OBJECTIVE:

1. Bearing in mind the general objective of decentralizing authority and responsibility to managers and the scarce human and financial resources, it is vital to reduce the bureaucratic procedures associated with the recording of obligations. It is imperative that administrative processes and procedures be revised to go hand-in-hand with the forthcoming systems modernization to provide more efficient services to all stakeholders.

2. Once the systems modernization is in place, areas will have direct access to the budgetary account module to record obligation of funds without the Department of Program-Budget previous verification.

3. During 1998, however, the Department of Program-Budget will assist the areas in recording obligations submitted through the MIS, provided that the funds are within the available funds for the area and each and everyone complies with the General Standards and administrative policies.

GOAL:

1. To delegate to administrative support staff and the official(s) responsible for the areas' budget, the authority to enter and record obligations in accordance with chapter IV of the Budgetary and Financial Rules.

2. During 1998, the Department of Program Budget will provide assistance in the process of recording obligations submitted via the MIS, provided that funds are available.

CONDITIONS:

1. Program managers, departments, units and coordination heads as well as obligating officers, are responsible for the accuracy and sufficiency of the information on each obligation document. He/she is also to make certain that each and every obligation document complies with the General Standards that governs the operations of the General Secretariat, the Budgetary and Financial Rules and any other administrative, financial and budget dispositions issued by the Secretariat for Management.

2. Administrative actions to record obligations must be based on the authority to spend financial resources of the Organization, whether the funds were approved by the General Assembly (the Regular Fund and/or voluntary funds), or whether they are contributions from other international organization, government agencies and/or private enterprises approved by way of an authorized agreement. Preceding the recording obligation process there must be a detailed budget which outlines the purpose for which the authorization is given and the expected budget line items for the acquisition of goods and services (human or material resources).

3. Prior to the processing of administrative action to record -obligation- for a particular activity or project, a Plan of Activities and Allotment Request (PASAFS) must be developed and submitted to the Department of Program Budget for its review.

4. Once the Assistant Secretary for Management approves a PASAF, the requested amount is recorded by Program-Budget in the allotment column of the corresponding budgetary account or accounts by object of expense.

5. Obligations will only be recorded in accounts where funds are allotted. In no case will an obligation be recorded in excess of the remaining balance of funds allocated to that account/sub program.

6. The Financial Data System - Budgetary Accounts will not allow obligations to be recorded in the System if an allotment balance is insufficient.

7. Obligations shall continue to be submitted and recorded exclusively via electronic means.

8. Program Managers, Departments, Units and Coordination Heads as well as obligating officers are specifically responsible for full compliance with Article 94 of the General Standards in so far as obligations are concerned. That Article states:

"Appropriations shall be available to meet the obligations incurred during the year for which they were approved. However, and only to the extent necessary to liquidate obligations pending at the close of the year for which they were approved, the appropriations mentioned may be extended, but not beyond December 31 of the following year, on which date they shall expire irrevocably.

In the case of FEMCIDI, in accordance with its Statutes, resources from voluntary contributions made by the member states shall be appropriated and obligated prior to December 31 of the year in which the contributions are received and the obligations shall be liquidated prior to December 31 of the following year.

For the purposes of this article, obligations shall be understood as those arising from any agreement, contract, purchase order, or other document concluded with a natural person under which the General Secretariat is legally obligated to disburse funds to the corresponding natural or legal person in order to execute approved activities in keeping with the provisions of the Charter, the resolutions of the General Assembly, and these General Standards. The obligations shall be recorded on the date on which the commitment becomes legally binding".

Obligating officers, Administrative support staff and responsible officials assigned to the areas must ascertain the accurate recording of obligations and should maintain a filing system for all obligation documents by budgetary account sequence. These officers are also responsible to conduct periodic review of all unexpended obligation balances within the accounts of the area. The Department of Program Budget, on behalf of the Assistant Secretary for Management, reserves the right to request from the areas supporting documentation when analyzing obligations during the course of the budget execution.

9. The Department of Financial Services, before a payment or disbursement is made, will require from the originating area the original supporting documentation it deems necessary to issue checks against a recorded obligation. No disbursements will be made without previously recording obligations in a budgetary account. Examples of such documentation include: signed contracts, purchase orders, invoices, receiving reports and any other document deemed pertinent.

10. The Department of Program-Budget will monitor the budget execution as it progresses during a calendar year and will prepare bimonthly reports to the Heads of the responsible offices.

11. During the month of January 1998, the Department of Program-Budget will conduct workshops on the changes of this procedure. The directors should designate, in writing, the obligating officers from their respective areas. The material to be used in the workshop will become an integral part of this circular.

This Administrative Memorandum shall enter into force on the date of its signature.

James R. Harding
Assistant Secretary for Management