International Atomic Energy Agency General Conference (Unofficial electronic version)	GC(40)/9 August 1996
Fortieth regular session

1. I present herewith the Agency's accounts for the year ended 31 December 1995. Part I contains the External Auditor's report to the Board of Governors on the audit of the accounts. The Agency's accounts, comprising Statements I to V and Schedules A to G, are presented in Parts II and III, respectively. Part IV, entitled 'Notes to the financial statements' describes the purpose and financing of the Funds and the authority under which they are administered, and the significant accounting policies applied by the Secretariat in preparing the statements and schedules. The notes offer the reader additional information on significant items and events which could have a bearing on the financial position of the Agency, or of funds in its possession or under its control.

I. Significant changes

2. On 1 January 1995, a set of revised Financial Regulations and Financial Rules went into effect. As a result, this year's accounts use the names and fund structure reflected in those Regulations and Rules. In particular, the following changes were made:

Old	New
Administrative Fund	Regular Budget Fund
General Fund Technical Assistance and Co-operation Fund	General Fund Technical Co-operation Fund
Operating Fund I Operational Facilities Activities partially financed from the Administrative Fund	General Fund - Operational Facilities Activities partially financed from the Regular Budget Fund
General Fund - Voluntary Contributions from Member States, United Nations, and Other Donors in support of Extrabudgetary Activities	General Fund - Extrabudgetary Programme Fund - Technical Co-operation Extrabudgetary Fund

In order to give effect to the establishment of the new Extrabudgetary Programme Fund and the Technical Co-operation Extrabudgetary Fund, the individual Funds shown under Fund group IV in 1994 have been divided accordingly, and separate financial statements are now shown for technical co-operation and other extrabudgetary activities.

3. Statements for the International Centre for Theoretical Physics (ICTP) in Trieste, Italy, appear in the Agency's accounts for the last time. The administrative responsibility for the Centre was transferred to the United Nations Educational, Scientific and Cultural Organization (UNESCO) on 1 January 1996.

4. The United Nations system accounting standards adopted by the Consultative Committee on Administrative Questions - Finance and Budget (CCAQ - FB) on behalf of the Administrative Committee on Co-ordination (ACC) in 1995 has been reviewed by the Secretariat. A separate paper explaining the major accounting and statement presentation changes which are expected from the Agency in this respect has been prepared for Member States' information.

5. Fund Group IV includes the following new accounts under the Technical Co-operation Extrabudgetary Fund:

China, People's Republic of - to administer contributions in support of a footnote a/ project and to the Agency's Regional Co-operative Agreement (RCA).

Philippines - to administer contributions in support of the Agency's Regional Co-operative Agreement (RCA).

Thailand - to administer contributions in support of the Agency's Regional Co-operative Agreement (RCA).

II. Financial Highlights

General

6. The Agency's general financial situation has been marked by a significant decrease in overall cash resources compared to last year, mainly due to lower assessment collection in the Regular Budget Fund towards the end of the year. Total Agency cash holdings at the end of the year amounted to $ 86.4 million (1994: $ 114.8 million).

7. The United Nations rate of exchange of the Austrian schilling versus the United States dollar has dropped from 11.00 in January to 10.00 in December 1995, with a low of 9.60 in May and June. This resulted in overall gains on exchange from revaluation of cash holdings in Fund groups I, II and III reflected in Statements I.D, II.D and III.D under the item "Provision for revaluation of cash". Gains on exchange from revaluation of currencies are used to offset potential future losses.

Fund Group I. Regular Budget Fund and Working Capital Fund

8. Appropriations originally approved in the amount of $ 211 557 000 at the rate of AS 12.70 to the US dollar, were recalculated at $ 258 615 000 using the average rate of exchange of AS 10.03, in accordance with Resolution GC (XXXVIII)/RES/2 Attachment.

9. Cash in banks declined sharply from $ 54.8 million in 1994 (Regular Budget Fund $ 39.1 million and Working Capital Fund $ 15.7 million) to $ 18.1 million in 1995 in the Regular Budget Fund, including the Working Capital Fund. This was due to an increase in current year assessments outstanding from $ 30.8 million in 1994 to $ 82.6 million in 1995.

10. In November 1995, an advance from the Working Capital Fund totalling $ 15.8 million and of part of the retained cash surpluses became necessary to carry out the approved programmes. By the end of 1995, the total Working Capital Fund and $ 18.2 million of prior years' cash surpluses were utilized.

11. The 1994 cash surplus amounted to $ 25.5 million (1993 cash surplus: $ 7.5 million), due to improvements in the collection for prior years' arrears, savings on prior years' obligations and unspent balances of deferred programme activities. Of the 1994 Deferred Programme activities set up in the amount of $ 13.5 million, $ 10.3 million were spent or obligated, leaving $ 3.2 million to be returned to the 1994 cash surplus (Statement I.A.2).

12. The 1995 budgetary surplus of $ 8.3 million (1994: S 19.3 million) consists of the following (in millions S):

	1995	1994
Unused balance of appropriations (Statement I.A.1)	5.3	8.8
Surplus of actual resources over adjusted estimates (Statement I.B)	2.9	8.4
Contributions assessed on new Member States	0.1	2.1
	8.3	19.3

The decrease in 1995 over 1994 is due to the return to normal implementation of Regular Budget programmes which led to a fuller use of approved appropriations. The budgetary surplus will turn into a cash surplus once the majority of the 1995 arrears of assessed contributions is paid in 1996 (Statement I.C). Details on programme and budgetary performance of the Regular Budget as well as other Agency activities are given in a separate note issued by the Secretariat under the heading "Report on Programme and Budgetary Performance in 1995".

Fund Group II. General Fund - Technical Co-operation Fund

13. The financial situation of this Fund is stable. A slight increase in cash is due to improved collection of voluntary contributions. Total pledges amounted to $ 47.7 million (1994: $ 42.4 million) against a target of $ 61.5 million (1994: S 58.5 million).

Other Fund groups

14. The financial situation of Fund groups III, IV and V is stable. The resources are based on extrabudgetary contributions from Member States or Member State institutions received before the respective activities are undertaken, or funding agreements with United Nations or other international organizations.

(signed) HANS BLIX
Director General