CP/RES. 894 (1516/05)

USE AND REPLENISHMENT OF THE CAPITAL FUND FOR THE OAS SCHOLARSHIP AND TRAINING PROGRAMS TO MEET OVEREXTENDED FELLOWSHIP COMMITMENTS

 (Adopted at its session held on October 12, 2005)

THE PERMANENT COUNCIL OF THE ORGANIZATION OF AMERICAN STATES,

CONSIDERING:

That obligations for the 2005 fiscal year exceed the approved program-budget by $4,613.600, consisting of: $312,500 in the Inter-American Commission on Human Rights; $1,252,800 in the Building and Maintenance account; $1,016,200 in the Terminations and Repatriations account; and $2,032,100 in overextended fellowship commitments;

That the General Secretariat has informed the member states that the overextended fellowship commitments for 2005 are for tuition and student subsistence payments due during the last trimester of 2005;

That the Reserve Subfund of the Regular Fund is fully depleted, and it therefore cannot presently provide the resources urgently needed for funding the overextended fellowship commitments;

That by resolution AG/RES. 1460 (XXVII-O/97), the General Assembly authorized the creation of the Capital Fund for the OAS Scholarship and Training Programs, a specific fund under Article 74 of the General Standards to Govern the Operations of the General Secretariat and Article 24 of the Statutes of the Special Multilateral Fund of the Inter-American Council for Integral Development (FEMCIDI), whose objective is to establish, maintain, and generate additional resources to finance scholarship and training programs, and whose balance as of July 31, 2005, according to the General Secretariat, was $5,795,000 -- $5 million corresponding to the principal of the Capital Fund and $795,000 in interest and other earnings;

That pursuant to the recommendation of the Committee on Administrative and Budgetary Affairs (CAAP), the Permanent Executive Committee of the Inter-American Council for Integral Development (CEPCIDI) approved on September 29, 2005, the use of up to $1,236,826 from the $5 million principal of the Capital Fund for the OAS Scholarship and Training Programs and up to the full amount of its accrued interest and other income as of that date, for the financing of the General Secretariat’s overextended fellowship commitments through the end of FY 2005, subject to the Permanent Council’s approval of a resolution requiring full restoration of those funds to the Capital Fund from the Regular Fund’s Reserve Subfund and donor contributions;

That Article VI of the Statutes of the Capital Fund for the OAS Scholarship and Training Programs and resolution AG/RES. 2157 (XXXV-O/05) authorize the General Secretariat to deposit in the Capital Fund for the OAS Scholarship and Training Programs any unused or deobligated funds from scholarships under object 3 to the extent permitted under Article 100 of the General Standards to Govern the Operations of the General Secretariat;

That the General Secretariat will continue to seek financing for those overextended fellowship commitments from permanent observers and other potential donors and other sources;

That the General Secretariat expects to receive $14.4 million in quota payments by the end of FY2005 in accordance with written payment plans, and it has also received oral commitments from several other member states for payments by year-end; that those funds will finance the budget for this year; and that any arrears payments received in excess of the budgetary requirements will be deposited in the Reserve Subfund;

That the Executive Secretariat for Integral Development has established a taskforce to investigate the overextended expenses, to examine its origins, and to propose measures to prevent further occurrences of this nature; and

That the Inspector General has been seized of this matter, and that the Secretary General has issued a directive establishing internal controls,

RESOLVES:

1. To thank the Permanent Executive Committee of the Inter-American Council for Integral Development (CEPCIDI) for its resolution CEPCIDI/RES. 115 (XXIII-E/O5), adopted on September 29, 2005, which authorized the Secretary General to use from the Capital Fund for the OAS Scholarship and Training Programs an amount up to $1,236,826 from the principal of that Fund, together with up to the full amount of its accrued interest and other income as of that date, for the financing of the General Secretariat’s overextended fellowship commitments.

2. To instruct the Secretary General to restore to the Capital Fund for the OAS Scholarship and Training Programs the full amount used under CEPCIDI’s September 29, 2005, resolution, from the balance in the Reserve Subfund at the end of each year, with priority over all other authorities for the use of this Subfund, and from special contributions to the Capital Fund for the OAS Scholarship and Training Programs solicited for that purpose from individual member states, permanent observers, foundations, nongovernmental organizations, and other public and private donors.

3 To instruct the Secretary General, pursuant to Article VI of the Statutes of the Capital Fund for the OAS Scholarship and Training Programs and resolution AG/RES. 2157 (XXXV-O/05), to continue to make deposits of any Regular Fund unused or deobligated funds from scholarships under object 3 to the extent permitted under Article 100 of the General Standards, and not to construe those deposits as repayment of the amounts used from the Capital Fund for the OAS Scholarship and Training Programs under this resolution.

4. To instruct the Secretary General to deposit to the Reserve Subfund any arrears payment received in excess of the budgetary requirements in order to replenish the Capital Fund for the OAS Scholarship and Training Programs and to prepare proposals for timely replenishment of the Capital Fund for the OAS Scholarship and Training Programs.

5. To instruct the Secretary General to encourage member states, permanent observers, and other donors to make substantial capital contributions to the Capital Fund for the OAS Scholarship and Training Programs so as to strengthen its potential for financing an ever-increasing number of fellowships from its income.

6. To request the General Assembly at its next regular session to waive the requirement under Article 72(b) of the General Standards, which would otherwise require restoration to the Reserve Subfund of the amounts used to restore the Capital Fund for the OAS Scholarship and Training Programs.

7. To instruct the Secretary General to present quarterly reports to the Committee on Administrative and Budgetary Affairs (CAAP) on the use and restoration of the funds of the Capital Fund for the OAS Scholarship and Training Programs used under this resolution, and on the implementation of those steps and internal controls established to address the matter.

8. To instruct the Secretary General to present to the Permanent Council the findings of the ongoing internal investigation on the overextended expenses for the Scholarship and Training Programs and on any corresponding responsibility, and to propose measures to prevent further occurrences of this nature.