programming and rationalisation of Council of Europe/European Union Joint Programmes; and (iii) the coordination between the DGPROG and the Directorate of Programme, Finance and Linguistic services (DPFL) as far as the elaboration, the implementation and follow-up of the Programme and Budget was concerned.

20. The Committee was notably interested in the interactions between DGPROG and DPFL with regard to the monitoring of the implementation of the Programme and Budget, with a particular focus on the efficient use of Ordinary Budget and extrabudgetary resources. The Committee stressed that the large amount of extrabudgetary contributions made it all the more necessary to analyse, identify and quantify the overhead costs associated with the implementation of Joint Programmes and projects financed through voluntary contributions, with a view to determining the appropriate level of overhead costs to be levied.

9. Programme and Budget 2012-2013

      a. Presentation of changes made by the Deputies to the draft budget 2012-2013 before its approval

21. The Committee took note of the changes made by the Deputies at the time of the adoption of the Programme and Budget 2012-2013 in November 2011 as set out in document P-Bud(2012)7 and welcomed the fact that some of these changes were based on the Committee’s recommendations, inter alia the way the savings relating to the Agora scheme be included in the Budget and the budgetary neutrality of the reinstatement of pension costs in the Ordinary Budget.

      b. Adjustments to 2013

22. The Committee considered the Secretary General’s proposal concerning the 2013 adjustments to the Programme and Budget 2012-2013 set out in document CM(2012)130.

23. The Secretariat recalled that the principle of a biennial Programme and Budget was to limit adjustments in the second year to those of a purely technical nature, notwithstanding exceptions due to unforeseen and exceptional circumstances.

24. The Committee recalled the Deputies’ decisions of June and November 2011 concerning respectively the level of member States’ contributions for 2013 and the additional requests made to the Secretary General.

25. Concerning the total of member States’ contributions to the Ordinary Budget in 2013, the Committee of Ministers decided that they should increase by the lower of zero real growth, based on the current inflation method, or 2% if the inflation rate was higher than 2%. In this respect, the Committee welcomed the Secretary General’s proposal, in light of the difficult financial situation in some member States, to limit the adjustment rate of member States’ contributions to 2%, bringing about a reduction of the budget in real terms of €934 000. The Committee noted that the Secretary General considered that this reduction met the additional requests for savings made by the Deputies, without prejudice to the ongoing consideration of the situation concerning consultants, missions, per diems, hospitality and publications, which is under way (see below).

26. Concerning the additional requests made to the Secretary General, the Committee noted the following:

    · In respect of the request to identify additional substantial savings for the 2013 budget in line with the austerity policies implemented in member States, the Secretary General considered that this has been done through the reduction of the budget in real terms of €934 000 mentioned above.

    · In respect of the request to continue the efforts to reduce the staff expenditure ratio, the staff ratio for 2013 as proposed (65.4%) remained substantially the same as in the provisional budget (65.5%) (pro memoria 2011: 66.4%; 2012: 66.0%). The number of posts/positions suppressions in the draft adjusted budget remained the same as in the provisional budget.

    · In respect of the request to review the contractual and human resources policy for Council of Europe staff to achieve more flexibility, cost-efficiency and impact, a review of contractual policy was underway (see Item 11).

    · In respect of the request to review the rules applicable to external consultants, missions, per diems, and hospitality budgets in order to focus the expenditure on priorities, the rules applicable were being reviewed at GR-PBA level.

    · In respect of the request to develop a new publications policy for the Organisation to strengthen its visibility and outreach at a justified cost, the publication policy of the Organisation was also being reviewed at GR-PBA level.

    · In respect of the request to analyse possibilities for further rationalising the Council of Europe programmes and activities, including through proposals for use of partial agreements, the Committee noted the various developments concerning partial agreements, which prompted general questions. The Committee further considered this matter under Item 14 (see below).

    · In respect of the request to focus the Organisation's capacities on its core competences and to continue the redeployment of the staff so that more personnel is allocated to operational programmes and priority activities, the Committee noted that the Secretary General proposed that appropriations resulting inter alia from staff savings in the order of €400 000 be redeployed to the following priority operational programmes as operational resources: (i) Enhancing the effectiveness of the ECHR system at national and European level; (ii) Equality and Diversity; (iii) Prisons and Police; (iv) Development and Implementation of common Standards and Policies; (v) Organised Crime, Money Laundering – MONEYVAL – Terrorism, Cybercrime, Trafficking in Human Beings – GRETA – and counterfeiting of Medical Products. In addition, the Secretary General proposed to redeploy 3 posts from the support pillar to priority areas namely MONEYVAL, the CEPEJ and the Office of the Director General of Programmes, in respect of external presence.

    · In respect of the request to include appropriate proposals on concrete action in his progress review report by mid-April 2012, the Committee noted that a number of the above-mentioned issues had been already raised in the Progress Review Report 2011 and served as a basis for the 2013 draft adjusted budget.

27. The Committee noted that, in line with the inflation adjustment retained for 2013, a provision for salary adjustment based on a 2% increase had been included in the budget notwithstanding the fact that the CCR recommendation would only be known later in the fall. In this respect, the Committee considered that if the decision by the Committee of Ministers concerning the salary adjustment, based on the CCR recommendation, would be higher than 2%, the increase above 2% would have to be accommodated in the Budget according to standard practice and that if it would be lower than 2% additional resources would be available in the Budget. In the latter case, the Committee of Ministers might find it appropriate to examine how the excess funds might be dealt with within the envelope of the Ordinary Budget.

28. The Secretariat informed the Committee that the Programme and Budget 2012-2013 contained an overstatement of pensions cost (€286 K). An explanation of the calculation of the overall contributions is included in Appendix IV. The Committee confirmed the calculations, welcomed the fact that the overstatement had been corrected for 2013 bringing the total of member States’ contributions for the Ordinary Budget to €237 562 000 and recommended consequently that an amount of €286 K be frozen in the budget for 2012. The member States’ contributions to the Pension Reserve Fund for 2013 were estimated at €22 435 400. Given the fact that the Committee of Ministers had decided to allocate part of the proceeds of the sale of the B-Building (€4 190 000 of which, €1 893 000 for 2012 and €2 297 000 for 2013) to finance the increase in member States’ contributions to the Pension Reserve Fund for the biennium as required by the actuarial study 2012, €2 297 000, corresponding to the amount allocated to 2013 (see CM(2012)19) would then be reimbursed to member States, bringing the total increase in contributions to the Ordinary Budget and the Pension Reserve Fund from €4 805 800 to €2 508 8002. This corresponded to an increase of 0.98% of the total contributions to the Ordinary Budget and the Pension Reserve Fund as compared to the contributions included in the provisional budget.

10. Late Payment interest

29. The Committee considered the matter on the basis of document P-Bud(2012)11) and noted that consolidated late payment interest had become increasingly significant over recent years.

30. In the light of the increasing amount of late payment interest received by the Council of Europe and the fact that the amounts fluctuate from year to year, the Secretariat proposed that unless late payment interest receipts were needed to compensate for an overall deficit in income during the financial year, they be deducted from the overall year-end balance and allocated to a reserve (up to a maximum of €1M) to compensate possible income deficits in future financial years.

31. The Committee noted that the late payment interest system aimed on the one hand at providing compensation for loss of interest on obligatory contributions, and on the other hand to promote timely payment.

32. The Committee also noted that the Council of Europe had so far not met any significant problems with regard to late payment of contributions. To some extent this positive fact might be attributable to the applied rules regarding interest on late payments of contributions.

33. The Committee considered that fluctuations in the amount of interest on late payments were rather small in absolute terms and that such fluctuations did not warrant the creation of a special reserve for this purpose. The Committee could therefore not recommend the creation of such a reserve.

11. Exchange of views with Mr Francis Dangel, Director of Human Resources

34. The Committee held an exchange of views with the Director of Human Resources on the reform of the pensions system and the latest developments regarding the Council of Europe staff and staff policy, with a particular focus on the actual number of staff; staff costs and ratios; the payment dates for permanent and non-permanent staff; the use of fixed-term contracts; and the vacancy rates.

    a. Reform of the pension system

35. The Committee considered the Secretary General’s proposals for the reform of the Council of Europe’s pension schemes as set out in document CM(2012)20, GR-PBA(2012)8 and other related documents, as well as the proposal by 14 Delegations (see document DD(2012)317rev) while noting that this item was currently under discussion at the GR-PBA.

36. The Committee held an exchange of views with the Director General of Administration, the Director of Legal Advice and Public International Law and the Actuary in charge of the actuarial studies on the Council of Europe pension schemes.

37. The Committee recommended the creation of a Third Pension Scheme with the following features (savings are shown in Appendix V):

    - it should be a defined benefit scheme and applicable to new entrants;

    - the accumulation rate should be 1.75%;

    - the minimum pension rate should be 1.75% of the salary for grade B3 step 1;

    - the pensionable age should be 65 years;

    - the age for early pensions should be 55 years;

    - the employees’ share of costs should be fixed at a maximum of 45% and the employers’ share at 55% in order to maintain parity with the level of contributions of staff members in the New Pension Scheme (should an actuarial study show that a lower employees’ share would achieve the same objective, such share should be used);

    - the reference salary should be the final salary but no account should be taken of promotions awarded during the last 24 months;

    - the possibility of opting for a reference salary scale should be excluded thus simplifying management of pensions and leaving allowances; and

    - the pension adjustment should be in line with inflation of the applicable salary scale, and not with changes in salary scales.

38. The Committee noted the Legal Advisor’s opinion to the effect that the implementation of these measures for future staff members should not pose any particular legal problem.

39. The Committee also recommended that, as proposed by the Secretary General, a number of more minor points be reviewed, e.g. entitlement to the education allowance for a pensioner who remains in the country of his/her last duty station or payment of a capital sum to the widow or widower of a staff member who remarries (and who thus loses all entitlement to a survivor’s/reversion pension); and recommended that additional savings be identified in this respect.

40. The Committee considered that the introduction of a cap at grade A3 step 11 beyond which neither the employer nor the employee was bound to fund pension rights concerned a limited number of staff, would produce limited savings and raised complex issues and therefore could not recommend it.

41. The Committee further recommended the introduction of a flexibility clause with a view to allowing, within the limits of legal certainty, for future balanced modifications of contributions, benefits or other pension parameters. This clause should provide for safeguards for staff members by setting the necessary absolute limits and should obviously also provide for prior consultation with staff representatives. These conditions were indispensable in order to respect the general legal principles, including those of legal certainty and protecting legitimate expectations. The purpose of this flexibility clause would be to avoid that, at some future date, the Organisation would be obliged to introduce yet another new pension scheme, should further reform be necessary. This would also allow for the burden of any subsequent change to be shared amongst a greater number of staff members.

42. One member of the Committee was not convinced that the proposed change of the shares of costs between employer and employee would not lead to future legal problems.

43. Concerning the Co-ordinated Pension Scheme, the Committee considered the proposal to align the employee/employer distribution to that in the New Pension Scheme i.e.: 40%-60%. The Committee noted that this proposal required an amendment of the Co-ordinated Pension Scheme Rules to allow each of the
co-ordinated organisations the opportunity to change the distribution up to a maximum of 40% for the employee. It noted that according to the Legal Advisor there were no legal obstacles at the level of Co-ordination for the implementation of the proposal, and that as far as acquired rights were concerned, in case of litigation, the case was defendable. The Committee welcomed the Secretary General’s proposal but considered that the estimated €700K savings could not be considered as achieved at this stage since they were subject to factors beyond the Council of Europe’s control.

44. Concerning the gradual increase of the pensionable age from 63 to 65 for staff members in the New Pension Scheme, the Committee noted that according to the Legal Advisor, there was no legal obstacle to the implementation of this proposal and therefore could recommend it.

45. The Committee further considered that the proposed possibility to raise the statutory age limit from 65 to 67 years allowing the Secretary General to continue the employment of staff in exceptional circumstances was reasonable and noted that the Legal Advisor considered that it did not raise particular issues, although its implementation could give rise to litigation.

46. The Committee further recommended that the remaining proceeds of the sale of the B-Building (€2.4M) be injected in the Pension Reserve Fund as part of the comprehensive pension reform package as proposed by the Secretary General.

47. The Committee recommended that the pension reform outlined above be approved in its entirety by the Committee of Ministers and that the Committee of Ministers instructed the Secretary General to work out the detailed necessary measures for its implementation and submit them to the Committee of Ministers for approval.

      b. Staffing: development of number of staff and staff costs, ratios, etc.

48. The Committee noted that the Organisation employed 2157 staff members in 2010 and 2167 in 2011. These figures reflected an increase of staff members financed trough the budget of partial agreements or through Council of Europe/European Union Joint Programmes, and a decrease in the number of staff members financed through the Ordinary Budget. In 2011 out of 2167 staff members, 2103 were employed in Strasbourg and 64 in the field.

49. The Director of Human Resources stressed that the short-term objective was to implement the staff suppressions foreseen in the biennium (57 posts) and to consolidate the downward trend concerning the staff ratio (2011: 66.4%, 2012: 66%, 2013: 65.4%), while in the medium term further focus would be placed on the development of the staff ratio.

50. The Committee examined in particular the staff expenditure in relation to the salary ceiling relating to the Ordinary Budget and recalled that the ceiling was being used passively and was underutilised in the control of staff costs (2008: €-0.9M; 2009: €-2.0M; 2010: €-1.2M: , 2011: €-1.4M).

51 The Committee encouraged the Director of Human Resources to use all possible techniques to achieve the objective of consolidating the downward trend concerning the staff ratio and recommended again that the Committee of Ministers consider using the salary ceiling as an active management tool by setting the ceiling at an early stage in the budgetary process, particularly for the next biennia.

      c. Contractual Policy: use of fixed-term contracts

52. The Committee recalled that the review of the contractual policy had been specifically requested by the Committee of Ministers while adopting the Programme 2012-2013 and noted that a comprehensive review of the contractual policy was under way. It noted that the challenge for the Council of Europe was to ensure a sufficient degree of flexibility while preserving the quality of the recruitments.

53. The Committee noted the progress made so far in the use of fixed-term contracts within the Ordinary Budget (some 20 additional such contracts in 2011 compared to 2010). By the end of 2011 the overall figure for the Organisation was 20.8%.

54. The Committee recommended that fixed-term contracts of different duration and renewable at the employer’s initiative be used as a matter of principle, in order to make it easier for the Organisation to respond to its needs.

      d. Payment of salaries: payment dates for permanent and non-permanent staff

55. The Committee recalled that the external auditor had recommended that the date of payment for permanent staff be aligned with that of temporary staff and therefore moved to the end of the month. The Committee noted that the Secretary General was in favour of that recommendation but that its implementation was lagging behind, which it deplored.

56. The Committee recommended that the modalities (transitional measures, date of implementation) for such a reform not be further delayed.

      e. Vacancy rates

57. The Committee considered a proposal from a member to increase the technical abatement and was informed by the Secretariat on current vacancy rates and the actual staff expenditure in recent years compared to salary ceiling. It noted that the technical abatement issue was currently being considered by the external auditor.

58. The Committee underlined the importance of using the salary ceiling as an active management tool in order to keep the development of staff costs under control (see paragraphs 10 and 51).

12. Exchange of views with Mr Erik Fribergh, Registrar of the European Court of Human Rights

59. The Committee held an exchange of views with Mr Erik Fribergh, Registrar of the European Court of Human Rights on the recent developments concerning the Court. It welcomed the fact that, since September 2011, the Court’s backlog had been reduced by 10,000 applications due to fewer applications and better output (27% increase in 2011) mainly due to the Single Judge procedure and the setting-up of a filtering mechanism. The Committee welcomed these developments.

60. The Committee considered proposals from the Registrar of the ECHR concerning the exceptional use of foreseeable underspending of judges’ emoluments appropriations to recruit staff (13 lawyers) at an earlier stage in 2012, to be used to reduce the backlog.

61. In the light of the ECHR’s particular situation, notwithstanding the salary ceiling adopted by the Committee of Ministers, the Committee recommended that the Committee of Ministers grant a special authorisation to transfer €300 000 from the budget sub-head covering judges’ emoluments to the budget sub-head covering staff within the same programme line. This authorisation would be valid for 2012 only and shall have no bearing in 2013.

13. Exchange of views with Ms Susanne Keitel, Director of the European Directorate for the Quality of Medicines – EDQM

62. The Committee held an exchange of views with the Director of the European Pharmacopoeia-EDQM and took note of the updated EDQM Medium Term Financial and Operational Strategy 2012-2015 with a particular focus on its revenue stream and its capacity to continue to reimburse member States’ contributions, and to address contingencies.

63. The Committee noted the EDQM’s intention to increase as of 2014 the annual grant to the investment budget from €2.1M to €2.7M due to the scientific equipment replacement policy.

64. The Committee took note of the Final Report on a Risk Analysis and Contingency Plan prepared by an external consultant and welcomed the report, noting in particular the assessment concerning the building of a second site in order to avoid a partial or total destruction of reference stock in case of disaster. It further noted other critical risks connected with inter alia IT and recommended that they be addressed as soon as possible. This might make it necessary to review the investment plan for 2012-2013. The Committee wished to be kept informed of the course of action and the proposals that the Secretary General would submit as a consequence of the report.

14. Developments concerning Partial Agreements

65. The Committee took note of the developments concerning partial agreements as set out in document P-Bud(2012)14. It noted that 12 partial agreements, enlarged partial agreements or enlarged agreements were currently opened within the Organisation, varying greatly as regards their activities, size and budget, as well as in their number of members.

66. The Committee considered in particular the developments concerning the North-South Centre and had an exchange of views with its Executive Director, Mr Denis Huber. It considered that these developments, in particular the withdrawal of major contributors raised issues which should be addressed at general level.

67. The Committee further recalled that when adopting the Programme and Budget 2012-2013, the Committee of Ministers requested that the possibilities for further rationalising the Council of Europe programmes and activities, including through proposals for use of partial agreements be analysed.

68. The Committee noted that the withdrawal of a state party to a partial agreement with a small budget contribution might necessitate only minor modifications, while the withdrawal of a member state with a greater budgetary impact might have far-reaching consequences. Thus, the withdrawal of one or more major contributors to a partial agreement might pose a problem of sustainability for the agreement as a whole, even if the agreement still had the required minimum number of States parties. This problem had been raised by the Organisation's external auditor in his provisional observations on the 2011 Budgetary Management Accounts, which indicated, with regard to the North-South Centre, that the possibility of the complete discontinuation of this partial agreement's activities could not be fully ruled out, making it necessary to give consideration to the coverage of any outstanding liabilities, in particular regarding commitments in respect of the staff.

69. Furthermore, the Committee noted that, pursuant to the applicable regulations, if the notification was given before 30 September, withdrawals were effective for the following financial year. This is further complicated by the fact that the adjusted budget must be adopted before 31 October. The Committee considered that in some cases the withdrawal would produce its effects in less than three months, compromising the proper planning of the functioning and operation of the partial agreement and this problem should be addressed.

70. The Committee considered that the ability of states to accede to or withdraw from partial agreements using relatively light procedures should be preserved. At the same time, these agreements should operate with a sufficient degree of flexibility, in particular relating to the employment of staff, in order to be able absorb the financial and operational consequences of one or more withdrawals. In this respect, it noted that according to the applicable rules the secretariat of partial agreements was provided by Council of Europe staff subject to the Organisation’s Staff Regulations, including those concerning the termination of contracts.

71. The Committee also recalled that pursuant to Article 16 of the Financial Regulations, the Committee of Ministers shall examine the financial consequences of the withdrawal or suspension of a member and shall make the appropriate arrangements.

72. The Committee will continue reviewing this issue.

15. Preparation of the seminar on RBB/RBM in September

73. The Committee recalled that at its meeting in September 2011 meeting it had decided to organise a seminar on the subject of “Objectives, Expected Results and Performance Indicators” involving other interested parties of the Council of Europe and external experts and welcomed the proposals of the Secretariat for the organisation of the seminar (see document P-Bud(2012)8).

74. The Committee held an exchange of views with the Director of Internal Oversight, Mr Ansgar Eussner, and discussed the preparation of the seminar on the basis of the proposal from the Secretariat.

75. The Committee asked the Secretariat to go ahead with it. The seminar will be held during the Committee’s September meeting (25 September 2012).

16. Draft Report of the Budget Committee – Session of May 2012

76. The Committee approved the report of the session as set out in document P-Bud(2012)15.

17. Any other business

Date of the next meeting

77. The forthcoming meeting of the Budget Committee will take place from Monday 24 September to Friday 28 September 2012 including the seminar mentioned above (see paragraph 73).

Appendix I

AGENDA


Item 1 Opening of the meeting

Item 2 Election of the Chair and Vice-Chair

Item 3 Adoption of the Agenda and approval of the Order of Business

Item 4 Examination of the report of the September 2011 session

Item 5 Recent developments concerning the Council of Europe - Statement by
Ms Ute Dahremöller, Director General of Administration

Item 6 Implementation of the 2011 Programme and Budget

Item 7 Consolidated Financial statements and Budgetary Management accounts for 2011 – documents not yet audited

Item 8 Office of the Director General of Programmes – Exchange of views on recent developments with Ms Claudia Luciani, Deputy to the Director General

Item 9 Programme and Budget 2012-2013

      a. Presentation of changes made by the Deputies to the draft budget 2012-2013 before its approval

      b. Adjustments to 2013

Item 10 Late Payment interest on unpaid contributions

Item 11 Human Resources - exchange of views with Mr Francis Dangel, Director of Human Resources

a. Reform of the pension system

b. Staffing: development of number of staff and staff costs, ratios, etc.

c. Contractual Policy: use of fixed term contracts

d. Payment of salaries: payment dates for permanent and non-permanent staff

      e. Vacancy rates

Item 12 Exchange of views with Mr Erik Fribergh, Registrar of the European Court of Human Rights

Item 13 Exchange of views with Ms Susanne Keitel, Director of the European Pharmacopoeia – EDQM

Item 14 Developments concerning Partial Agreements

Item 15 Preparation of the seminar on RBB/RBM in September

Item 16 Draft meeting report of the Budget Committee – May 2012 session

Item 17 Other business

Appendix II

LIST OF PARTICIPANTS

Mr Christoph JACKWERTH (Austria)

Ms Anne VAN NIEUWENBURG (Belgium)

Mr Jean PARMENTIER (France)

Mr Michael LAUMANNS (Germany)

Mr Claudio DE ROSE (Italy)

Mr Szymon CHOJNOWSKI (Poland) (Substitute)

Mr Vladimir IOSIFOV (Russian Federation)

Ms Marta QUINTIAN GOROSTEGUI (Spain)

Mr Åke HJALMARSSON, Chair (Sweden)

Mr Fikret DEMIR (Turkey)

Ms Joycelyn BUCHAN, Vice-Chair (United Kingdom)

Appendix III

STANDARDISED FORM FOR BUDGET TRANSFERS REQUIRING INFORMATION
OF THE COMMITTEE OF MINISTERS

Appendix IV

MEMBER STATES CONTRIBUTIONS TO THE 2013 ORDINARY BUDGET

Calculation of the increase in member States contributions to the 2013 Ordinary Budget

     
     

Total contributions to the Ordinary Budget as per Programme and Budget 2013-2013 at 2012 prices

233 465 400

    a

     

of which pensions (see page 238 of Programme and Budget 2012-2013)

17 804 400

    b

     

Total Ordinary Budget excluding pensions

215 661 000

    c=a-b

     

2% inflation adjustment

4 313 200

    d=c*2%

     

Total Ordinary Budget excluding pensions including adjustment for inflation

219 974 200

    e=c+d

     

2013 pensions (see appendix 14 of CM(2012)130)

17 523 700

    f

     

2% inflation adjustment

350 500

    g=f*2%

     

Total pensions 2013

17 874 200

    h=f+g

     

Total calculated contributions 2013

237 848 400

    i=e+h

     

Ad hoc technical adjustment (1)

286 400

    j

     

Total net contributions 2013

237 562 000

    k=i-j

     
     

(1)During the preparation of the 2012-2013 budget there was a double counting of judges' pensions which were included in both the sub-head for judges' emoluments and in the sub-head for pensions. Correcting the situation without changing the total of member States' contributions would have resulted in an unjustified increase in appropriations available for redeployment within the Ordinary budget for an amount of €286 400.

Appendix V

PENSION REFORM

ESTIMATED SAVINGS BASED ON THE ANALYSIS OF PROPOSALS
BY THE BUDGET COMMITTEE*

     

Budget Committee's recommendations :

Short term saving

Long term saving

 

 

 

Third scheme :

 

 

- the accumulation rate should be 1.75%

480 K€

3000 K€

- the Minimum pension rate should be 1.75% of the salary for grade B3 step 1

64 K€

400 K€

- the pensionable age should be 65 years

256 K€

1600 K€

- the age for early pensions should be 55 years

-

-

- the employees' share of costs should be fixed at a maximum of 45% and the employers' share at 55% in order to maintain the rate of contributions of staff members in line with the new pension scheme

500K€ 

1030K€ 

- the reference salary should be the final salary but no account should be taken of promotions awarded during the last 24 months

marginal

marginal

- the possibility of opting for a reference salary scale should be excluded thus simplifying management of pensions and leaving allowances

marginal

marginal

- the pension adjustment should be in line with inflation of the applicable salary scale, and not with changes in salary scales.

-

-

Minor points be reviewed, e.g. entitlement to the education allowance for a pensioner who remains in the country of his/her last duty station or payment of a capital sum to the widow or widower of a staff member who remarries

marginal

marginal

 

 

 

gradual increase of the pensionable age from 63 to 65 for staff members in the New Pension Scheme

1400 K€

1200 K€

 

 

 

Coordinated Pension Scheme : align the employee/employer distribution to the one in the new pension scheme i.e.: 40%-60%

700 K€**

750 K€**

* In the estimates of the Actuary, “short term” refers to the first year when the reform is implemented and “long term” refers to the 15th year after the implementation.

**See paragraph 43.

1 This document has been classified restricted at the date of issue; it will be declassified in accordance with Resolution Res(2001)6 on access to Council of Europe documents.

2 The total net contributions to the Ordinary Budget and the Pension Reserve Fund after the reduction for part of the proceeds from the B-Building for 2012 amounts to (233 511 500 + 21 266 900 - 1 893 000) €252 885 400. This means that the increase of contributions from 2012 to 2013 amounts to 1.9%.



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