The financial position of the Organization of American States is shown in the attached statements of:

a) The General, Operating, Working Capital, and Reserve Subfunds of the Regular Fund and the Special Multilateral Funds, whose budgets are approved by the General Assembly, and

b) The Specific Funds financed by unilateral or multinational contributions for extra-budgetary activities.

The Combined Statement of Assets, Liabilities and Fund Balances set forth the financial position of the Organization at the end of the period. The Combined Statement of Changes in Fund Balances reflect the result of financial activity during the period.

Biennium ended December 31, 1995

After four consecutive years of improvement, the financial position of the Regular Fund deteriorated during 1994-95. Between 1989 and 1993 the financial position in the Regular Fund, which is financed from the member states' quotas, improved from a deficit of US$31.5 million to a positive fund balance of $16.3 million. In 1994, the fund balance decreased to $14.2 million owing to lower quota collections and unanticipated costs increases. In 1995, owing principally to the non payment or underpayment of quotas by member states, the fund balance decreased by $14.1 million to $0.1 million. Uncollected quotas due from member states increased in the biennium by $18.7 million to $51.5 million at December 31, 1995, compared to $34.9 at the beginning of the biennium.

Because of the Organization's financial crisis of the 1980's, which lasted about 10 years, the General Secretariat was forced to postpone much of the normal maintenance and repair of its buildings. In addition, during that same period, the membership of the Organization grew, thereby outgrowing the meeting capacity of the Headquarters Building. Recognizing these problems and taking into account the additional resources which were to become available, the General Assembly and the Permanent Council, pursuant to the authority delegated to it by the General Assembly, have approved extraordinary appropriations of more than $17 million for long-delayed maintenance work in all of the General Secretariat's buildings and a major renovation project for the Headquarters Building as well as for other purposes. As noted above, however, the resources available at December 31, 1995, are insufficient to finance these appropriations.

Finally, the financial health of the Regular Fund can not be considered restored until there is once again a fully funded Working Capital Subfund. The General Standards provide that the Subfund should be 25% of annual quota assessments — which based on the 1996 assessments would mean a balance of more than $18 million. Income in the Special Multilateral Funds financed by voluntary contributions for the biennium was $33 million while budgetary execution was $36 million. By December 31, 1995, each of the Special Multilateral Funds had resources in its Reserve Subfund.

As to the Specific Funds, contributions for the biennium exceeded $48 million, which financed a number of priority activities, most notably the Observer Mission in Haiti, which were not included in the budget of the Organization.

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